UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10
GENERAL FORM FOR REGISTRATION OF SECURITIES
Pursuant to Section 12(b) or (g) of the Securities Exchange Act of 1934
INTERNATIONAL ENDEAVORS CORPORATION
(Exact Name of Registrant as Specified in its Charter)
Nevada | 45-5692180 | |
(State or Other Jurisdiction of | (I.R.S. Employer | |
Incorporation or Organization) | Identification No.) | |
Unit 2, Level 6, Westin Centre, 26 Hung To Road, Kwun Tong, Hong Kong |
n/a | |
(Address of Principal Executive Offices) | (Zip Code) |
Registrant’s telephone number, including area code: +1 888-493-8028
Securities registered pursuant to Section 12(b) of the Act:
(Title of Class) | (Name of exchange on which registered) | |
n/a | n/a |
Securities registered pursuant to section 12(g) of the Act:
(Title of Class)
Common Stock, par value $0.001 per share | ||
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in rule 12b-2 of the Exchange Act.
Large accelerated filer | ☐ | Accelerated filer | ☐ | |||
Non-accelerated filer | ☒ | Smaller reporting company | ☒ | |||
Emerging Growth Company | ☐ |
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 standards provided pursuant to Section 13(a) of the Exchange Act ☐
FORM 10
INTERNATIONAL ENDEAVORS CORPORATION
Page | ||
Item 1. | Business | 1 |
Item 1A. | Risk Factors | 22 |
Item 2. | Financial Information | 40 |
Item 3. | Properties | 53 |
Item 4. | Security Ownership of Certain Beneficial Owners and Management | 54 |
Item 5. | Directors and Executive Officers | 55 |
Item 6. | Executive Compensation | 58 |
Item 7. | Certain Relationships and Related Transactions, and Director Independence | 61 |
Item 8. | Legal Proceedings | 63 |
Item 9. | Market Price of and Dividends of the Registrant’s Common Equity and Related Stockholder Matters | 64 |
Item 10. | Recent Sales of Unregistered Securities | 65 |
Item 11. | Description of Registrant’s Securities to Be Registered | 65 |
Item 12. | Indemnification of Directors and Officers | 68 |
Item 13. | Financial Statements and Supplementary Data | 70 |
Item 14. | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure | 70 |
Item 15a. | List of Financial Statements and Exhibits Part of Form 10 | 70 |
Item 15b. | Exhibits of Financial Statements | 71 |
Index to Financial Statements | F-1 |
i |
INTRODUCTORY COMMENT
We are a Nevada holding company with operations conducted through our wholly owned subsidiaries based in Hong Kong and an affiliated company in Australia. Our investors hold shares of common stock in International Endeavors Corporation, the Nevada holding company. This structure presents unique risks as our investors may never directly hold equity interests in our Hong Kong subsidiaries and will be dependent upon contributions from our subsidiaries to finance our cash flow needs. Our ability to obtain contributions from our subsidiaries are significantly affected by regulations promulgated by Hong Kong authority. Any change in the interpretation of existing rules and regulations or the promulgation of new rules and regulations may materially affect our operations and or the value of our securities, including causing the value of our securities to significantly decline or become worthless. For a detailed description of the risks facing the Company associated with our structure, please refer to “Risk Factors – Risks Relating to Doing Business in Hong Kong.”
International Endeavors Corporation and our Hong Kong subsidiaries are not required to obtain permission or approval from the China Securities Regulatory Commission, or CSRC, the Cybersecurity Administration Committee, or CAC, or any other Chinese authorities to operate our business or to issue securities to foreign investors. However, in light of the recent statements and regulatory actions by the People’s Republic of China (“the PRC”) government, such as those related to Hong Kong’s national security, the promulgation of regulations prohibiting foreign ownership of Chinese companies operating in certain industries, which are constantly evolving, and anti-monopoly concerns, we may be subject to the risks of uncertainty of any future actions of the PRC government in this regard including the risk that we inadvertently conclude that such approvals are not required, that applicable laws, regulations or interpretations change such that we are required to obtain approvals in the future, or that the PRC government could disallow our holding company structure, which would likely result in a material change in our operations, including our ability to continue our existing holding company structure, carry on our current business, accept foreign investments, and offer or continue to offer securities to our investors. These adverse actions could cause the value of our common stock to significantly decline or become worthless. We may also be subject to penalties and sanctions imposed by the PRC regulatory agencies, including the Chinese Securities Regulatory Commission, if we fail to comply with such rules and regulations, which would likely adversely affect the ability of the Company’s securities to continue to trade on the Over-the-Counter Bulletin Board, which would likely cause the value of our securities to significantly decline or become worthless.
There are prominent legal and operational risks associated with our operations being in Hong Kong. For example, as a U.S.-listed Hong Kong public company, we may face heightened scrutiny, criticism and negative publicity, which could result in a material change in our operations and the value of our common stock. It could also significantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause the value of such securities to significantly decline or be worthless. We are subject to risks arising from the legal system in China where there are risks and uncertainties regarding the enforcement of laws including where the Chinese government can change the rules and regulations in China and Hong Kong, including the enforcement and interpretation thereof, at any time with little to no advance notice and can intervene at any time with little to no advance notice. Changes in Chinese internal regulatory mandates, such as the M&A rules, Anti-Monopoly Law, and Data Security Law, may target the Company's corporate structure and impact our ability to conduct business in Hong Kong, accept foreign investments, or list on an U.S. or other foreign exchange. By way of example, the PRC government initiated a series of regulatory actions and statements to regulate business operations in China with little advance notice, including cracking down on illegal activities in the securities market, enhancing supervision over China-based companies listed overseas using variable interest entity structure, adopting new measures to extend the scope of cybersecurity reviews, and expanding the efforts in anti-monopoly enforcement. In April 2020, the Cyberspace Administration of China and certain other PRC regulatory authorities promulgated the Cybersecurity Review Measures, which became effective in June 2020. Pursuant to the Cybersecurity Review Measures, operators of critical information infrastructure must pass a cybersecurity review when purchasing network products and services which do or may affect national security. On July 10, 2021, the Cyberspace Administration of China issued a revised draft of the Measures for Cybersecurity Review for public comments (“Draft Measures”), which required that, in addition to “operator of critical information infrastructure,” any “data processor” carrying out data processing activities that affect or may affect national security should also be subject to cybersecurity review, and further elaborated the factors to be considered when assessing the national security risks of the relevant activities, including, among others, (i) the risk of core data, important data or a large amount of personal information being stolen, leaked, destroyed, and illegally used or exited the country; and (ii) the risk of critical information infrastructure, core data, important data or a large amount of personal information being affected, controlled, or maliciously used by foreign governments after listing abroad. The Cyberspace Administration of China has said that under the proposed rules companies holding data on more than 1,000,000 users must now apply for cybersecurity approval when seeking listings in other nations because of the risk that such data and personal information could be “affected, controlled, and maliciously exploited by foreign governments,” The cybersecurity review will also investigate the potential national security risks from overseas IPOs. On January 4, 2022, the CAC, in conjunction with 12 other government departments, issued the New Measures for Cybersecurity Review (the "New Measures") on January 4, 2022. The New Measures amends the Draft Measures released on July 10, 2021 and became effective on February 15, 2022.
ii |
The business of our subsidiaries is not subject to cybersecurity review with the Cyberspace Administration of China, or CAC, given that: (i) we do not have one million individual online users of our products and services in Hong Kong; (ii) we do not possess a large amount of personal information in our business operations. In addition, we are not subject to merger control review by China’s anti-monopoly enforcement agency due to the level of our revenues which provided from us and audited by our auditor and the fact that we currently do not expect to propose or implement any acquisition of control of, or decisive influence over, any company with revenues within China of more than Renminbi (“RMB”) 400 million. Currently, these statements and regulatory actions have had no impact on our daily business operations, the ability to accept foreign investments and list our securities on an U.S. or other foreign exchange. However, since these statements and regulatory actions are new, it is highly uncertain how soon legislative or administrative regulation making bodies will respond and what existing or new laws or regulations or detailed implementations and interpretations will be modified or promulgated, if any, and the potential impact such modified or new laws and regulations will have on our daily business operation, the ability to accept foreign investments and list our securities on an U.S. or other foreign exchange. For a detailed description of the risks the Company is facing and the offering associated with our operations in Hong Kong, please refer to “Risk Factors – Risks Relating to Doing Business in Hong Kong.”
The recent joint statement by the SEC and PCAOB, and the Holding Foreign Companies Accountable Act all call for additional and more stringent criteria to be applied to emerging market companies upon assessing the qualification of their auditors, especially the non-U.S. auditors who are not inspected by the PCAOB. Trading in our securities may be prohibited under the Holding Foreign Companies Accountable Act if the PCAOB determines that it cannot inspect or investigate completely our auditor, and that as a result, an exchange may determine to delist our securities. On June 22, 2021, the U.S. Senate passed the Accelerating Holding Foreign Companies Accountable Act (HFCAA) which would reduce the number of consecutive non-inspection years required for triggering the prohibitions under the HFCAA from three years to two thus reducing the time before our securities may be prohibited from trading or being delisted. On December 2, 2021, the U.S. Securities and Exchange Commission adopted rules to implement the HFCAA. On December 16, 2021, the Public Company Accounting Oversight Board (PCAOB) issued its report notifying the Commission that it is unable to inspect or investigate completely accounting firms headquartered in mainland China or Hong Kong due to positions taken by authorities in mainland China and Hong Kong. On December 15, 2022, the PCAOB issued a report that vacated its December 16, 2021 determination and removed mainland China and Hong Kong from the list of jurisdictions where it is unable to inspect or investigate completely registered public accounting firms. Our auditor is based in Hong Kong and is subject to PCAOB inspection. It is not subject to the determinations announced by the PCAOB on December 16, 2021. Each year, the PCAOB will determine whether it can inspect and investigate completely audit firms in mainland China and Hong Kong, among other jurisdictions. If PCAOB determines in the future that it no longer has full access to inspect and investigate completely accounting firms in mainland China and Hong Kong and we continue to use an accounting firm headquartered in Hong Kong to issue an audit report on our financial statements filed with the Securities and Exchange Commission, we would be identified as a Commission-Identified Issuer following the filing of the annual report on Form 10-K for the relevant fiscal year. There can be no assurance that we would not be identified as a Commission-Identified Issuer for any future fiscal year, and if we were so identified for two consecutive years, we would become subject to the prohibition on trading under the HFCAA and our securities may be delisted from OTC Markets as a result. Furthermore, due to the recent developments in connection with the implementation of the Holding Foreign Companies Accountable Act, we cannot assure you whether the SEC or other regulatory authorities would apply additional and more stringent criteria to us after considering the effectiveness of our auditor’s audit procedures and quality control procedures, adequacy of personnel and training, or sufficiency of resources, geographic reach or experience as it relates to the audit of our financial statements. Please see “Risk Factors- The Holding Foreign Companies Accountable Act requires the Public Company Accounting Oversight Board (PCAOB) to be permitted to inspect the issuer's public accounting firm within three years. This three-year period will be shortened to two years if the Accelerating Holding Foreign Companies Accountable Act is enacted. There are uncertainties under the PRC Securities Law relating to the procedures and requisite timing for the U.S. securities regulatory agencies to conduct investigations and collect evidence within the territory of the PRC. If the U.S. securities regulatory agencies are unable to conduct such investigations, they may suspend or de-register our registration with the SEC and delist our securities from applicable trading market within the US.”
iii |
In addition to the foregoing risks, we face various legal and operational risks and uncertainties arising from doing business in Hong Kong as summarized below and in “Risk Factors — Risks Relating to Doing Business in Hong Kong.”
· | Adverse changes in economic and political policies of the PRC government could have a material and adverse effect on overall economic growth in China and Hong Kong, which could materially and adversely affect our business. Please see “Risk Factors-We face the risk that changes in the policies of the PRC government could have a significant impact upon the business we may be able to conduct in Hong Kong and the profitability of such business.” and “Substantial uncertainties and restrictions with respect to the political and economic policies of the PRC government and PRC laws and regulations could have a significant impact upon the business that we may be able to conduct in the PRC and accordingly on the results of our operations and financial condition.” | |
· | We are a holding company with operations conducted through our wholly owned subsidiaries based in Hong Kong and an affiliated company in Australia. We will set up joint-venture entities for property development projects. This structure presents unique risks as our investors may never directly hold equity interests in our Hong Kong subsidiaries and will be dependent upon contributions from our subsidiaries to finance our cash flow needs. Any limitation on the ability of our subsidiaries to make payments to us could have a material adverse effect on our ability to conduct business. We are currently focused on reinvesting our earnings to support future growth and innovation. As a result, we do not anticipate paying dividends in the foreseeable future. Please see “Risk Factors - Because our holding company structure creates restrictions on the payment of dividends or other cash payments, our ability to pay dividends or make other payments is limited.” | |
· | There is a possibility that the PRC could prevent our cash maintained in Hong Kong from leaving or the PRC could restrict the deployment of the cash into our business or for the payment of dividends. We rely on dividends from our Hong Kong subsidiary for our cash and financing requirements, such as the funds necessary to service any debt we may incur. Any such controls or restrictions may adversely affect our ability to finance our cash requirements, service debt or make dividend or other distributions to our shareholders. Please see “Risk Factors - Our Hong Kong subsidiary may be subject to restrictions on paying dividends or making other payments to us, which may restrict its ability to satisfy liquidity requirements, conduct business and pay dividends to holders of our common stock.”; “Risk Factors - PRC regulation of loans to and direct investment in PRC entities by offshore holding companies and governmental control of currency conversion may delay or prevent us from using the proceeds we receive from offshore financing activities to make loans to or make additional capital contributions to our Hong Kong subsidiary, which could materially and adversely affect our liquidity and our ability to fund and expand business.”; “Risk Factors - Because our holding company structure creates restrictions on the payment of dividends or other cash payments, our ability to pay dividends or make other payments is limited.” and “Transfers of Cash to and from our Subsidiaries.” | |
· | PRC regulation of loans to and direct investments in PRC entities by offshore holding companies may delay or prevent us from using the proceeds of this offering to make loans or additional capital contributions to our operating subsidiaries in Hong Kong. Substantial uncertainties exist with respect to the interpretation of the PRC Foreign Investment Law and how it may impact the viability of our current corporate structure, corporate governance and business operations. Please see “Risk Factors- PRC regulation of loans to and direct investment in PRC entities by offshore holding companies and governmental control of currency conversion may delay or prevent us from using the proceeds we receive from offshore financing activities to make loans to or make additional capital contributions to our Hong Kong subsidiaries, which could materially and adversely affect our liquidity and our ability to fund and expand business.” | |
· | The legal and regulatory environment in Hong Kong has continued to evolve in recent years. While Hong Kong maintains a separate legal system from mainland China, government authority in mainland China may change Hong Kong’s rules and regulations with little to no advance notice, and can intervene and influence our operations and business activities in Hong Kong. We are currently not required to obtain approval from Chinese authorities to list on U.S. exchanges. However, if our subsidiaries or the holding company were required to obtain approval in the future, or we erroneously conclude that approvals were not required, or we were denied permission from Chinese authorities to operate or to list on U.S. exchanges, we will not be able to continue listing on a U.S. exchange and the value of our common stock would likely significantly decline or become worthless, which would materially affect the interest of the investors. There is a risk that the Chinese government may intervene or influence our operations, or may exert more control over offerings conducted overseas and/or foreign investment in Hong Kong-based issuers, which could result in a material change in our operations and/or the value of our securities. Further, any actions by the Chinese government to exert more oversight and control over offerings that are conducted overseas and/or foreign investment in China-based issuers would likely significantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause the value of such securities to significantly decline or be worthless. Please see “Risk Factors-We face the risk that changes in the policies of the PRC government could have a significant impact upon the business we may be able to conduct in the Hong Kong and the profitability of such business.” and “Substantial uncertainties and restrictions with respect to the political and economic policies of the PRC government and PRC laws and regulations could have a significant impact upon the business that we may be able to conduct in Hong Kong and accordingly on the results of our operations and financial condition.” and “The Chinese government exerts substantial influence over the manner in which we must conduct our business activities. We are currently not required to obtain approval from Chinese authorities to list on U.S exchanges. However, to the extent that the Chinese government exerts more control over offerings conducted overseas and/or foreign investment in China-based issuers over time and if our PRC subsidiaries or the holding company were required to obtain approval in the future and were denied permission from Chinese authorities to list on U.S. exchanges, we will not be able to continue listing on U.S. exchange and the value of our common stock may significantly decline or become worthless, which would materially affect the interest of the investors.” |
iv |
· | Governmental control of currency conversion may limit our ability to utilize our revenues effectively and affect the value of your investment. | |
· | We may become subject to a variety of laws and regulations in the PRC regarding privacy, data security, cybersecurity, and data protection. We may be liable for improper use or appropriation of personal information provided by our customers. Please see “Risk Factors- The Chinese government exerts substantial influence over the manner in which we must conduct our business activities. We are currently not required to obtain approval from Chinese authorities to list on U.S exchanges. However, to the extent that the Chinese government exerts more control over offerings conducted overseas and/or foreign investment in China-based issuers over time and if our PRC subsidiaries or the holding company were required to obtain approval in the future and were denied permission from Chinese authorities to list on U.S. exchanges, we will not be able to continue listing on U.S. exchange and the value of our common stock may significantly decline or become worthless, which would materially affect the interest of the investors.” | |
· | Under the Enterprise Income Tax Law of the PRC (“EIT Law”), we may be classified as a “Resident Enterprise” of China. Such classification will likely result in unfavorable tax consequences to us and our non-PRC shareholders. Please see “Risk Factors- Our global income may be subject to PRC taxes under the PRC Enterprise Income Tax Law, which could have a material adverse effect on our results of operations.” | |
· | Failure to comply with PRC regulations relating to the establishment of offshore special purpose companies by PRC residents may subject our PRC resident Shareholders to personal liability, may limit our ability to acquire Hong Kong and PRC companies or to inject capital into our Hong Kong subsidiary, may limit the ability of our Hong Kong subsidiaries to distribute profits to us or may otherwise materially and adversely affect us. | |
· | The recent joint statement by the SEC and PCAOB, and the Holding Foreign Companies Accountable Act all call for additional and more stringent criteria to be applied to emerging market companies upon assessing the qualification of their auditors, especially the non-U.S. auditors who are not inspected by the PCAOB. Trading in our securities may be prohibited under the Holding Foreign Companies Accountable Act if the PCAOB determines that it cannot inspect or investigate completely our auditor, and that as a result an exchange may determine to delist our securities. On June 22, 2021, the U.S. Senate passed the Accelerating Holding Foreign Companies Accountable Act (HFCAA) which would reduce the number of consecutive non-inspection years required for triggering the prohibitions under the HFCAA from three years to two thus reducing the time before our securities may be prohibited from trading or being delisted. On December 2, 2021, the U.S. Securities and Exchange Commission adopted rules to implement the HFCAA. Pursuant to the HFCAA, the Public Company Accounting Oversight Board (PCAOB) issued its report notifying the Commission that it is unable to inspect or investigate completely accounting firms headquartered in mainland China or Hong Kong due to positions taken by authorities in mainland China and Hong Kong. This report was vacated on December 15, 2022. Our auditor is not subject to the determinations announced by the PCAOB on December 16, 2021. However, in the event the Chinese authorities subsequently take a position disallowing the PCAOB to inspect our auditor, then we would need to change our auditor to avoid having our securities delisted. Please see “Risk Factors- The Holding Foreign Companies Accountable Act requires the Public Company Accounting Oversight Board (PCAOB) to be permitted to inspect the issuer's public accounting firm within three years. This three-year period will be shortened to two years if the Accelerating Holding Foreign Companies Accountable Act is enacted. There are uncertainties under the PRC Securities Law relating to the procedures and requisite timing for the U.S. securities regulatory agencies to conduct investigations and collect evidence within the territory of the PRC. If the U.S. securities regulatory agencies are unable to conduct such investigations, they may suspend or de-register our registration with the SEC and delist our securities from applicable trading market within the US.” | |
· | You may be subject to PRC income tax on dividends from us or on any gain realized on the transfer of shares of our common stock. Please see “Risk Factors- Dividends payable to our foreign investors and gains on the sale of our shares of common stock by our foreign investors may become subject to tax by the PRC.” | |
· | We face uncertainties with respect to indirect transfers of equity interests in PRC resident enterprises by their non-PRC holding companies. Please see “Risk Factors- We and our shareholders face uncertainties with respect to indirect transfers of equity interests in PRC resident enterprises by their non-PRC holding companies.” | |
· | We are organized under the laws of the State of Nevada as a holding company that conducts its business through a number of subsidiaries organized under the laws of foreign jurisdictions such as Hong Kong and the British Virgin Islands. This may have an adverse impact on the ability of U.S. investors to enforce a judgment obtained in U.S. Courts against these entities, bring actions in Hong Kong against us or our management or to effect service of process on the officers and directors managing the foreign subsidiaries. Please see “Risk Factors- It may be difficult for stockholders to enforce any judgment obtained in the United States against us, which may limit the remedies otherwise available to our stockholders.” | |
· | U.S. regulatory bodies may be limited in their ability to conduct investigations or inspections of our operations in China. | |
· | There are significant uncertainties under the EIT Law relating to the withholding tax liabilities of our PRC subsidiary, and dividends payable by our PRC subsidiary to our offshore subsidiaries may not qualify to enjoy certain treaty benefits. Please see “Risk Factors- Our global income may be subject to PRC taxes under the PRC Enterprise Income Tax Law, which could have a material adverse effect on our results of operations.” |
v |
References in this registration statement to the “Company,” “IDVV,” “we,” “us” and “our” refer to International Endeavors Corporation, a Nevada company and all of its subsidiaries on a consolidated basis. Where reference to a specific entity is required, the name of such specific entity will be referenced.
Transfers of Cash to and from Our Subsidiaries
International Endeavors Corporation is a Nevada holding company with no operations of its own. We conduct our operations primarily through our subsidiaries in Hong Kong and an affiliated company in Australia. We will set up joint-venture entities for property development projects. We may rely on dividends or other transfers of cash or assets to be made by our Hong Kong subsidiaries to fund our cash and financing requirements, including the funds necessary to pay dividends and other cash distributions to our shareholders, to service any debt we may incur and to pay our operating expenses. If our Hong Kong subsidiaries incur debt on their own behalf in the future, the instruments governing the debt may restrict their ability to pay dividends or make other distributions to us. To date, our subsidiaries have not made any transfers, dividends or distributions of cash flows or other assets to International Endeavors Corporation and International Endeavors Corporation has not made any transfers, dividends or distributions of cash flows or other assets to our subsidiaries.
International Endeavors Corporation is permitted under the Nevada laws to provide funding to and receive funding from our subsidiaries in Hong Kong through loans or capital contributions without restrictions on the amount of the funds, subject to satisfaction of applicable government registration, approval and filing requirements. Our Hong Kong subsidiaries are also permitted under the laws of Hong Kong to provide and receive funding to and from International Endeavors Corporation through dividend distribution without restrictions on the amount of the funds. As of the date of this report, there has been no dividends or distributions among the holding company or the subsidiaries nor do we expect such dividends or distributions to occur in the foreseeable future among the holding company and its subsidiaries.
We currently intend to retain all available funds and future earnings, if any, for the operation and expansion of our business and do not anticipate declaring or paying any dividends in the foreseeable future. Any future determination related to our dividend policy will be made at the discretion of our board of directors after considering our financial condition, results of operations, capital requirements, contractual requirements, business prospects and other factors the board of directors deems relevant, and subject to the restrictions contained in any future financing instruments.
Subject to the Nevada Revised Statutes and our bylaws, our board of directors may authorize and declare a dividend to shareholders at such time and of such an amount as they think fit if they are satisfied, on reasonable grounds, that immediately following the dividend the value of our assets will exceed our liabilities and we will be able to pay our debts as they become due. There is no further Nevada statutory restriction on the amount of funds which may be distributed by us by dividend.
Under the current practice of the Inland Revenue Department of Hong Kong, no tax is payable in Hong Kong in respect of dividends paid by us. The laws and regulations of the PRC do not currently have any material impact on transfer of cash from International Endeavors Corporation to our Hong Kong subsidiaries or from our Hong Kong subsidiaries to International Endeavors Corporation There are no restrictions or limitation under the laws of Hong Kong imposed on the conversion of Hong Kong dollar (“HKD”) into foreign currencies and the remittance of currencies out of Hong Kong or across borders and to U.S. investors.
There is a possibility that the PRC could prevent our cash maintained in Hong Kong from leaving or the PRC could restrict the deployment of the cash into our business or for the payment of dividends. Any such controls or restrictions may adversely affect our ability to finance our cash requirements, service debt or make dividend or other distributions to our shareholders. Please see “Risk Factors - Our Hong Kong subsidiary may be subject to restrictions on paying dividends or making other payments to us, which may restrict its ability to satisfy liquidity requirements, conduct business and pay dividends to holders of our common stock.”; “Risk Factors - PRC regulation of loans to and direct investment in PRC entities by offshore holding companies and governmental control of currency conversion may delay or prevent us from using the proceeds we receive from offshore financing activities to make loans to or make additional capital contributions to our Hong Kong subsidiary, which could materially and adversely affect our liquidity and our ability to fund and expand business.”; “Risk Factors - Because our holding company structure creates restrictions on the payment of dividends or other cash payments, our ability to pay dividends or make other payments is limited.”
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Current PRC regulations permit PRC subsidiaries to pay dividends to Hong Kong subsidiaries only out of their accumulated profits, if any, determined in accordance with Chinese accounting standards and regulations. In addition, each of our subsidiaries in China is required to set aside at least 10% of its after-tax profits each year, if any, to fund a statutory reserve until such reserve reaches 50% of its registered capital. Each of such entity in China is also required to further set aside a portion of its after-tax profits to fund the employee welfare fund, although the amount to be set aside, if any, is determined at the discretion of its board of directors. Although the statutory reserves can be used, among other ways, to increase the registered capital and eliminate future losses in excess of retained earnings of the respective companies, the reserve funds are not distributable as cash dividends except in the event of liquidation. As of the date of this prospectus, we do not have any PRC subsidiaries.
The PRC government imposes controls on the conversion of RMB into foreign currencies and the remittance of currencies out of the PRC. We currently do not maintain bank accounts in the PRC. To the extent that we maintain bank accounts in the PRC in the future, we may experience difficulties in completing the administrative procedures necessary to obtain and remit foreign currency to finance our cash requirements, service debt or make dividend or other distributions to our shareholders. Furthermore, if our subsidiaries in the PRC incur debt on their own in the future, the instruments governing the debt may restrict their ability to pay dividends or make other payments. If we or our subsidiaries are unable to receive all of the revenues from our operations, we may be unable to pay dividends on our common stock.
Cash dividends, if any, on our common stock will be paid in U.S. dollars. If we are considered a PRC tax resident enterprise for tax purposes, any dividends we pay to our overseas shareholders may be regarded as China-sourced income and as a result may be subject to PRC withholding tax at a rate of up to 10.0%.
In order for us to pay dividends to our shareholders, we will rely on payments made from our Hong Kong subsidiaries to International Endeavors Corporation. If in the future we have PRC subsidiaries, certain payments from such PRC subsidiaries to Hong Kong subsidiaries will be subject to PRC taxes, including business taxes and VAT. As of the date of this prospectus, we do not have any PRC subsidiaries and our Hong Kong subsidiaries have not made any transfers, dividends or distributions nor do we expect to make such transfers, dividends or distributions in the foreseeable future.
Pursuant to the Arrangement between Mainland China and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation and Tax Evasion on Income, or the Double Tax Avoidance Arrangement, the 10% withholding tax rate may be lowered to 5% if a Hong Kong resident enterprise owns no less than 25% of a PRC entity. However, the 5% withholding tax rate does not automatically apply and certain requirements must be satisfied, including, without limitation, that (a) the Hong Kong entity must be the beneficial owner of the relevant dividends; and (b) the Hong Kong entity must directly hold no less than 25% share ownership in the PRC entity during the 12 consecutive months preceding its receipt of the dividends. In current practice, a Hong Kong entity must obtain a tax resident certificate from the Hong Kong tax authority to apply for the 5% lower PRC withholding tax rate. As the Hong Kong tax authority will issue such a tax resident certificate on a case-by-case basis, we cannot assure you that we will be able to obtain the tax resident certificate from the relevant Hong Kong tax authority and enjoy the preferential withholding tax rate of 5% under the Double Taxation Arrangement with respect to dividends to be paid by a PRC subsidiary to its immediate holding company. As of the date of this prospectus, we do not have a PRC subsidiary. In the event that we acquire or form a PRC subsidiary in the future and such PRC subsidiary desires to declare and pay dividends to our Hong Kong subsidiary, our Hong Kong subsidiary will be required to apply for the tax resident certificate from the relevant Hong Kong tax authority. In such event, we plan to inform the investors through SEC filings, such as a current report on Form 8-K, prior to such actions. See “Risk Factors – Risks Relating to Doing Business in Hong Kong.”
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SPECIAL CAUTIONARY NOTICE REGARDING FORWARD-LOOKING STATEMENTS
Certain matters discussed in this registration statement may constitute forward-looking statements for purposes of the Securities Act of 1933, as amended (the “Securities Act”) and the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from the future results, performance or achievements expressed or implied by such forward-looking statements. The words “anticipate,” “believe,” “estimate,” “may,” “expect” and similar expressions are generally intended to identify forward-looking statements. Our actual results may differ materially from the results anticipated in these forward-looking statements due to a variety of factors, including, without limitation, those discussed under the captions “Risk Factors,” and elsewhere in this registration statement. All written or oral forward-looking statements attributable to us are expressly qualified in their entirety by these cautionary statements. Such forward-looking statements include, but are not limited to, statements about our:
· | expectations for increases or decreases in expenses; | |
· | expectations for incurring capital expenditures to expand our products and services or our geographical reach; | |
· | expectations for generating revenue or becoming profitable on a sustained basis; | |
· | expectations or ability to enter into marketing and other partnership agreements; | |
· | our ability to compete against other companies; | |
· | our ability to attract and retain key personnel; | |
· | estimates of the sufficiency of our existing cash and cash equivalents to finance our operating requirements; | |
· | the volatility of our stock price; | |
· | expected losses; and | |
· | expectations for future capital requirements. |
The forward-looking statements contained in this registration statement reflect our views and assumptions as of the effective date of this registration statement. Except as required by law, we assume no responsibility for updating any forward-looking statements. We qualify all of our forward-looking statements by these cautionary statements.
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Item 1: | Business |
OVERVIEW
International Endeavors Corporation is a Nevada holding company that through its subsidiaries are engaged primarily in property development construction and design services by implementing modular integrated construction technology (“MiC”), embedded with our proprietary atmospheric water generators (“AWG”) and property management system by internet of things technology (“IoT”). We develop sustainable, technology-enabled communities that enhance the quality of life. We build smart, energy-efficient structures that we believe are secure, adaptable and ready for the future. We focus on projects that we believe will enhance the quality of life and reduce environmental impact, while driving innovation and excellence in the real estate market across Australia, Europe, America and Asia.
By embracing advanced technologies, we expect to achieve competitive advantages, drive sustainable growth, and meet the evolving needs of modern urban environments. We believe that careful planning, strategic investment and effective risk management are essential to maximize the potential of these innovative solutions and ensure long-term success. We are dedicated to advancing the boundaries of construction innovation.
Our corporate organization chart is below:
(1) | International Endeavors Corporation, a Nevada corporation, is our parent holding company and conducts no business operations. |
(2) | ModuLink Investment Limited, a British Virgin Islands limited company, is a holding company. |
(3) | ModuLink Corporation Limited, a Hong Kong limited liability company, focuses on strategic planning and providing intergroup management services serving its subsidiaries. |
(4) | Zenith Integrated Modular Limited, a Hong Kong limited liability company, provides design, engineering and holistic project management services, including project planning, procurement, logistics, assembly and installation. |
(5) | ModuLink InnoTech Company Limited, a Hong Kong limited liability company, is a technology development company focused on AWG and building management systems with built-in software to enable real-time monitoring and control. |
(6) | Zenith AY Modular Buildings Company Limited, a Hong Kong limited liability company, is an investment holding and project investment company |
(7) | ModuLink Australia Pty. Ltd., an Australian limited liability company, is a project management company that facilitates project development in Australia. Each of Zenith AY Modular Buildings Company Limited and Zenith (PMS) Limited, a Hong Kong company, hold 40% and 60% of the outstanding securities of ModuLink Australia Pty. Ltd. TAM, Hin Wah Anthony, our Chairman of the Board, is the director and controlling shareholder of Zenith (PMS) Limited. |
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We are a Nevada holding company with operations conducted through our wholly owned subsidiaries based in Hong Kong and an affiliated company. We also operate through joint-venture entities that are newly established for our property development projects. This structure presents unique risks as our investors may never directly hold equity interests in our operating Hong Kong subsidiaries and will be dependent upon contributions from our subsidiaries to finance our cash flow needs. International Endeavors Corporation and its Hong Kong subsidiaries are not required to obtain permission from the Chinese authorities including the China Securities Regulatory Commission, or CSRC, or Cybersecurity Administration Committee, or CAC, to operate or to issue securities to foreign investors. However, in light of the recent statements and regulatory actions by the PRC government, such as those related to Hong Kong’s national security, the promulgation of regulations prohibiting foreign ownership of Chinese companies operating in certain industries, which are constantly evolving, and anti-monopoly concerns, we (the parent company and our subsidiaries) may be subject to the risks of uncertainty of any future actions of the PRC government in this regard including the risk that we inadvertently conclude that such approvals are not required, that applicable laws, regulations or interpretations change such that we are required to obtain approvals in the future, or that the PRC government could disallow our holding company structure, which would likely result in a material change in our operations, including our ability to continue our existing holding company structure, carry on our current business, accept foreign investments, and offer or continue to offer securities to our investors. These adverse actions would likely cause value the value of our common stock to significantly decline or become worthless. We may also be subject to penalties and sanctions imposed by the PRC regulatory agencies, including the Chinese Securities Regulatory Commission, if we fail to comply with such rules and regulations, which would likely adversely affect the ability of the Company’s securities to continue to trade on the Over-the-Counter Bulletin Board, which would likely cause the value of our securities to significantly decline or become worthless. For a detailed description of the risks facing the Company associated with our operations in Hong Kong, please refer to “Risk Factors – Risk Relating to Doing Business in Hong Kong.”
We are organized under the laws of the State of Nevada as a holding company that conducts its business through a number of subsidiaries organized under the laws of foreign jurisdictions such as Hong Kong and the British Virgin Islands. This may have an adverse impact on the ability of U.S. investors to enforce a judgment obtained in U.S. Courts against these entities, or to effect service of process on the officers and directors managing the foreign subsidiaries.
We are authorized to issue up to 4,000,000,000 shares of our common stock, par value $0.001, and 10,000,000 shares of preferred stock, par value $0.001, 500,000 of which has been designated Series A Convertible Preferred Stock. 200,000 shares of the Series A Convertible Preferred Stock are issued and outstanding to ModuLink Inc. Our directors, TAM, Hin Wah Anthony, FU, Wah and AU-YEUNG, Sai Kit, hold 50%, 25% and 25% shareholding interests of ModuLink Inc., respectively. The voting and conversion rights of each Series A Convertible Preferred stock is 1 to 20,000. As a result, ModuLink Inc. controls the voting power of approximately 50.19% of our common stock, as calculated on a fully diluted basis, as of the date of this registration statement. Pursuant to the Share Exchange Agreement, the aggregate balances of 1,414,027,236 shares of common stock will be issued to our directors, TAM, Hin Wah Anthony, FU, Wah and AU-YEUNG, Sai Kit. They will, in aggregate of shareholding interests through ModuLink Inc. and personally, control approximately 67.93% of the voting power of our common stock, as calculated on a fully diluted basis.
Our sources of capital in the past have included the sale of equity securities, which include common stock sold in private transactions to our executive officers or existing shareholders, and short-term and long-term debts. We expect to finance future acquisitions through a combination of the foregoing. While we believe that existing shareholders and our officers and directors will continue to provide additional cash to make acquisitions and to meet our obligations as they become due or that we will obtain external financing, there can be no assurance that we will be able to raise such additional capital resources on satisfactory terms. We believe that our current cash and other sources of liquidity discussed below are adequate to support operations for at least the next 12 months. We believe that we will need $6.5 million and $11.5 million to implement our business plan in the next 12 and 24 months respectively.
In carrying out our property development projects, we rely on third party manufacturers and partners to supply key components of our proprietary ModuLink platform, including modular steel structures and atmospheric water generators (AWGs). These systems are designed in-house and incorporate core technologies that are owned or controlled by the Company. However, the physical production of these components is currently outsourced to strategic manufacturing partners located in mainland China, that operate under strict adherence to our proprietary design specifications and quality standards.
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In addition to these core manufactured components, we also source various auxiliary materials and technologies from local suppliers in the regions where projects are developed. This hybrid sourcing strategy allows us to optimize cost efficiencies, reduce logistical complexity, and support regional economies.
To mitigate geopolitical, regulatory, and operational risks, we are actively exploring opportunities to identify and engage qualified manufacturing partners outside of mainland China. Our intention is to diversify our supply chain by establishing relationships with suppliers in jurisdictions that offer competitive cost structures, manufacturing capabilities, and regulatory stability. This strategic initiative is designed to enhance our supply chain resilience while maintaining the quality and performance standards required for our proprietary technologies.
Because we are dependent on third party manufacturers to support certain aspects of our business activities, any interruption in the provision of products by these third parties whether due to supply chain disruptions, regulatory restrictions, or geopolitical developments may impair our ability to deliver properties to our clients in a timely or cost-effective manner. Please see “Risk Factors - We rely on third-party manufacturers and partners for certain aspects of our operations, and any interruptions in the provision of products provided by these third parties may impair our ability to deliver properties to our clients.”
History
We were incorporated under the laws of the State of Nevada on May 7, 2014, under the name International Endeavors Corporation. At inception, the Company was formed for the purpose of developing and leasing land for recreational vehicle use, acquisition of land and/or vineyards for vineyard development, production of grapes for wine, private labeling of wine for wine distribution and developing and marketing of a Wine APP.
The Company filed a registration statement on Form S-1 on March 5, 2015, which became effective on September 28, 2015. Thereafter, the Company filed periodic reports with the Securities and Exchange Commission until it filed a Form 15 terminating its registration and otherwise suspending its duty to file reports on August 7, 2017. On September 13, 2017, the Company began posting periodic reports on the OTC Markets website under the alternative reporting standard.
Change in Control
On January 22, 2025, Raymond Valdez, the sole executive officer and director entered into the Stock Purchase Agreement, pursuant to which Mr. Valdez agreed to sell (the “Sale”) to ModuLink Inc., a British Virgin Islands corporation (“ModuLink BVI”), and Zenith (Hong Kong) Engineering Limited, a Hong Kong corporation (“Zenith (HK)”), 200,000 shares of Preferred A shares, representing all of the issued and outstanding shares of Preferred A, and the transfer of certain promissory notes of the Company held by third parties, in an aggregate consideration of Two Hundred Eighty Thousand Dollars ($280,000). Each holder of Preferred A shares is entitled to vote together with holders of the common stock with each one Preferred A share voting as twenty thousand shares of common stock. Similarly, each one share of Preferred A is convertible into twenty thousand shares of common stock. The Sale consummated on February 10, 2025.
In connection with the Sale, Raymond Valdez and Bill Martin resigned from all of their positions with the Company and the following persons were appointed to the offices set forth next to their names, effective February 10, 2025:
Name | Position | |
TAM, Hin Wah Anthony | Chairman | |
FU, Wah | Chief Executive Officer | |
AU-YEUNG, Sai Kit | Chief Financial Officer and Secretary | |
WONG, Ho Man Alex | Non-Executive Director | |
FUNG, Kwai Kin | Non-Executive Director |
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TAM, Hin Wah Anthony, our Chairman of the Board is the controlling shareholder of ModuLink BVI. PUN, Ah Keung is the sole shareholder of Zenith (HK).
As part of the Sale, the each of Bearcreek Resourses, Inc., a Montana corporation, and Tala Media Corp., a Wyoming corporation, transferred to Zenith (HK) certain convertible promissory notes of the Company in the principal amounts of $65,000 and $75,000, respectively on January 30, 2025. The notes are convertible into shares of the Company’s common stock in accordance with the terms set forth therein. On February 28, 2025, Zenith (HK) waived all rights to convert the outstanding principal amount and any accrued but unpaid interest under the two convertible promissory notes into equity securities of the Company.
The Company, Mr. Valdez, ModuLink BVI and Zenith (HK) further agreed that the parties intend to transfer ownership of Witech to Mr. Valdez or its designees as part of the sale of the Preferred A shares. The transfer has been completed on May 1, 2025.
The foregoing descriptions of the Stock Purchase Agreement, each of the promissory notes transferred to Zenith (HK), and the Waiver and Amendment Agreement of promissory notes are qualified in their entirety by reference to the Stock Purchase Agreement, which is filed as Exhibits 10.1 through and including 10.5 to this Registration Statement and are incorporated herein by reference.
Immediately prior to the closing of the transactions contemplated in the Stock Purchase Agreement, the Company amended and restated its Articles of Incorporation to amend the rights, powers and designations of the Series A Convertible Preferred Stock so that each holder of Preferred A shares is entitled to vote together with holders of the common stock with each one Preferred A share voting as twenty thousand shares of common stock, representing an increase from the prior voting ratio of one to ten thousand. Similarly, each one share of Preferred A became convertible into twenty thousand shares of common stock, representing an increase from the prior conversion ratio of one to ten thousand. The Company also confirmed the Company’s prior cancellation of the Series B Preferred Stock.
Acquisition of ModuLink Investment Limited, our property development business adopting modular construction technology
On March 28, 2025, the Company entered into a Share Exchange Agreement (the “Share Exchange”) of all the issued and outstanding shares with the shareholders of ModuLink Investment Limited (hereafter referred to as, ModuLink), a British Virgin Islands limited liability company. ModuLink and its subsidiaries engage in the property development industry adopting modular construction technology by leveraging Modular Integrated Construction (MiC), Atmospheric Water Generators (AWG), and Internet of Things (IoT) technology enhanced by AI to redefine property development. The Company agreed to issue 2,356,712,066 shares of common stock, at a valuation of $0.0034 per share, in exchange for all the issued and outstanding shares with the shareholders of ModuLink. The Company relied on the exemption from registration pursuant to Section 4(2) of, and Regulation D and/or Regulation S promulgated under the Act in selling the Company’s securities to the shareholders of ModuLink. This Share Exchange was consummated on May 1, 2025.
The foregoing description of the Share Exchange Agreement is qualified in its entirety by reference to the Share Exchange Agreement which is filed as Exhibit 10.5 to this Registration Statement and is incorporated herein by reference.
Prior to the acquisition of ModuLink and immediately after the disposition of Witech as stipulated in the Stock Purchase Agreement, the Company was considered as a shell company due to its nominal assets and limited operation. Upon the acquisition, ModuLink will comprise the ongoing operations of the combined entity and its senior management will serve as the senior management of the combined entity, ModuLink is deemed to be the accounting acquirer for accounting purposes. The transaction will be treated as a recapitalization of the Company. Accordingly, the consolidated assets, liabilities and results of operations of the Company will become the historical financial statements of ModuLink after the acquisition date. ModuLink was the legal acquiree but is deemed to be the accounting acquirer. The Company, on the other hand, was the legal acquirer but is deemed to be the accounting acquiree in the reverse merger. The historical financial statements prior to the acquisition are those of the accounting acquirer. Historical stockholders’ equity of the accounting acquirer prior to the merger are retroactively restated (a recapitalization) for the equivalent number of shares received in the merger. Operations prior to the merger are those of the acquirer. After completion of the share exchange transaction, the Company’s consolidated financial statements include the assets and liabilities, the operations and cash flow of the accounting acquirer.
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Market Overview
Our Business.
Overview
International Endeavors Corporation is a Nevada holding company that through its subsidiaries are engaged primarily in property development by implementing modular integrated construction technology (“MiC”), embedded with our proprietary atmospheric water generators (“AWG”) and property management system by internet of things technology (“IoT”) as set forth below:
· | ModuLink Corporation Limited, a Hong Kong limited liability company, focuses on strategic planning and providing intergroup management services serving its subsidiaries. | |
· | Zenith Integrated Modular Limited, a Hong Kong limited liability company (“ZiM”), provides design, engineering and holistic project management services, including project planning, procurement, logistics, assembly and installation. | |
· | ModuLink InnoTech Company Limited, a Hong Kong limited liability company, is a technology development company focused on AWG and building management systems with built-in software to enable real-time monitoring and control. | |
· | Zenith AY Modular Buildings Company Limited, a Hong Kong limited liability company, is an investment holding and project investment company. | |
· | ModuLink Australia Pty. Ltd., an Australian limited liability company, is a project management company that facilitates project development in Australia. Each of Zenith AY Modular Buildings Company Limited and Zenith (PMS) Limited, a Hong Kong company, hold 40% and 60% of the outstanding securities of ModuLink Australia Pty. Ltd. TAM, Hin Wah Anthony, our Chairman of the Board, is the director and controlling shareholder of Zenith (PMS) Limited. |
As a group, our subsidiaries seek to develop sustainable, technology-enabled communities that enhance the quality of life. We seek to build smart, energy-efficient structures that we believe are secure, adaptable and ready for the future. We focus on projects that we believe will enhance the quality of life and reduce environmental impact, while driving innovation and excellence in the real estate market across America, Europe, Australia and Asia.
Competitive Strength
We believe that our competitive strengths in technology-based property development are as follows:
Modular Integrated Construction (MiC):
Faster Construction Timelines: MiC is a free-standing integrated module manufactured in a factory, complete with finishes, fixtures and fittings. MiC allows for the parallel construction of building modules off-site while site preparation occurs. This method significantly reduces construction time, typically by 30-50%, enabling faster project delivery and earlier occupancy.
Cost Reduction and Quality Improvement: Off-site prefabrication in controlled factory environments minimizes material waste, reduces labor costs and enhances quality control. This approach ensures higher consistency and durability of the building components, leading to lower long-term maintenance costs.
Enhanced Safety and Sustainability: MiC reduces the need for on-site labor and minimizes exposure to adverse weather conditions, thereby reducing workplace accidents. It also lowers environmental impact through reduced waste and optimized use of materials.
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Improved Project Predictability: Factory-controlled processes drastically reduce the risk of weather delays, labor shortages, and supply chain disruptions. This leads to better timeline control and more accurate budgeting—key concerns for developers and investors.
Compliance and Quality Assurance: Modules can be inspected and certified before arriving on-site, supporting compliance with strict building codes and reducing the chances of post-construction rework. This helps mitigate legal and financial risks.
Atmospheric Water Generators (AWG):
Responding to the Emergent Global Water Shortage: The world is entering a critical phase of water scarcity, exacerbated by climate change and dwindling freshwater reserves. Droughts are becoming more frequent and severe, while groundwater depletion continues at unsustainable rates. In this environment, AWGs offer a decentralized, climate-resilient alternative for producing clean water from ambient air without relying on overdrawn natural or municipal system.
Water Sustainability and Independence: AWG extract water directly from the air, providing a sustainable and decentralized water source. AWGs help reduce dependency on water supplies from municipal systems or groundwater, and mitigate the risks associated with water shortages, especially in disaster and emergency scenarios, such as earthquakes, hurricanes, floods, or wildfires, access to clean water is often disrupted or completely unavailable. AWGs can serve as a vital lifeline in these scenarios, providing on-site, potable water when infrastructure fails. Their independence from traditional supply lines makes them especially valuable for emergency response, humanitarian aid, remote communities, and climate-resilient urban planning.
Enhanced Environmental Performance: Incorporating AWG technology helps meet environmental goals by conserving natural water sources and reducing ecological impact. Particularly in drought-prone or arid regions, AWGs support responsible resource use and contribute to green building certifications and ESG performance.
Cost Savings on Water: On-site water generation reduces utility costs, especially in regions with high or volatile water prices. As climate pressures mount, centralized water becomes more expensive to treat, transport, and deliver. AWGs offer a cost-stable, scalable alternative, turning ambient humidity into a reliable resource.
Internet of Things (IoT):
Smart Property Management: IoT technologies enable real-time monitoring and control of building systems, including HVAC, lighting, and security. IoT sensors and devices can optimize energy usage, improve security, and enhance occupant comfort by automating systems based on real-time data.
Predictive Maintenance and Operational Efficiency: IoT devices provide continuous monitoring of equipment and infrastructure, allowing for predictive maintenance that can prevent costly breakdowns and extend the lifespan of building systems. This reduces operational costs and improves the reliability of property management.
Enhanced Data-Driven Decision Making: The integration of IoT technology facilitates data collection and analysis, providing valuable insights into building performance, occupant behavior, and resource utilization. This data-driven approach helps property managers make informed decisions to optimize operations and enhance the tenant experience.
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Connecting People: Health, Security & Smart Living
We believe that IoT enhances not only buildings, but lives:
Health & Well-being: Indoor air quality monitors, smart climate control, and lighting systems that adapt to circadian rhythms can improve comfort, productivity, and health outcomes.
Security: Smart surveillance, facial recognition, and connected alarm systems offer real-time threat detection and response, increasing safety for residents and visitors.
Smart Home Experience: Integrated smart home features such as voice-controlled devices, intelligent appliances, and personalized automation elevate the living experience—connecting people seamlessly to their environments.
Empowering Independent Living for the Elderly
Smart properties can support aging-in-place and improve the quality of life for elderly residents:
Fall Detection & Emergency Alerts: Wearable devices and motion sensors can detect falls or unusual inactivity, triggering immediate alerts to caregivers or emergency services.
Health Monitoring: IoT-enabled health devices (e.g., heart rate, blood pressure, glucose monitors) can provide continuous data to caregivers and healthcare providers.
Reminders & Cognitive Support: Smart assistants can provide medication reminders, appointment alerts, or daily routines to support memory and independence.
Ease of Use: Voice control, one-touch emergency buttons, and automated lighting improve accessibility and reduce risks.
Future-Proofing with Scalable Smart Infrastructure: IoT infrastructure is adaptable, allowing integration with AI, robotics, and smart city systems. This prepares properties to evolve with future technologies and increasing demands for connected, and sustainable living.
Business and Financial plans
Since 2019 to the present, ZiM together with its former affiliate, Zenith (PMS) Limited have carried out six construction projects covering 2,638 modules, and small-scale pilot projects equipped with property management systems powered by IoT technology.
2019-2020:
HK Science Park, InnoCell Residential Institution, Hong Kong | 418 MiC units |
Junior Police Permanent Activity Centre & Integrated Youth Training Camp, Hong Kong | 120 MiC units |
Penny’s Bay, Lantau Island, Hong Kong | 902 MiC units |
Longhua District, Shenzhen, PRC | 16 MiC units |
2020-2023
HK University WCH Student Residence, Hong Kong | 980 MiC units |
Lok Ma Chau Loop, Hong Kong | 202 MiC units |
The Lok Ma Chau Loop project was the largest MiC-utilized site office currently in use in Hong Kong, marking a significant milestone in the region’s adoption of modular construction.
In addition to ZiM’s accomplishments in Hong Kong, ModuLink is actively exploring potential development projects in Australia, North America and various parts of Europe. The Company is currently engaged in feasibility discussions with local partners to assess project viability and strategic alignment. Concurrently, ModuLink InnoTech Company Limited expects to continue to invest in the research and development of AWG and IoT technologies, aiming to integrate these cutting-edge innovations into the smart, sustainable homes that the ModuLink group will build in the future.
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Australia: Affordable Housing for Elderly or Retirement Communities
In Australia, Zenith AY Modular Buildings Limited and our affiliated company, ModuLink Australia Pty Ltd. are evaluating potential affordable housing projects located in the New South Wales and Victoria regions targeted at elderly or retired residents. Under this initiative, project-specific joint venture entities will be established to lead the planning, project financing, sales and promotion of the properties. ModuLink Australia Pty Ltd. will be responsible for project management and architectural design by leveraging its core expertise in modular construction. Each housing unit will offer optional integration with ModuLink’s proprietary Atmospheric Water Generator (AWG) system for off-grid water supply, as well as a power storage system for off-grid energy independence. Additionally, the homes will be equipped with embedded IoT devices, including vital sign monitoring and alert systems, to enhance resident safety and well-being. This project aligns with ModuLink’s commitment to developing sustainable, smart living environments tailored to the needs of vulnerable populations.
We intend to focus on New South Wales and Victoria regions, where we believe the demand for affordable housing is high. Currently, Zenith AY Modular Buildings Limited has built a smart modular house in Melbourne to showcase our top-tier design. With respect to our Australia projects, we expect to purchase building modules designed by us from Chinese manufacturers, source other building components locally and partner with local architects and sub-contractors to ensure a smooth building process and compliance with local building codes. We believe our projects in Australia will commence in the coming twelve months. We further expect ModuLink InnoTech Company Limited to assist in developing custom building management and AWG solutions for our projects in Australia.
We anticipate that that we will commence two or three property development projects in late 2025 and 2026. Because we will also source land parcels to build our land reserve in 2026, we seek to raise $6.5 million and $11.5 million in 2025 and 2026, respectively, to finance land acquisition for these projects.
Canada/North America/Parts of Europe:
We are currently engaged in very preliminary considerations for projects located in these regions. We hope to initiate outreach with local partners as market conditions and finances permit.
Implementation Strategies
We believe that the integration of MiC with AWG and IoT technologies can provide a comprehensive set of competitive advantages that address critical needs in the construction industry. From reducing construction times and costs to enhancing sustainability and operational efficiency, these combined technologies offer a compelling value proposition for developers, investors, and end-users. Leveraging these advantages, we believe we can position ourselves as one of the leaders in the evolving construction market, driving growth and delivering superior, sustainable building solutions.
Our implementation plan started with small pilot projects in Hong Kong to test and refine the integration of MiC, AWG and IoT technologies and to optimize processes before full-scale deployment. In the full integration stage, we expect to standardize processes, materials and components to maximize efficiency and reduce costs. In the coming 24 months, we expect to focus on the following areas:
Build Strategic Partnerships and Technology Integration: We partner with MiC manufacturers to ensure access to high-quality, prefabricated modules that meet our design and regulatory standards, and collaborate with AWG technology providers to integrate sustainable water solutions into building designs. Our technological consultants develop smart building systems, integrating sensors and automation for efficient building management with IoT technology.
Market Expansion: We intend to target key markets with high demand for sustainable and efficient construction solutions, including urban areas, remote locations, and regions facing water scarcity. We tailor our marketing strategies to highlight the unique benefits and value propositions of MiC with AWG and IoT integration. As a start, we built a model house in Melbourne, Australia and expect to extend our market to Sydney Australia, Canada, North America, and Europe in the coming 24 months.
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Regulatory Compliance and Standards: We ensure all construction projects comply with local, national, and international building codes and sustainability standards.
Performance Monitoring and Feedback: We implement robust monitoring systems to track the performance of integrated MiC, AWG, and IoT solutions by gathering and analyze feedback from clients and occupants to continuously improve product offerings and customer satisfaction.
Market Opportunity
Global Modular Construction Market:
The global modular construction market was valued at approximately USD 86.4 billion in 2022 and is projected to reach USD 130.7 billion by 2027, growing at a compound annual growth rate (CAGR) of around 8.5% from 2022 to 2027. Growth is driven by the increasing demand for affordable housing, the need for faster construction methods, and the rising adoption of sustainable building practices. MiC is particularly popular in urban areas where rapid construction is needed to meet housing demands.
*Source of data:
Source: MarketsandMarkets. (2022). Modular Construction Market by Type, Material, Module, End-Use Sector and Region - Global Forecast to 2027. Retrieved from https://www.marketsandmarkets.com
Atmospheric Water Generator (AWG) Market:
The AWG market is currently valued at around USD 1.2 billion in 2023 and is expected to grow to USD 2.5 billion by 2030, with a CAGR of approximately 10.2% from 2023 to 2030. This growth is fueled by increasing concerns over water scarcity, the demand for sustainable water solutions, and the need for clean water in regions with inadequate water infrastructure. AWGs are particularly valuable in arid and semi-arid regions, where traditional water sources are limited or unreliable.
*Source of data:
Source: MarketsandMarkets. (2023). Atmospheric Water Generator Market by Type, Application, and Region - Global Forecast to 2030. Retrieved from https://www.marketsandmarkets.com
IoT in the Real Estate Market:
The global IoT in real estate market was valued at around USD 25 billion in 2022 and is anticipated to reach USD 84 billion by 2030, with a CAGR of approximately 16% from 2023 to 2030. The demand for smart buildings is rising due to increased focus on energy efficiency, security, and enhanced occupant experiences. IoT integration in real estate allows property developers to differentiate themselves by offering advanced, connected environments that meet the needs of tech-savvy consumers and businesses.
Based on our analysis above, we believe that affordable housing in sub-urban areas alongside smart city development is an ideal market for our business in the next 24 months. As a property developer utilizing MiC, AWG, and IoT technologies, the ModuLink group hopes to achieve green building certifications like LEED and BREEAM, which we believe will appeal to environmentally conscious buyers and investors. There is a significant demand for affordable and rapidly constructed housing in sub-urban cities. Initially, we plan to build affordable MiC houses with AWG and IoT integration for elderly residents on the New South Wales and Victoria regions, and fostering a community tailored to their interests and needs.
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*Source of data:
Source: Fortune Business Insights. (2023). Internet of Things (IoT) in Real Estate Market Size, Share & Industry Analysis, By Component, Application, and Region Forecast, 2023–2030. Retrieved from https://www.fortunebusinessinsights.com
Charging Stations for Electric Vehicles
We are also exploring business opportunities relating to charging stations of electric vehicles in Hong Kong and the United Kingdom. On January 1, 2025, ModuLink InnoTech Company Limited entered into an Agency Cooperation Agreement, pursuant to which ModuLink InnoTech Company Limited agreed to distribute in Hong Kong and the United Kingdom certain electric vehicle chargers manufactured by a Chinese manufacturer. The distribution business is in its initial stages, and we do not expect that there will be significant financial results in 2025. The foregoing description of the Agency Cooperation Agreement is qualified in its entirety by reference to the Agency Cooperation Agreement which is filed as Exhibit 10.6 to this Registration Statement and is incorporated herein by reference.
Sales and Marketing
ModuLink provides building services and project management. Selling MiC smart houses involves a variety of channels and methods to reach potential buyers effectively. Our key strategies are as follows:
Online Platforms: We believe that a strong online presence is crucial. This includes having a user-friendly website, active social media channels, and listings on real estate websites. High-quality images, videos, and virtual tours can showcase the homes' features and benefits.
Content Marketing: Sharing stories through blogs, articles, and social media posts can highlight the advantages of modular homes, such as sustainability, cost-effectiveness, and modern design. This helps create an emotional connection with potential buyers.
Virtual Tours and 3D Renderings: These tools allow potential buyers to explore different designs and layouts from the comfort of their own homes, providing an immersive experience that static images cannot match.
Search Engine Optimization and Online Visibility: Optimizing website content with relevant keywords, creating quality backlinks, and maintaining an active blog can enhance online visibility, attracting more traffic and potential leads.
Influencer Collaborations and Testimonials: Partnering with influencers in the home design and sustainability sectors can help market modular homes. Testimonials from satisfied customers can also build trust and credibility.
Traditional Marketing: While digital marketing is essential, traditional methods like attending home shows, real estate expos, and community events can also be effective. These venues provide opportunities for face-to-face interactions with potential buyers.
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Partnerships with Real Estate Agents: Collaborating with real estate agents who specialize in modular homes can help reach a broader audience. Agents can provide valuable insights and help navigate the buying process.
Major Customers
During the three months ended March 31, 2025 and 2024, the following customers accounted for 10% or more of our total net revenues.
Three months ended March 31, 2025 | March 31, 2025 | ||||||||||||
Customer | Revenues | Percentage of revenues |
Accounts receivable | ||||||||||
An individual customer based in Hong Kong | $ | 300,019 | 70% | $ | – | ||||||||
Zenith (Hong Kong) Engineering Limited (“Zenith HK”) | 129,077 | 30% | 129,077 | ||||||||||
Total: | $ | 429,096 | 100% | Total: | $ | 129,077 |
Three months ended March 31, 2024 | March 31, 2024 | ||||||||||||
Customer | Revenues | Percentage of revenues |
Accounts receivable | ||||||||||
CRCC - Kwan Lee - Paul Y. JV | $ | 114,487 | 100% | $ | – | ||||||||
Total: | $ | 114,487 | 100% | Total: | $ | – |
During the years ended December 31, 2024 and 2023, the following customers accounted for 10% or more of our total net revenues.
Year ended December 31, 2024 | December 31, 2024 | ||||||||||||
Customer | Revenues | Percentage of revenues |
Accounts receivable | ||||||||||
CRCC - Kwan Lee - Paul Y. JV | $ | 114,482 | 28% | $ | 91,166 | ||||||||
Zenith (Hong Kong) Engineering Limited (“Zenith HK”) | 294,860 | 72% | – | ||||||||||
Total: | $ | 409,342 | 100% | Total: | $ | 91,166 |
Year ended December 31, 2023 | December 31, 2023 | ||||||||||||
Customer | Revenues | Percentage of revenues |
Accounts receivable | ||||||||||
CRCC - Kwan Lee - Paul Y. JV | $ | 1,624,302 | 100% | $ | 82,545 | ||||||||
Total: | $ | 1,624,302 | 100% | Total: | $ | 82,545 |
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All customers are located in Hong Kong. Except as set forth below, we are not parties to long term agreements with our customers and are retained on a project by project basis.
Project with CRCC – Kwan Lee – Paul Y. JV
In December 2021, the Company entered into a works order with CRCC - Kwan Lee - Paul Y. Joint Venture for the design and construction of an office space using MiC units at Lok Ma Chau Loop project, located in Hong Kong. The work scope covered the design, supply, fabricate and installation of the structure, the fitting out works and building services. The foregoing description of the works orders is qualified in its entirety by reference to the Works Order contracted which is filed as Exhibit 10.7_ to this Registration Statement and is incorporated herein by reference.
Agreement with Zenith (Hong Kong) Engineering Limited
ZiM is a party to a design services management agreement with Zenith HK, dated August 1, 2024, pursuant to which ZiM agreed to provide design technical manpower services relating to the Sheung Shui Town Lot No. 263 (F0874), Kwu Tung North – Podium and Tower project. The services scope covered the provision of skilled technical personnel, assistance with design development, planning and coordination activities, and collaboration with Zenith HK’s team. Zenith HK holds two convertible promissory notes in the aggregate amount of $124,549 as at March 31, 2025. On February 28, 2025, Zenith HK waived any and all rights to convert the outstanding principal amount and any accrued but unpaid interest under the two convertible promissory notes into equity securities of the Company. PUN, Ah Keung is the sole shareholder of Zenith. The foregoing description of the Design Services Management Agreement is qualified in its entirety by reference to the Design Services Management Agreement which is filed as Exhibit 10.8 to this Registration Statement and is incorporated herein by reference.
Major Suppliers/Contractors
During the three months ended March 31, 2025 and 2024, the following suppliers/contractors accounted for 10% or more of our total purchases.
Three months ended March 31, 2025 | March 31, 2025 | ||||||||||||
Suppliers/Contractors | Purchases | Percentage of purchases |
Accounts payable | ||||||||||
Supplier A | $ | 60,435 | 16% | $ | 28,613 | ||||||||
Supplier B | 62,318 | 16% | 62,318 | ||||||||||
Zenith (PMS) Limited | 192,661 | 51% | 85,097 | ||||||||||
Total: | $ | 315,414 | 83% | Total: | $ | 176,028 |
Three months ended March 31, 2024 | March 31, 2024 | ||||||||||||
Suppliers/Contractors | Purchases | Percentage of purchases |
Accounts payable | ||||||||||
Supplier C | $ | 31,859 | 76% | $ | – | ||||||||
Total: | $ | 31,859 | 76% | Total: | $ | – |
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During the years ended December 31, 2024 and 2023, the following suppliers/contractors accounted for 10% or more of our total purchases.
Year ended December 31, 2024 | December 31, 2024 | ||||||||||||
Suppliers/Contractors | Purchases | Percentage of purchases |
Accounts payable | ||||||||||
Supplier A | $ | 32,043 | 9% | $ | 32,503 | ||||||||
Zenith (PMS) Limited | 245,716 | 70% | – | ||||||||||
Total: | $ | 277,759 | 79% | Total: | $ | 32,503 |
Year ended December 31, 2023 | December 31, 2023 | ||||||||||||
Suppliers/Contractors | Purchases | Percentage of purchases |
Accounts payable | ||||||||||
Supplier D | $ | 530,769 | 34% | $ | 21,137 | ||||||||
Supplier A | $ | 486,387 | 31% | 32,503 | |||||||||
Total: | $ | 1,017,156 | 65% | Total: | $ | 53,640 |
Our major suppliers are located in Hong Kong and Greater China. We are parties to written contracts with our suppliers and vendors with various commercial terms.
Agreement with Zenith (PMS) Limited
Zenith (PMS) Limited is a party to a design and project services agreement with ZiM, dated August 1, 2024. Under this agreement, Zenith (PMS) Limited provides technical manpower and expertise to support the Company’s ongoing projects. The services scope covered provision of skilled technical personnel, assisting in project planning, design development, and project management activities, collaboration with ZiM team. TAM, Hin Wah Anthony, our Chairman of the Board, is the director and controlling shareholder of Zenith (PMS) Limited. The foregoing description of the Design and Project Services Management Agreement is qualified in its entirety by reference to the Design and Project Services Agreement which is filed as Exhibit 10.9 to this Registration Statement and is incorporated herein by reference.
Insurance
We maintain certain insurance in accordance with customary industry practices in Hong Kong. Under Hong Kong law it is a requirement that all employers in the city must purchase Employee's Compensation Insurance to cover their liability in the event that their staff suffers an injury or illness during the normal course of their work. We maintain Employee’s Compensation Insurance, vehicle insurance and third-party risks insurance for business purposes. Upon the requisition of developers, we are responsible for professional indemnity and/or employees’ compensation.
CORPORATE INFORMATION
Our principal executive and registered offices are located at Unit 2, Level 6, Westin Centre, 26 Hung To Road, Kwun Tong, Hong Kong, telephone number +1 888-493-8028.
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INTELLECTUAL PROPERTY AND PATENTS
We expect to rely on, trade secrets, copyrights, know-how, trademarks, license agreements and contractual provisions to establish our intellectual property rights and protect our brand and services. These legal means, however, afford only limited protection and may not adequately protect our rights. Litigation may be necessary in the future to enforce our intellectual property rights, protect our trade secrets or determine the validity and scope of the proprietary rights of others. Litigation could result in substantial costs and diversion of resources and management attention.
In addition, the laws of Hong Kong and the PRC may not protect our brand and services and intellectual property to the same extent as U.S. laws, if at all. We may be unable to fully protect our intellectual property rights in these countries.
We have registered our trademark in Australia and will register in Europe and America as a means of protecting the brand names of our companies and products. We intend to protect our trademarks against infringement and seek to register design protection where appropriate.
We rely on trade secrets and unpatentable know-how that we seek to protect, in part, by confidentiality agreements. We expect that, where applicable, we will require our employees to execute confidentiality agreements upon the commencement of employment with us. We expect these agreements to provide that all confidential information developed or made known to the individual during the course of the individual's relationship with us is to be kept confidential and not disclosed to third parties except in specific limited circumstances. The agreements will also provide that all inventions conceived by the individual while rendering services to us shall be assigned to us as the exclusive property of our company. There can be no assurance, however, that all persons who we desire to sign such agreements will sign, or if they do, that these agreements will not be breached, that we would have adequate remedies for any breach, or that our trade secrets or unpatentable know-how will not otherwise become known or be independently developed by competitors.
COMPETITION
We operate in a highly competitive market that is evolving very quickly with rapid developments. We face competition in the home building industry, which is characterized by relatively low barriers to entry. Homebuilders compete for, among other things, home buying customers, desirable land parcels, financing, raw materials, and skilled labor. Increased competition may prevent us from acquiring attractive land parcels on which to build homes, apartments, townhomes, condominiums, or deliver finished lots, or make such acquisitions more expensive, hinder our market share expansion, or lead to pressures that may adversely impact on our margins and revenues. Competitors may independently develop land and construct housing units that are superior or substantially similar to our products and because they are or may be significantly larger, have a longer operating history, and have greater resources or lower cost of capital than us, may be able to compete more effectively in one or more of the markets in which we operate or plan to operate. We also compete with other homebuilders that have longer-standing relationships with subcontractors and suppliers in the markets in which we operate or plan to operate.
The building construction industry is highly fragmented while the direct competitors in the MiC technology market in which we focus in are in the early phase of development across America, Europe, Australia and Asia except Greater China. However, we believe in modular construction technology by leveraging Modular Integrated Construction (MiC), Atmospheric Water Generators (AWG), and Internet of Things (IoT) technology enhanced by AI would redefine property development. The principal competitive factors in our market include the following:
· | Rising Demand for Sustainable and Eco-Friendly Buildings | |
· | Urbanization and the Need for Affordable Housing | |
· | Advancements in Smart Technology and IoT Adoption | |
· | Water Scarcity and the Need for Sustainable Water Solutions | |
· | Efficiency and Cost-Effectiveness of Modular Construction (MiC) | |
· | Increasing Focus on Health and Wellness in Building Design | |
· | Technological Advancements and Reduced Costs of IoT and AWG | |
· | Increased Investment in Smart City Initiatives | |
· | Growing Popularity of Resilient and Disaster-Proof Infrastructure |
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Although we believe we compete favorably on the factors described above, we anticipate that larger, more established companies may directly compete with us as we continue to demonstrate the viability of a local one-stop solution provider. Many of our current and potential competitors have longer operating histories, significantly greater financial, technical, marketing and other resources, larger product and services offerings, larger customer base and greater brand recognition. These factors may allow our competitors to benefit from their existing customer or subscriber base with lower acquisition costs or to respond more quickly than we can to new or emerging technologies and changes in customer requirements. These competitors may engage in more extensive research and development efforts, undertake more far-reaching marketing campaigns and adopt more aggressive pricing policies, which may allow them to build a larger customer base or to monetize that base more effectively than us. Our competitors may develop products or services that are similar to our products and services or that achieve greater market acceptance than our products and services.
EMPLOYEES AND CONSULTANTS
We are currently operating with 3 executive directors and 2 non-executive directors, 3 employees in Hong Kong and 7 expertise consultants in engineering and project development in Hong Kong, Australia, Canada and Europe.
We have the following employees and consultants located in Hong Kong, Australia, Canada, Europe as set forth below:
Executive officers | 1 | |||
Operational Management | 1 | |||
Business Development | 8 | |||
Total | 10 |
We are required to contribute to the Mandatory Provident Fund (“MPF”) for all eligible employees in Hong Kong between the ages of eighteen and sixty-five. We are required to contribute a specified percentage of the participant’s income based on their ages and wage level. For the years ended December 31, 2024 and 2023, the MPF contributions by us were $353 and $nil, respectively. We have not experienced any significant labor disputes or any difficulties in recruiting staff for our operations.
GOVERNMENT AND INDUSTRY REGULATIONS
International Endeavors Corporation is a Nevada corporation with operating businesses located in Hong Kong and extending to our target markets in America, Europe, Australia and Asia. As such, the parent holding company, International Endeavors Corporation is subject to the laws and regulations of the United States of America while our operating businesses are subject to the laws and regulations of Hong Kong and our target markets, as applicable, including labor, occupational safety and health, contracts, tort and intellectual property laws.
While Hong Kong currently operates under a different set of laws from mainland China, there remains a risk that PRC government could reinterpret or apply all or certain PRC laws to Hong Kong-based companies. Should this occur, our operations may become subject to additional legal and regulatory requirements under PRC law, including those related to labor, occupational safety and health, contracts, tort, and intellectual property. We may also become subject to PRC foreign exchange controls, which could affect our ability to convert foreign currency into Renminbi, pursue acquisitions of PRC companies, establish or maintain variable interest entities (VIEs) in the PRC, or repatriate dividends or other payments from any future wholly foreign-owned enterprises (WFOEs) in the PRC. Although no such changes have been imposed to date, any shift in the regulatory landscape could introduce uncertainties for our business and future plans.
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Building Services Regulations
We are subject to numerous local, state, federal, and other statutes, ordinances, rules, and regulations concerning zoning, development, building design, construction, and similar matters which impose restrictive zoning and density requirements in order to limit the number of homes that can eventually be built within the boundaries of a particular area. Projects that are not entitled may be subject to periodic delays, changes in use, less intensive development, or elimination of development in certain specific areas due to government regulations. We may also be subject to periodic delays or may be precluded entirely from developing in certain communities due to building moratoriums or “slow-growth” or “no-growth” initiatives that could be implemented in the future. Local and state governments also have broad discretion regarding the imposition of development fees for projects in their jurisdiction. Projects for which we have received land use and development entitlements or approvals may still require a variety of other governmental approvals and permits during the development process and can also be impacted adversely by unforeseen health, safety, and welfare issues, which can further delay these projects or prevent their development.
We are also subject to a variety of local, state, federal, and other statutes, ordinances, rules, and regulations concerning the environment. The particular environmental laws which apply to any given construction site vary according to the site’s location, its environmental conditions, and the present and former uses of the site, as well as adjoining properties. Environmental laws and conditions may result in delays, may cause us to incur substantial compliance and other costs, and can prohibit or severely restrict homebuilding activity in environmentally sensitive regions or areas. From time to time, the Environmental Protection Agency (the “EPA”) and similar federal or state agencies review homebuilders’ compliance with environmental laws and may levy fines and penalties for failure to strictly comply with applicable environmental laws or impose additional requirements for future compliance as a result of past failures. Any such actions imposed on us may increase our costs. Environmental regulations can also have an adverse impact on the availability and price of certain raw materials such as lumber.
Under various environmental laws, current or former owners of real estate, as well as certain other categories of parties, may be required to investigate and remediate hazardous or toxic substances or petroleum product releases and may be held liable to a governmental entity or to third parties for property damage and for investigation and remediation costs incurred by such parties in connection with the contamination. In addition, in those cases where an endangered species is involved, environmental rules and regulations can result in the elimination of development in identified environmentally sensitive areas. To date, we have never experienced a significant environmental issue.
Employment Ordinance
Hong Kong
The Employment Ordinance is the main piece of legislation governing conditions of employment in Hong Kong since 1968. It covers a comprehensive range of employment protection and benefits for employees, including Wage Protection, Rest Days, Holidays with Pay, Paid Annual Leave, Sickness Allowance, Maternity Protection, Statutory Paternity Leave, Severance Payment, Long Service Payment, Employment Protection, Termination of Employment Contract, Protection Against Anti-Union Discrimination. In addition, every employer must take out employees’ compensation insurance to protect the claims made by employees in respect of accidents occurred during the course of their employment.
An employer must also comply with all legal obligations under the Mandatory Provident Fund Schemes Ordinance, (CAP485). These include enrolling all qualifying employees in MPF schemes and making MPF contributions for them. Except for exempt persons, employer should enroll both full-time and part-time employees who are at least 18 but under 65 years of age in an MPF scheme within the first 60 days of employment. The 60-day employment rule does not apply to casual employees in the construction and catering industries. Pursuant to the said Ordinance, we are required to make MPF contributions for our Hong Kong employees once every contribution period (generally the wage period within 1 month). Employers and employees are each required to make regular mandatory contributions of 5% of the employee’s relevant income to an MPF scheme, subject to the minimum and maximum relevant income levels. For a monthly-paid employee, the minimum and maximum relevant income levels are HKD7,100 and HKD30,000 respectively.
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China
Depending on future regulatory developments, we may become subject to PRC laws applicable to businesses in general, including those related to labor, occupational safety, contracts, torts, and intellectual property. We may also face restrictions under PRC foreign exchange regulations, which could limit our ability to convert foreign currency into Renminbi, acquire mainland entities, or make dividend or other payments of cash to IDVV.
Regulations in the PRC
Currently, our group does not have any subsidiaries or operations in the PRC. However, in the event that we establish PRC-based subsidiaries, expand our operations to the PRC, or become otherwise subject to PRC regulations due to China’s future regulatory developments, we may become subject to various laws and regulations that generally apply to our PRC businesses.
PRC Tax Regulations
Enterprise Income Tax
The EIT Law was promulgated by the Standing Committee of the National People’s Congress on March 16, 2007 and became effective on January 1, 2008, and was later amended on February 24, 2017. The Implementation Rules of the EIT Law (the “Implementation Rules”) were promulgated by the State Council on December 6, 2007 and became effective on January 1, 2008. According to the EIT Law and the Implementation Rules, enterprises are divided into resident enterprises and non-resident enterprises. Resident enterprises shall pay enterprise income tax on their incomes obtained in and outside the PRC at the rate of 25%. Non-resident enterprises setting up institutions in the PRC shall pay enterprise income tax on the incomes obtained by such institutions in and outside the PRC at the rate of 25%. Non-resident enterprises with no institutions in the PRC, and non-resident enterprises whose incomes having no substantial connection with their institutions in the PRC, shall pay enterprise income tax on their incomes obtained in the PRC at a reduced rate of 10%.
The Arrangement between the PRC and Hong Kong Special Administrative Region for the Avoidance of Double Taxation the Prevention of Fiscal Evasion with respect to Taxes on Income (the “Arrangement”) was promulgated by the State Administration of Taxation (“SAT”) on August 21, 2006 and came into effect on December 8, 2006. According to the Arrangement, a company incorporated in Hong Kong will be subject to withholding tax at the lower rate of 5% on dividends it receives from a company incorporated in the PRC if it holds a 25% interest or more in the PRC company. The Notice on the Understanding and Identification of the Beneficial Owners in the Tax Treaty (the “Notice”) was promulgated by SAT and became effective on October 27, 2009. According to the Notice, a beneficial ownership analysis will be used based on a substance-over-form principle to determine whether or not to grant tax treaty benefits.
In April 2009, the Ministry of Finance, or MOF, and SAT jointly issued the Notice on Issues Concerning Process of Enterprise Income Tax in Enterprise Restructuring Business, or Circular 59. In December 2009, SAT issued the Notice on Strengthening Administration of Enterprise Income Tax for Share Transfers by Non-PRC Resident Enterprises, or Circular 698. Both Circular 59 and Circular 698 became effective retroactively as of January 2008. In February 2011, SAT issued the Notice on Several Issues Regarding the Income Tax of Non-PRC Resident Enterprises, or SAT Circular 24, effective April 2011. By promulgating and implementing these circulars, the PRC tax authorities have enhanced their scrutiny over the direct or indirect transfer of equity interests in a PRC resident enterprise by a non-resident enterprise.
Under Circular 698, where a non-resident enterprise conducts an “indirect transfer” by transferring the equity interests of a PRC “resident enterprise” indirectly by disposing of the equity interests of an overseas holding company, the non-resident enterprise, being the transferor, may be subject to PRC enterprise income tax, if the indirect transfer is considered to be an abusive use of company structure without reasonable commercial purposes. As a result, gains derived from such indirect transfer may be subject to PRC tax at a rate of up to 10%. Circular 698 also provides that, where a non-PRC resident enterprise transfers its equity interests in a PRC resident enterprise to its related parties at a price lower than the fair market value, the relevant tax authority has the power to make a reasonable adjustment to the taxable income of the transaction.
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In February 2015, the SAT issued Circular 7 to replace the rules relating to indirect transfers in Circular 698. Circular 7 has introduced a new tax regime that is significantly different from that under Circular 698. Circular 7 extends its tax jurisdiction to not only indirect transfers set forth under Circular 698 but also transactions involving transfer of other taxable assets, through the offshore transfer of a foreign intermediate holding company. In addition, Circular 7 provides clearer criteria than Circular 698 on how to assess reasonable commercial purposes and has introduced safe harbors for internal group restructurings and the purchase and sale of equity through a public securities market. Circular 7 also brings challenges to both the foreign transferor and transferee (or other person who is obligated to pay for the transfer) of the taxable assets. Where a non-resident enterprise conducts an “indirect transfer” by transferring the taxable assets indirectly by disposing of the equity interests of an overseas holding company, the non-resident enterprise being the transferor, or the transferee, or the PRC entity which directly owned the taxable assets may report to the relevant tax authority such indirect transfer. Using a “substance over form” principle, the PRC tax authority may disregard the existence of the overseas holding company if it lacks a reasonable commercial purpose and was established for the purpose of reducing, avoiding or deferring PRC tax. As a result, gains derived from such indirect transfer may be subject to PRC enterprise income tax, and the transferee or other person who is obligated to pay for the transfer is obligated to withhold the applicable taxes, currently at a rate of 10% for the transfer of equity interests in a PRC resident enterprise.
On October 17, 2017, the SAT issued a Notice Concerning Withholding Income Tax of Non-Resident Enterprise, or SAT Notice No. 37, which abolishes Circular 698 and certain provisions of Circular 7. SAT Notice No. 37 reduces the burden of the withholding obligator, such as revocation of contract filing requirements and tax liquidation procedures, strengthens the cooperation of tax authorities in different places, and clarifies the calculation of tax payable and mechanism of foreign exchange.
Value-added Tax
Pursuant to the Provisional Regulations on Value-added Tax of the PRC, or the VAT Regulations, which were promulgated by the State Council on December 13, 1993, took effect on January 1, 1994, and were amended on November 10, 2008, February 6, 2016, and November 19, 2017, respectively, and the Rules for the Implementation of the Provisional Regulations on Value-added Tax of the PRC, which were promulgated by the MOF on December 25, 1993, and were amended on December 15, 2008, and October 28, 2011, respectively, entities and individuals that sell goods or labor services of processing, repair or replacement, sell services, intangible assets, or immovables, or import goods within the territory of the People’s Republic of China are taxpayers of value-added tax. The VAT rate is 17% for taxpayers selling goods, labor services, or tangible movable property leasing services or importing goods, except otherwise specified; 11% for taxpayers selling services of transportation, postal, basic telecommunications, construction and lease of immovable, selling immovable, transferring land use rights, selling and importing other specified goods including fertilizers; 6% for taxpayers selling services or intangible assets.
According to the Notice on the Adjustment to the Value-added Tax Rates issued by the SAT and the MOF on April 4, 2018, where taxpayers make VAT taxable sales or import goods, the applicable tax rates shall be adjusted from 17% to 16% and from 11% to 10%, respectively. Subsequently, the Notice on Policies for Deepening Reform of Value-added Tax was issued by the SAT, the MOF and the General Administration of Customs on March 30, 2019 and took effective on April 1, 2019, which further adjusted the applicable tax rate for taxpayers making VAT taxable sales or importing goods. The applicable tax rates shall be adjusted from 16% to 13% and from 10% to 9%, respectively.
Dividend Withholding Tax
The Enterprise Income Tax Law provides that since January 1, 2008, an income tax rate of 10% will normally be applicable to dividends declared to non-PRC resident investors that do not have an establishment or place of business in the PRC, or that have such establishment or place of business but the relevant income is not effectively connected with the establishment or place of business, to the extent such dividends are derived from sources within the PRC.
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PRC Laws and Regulations on Employment and Social Welfare
Labor Law of the PRC
Pursuant to the Labor Law of the PRC, which was promulgated by the Standing Committee of the NPC on July 5, 1994 with an effective date of January 1, 1995 and was last amended on August 27, 2009 and the Labor Contract Law of the PRC, which was promulgated on June 29, 2007, became effective on January 1, 2008 and was last amended on December 28, 2012, with the amendments coming into effect on July 1, 2013, enterprises and institutions shall ensure the safety and hygiene of a workplace, strictly comply with applicable rules and standards on workplace safety and hygiene in China, and educate employees on such rules and standards. Furthermore, employers and employees shall enter into written employment contracts to establish their employment relationships. Employers are required to inform their employees about their job responsibilities, working conditions, occupational hazards, remuneration and other matters with which the employees may be concerned. Employers shall pay remuneration to employees on time and in full accordance with the commitments set forth in their employment contracts and with the relevant PRC laws and regulations. Our Hong Kong subsidiary currently does not comply with PRC laws and regulations, but complies with Hong Kong laws and regulations.
Social Insurance and Housing Fund
Pursuant to the Social Insurance Law of the PRC, which was promulgated by the Standing Committee of the NPC on October 28, 2010 and became effective on July 1, 2011, employers in the PRC shall provide their employees with welfare schemes covering basic pension insurance, basic medical insurance, unemployment insurance, maternity insurance, and occupational injury insurance. Our Hong Kong subsidiary has not deposited the social insurance fees in full for all the employees in compliance with the relevant regulations. We may be ordered by the social security premium collection agency to make or supplement contributions within a stipulated period, and shall be subject to a late payment fine computed from the due date at the rate of 0.05% per day; where payment is not made within the stipulated period, the relevant administrative authorities shall impose a fine ranging from one to three times the amount of the amount in arrears. Our Hong Kong subsidiary has not deposited the social insurance fees as required by relevant regulations.
In accordance with the Regulations on Management of Housing Provident Fund, which were promulgated by the State Council on April 3, 1999 and last amended on March 24, 2002, employers must register at the designated administrative centers and open bank accounts for depositing employees’ housing funds. Employers and employees are also required to pay and deposit housing funds, with an amount no less than 5% of the monthly average salary of the employee in the preceding year in full and on time. Our subsidiaries have not registered at the designated administrative centers nor opened bank accounts for depositing employees’ housing funds. They also have not deposited employees’ housing funds. Our subsidiaries may be ordered by the housing provident fund management center to complete the registration formalities, open bank accounts, make the payment and deposit within a prescribed time limit if they become subject to PRC laws. Failing to register or open bank accounts at the expiration of the time limit could result in fines of not less than RMB 10,000 nor more than RMB 50,000. And an application may be made to a people’s court for compulsory enforcement if payment and deposit has not been made after the expiration of the time limit.
PRC Regulations Relating to Foreign Exchange
General Administration of Foreign Exchange
The principal regulation governing foreign currency exchange in the PRC is the Administrative Regulations of the PRC on Foreign Exchange (the “Foreign Exchange Regulations”), which were promulgated on January 29, 1996, became effective on April 1, 1996 and were last amended on August 5, 2008. Under these rules, Renminbi is generally freely convertible for payments of current account items, such as trade- and service-related foreign exchange transactions and dividend payments, but not freely convertible for capital account items, such as capital transfer, direct investment, investment in securities, derivative products or loans unless prior approval by competent authorities for the administration of foreign exchange is obtained. Under the Foreign Exchange Regulations, foreign-invested enterprises in the PRC may purchase foreign exchange without the approval of SAFE to pay dividends by providing certain evidentiary documents, including board resolutions, tax certificates, or for trade- and services-related foreign exchange transactions, by providing commercial documents evidencing such transactions.
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Circular No. 37 and Circular No. 13
Circular 37 was released by SAFE on July 4, 2014 and abolished Circular 75 which had been in effect since November 1, 2005. Pursuant to Circular 37, a PRC resident should apply to SAFE for foreign exchange registration of overseas investments before it makes any capital contribution to a special purpose vehicle, or SPV, using his or her legitimate domestic or offshore assets or interests. SPVs are offshore enterprises directly established or indirectly controlled by domestic residents for the purpose of investment and financing by utilizing domestic or offshore assets or interests they legally hold. Following any significant change in a registered offshore SPV, such as capital increase, reduction, equity transfer or swap, consolidation or division involving domestic resident individuals, the domestic individuals shall amend the registration with SAFE. Where an SPV intends to repatriate funds raised after completion of offshore financing to the PRC, it shall comply with relevant PRC regulations on foreign investment and foreign debt management. A foreign-invested enterprise established through return investment shall complete relevant foreign exchange registration formalities in accordance with the prevailing foreign exchange administration regulations on foreign direct investment and truthfully disclose information on the actual controller of its shareholders.
If any shareholder who is a PRC resident (as determined by the Circular No. 37) holds any interest in an offshore SPV and fails to fulfil the required foreign exchange registration with the local SAFE branches, the PRC subsidiaries of that offshore SPV may be prohibited from distributing their profits and dividends to their offshore parent company or from carrying out other subsequent cross-border foreign exchange activities. The offshore SPV may also be restricted in its ability to contribute additional capital to its PRC subsidiaries. Where a domestic resident fails to complete relevant foreign exchange registration as required, fails to truthfully disclose information on the actual controller of the enterprise involved in the return investment or otherwise makes false statements, the foreign exchange control authority may order them to take remedial actions, issue a warning, and impose a fine of less than RMB 300,000 on an institution or less than RMB 50,000 on an individual.
Circular 13 was issued by SAFE on February 13, 2015, and became effective on June 1, 2015. Pursuant to Circular 13, a domestic resident who makes a capital contribution to an SPV using his or her legitimate domestic or offshore assets or interests is no longer required to apply to SAFE for foreign exchange registration of his or her overseas investments. Instead, he or she shall register with a bank in the place where the assets or interests of the domestic enterprise in which he or she has interests are located if the domestic resident individually seeks to make a capital contribution to the SPV using his or her legitimate domestic assets or interests; or he or she shall register with a local bank at his or her permanent residence if the domestic resident individually seeks to make a capital contribution to the SPV using his or her legitimate offshore assets or interests.
We cannot assure that our PRC beneficial shareholders have completed registrations in accordance with Circular 37.
Circular 19 and Circular 16
Circular 19 was promulgated by SAFE on March 30, 2015, and became effective on June 1, 2015. According to Circular 19, the foreign exchange capital in the capital account of foreign-invested enterprises, meaning the monetary contribution confirmed by the foreign exchange authorities or the monetary contribution registered for account entry through banks, shall be granted the benefits of Discretional Foreign Exchange Settlement (“Discretional Foreign Exchange Settlement”). With Discretional Foreign Exchange Settlement, foreign capital in the capital account of a foreign-invested enterprise for which the rights and interests of monetary contribution have been confirmed by the local foreign exchange bureau, or for which book-entry registration of monetary contribution has been completed by the bank, can be settled at the bank based on the actual operational needs of the foreign-invested enterprise. The allowed Discretional Foreign Exchange Settlement percentage of the foreign capital of a foreign-invested enterprise has been temporarily set to be 100%. The Renminbi converted from the foreign capital will be kept in a designated account and if a foreign-invested enterprise needs to make any further payment from such account, it will still need to provide supporting documents and to complete the review process with its bank.
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Furthermore, Circular 19 stipulates that foreign-invested enterprises shall make bona fide use of their capital for their own needs within their business scopes. The capital of a foreign-invested enterprise and the Renminbi it obtained from foreign exchange settlement shall not be used for the following purposes:
· | directly or indirectly used for expenses beyond its business scope or prohibited by relevant laws or regulations; | |
· | directly or indirectly used for investment in securities unless otherwise provided by relevant laws or regulations; | |
· | directly or indirectly used for entrusted loan in Renminbi (unless within its permitted scope of business), repayment of inter-company loans (including advances by a third party) or repayment of bank loans in Renminbi that have been sub-lent to a third party; or | |
· | directly or indirectly used for expenses related to the purchase of real estate that is not for self-use (except for foreign-invested real estate enterprises). |
Circular 16 was issued by SAFE on June 9, 2016. Pursuant to Circular 16, enterprises registered in the PRC may also convert their foreign debts from foreign currency to Renminbi on a self-discretionary basis. Circular 16 provides an integrated standard for conversion of foreign exchange capital items (including but not limited to foreign currency capital and foreign debts) on a self-discretionary basis applicable to all enterprises registered in the PRC. Circular 16 reiterates the principle that an enterprise’s Renminbi capital converted from foreign currency-denominated capital may not be directly or indirectly used for purposes beyond its business scope or purposes prohibited by PRC laws or regulations, and such converted Renminbi capital shall not be provided as loans to non-affiliated entities.
PRC subsidiaries' distributions to their offshore parents are required to comply with the requirements as described above.
While there are currently no such restrictions on foreign exchange and our ability to transfer cash or assets between IDVV and our Hong Kong subsidiaries, there can be no assurance that future developments in PRC laws and regulations will not result in new restrictions and limitations on our ability to transfer funds or assets. Should such regulations affect our operations, our cash or assets in Hong Kong might become inaccessible. Furthermore, should new restrictions be imposed on IDVV or its subsidiaries regarding the transfer or distribution of cash within the organization, we may encounter limitations or prohibition on making transfers or distributions to entities outside of mainland China and Hong Kong.
PRC Share Option Rules
Under the Administration Measures on Individual Foreign Exchange Control issued by the PBOC on December 25, 2006, all foreign exchange matters involved in employee share ownership plans and share option plans in which PRC citizens participate require approval from SAFE or its authorized branch. Pursuant to SAFE Circular 37, PRC residents who participate in share incentive plans in overseas non-publicly-listed companies may submit applications to SAFE or its local branches for the foreign exchange registration with respect to offshore special purpose companies. In addition, under the Notices on Issues concerning the Foreign Exchange Administration for Domestic Individuals Participating in Share Incentive Plans of Overseas Publicly-Listed Companies, or the Share Option Rules, issued by SAFE on February 15, 2012, PRC residents who are granted shares or share options by companies listed on overseas stock exchanges under share incentive plans are required to (i) register with SAFE or its local branches, (ii) retain a qualified PRC agent, which may be a PRC subsidiary of the overseas listed company or another qualified institution selected by the PRC subsidiary, to conduct the SAFE registration and other procedures with respect to the share incentive plans on behalf of the participants, and (iii) retain an overseas institution to handle matters in connection with their exercise of share options, purchase and sale of shares or interests and funds transfers.
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PRC Regulation of Dividend Distributions
The principal laws, rules and regulations governing dividend distributions by foreign-invested enterprises in the PRC are the Company Law of the PRC, as amended, the Wholly Foreign-owned Enterprise Law and its implementation regulations, the Chinese-foreign Cooperative Joint Venture Law and its implementation regulations, and the Chinese-foreign Equity Joint Venture Law and its implementation regulations. Under these laws, rules and regulations, foreign-invested enterprises may pay dividends only out of their accumulated profit, if any, as determined in accordance with PRC accounting standards and regulations. Both PRC domestic companies and wholly-foreign owned PRC enterprises are required to set aside a general reserve of at least 10% of their after-tax profit, until the cumulative amount of such reserve reaches 50% of their registered capital. A PRC company is not permitted to distribute any profits until any losses from prior fiscal years have been offset. Profits retained from prior fiscal years may be distributed together with distributable profits from the current fiscal year.
REPORTS TO SECURITY HOLDERS
Upon the effective date of this Registration Statement, we will become subject to the informational requirements of the Securities Exchange Act of 1934, as amended, and accordingly, will file current and periodic reports, proxy statements and other information with the Securities and Exchange Commission, or the Commission. Information that the Company previously publicly disclosed was made through the OTC Disclosure and News Service and are available on the OTC Markets Group’s website at www.otcmarkets.com. With respect to disclosures filed or furnished to the Commission, you may obtain copies of our prior and future reports from the Commission’s Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549, or on the SEC's website, at www.sec.gov. You may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330.
Item 1A. | Risk Factors |
The following information sets forth risk factors that could cause our actual results to differ materially from those contained in forward-looking statements we have made in this registration statement and those we may make from time to time. You should carefully consider the risks described below, in addition to the other information contained in this registration statement, before making an investment decision. Our business, financial condition or results of operations could be harmed by any of these risks. The risks and uncertainties described below are not the only ones we face. Additional risks not presently known to us or other factors not perceived by us to present significant risks to our business at this time also may impair our business operations.
Risks Related to Our Business and Industry
We have not yet begun generating significant revenue as our business of building properties through the use of modular integrated construction technology (“MiC”), embedded with atmospheric water generators (“AWG”), together with a property management system powered by internet of things technology (“IoT”), is at a development stage that is dependent upon the financial support of our stockholders to finance our operations. Further, our financial statements have been prepared assuming that we will continue as a going concern. As such, we are dependent upon the continued support of our insiders to continue operations.
We have not yet begun generating significant revenues and are dependent upon the continued support of our majority shareholders to continue operations. Our financial statements have been prepared assuming that we will continue as a going concern. Our continuation as a going concern is dependent upon improving our profitability and the continuing financial support from our stockholders. If our assumption regarding profitability or the continued support of our stockholders is not valid, we may not be able to pursue our business plan or continue operations as planned, which may materially and adversely affect our financial condition and results of operations. Further, the value of your securities may be significantly and adversely affected or become worthless.
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We have substantial customer concentration, with two customers accounting for all of our 2024 revenues.
We currently derive all of our revenues from two customers, Zenith (HK) Engineering Limited and an individual based in Hong Kong, each of which accounted 72% and 28%, respectively of our revenues in fiscal 2024. In fiscal 2023, the same individual accounted for all of our revenues. There are inherent risks whenever a large percentage of total revenues are concentrated with a limited number of customers. It is not possible for us to predict the future level of demand for our services that will be generated by these customers or the future demand for the products and services of these customers in the end-user marketplace. In addition, revenues from two customers, may fluctuate from time to time based on the commencement and completion of projects, the timing of which may be affected by market conditions or other facts, some of which may be outside of our control. Further, some of our contracts with these larger customers permit them to terminate our services at any time (subject to notice and certain other provisions). If any of these customers experience declining or delayed sales due to market, economic or competitive conditions, we could be pressured to reduce the prices we charge for our services which could have an adverse effect on our margins and financial position, and could negatively affect our revenues and results of operations and/or trading price of our common stock. We are not parties to long term contracts with these two customers. If either of these two customers terminates our services, such termination will materially and significantly affect our revenues and results of operations and/or trading price of our common stock.
We cannot assure you that our current business plan will be successful as initiation of our property development projects require significant upfront financing.
We cannot guarantee the success of our current business strategy. The initiation of our property development projects is heavily reliant on securing adequate funding to cover the upfront costs of land acquisition and procuring modular integrated units from manufacturers. While these initial investments are dependent on secured funding, the ongoing construction expenses are expected to be financed through pre-sale deposits. However, the timing and revenue generated from property sales remain challenging to forecast, as they are influenced by market conditions and other external factors. Our business plan is subject to modifications over time, driven by fluctuations in real estate market dynamics, economic trends, the availability and cost of capital, and potential changes in legislation.
We are susceptible to consumer demand risk.
Adverse conditions in our target markets or nationally could be caused or worsened by factors outside of our control, including slow or negative economic growth, sustained elevated mortgage interest rates and inflation, and various other macroeconomic as well as geopolitical concerns, such as military conflicts in Ukraine and the Middle East, and the U.S. federal government’s financial and regulatory stability with the recent significant increase in import tariffs. Among other impacts, a severe or sustained economic contraction or stagflation around the globe may trigger a rise in home sales contract cancellations. In addition, these conditions, along with heightened competition from other homebuilders and sellers and landlords of existing homes may lead us to reduce our home selling prices or offer other concessions to attract or retain buyers, negatively affecting our revenues and margins and, to the extent the concessions we offer are not sufficient to attract and retain buyers, our net orders.
We are not parties to long term contracts with our clients and operate on a project by project basis. As a result, historical results of operations are not indicative of our future performance or prospects.
Our construction services and property development projects are unique and project-specific, and we are engaged on a project by project basis. Customers are not parties to on-going contracts and there is no assurance that the Company can retain customers. For these reasons, we believe that our results of operations during the periods presented in this prospectus are not comparable. Moreover, the historical financial information included in this prospectus may not be indicative of our future performance or prospects. There can be no assurance that we will be able to achieve similar growth trend of our business in our home markets and/or the international markets where the business, regulatory and customer landscapes may differ significantly from Hong Kong. As such, our past historical results of operations may not be indicative of our future performance or prospects.
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We rely on third-party manufacturers and partners for critical components, and any interruptions in the provision of products provided by these third parties may impair our ability to deliver properties to our clients.
We depend on third-party providers for various critical components of our property development projects, such as the manufacturing of modular integrated units and our proprietary atmospheric water generators. These elements are fundamental to our deliverables, and reliance on third parties exposes us to elevated operational risks. As we do not oversee the manufacturing processes of these external providers, there is a possibility that they may fail to supply the required modular integrated units to the expected standards or encounter unforeseen challenges. In such scenarios, securing suitable alternatives promptly, efficiently, and under favorable terms could prove challenging or even impossible. This could result in disruptions to our operations, financial losses, costs associated with addressing deficiencies, diminished customer satisfaction, damage to our reputation, legal or regulatory liabilities, or other adverse effects that may significantly impact our business.
We may face construction services shortages which may adversely affect our ability to deliver modular units.
Though our critical components modular integrated units are manufacturing in the factory, we rely on a network of local workers to perform limited installation and interfacing services. However, our industry and the Hong Kong and Australian economies have experienced labor shortages, as well as delays with respect to state and municipal construction permitting, inspections and utility processes. Such constraints, cost pressures and delays have increased our costs, reduced our revenues, and in some instances, led to home sales contract cancellations or lower customer satisfaction.
We are subject to warranty risks.
Our property development business is subject to warranty and construction defect claims. Due to our dependence on the performance of independent third party manufacturers and contractors to provide products and materials and carry out certain homebuilding activities, inherent uncertainties, including obtaining recoveries from responsible parties and/or their or our insurers, our recorded warranty and other liabilities may be inadequate to address future claims, which, among other things, could require us to record charges to increase such liabilities. We may also record charges to reflect our then-current claims experience, including the actual costs incurred. Home warranty and other construction defect issues may also generate negative publicity, including on social media and the internet, that detracts from our reputation and efforts to sell homes.
We are subject to legal and compliance risks.
Our operations are subject to myriad legal and regulatory requirements, which can delay our operational activities, raise our costs and/or prohibit or restrict homebuilding in some areas. These requirements often provide broad discretion to government authorities, and they could be interpreted or revised in ways unfavorable to us. The costs to comply, or associated with any noncompliance, are, or can be, significant and variable from period to period. With respect to environmental laws, in addition to the risks and potential operational costs discussed above, we have been, and we may in the future be, involved in federal, state and local air and water quality agency investigations or proceedings for potential noncompliance with their rules, including rules governing discharges of materials into the air and waterways; stormwater discharges from community sites; and wetlands and listed species habitat protection. We could incur penalties and/or be restricted from developing or building at certain community locations during or as a result of such agencies’ investigations or findings.
Additionally, we are involved in legal, arbitral or regulatory proceedings or investigations incidental to our business, the outcome or settlement of which could result in material claims, losses, monetary damage awards, penalties, or other direct or indirect payments recorded against our earnings, or injunctions, consent decrees or other voluntary or involuntary restrictions or adjustments to our business operations or practices. Any adverse results could be beyond our expectations, insurance coverage and/or accruals at particular points in time. Unfavorable outcomes, as well as unfavorable investor, analyst or news reports related to our industry, company, personnel, governance or operations, may also generate negative publicity, including on social media and the internet, damaging our reputation and resulting in the loss of customers or revenues. We may also face similar reputational impacts if our sustainability initiatives or objectives and/or our social or governance practices do not meet the standards set by investors or third-party rating services. Low third-party ratings could result in our common stock not being recommended for or selected by investors with certain mandates or priorities.
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If we are unable to protect the confidentiality of our trade secrets, our business and competitive position would be harmed.
We may rely on trade secrets, including unpatented know-how, technology and other proprietary information, to maintain our competitive position. However, trade secrets are difficult to protect. We limit disclosure of such trade secrets where possible but we also seek to protect these trade secrets, in part, by entering into non-disclosure and confidentiality agreements with parties who do have access to them, such as our employees, contract manufacturers, consultants, advisors and other third parties. Despite these efforts, any of these parties may breach the agreements and may unintentionally or willfully disclose our proprietary information, including our trade secrets, and we may not be able to obtain adequate remedies for such breaches. Enforcing a claim that a party illegally disclosed or misappropriated a trade secret is difficult, expensive and time-consuming, and the outcome is unpredictable. In addition, some courts inside and outside the United States are less willing or unwilling to protect trade secrets. Moreover, if any of our trade secrets were to be lawfully obtained or independently developed by a competitor, we would have no right to prevent them, or those to whom they communicate it, from using that technology or information to compete with us. If any of our trade secrets were to be disclosed to or independently developed by a competitor, our competitive position would be harmed.
We are also subject to other risks and uncertainties that affect many other businesses, including:
· | increasing costs, the volatility of costs and funding requirements and other legal mandates for employee benefits, especially pension and healthcare benefits; | |
· | the increasing costs of compliance with federal, state and foreign governmental agency mandates (including the Foreign Corrupt Practices Act) and defending against inappropriate or unjustified enforcement or other actions by such agencies; | |
· | the impact of any international conflicts on the U.S. and global economies in general, the transportation industry or us in particular, and what effects these events will have on our costs or the demand for our products; | |
· | any impacts on our business resulting from new domestic or international government laws and regulation; | |
· | market acceptance of our products and growth initiatives; | |
· | the impact of technology developments on our products and on demand for our products; | |
· | governmental under-investment in transportation infrastructure, which could increase our costs and adversely impact our construction schedule due to traffic congestion or sub-optimal routing of our vehicles; | |
· | widespread outbreak of an illness or any other communicable disease, or any other public health crisis; | |
· | availability of financing on terms acceptable to our ability to maintain our current credit ratings, especially given the capital intensity of our operations. | |
· | our ability to attract, maintain, and grow our customer base and engage our customers; | |
· | pricing for our products and services; | |
· | our ability to diversify and grow our revenue; | |
· | changes in macroeconomic conditions, political and legal environments; | |
· | adverse legal proceedings or regulatory enforcement actions, judgments, settlements, or other legal proceeding and enforcement-related costs; | |
· | our ability to attract and retain talent; and | |
· | our ability to compete with our competitors. |
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Risks Related to Our Finances and Capital Requirements
We will need additional funding and may be unable to raise capital when needed, which would force us to delay any property development projects or land parcels acquisitions.
Our business plan contemplates the commencement of property development projects in Australia, and, as business permits, in Canada and Europe. With respect to property developments located outside of Hong Kong, we will need to seek financing to purchase of land parcels in these targeted regions. While we currently have no commitments or agreements relating to any of these types of transactions, we do not generate sufficient revenue from operations to finance new projects in our target markets. We expect to finance such future cash needs through public or private equity offerings, debt financings, corporate collaboration arrangements, or project financing from financial institutions. However, outside financing may be unavailable because of tight or volatile capital or financial market conditions may hinder our ability to obtain external financing, costly and / or considerably dilute stockholders. We cannot be certain that additional funding will be available on acceptable terms, or at all. If adequate funds are not available, we may be required to delay, reduce the scope of or eliminate one or more of our property development projects.
Raising additional capital may cause a dilution of ownership interests to our existing stockholders or restrict our operations.
Until such time, if ever, as we can generate substantial revenue, we expect to finance our cash needs through a combination of equity offerings, debt financings, and development agreements in connection with any collaborations. To the extent that we raise additional capital through the sale of equity or convertible debt securities, your ownership interest will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect your rights as a stockholder. Debt financing and preferred equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends.
If we are unable to raise additional funds through equity or debt financings when needed, we may be required to delay, limit, reduce or terminate our property development projects in our target markets.
We are indebted to Zenith (HK), a customer that accounted for approximately 72% of our revenues, in the approximate amount of US$124,549 as of March 31, 2025.
Pursuant to the Stock Purchase Agreement dated January 22, 2025, the two convertible promissory notes were purchased and assigned to Zenith (HK) on January 30, 2025. On February 28, 2025, Zenith (HK) waived all rights to convert the outstanding principal amount and any accrued but unpaid interest under the two convertible promissory notes into equity securities of the Company. We owe approximately $124,549 pursuant to such notes. Both notes have already become due and payable. We do not expect to generate sufficient cash flow to repay these notes within the next twenty-four months. There is no assurance that we can generate sufficient cash flow to repay these notes after such twenty-four-month period, if ever. If we are required to repay these notes prior to achieving profitability, our ability to implement our business plan or to expand our business may be significantly delayed.
Risks Relating to Doing Business in Hong Kong.
We face the risk that changes in the policies of the PRC government could have a significant impact upon the business we may be able to conduct in Hong Kong and the profitability of such business.
The mainland Chinese government has significant oversight, discretion and control over the manner in which companies incorporated under the laws of mainland China must conduct their business activities. We currently operate in Hong Kong which has a separate legal frameword from that of mainland China. However, since Hong Kong is a special administrative region of China, there can be no assurance as to whether the government of Hong Kong will enact laws and regulations similar to mainland China, or whether any laws or regulations of mainland China will become applicable to our operations in Hong Kong in the future, which could be at any time and with no advance notice. Therefore, the legal and operational risks associated with operating in China also apply to operations in Hong Kong. If we were to become subject to such oversight, discretion and control, including over overseas offerings of securities and/or foreign investments, it may result in a material adverse change in our operations, significantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause the value of our securities to significantly decline, which would materially affect the interests of the investors.
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We conduct our operations and generate our revenue in Hong Kong. Our major suppliers and customers are currently all located in Hong Kong and China. Accordingly, economic, political and legal developments in the PRC will significantly affect our business, financial condition, results of operations and prospects. The PRC economy is in transition from a planned economy to a market-oriented economy subject to plans adopted by the government that set national economic development goals. Policies of the PRC government can have significant effects on economic conditions in the PRC. While we believe that the PRC will continue to strengthen its economic and trading relationships with foreign countries and that business development in the PRC will continue to follow market forces, we cannot assure you that this will be the case. Our interests may be adversely affected by changes in policies by the PRC government, including:
· | changes in laws, regulations or their interpretation; | |
· | confiscatory taxation; | |
· | restrictions on currency conversion, imports or sources of supplies, or ability to continue as a for-profit enterprise; | |
· | expropriation or nationalization of private enterprises; and | |
· | the allocation of resources. |
Substantial uncertainties and restrictions with respect to the political and economic policies of the PRC government and PRC laws and regulations could have a significant impact upon the business that we may be able to conduct in the PRC and accordingly on the results of our operations and financial condition.
While Hong Kong currently operates under a separate legal framework from mainland China, there remains the possibility that Hong Kong’s legal framework will become more closely aligned with the legal framework of mainland China, including their interpretation, implementation, and enforcement. Changes to Hong Kong’s legal or regulatory frameworks may be introduced with limited or no advance notice. Our operations may also be influenced by the current and future political and regulatory environment in mainland China. Should regulatory requirements from mainland China be extended to Hong Kong-based companies such as ours, this could create uncertainty regarding potential future restrictions on capital flows, foreign listings, or operational requirements. Such developments may affect various aspects of our business, including taxation, import and export controls, healthcare and environmental regulations, land use, and property ownership rights. We may also face increased compliance obligations, operational disruptions, or limitations on our ability to access international capital markets. As a result, our business, financial condition, results of operations, the value of our securities, and our ability to offer or continue to offer securities to investors may be materially and adversely affected.
Accordingly, government actions in the future, including any decision not to continue to support recent economic reforms and to return to a more centrally planned economy or regional or local variations in the implementation of economic policies, could have a significant effect on economic conditions in Hong Kong or particular regions thereof, and could limit or completely hinder our ability to offer or continue to offer securities to investors or require us to divest ourselves of any interest we then hold in Hong Kong properties or joint ventures. Any such actions (including divesture or similar actions) could result in a material adverse effect on us and on your investment in us and could render our securities and your investment in our securities worthless.
There are substantial uncertainties regarding the interpretation and application of PRC laws and regulations, including, but not limited to, the laws and regulations governing our business, or the enforcement and performance of our contractual arrangements with borrowers in the event of the imposition of statutory liens, death, bankruptcy or criminal proceedings. Only after 1979 did the Chinese government begin to promulgate a comprehensive system of laws that regulate economic affairs in general, deal with economic matters such as foreign investment, corporate organization and governance, commerce, taxation and trade, as well as encourage foreign investment in China. Although the influence of the law has been increasing, China has not developed a fully integrated legal system and recently enacted laws and regulations may not sufficiently cover all aspects of economic activities in China. Also, because these laws and regulations are relatively new, and because of the limited volume of published cases and their lack of force as precedents, interpretation and enforcement of these laws and regulations involve significant uncertainties. New laws and regulations that affect existing and proposed future businesses may also be applied retroactively. In addition, there have been constant changes and amendments of laws and regulations over the past 30 years in order to keep up with the rapidly changing society and economy in China. Because government agencies and courts that provide interpretations of laws and regulations and decide contractual disputes and issues may change their interpretation or enforcement very rapidly with little advance notice at any time, we cannot predict the future direction of Chinese legislative activities with respect to either businesses with foreign investment or the effectiveness on enforcement of laws and regulations in China. The uncertainties, including new laws and regulations and changes of existing laws, as well as, may cause possible problems to foreign investors.
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Although the PRC government has been pursuing economic reform policies for more than two decades, the PRC government continues to exercise significant control over economic growth in the PRC through the allocation of resources, controlling payments of foreign currency, setting monetary policy and imposing policies that impact particular industries in different ways. We cannot assure you that the PRC government will continue to pursue policies favoring a market oriented economy or that existing policies will not be significantly altered, especially in the event of a change in leadership, social or political disruption, or other circumstances affecting political, economic and social life in the PRC.
The Chinese government exerts substantial influence over the manner in which we must conduct our business activities. We are currently not required to obtain approval from Chinese authorities to list on U.S. exchanges. However, to the extent that the Chinese government exerts more control over offerings conducted overseas and/or foreign investment in China-based issuers over time and if we were required to obtain approval in the future and were denied permission from Chinese authorities to list on U.S. exchanges, we will not be able to continue listing on U.S. exchange and the value of our common stock may significantly decline or become worthless, which would materially affect the interest of the investors.
Regulatory authorities in mainland China continue to play a significant role in overseeing various sectors of Hong Kong’s economy through laws, regulations, and state involvement and ownership. While we are based in Hong Kong and operate under its separate legal system, future changes in local laws and regulations—including those related to taxation, environmental compliance, land use, property rights, and other areas—may impact our operations. The central or local governments of these jurisdictions may impose new, stricter regulations or interpretations of existing regulations that would require additional expenditures and efforts on our part to ensure our compliance with such regulations or interpretations. Accordingly, government actions in the future, including any decision not to continue to support recent economic reforms and to return to a more centrally planned economy or regional or local variations in the implementation of economic policies, could have a significant effect on economic conditions in China or particular regions thereof, and could require us to divest ourselves of any interest we then hold in Chinese properties.
For example, just days after Didi Global Inc. (NYSE: DIDI) completed its $4.4 billion IPO on June 30, 2021, the Chinese cybersecurity regulator announced on July 2, 2021, that it had begun an investigation of Didi for failure to comply with data and cybersecurity laws and two days later ordered that the company’s app be removed from smartphone app stores. Eventually, on July 21, 2022, the CAC fined Didi approximately $1.19 billion, and Didi formally delisted from the NYSE on June 13, 2022.
As such, the Company’s business segments may be subject to various government and regulatory interference in the provinces in which they operate. The Company could be subject to regulation by various political and regulatory entities, including various local and municipal agencies and government sub-divisions. The Company may incur increased costs necessary to comply with existing and newly adopted laws and regulations or penalties for any failure to comply. The Company’s operations could be adversely affected, directly or indirectly, by existing or future laws and regulations relating to its business or industry. The Chinese government may, in the future, adopt or implement new laws, regulations, or policies that could affect our operations, including those conducted in or through Hong Kong. Any such regulatory changes or interventions could materially impact our business activities and the value of our common stock. Recent public statements by PRC authorities suggest increased oversight of overseas offerings by companies with ties to China or Hong Kong. If such measures are implemented, they could limit or prevent our ability to raise capital in foreign markets, which may materially and adversely affect the value or liquidity of our securities.
Furthermore, it is uncertain when and whether the Company will be required to obtain permission from the PRC government to list on U.S. exchanges in the future, and even when such permission is obtained, whether it will be denied or rescinded. Although the Company is currently not required to obtain permission from any of the PRC federal or local government to obtain such permission and has not received any denial to list on the U.S. exchange, our operations could be adversely affected, directly or indirectly, by existing or future laws and regulations relating to its business or industry. As a result, our common stock may decline in value dramatically or even become worthless should we become subject to new requirement to obtain permission from the PRC government to list on U.S. exchange in the future.
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Recently, the General Office of the Central Committee of the Communist Party of China and the General Office of the State Council jointly issued the Opinions on Severe and Lawful Crackdown on Illegal Securities Activities, which were available to the public on July 6, 2021. These opinions emphasized the need to strengthen the administration over illegal securities activities and the supervision on overseas listings by China-based companies. These opinions proposed to take effective measures, such as promoting the construction of relevant regulatory systems, to deal with the risks and incidents facing China-based overseas-listed companies and the demand for cybersecurity and data privacy protection.
In April 2020, the Cyberspace Administration of China and certain other PRC regulatory authorities promulgated the Cybersecurity Review Measures, which became effective in June 2020. Pursuant to the Cybersecurity Review Measures, operators of critical information infrastructure must pass a cybersecurity review when purchasing network products and services which do or may affect national security. On July 10, 2021, the Cyberspace Administration of China issued a revised draft of the Measures for Cybersecurity Review for public comments (“Draft Measures”), which required that, in addition to “operator of critical information infrastructure,” any “data processor” carrying out data processing activities that affect or may affect national security should also be subject to cybersecurity review, and further elaborated the factors to be considered when assessing the national security risks of the relevant activities, including, among others, (i) the risk of core data, important data or a large amount of personal information being stolen, leaked, destroyed, and illegally used or exited the country; and (ii) the risk of critical information infrastructure, core data, important data or a large amount of personal information being affected, controlled, or maliciously used by foreign governments after listing abroad. The Cyberspace Administration of China has said that under the proposed rules companies holding data on more than 1,000,000 users must now apply for cybersecurity approval when seeking listings in other nations because of the risk that such data and personal information could be “affected, controlled, and maliciously exploited by foreign governments,” The cybersecurity review will also investigate the potential national security risks from overseas IPOs. On January 4, 2022, the CAC, in conjunction with 12 other government departments, issued the New Measures for Cybersecurity Review (the "New Measures") on January 4, 2022. The New Measures amends the Draft Measures released on July 10, 2021 and became effective on February 15, 2022.
The aforementioned policies and any related implementation rules to be enacted may subject us to additional compliance requirement in the future. While we believe that our operations are not affected by this, as these opinions were recently issued, official guidance and interpretation of the opinions remain unclear in several respects at this time. Therefore, we cannot assure you that we will remain fully compliant with all new regulatory requirements of these opinions or any future implementation rules on a timely basis, or at all.
The Holding Foreign Companies Accountable Act requires the Public Company Accounting Oversight Board (PCAOB) to be permitted to inspect the issuer's public accounting firm within three years. This three-year period will be shortened to two years if the Accelerating Holding Foreign Companies Accountable Act is enacted. There are uncertainties under the PRC Securities Law relating to the procedures and requisite timing for the U.S. securities regulatory agencies to conduct investigations and collect evidence within the territory of the PRC. If the U.S. securities regulatory agencies are unable to conduct such investigations, they may suspend or de-register our registration with the SEC and delist our securities from applicable trading market within the US.
The Holding Foreign Companies Accountable Act was signed into law on December 18, 2020, and requires Auditors of publicly traded companies to submit to regular inspections every three years to assess such auditors’ compliance with applicable professional standards. On June 22, 2021, the U.S. Senate passed the Accelerating Holding Foreign Companies Accountable Act which, if passed by the U.S. House of Representatives and signed into law, would reduce the number of consecutive non-inspection years required for triggering the prohibitions under the HFCA Act from three years to two. On September 22, 2021, the PCAOB adopted rules to create a framework for the PCAOB to use when determining, as contemplated under the HFCA Act, whether it is unable to inspect or investigate completely registered public accounting firms located in a foreign jurisdiction because of a position taken by one or more authorities in that jurisdiction. On December 2, 2021, the SEC adopted amendments to finalize rules implementing the submission and disclosure requirements in the HFCA Act. The rules apply to registrants that the SEC identifies as having filed an annual report with an audit report issued by a registered public accounting firm that is located in a foreign jurisdiction and that the PCAOB is unable to inspect or investigate completely because of a position taken by an authority in a foreign jurisdiction. On December 16, 2021, the PCAOB issued a report on its determinations that it is unable to inspect or investigate completely PCAOB-registered public accounting firms headquartered in China and in Hong Kong because of positions taken by PRC and Hong Kong authorities in those jurisdictions.
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On December 16, 2021, the Public Company Accounting Oversight Board (PCAOB) issued its report notifying the Commission that it is unable to inspect or investigate completely accounting firms headquartered in mainland China or Hong Kong due to positions taken by authorities in mainland China and Hong Kong. On December 15, 2022, the PCAOB issued a report that vacated its December 16, 2021 determination and removed mainland China and Hong Kong from the list of jurisdictions where it is unable to inspect or investigate completely registered public accounting firms. Each year, the PCAOB will determine whether it can inspect and investigate completely audit firms in mainland China and Hong Kong, among other jurisdictions. Our auditor is based in Hong Kong and is subject to PCAOB inspection. If PCAOB determines in the future that it no longer has full access to inspect and investigate completely accounting firms in mainland China and Hong Kong and we continue to use an accounting firm headquartered in Hong Kong to issue an audit report on our financial statements filed with the Securities and Exchange Commission, we would be identified as a Commission-Identified Issuer following the filing of the annual report on Form 10-K for the relevant fiscal year. There can be no assurance that we would not be identified as a Commission-Identified Issuer for any future fiscal year, and if we were so identified for two consecutive years, we would become subject to the prohibition on trading under the HFCAA and our securities may be delisted from OTC Markets as a result.
In the event the Chinese authorities subsequently take a position disallowing the PCAOB to inspect our auditor, then we would need to change our auditor. Furthermore, due to the recent developments in connection with the implementation of the Holding Foreign Companies Accountable Act, we cannot assure you whether the SEC or other regulatory authorities would apply additional and more stringent criteria to us after considering the effectiveness of our auditor’s audit procedures and quality control procedures, adequacy of personnel and training, or sufficiency of resources, geographic reach or experience as it relates to the audit of our financial statements. The requirement in the HFCA Act that the PCAOB be permitted to inspect the issuer’s public accounting firm within two or three years, may result in the delisting of our securities from applicable trading markets in the U.S. in the future if the PCAOB is unable to inspect our accounting firm at such future time.
According to Article 177 of the Securities Law of the PRC (“Article 177”), overseas securities regulatory authorities are prohibited from engaging in activities pertaining to investigations or evidence collection directly conducted within the territories of the PRC, and Chinese entities or individuals are further prohibited from providing documents and information in connection with securities business activities to any organizations and/or persons abroad without the prior consent of the securities regulatory authority of the State Council and the competent departments of the State Council. As of the date of this prospectus, we are not aware of any implementing rules or regulations which have been published regarding application of Article 177.
We believe Article 177 is only applicable where the activities of overseas authorities constitute a direct investigation or evidence collection by such authorities within the territory of the PRC. In the event that the U.S. securities regulatory agencies carry out an investigation on us such as an enforcement action by the Department of Justice, the SEC or other authorities, such agencies’ activities will constitute conducting an investigation or collecting evidence directly within the territory of the PRC and accordingly fall within the scope of Article 177. In that case, the U.S. securities regulatory agencies may have to consider establishing cross-border cooperation with the securities regulatory authority of the PRC by way of judicial assistance, diplomatic channels or establishing a regulatory cooperation mechanism with the securities regulatory authority of the PRC. However, there is no assurance that the U.S. securities regulatory agencies will succeed in establishing such cross-border cooperation in this particular case and/or establish such cooperation in a timely manner.
Furthermore, as Article 177 is a recently promulgated provision, it remains unclear as to how it will be interpreted, implemented or applied by the Chinese Securities Regulatory Commission or other relevant government authorities. As such, there are uncertainties as to the procedures and requisite timing for the U.S. securities regulatory agencies to conduct investigations and collect evidence within the territory of the PRC. The Holding Foreign Companies Accountable Act requires the Public Company Accounting Oversight Board (PCAOB) be permitted to inspect the issuer's public accounting firm within three years. This three-year period will be shortened to two years if the Accelerating Holding Foreign Companies Accountable Act is enacted. If the U.S. securities regulatory agencies are unable to conduct such investigations, there exists a risk that they may determine to suspend or de-register our registration with the SEC and may also delist our securities from applicable trading market within the US.
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Adverse regulatory developments in China may subject us to additional regulatory review, and additional disclosure requirements and regulatory scrutiny to be adopted by the SEC in response to risks related to recent regulatory developments in China may impose additional compliance requirements for companies like us with significant China-based operations, all of which could increase our compliance costs, subject us to additional disclosure requirements.
The recent regulatory developments in China, in particular with respect to restrictions on China-based companies raising capital offshore, may lead to additional regulatory review in China over our financing and capital raising activities in the United States. In addition, we may be subject to industry-wide regulations that may be adopted by the relevant PRC authorities, which may have the effect of limiting our service offerings, restricting the scope of our operations in China, or causing the suspension or termination of our business operations in China entirely, all of which will materially and adversely affect our business, financial condition and results of operations. We may have to adjust, modify, or completely change our business operations in response to adverse regulatory changes or policy developments, and we cannot assure you that any remedial action adopted by us can be completed in a timely, cost-efficient, or liability-free manner or at all.
On July 30, 2021, in response to the recent regulatory developments in China and actions adopted by the PRC government, the Chairman of the SEC issued a statement asking the SEC staff to seek additional disclosures from offshore issuers associated with China-based operating companies before their registration statements will be declared effective, including detailed disclosure related to whether the issuer received or were denied permission from Chinese authorities to list on U.S. exchanges and the risks that such approval could be denied or rescinded. On August 1, 2021, the China Securities Regulatory Commission stated in a statement that it had taken note of the new disclosure requirements announced by the SEC regarding the listings of Chinese companies and the recent regulatory development in China, and that both countries should strengthen communications on regulating China-related issuers. We cannot guarantee that we will not be subject to tightened regulatory review and we could be exposed to government interference in China.
We may be exposed to liabilities under the Foreign Corrupt Practices Act, and any determination that we violated the Foreign Corrupt Practices Act could have a material adverse effect on our business.
We are subject to the Foreign Corrupt Practice Act, or FCPA, and other laws that prohibit improper payments or offers of payments to foreign governments and their officials and political parties by U.S. persons and issuers as defined by the statute for the purpose of obtaining or retaining business. We will have operations, agreements with third parties and make sales in Hong Kong, which may experience corruption. Our proposed activities may create the risk of unauthorized payments or offers of payments by one of the employees, consultants, or sales agents of our Company, because these parties are not always subject to our control. It will be our policy to implement safeguards to discourage these practices by our employees. Also, our existing practices and any future improvements may prove to be less than effective, and the employees, consultants, or sales agents of our Company may engage in conduct for which we might be held responsible. Violations of the FCPA may result in severe criminal or civil sanctions, and we may be subject to other liabilities, which could negatively affect our business, operating results and financial condition. In addition, the government may seek to hold our Company liable for successor liability FCPA violations committed by companies in which we invest or that we acquire.
PRC regulation of loans to and direct investment in PRC entities by offshore holding companies and governmental control of currency conversion may delay or prevent us from using the proceeds we receive from offshore financing activities to make loans to or make additional capital contributions to our Hong Kong subsidiaries, which could materially and adversely affect our liquidity and our ability to fund and expand business.
Any transfer of funds by us to our Hong Kong subsidiaries, either as a shareholder loan or as an increase in registered capital, may become subject to approval by or registration or filing with relevant governmental authorities in China. According to the relevant PRC regulations on foreign-invested enterprises in China, capital contributions to PRC subsidiaries are subject to the approval of or filing with the Ministry of Commerce in its local branches and registration with a local bank authorized by SAFE. It is unclear if Hong Kong subsidiaries will be deemed a PRC subsidiary. If Hong Kong subsidiaries are deemed to be PRC subsidiaries, (i) any foreign loan procured by our Hong Kong subsidiaries will be required to be registered with SAFE or its local branches or filed with SAFE in its information system; and (ii) our Hong Kong subsidiaries will not be able to procure loans which exceed the difference between their total investment amount and registered capital or, as an alternative, only procure loans subject to the calculation approach and limitation as provided in the People’s Bank of China Notice No. 9 (“PBOC Notice No. 9”). We may not be able to obtain these government approvals or complete such registrations on a timely basis, if at all, with respect to future capital contributions or foreign loans by us to our Hong Kong subsidiaries, if required. If we fail to receive such approvals or complete such registration or filing, our ability to use the proceeds we receive from our offshore financing activities and to capitalize our Hong Kong operations may be negatively affected, which could adversely affect our liquidity and ability to fund and expand our business. There is, in effect, no statutory limit on the amount of capital contribution that we can make to our Hong Kong subsidiaries. This is because there is no statutory limit on the amount of registered capital for our Hong Kong subsidiaries, and we are allowed to make capital contributions to our Hong Kong subsidiaries by subscribing for their initial registered capital and increased registered capital, provided that the Hong Kong subsidiaries complete the relevant filing and registration procedures.
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The Circular on Reforming the Administration of Foreign Exchange Settlement of Capital of Foreign-Invested Enterprises, or SAFE Circular 19, effective as of June 1, 2015, as amended by Circular of the State Administration of Foreign Exchange on Reforming and Regulating Policies on the Control over Foreign Exchange Settlement under the Capital Account, or SAFE Circular 16, effective on June 9, 2016, allows FIEs to settle their foreign exchange capital at their discretion, but continues to prohibit FIEs from using the Renminbi fund converted from their foreign exchange capitals for expenditure beyond their business scopes, and also prohibit FIEs from using such Renminbi fund to provide loans to persons other than affiliates unless otherwise permitted under its business scope. If Safe Circulars 16 and 19 are interpreted to apply to the Hong Kong Dollar, our ability to use Hong Kong Dollars converted from the net proceeds from our offshore financing activities to fund the establishment of new entities in Hong Kong, to invest in or acquire any other Hong Kong or PRC companies may be limited, which may adversely affect our business, financial condition and results of operations.
Because our holding company structure creates restrictions on the payment of dividends or other cash payments, our ability to pay dividends or make other payments is limited.
We are a holding company whose primary assets are our ownership of the equity interests in our subsidiaries. We conduct no other business and, as a result, we depend entirely upon our subsidiaries’ earnings and cash flow to meet cash and financing requirements. If we decide in the future to pay dividends or make other payments, as a holding company, our ability to pay dividends and meet other obligations depends upon the receipt of dividends or other payments from our operating subsidiaries. Our subsidiaries and projects may be restricted in their ability to pay dividends, make distributions or otherwise transfer funds to us prior to the satisfaction of other obligations, including the payment of operating expenses or debt service, appropriation to reserves prescribed by laws and regulations, covering losses in previous years, restrictions on the conversion of local currency into U.S. dollars or other hard currency, completion of relevant procedures with governmental authorities or banks and other regulatory restrictions. Under the applicable PRC laws and regulations, foreign-invested enterprises in China may pay dividends only out of their accumulated profits, if any, determined in accordance with PRC accounting standards and regulations. In addition, a foreign-invested enterprise in China is required to set aside a portion of its after-tax profit to fund specific reserve funds prior to payment of dividends. In particular, at least 10% of its after-tax profits based on PRC accounting standards each year is required to be set aside towards its general reserves until the accumulative amount of such reserves reach 50% of its registered capital. These reserves are not distributable as cash dividends. If future dividends are paid in RMB, fluctuations in the exchange rate for the conversion of any of these currencies into U.S. dollars may adversely affect the amount received by U.S. stockholders upon conversion of the dividend payment into U.S. dollars. For a detailed description of the potential government regulations facing the Company associated with our operations in Hong Kong and on restrictions on payments from our subsidiaries, please refer to “Government and Industry Regulations–China” and “Transfers of Cash to and from our Subsidiaries.” We do not presently have any intention to declare or pay dividends in the future. You should not purchase shares of our common stock in anticipation of receiving dividends in future periods.
Our Hong Kong subsidiary may be subject to restrictions on paying dividends or making other payments to us, which may restrict its ability to satisfy liquidity requirements, conduct business and pay dividends to holders of our common stock.
Most of our cash is maintained in Hong Kong Dollars. We rely on dividends from our Hong Kong subsidiaries for our cash and financing requirements, such as the funds necessary to service any debt we may incur. There is a possibility that the PRC could prevent our cash maintained in Hong Kong from leaving or the PRC could restrict the deployment of the cash into our business or for the payment of dividends. Any such controls or restrictions may adversely affect our ability to finance our cash requirements, service debt or make dividend or other distributions to our shareholders. Current PRC regulations permit PRC subsidiaries to pay dividends to foreign parent companies only out of their accumulated after-tax profits upon satisfaction of relevant statutory condition and procedures, if any, determined in accordance with Chinese accounting standards and regulations. In addition, PRC subsidiaries are required to set aside at least 10% of their accumulated profits each year, if any, to fund certain reserve funds until the total amount set aside reaches 50% of its registered capital. Furthermore, if PRC subsidiaries and their subsidiaries incur debt on their own behalf in the future, the instruments governing the debt may restrict their ability to pay dividends or make other payments to the foreign parent company, which may restrict the ability of the foreign parent company to satisfy its liquidity requirements. If such restrictions on dividend and other payments are interpreted to apply to Hong Kong entities, our ability to rely on payments from our Hong Kong subsidiary will be adversely affected.
In addition, the Enterprise Income Tax Law of the PRC, or the PRC EIT Law, and its implementation rules provide that withholding tax rate of 10% will be applicable to dividends payable by Chinese companies to non-PRC-resident enterprises unless otherwise exempted or reduced according to treaties or arrangements between the PRC central government and governments of other countries or regions where the non-PRC-resident enterprises are incorporated. For a detailed description of the potential government regulations facing the Company and the offering associated with our operations in Hong Kong, please refer to “Government and Industry Regulations – Regulations Relating to Foreign Exchange and Dividend Distribution.”
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If any dividend is declared in the future and paid in a foreign currency, you may be taxed on a larger amount in U.S. dollars than the U.S. dollar amount that you will actually ultimately receive.
If you are a U.S. holder of our shares of common stock, you will be taxed on the U.S. dollar value of your dividends, if any, at the time you receive them, even if you actually receive a smaller amount of U.S. dollars when the payment is in fact converted into U.S. dollars. Specifically, if a dividend is declared and paid in a foreign currency such as the RMB, the amount of the dividend distribution that you must include in your income as a U.S. holder will be the U.S. dollar value of the payments made in the foreign currency, determined at the spot rate of the foreign currency to the U.S. dollar on the date the dividend distribution is includible in your income, regardless of whether the payment is in fact converted into U.S. dollars. Thus, if the value of the foreign currency decreases before you actually convert the currency into U.S. dollars, you will be taxed on a larger amount in U.S. dollars than the U.S. dollar amount that you will actually ultimately receive.
Dividends payable to our foreign investors and gains on the sale of our shares of common stock by our foreign investors may become subject to tax by the PRC.
Under the Enterprise Income Tax Law and its implementation regulations issued by the State Council of the PRC, unless otherwise provided under relevant tax treaties, a 10% PRC withholding tax is applicable to dividends payable to investors that are non-resident enterprises, which do not have an establishment or place of business in the PRC or which have such establishment or place of business but the dividends are not effectively connected with such establishment or place of business, to the extent such dividends are derived from sources within the PRC. Similarly, any gain realized on the transfer of shares by such investors is also subject to PRC tax at a current rate of 10%, subject to any reduction or exemption set forth in relevant tax treaties, if such gain is regarded as income derived from sources within the PRC. If we are deemed a PRC resident enterprise, dividends paid on our shares, and any gain realized from the transfer of our shares, would be treated as income derived from sources within the PRC and would as a result be subject to PRC taxation. Furthermore, if we are deemed a PRC resident enterprise, dividends payable to individual investors who are non-PRC residents and any gain realized on the transfer shares by such investors may be subject to PRC tax at a current rate of 20%, subject to any reduction or exemption set forth in applicable tax treaties. It is unclear whether we or any of our subsidiaries established outside of China are considered a PRC resident enterprise or whether holders of shares would be able to claim the benefit of income tax treaties or agreements entered into between China and other countries or areas. If dividends payable to our non-PRC investors, or gains from the transfer of our shares by such investors are subject to PRC tax, the value of your investment in our shares may decline significantly. For a detailed description of the potential government regulations facing the Company associated with our operations in Hong Kong, please refer to “Government and Industry Regulations–China ”.
Our global income may be subject to PRC taxes under the PRC Enterprise Income Tax Law, which could have a material adverse effect on our results of operations.
Under the PRC Enterprise Income Tax Law, or the New EIT Law, and its amendment and implementation rules, which became effective in January 2008, an enterprise established outside of the PRC with a “de facto management body” located within the PRC is considered a PRC resident enterprise and will be subject to the enterprise income tax at the rate of 25% on its global income. The implementation rules define the term “de facto management bodies” as “establishments that carry out substantial and overall management and control over the manufacturing and business operations, personnel and human resources, finance and treasury, and business combination and disposition of properties and other assets of an enterprise.” On April 22, 2009, the State Administration of Taxation (the “SAT”), issued a circular, or SAT Circular 82, which provides certain specific criteria for determining whether the “de facto management body” of a PRC-controlled enterprise that is incorporated offshore is located in China. Although the SAT Circular 82 only applies to offshore enterprises controlled by PRC enterprises or PRC enterprise groups, not those controlled by PRC individuals or foreigners, the determining criteria set forth in the SAT Circular 82 may reflect the SAT’s general position on how the “de facto management body” text should be applied in determining the resident status of all offshore enterprises for the purpose of PRC tax, regardless of whether they are controlled by PRC enterprises or individuals. Although we do not believe that our legal entities organized outside of the PRC constitute PRC resident enterprises, it is possible that the PRC tax authorities could reach a different conclusion. In such case, we may be considered a PRC resident enterprise and may therefore be subject to the 25% enterprise income tax on our global income, which could significantly increase our tax burden and materially and adversely affect our cash flow and profitability. In addition to the uncertainty regarding how the new PRC resident enterprise classification for tax purposes may apply, it is also possible that the rules may change in the future, possibly with retroactive effect. For a detailed description of the potential government regulations facing the Company associated with our operations in Hong Kong, please refer to “Government and Industry Regulations–China”.
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We and our shareholders face uncertainties with respect to indirect transfers of equity interests in PRC resident enterprises by their non-PRC holding companies.
On February 3, 2015, the State Administration of Taxation issued an Announcement on Several Issues Concerning Enterprise Income Tax on Income Arising from Indirect Transfers of Property by Non-PRC Resident Enterprises, or Announcement 7, with the same effective date. Under Announcement 7, an “indirect transfer” refers to a transaction where a non-resident enterprise transfers its equity interest and other similar interest in an offshore holding company, which directly or indirectly holds Chinese taxable assets (the assets of an “establishment or place” situated in China; real property situated in China and equity interest in Chinese resident enterprises) and any indirect transfer without reasonable commercial purposes are subject to the PRC taxation. In addition, Announcement 7 specifies the conditions under which an indirect transfer is deemed to lack a reasonable commercial purpose which include: (1) 75% or more of the value of the offshore holding company’s equity is derived from Chinese taxable assets, (2) anytime in the year prior to the occurrence of the indirect transfer of Chinese taxable assets, 90% or more of the total assets (excluding cash) of the offshore holding company are direct or indirect investments in China, or 90% or more of the revenue of the offshore holding company was sourced from China; (3) the functions performed and risks assumed by the offshore holding company(ies), although incorporated in an offshore jurisdiction to conform to the corporate law requirements there, are insufficient to substantiate their corporate existence and (4) the foreign income tax payable in respect of the indirect transfer is lower than the Chinese tax which would otherwise be payable in respect of the direct transfer if such transfer were treated as a direct transfer. As a result, gains derived from such indirect transfer will be subject to PRC enterprise income tax, currently at a tax rate of 10%.
Announcement 7 grants a safe harbor under certain qualifying circumstances, including transfers in the public securities market and certain intragroup restricting transactions, however, there is uncertainty as to the implementation of Announcement 7. For example, Announcement 7 requires the buyer to withhold the applicable taxes without specifying how to obtain the information necessary to calculate taxes and when the applicable tax shall be submitted. Announcement 7 may be determined by the tax authorities to be applicable to our offshore restructuring transactions or sale of the shares of our offshore subsidiaries where non-resident enterprises, being the transferors, were involved. Though Announcement 7 does not impose a mandatory obligation of filing the report of taxable events, the transferring party shall be subject to PRC withholding tax if the certain tax filing conditions are met. Non-filing may result in an administrative penalty varying from 50% to 300% of unpaid taxes. As a result, we and our non-resident enterprises in such transactions may become at risk of being subject to taxation under Announcement 7, and may be required to expend valuable resources to comply with Announcement 7 or to establish that we and our non-resident enterprises should not be taxed under Announcement 7, for any restructuring or disposal of shares of offshore subsidiaries, which may have a material adverse effect on our financial condition and results of operations.
PRC laws and regulations have established more complex procedures for certain acquisitions of Chinese companies by foreign investors, which could make it more difficult for us to pursue growth through acquisitions in China.
Further to the Regulations on Mergers and Acquisitions of Domestic Enterprises by Foreign Investors, or the New M&A Rules, the Anti-monopoly Law of the PRC, the Rules of Ministry of Commerce on Implementation of Security Review System of Mergers and Acquisitions of Domestic Enterprises by Foreign Investors promulgated by MOFCOM or the MOFCOM Security Review Rules, was issued in August 2011, which established additional procedures and requirements that are expected to make merger and acquisition activities in China by foreign investors more time-consuming and complex, including requirements in some instances that MOFCOM be notified in advance of any change of control transaction in which a foreign investor takes control of a PRC enterprise, or that the approval from MOFCOM be obtained in circumstances where overseas companies established or controlled by PRC enterprises or residents acquire affiliated domestic companies. PRC laws and regulations also require certain merger and acquisition transactions to be subject to merger control review and or security review.
The MOFCOM Security Review Rules, effective from September 1, 2011, which implement the Notice of the General Office of the State Council on Establishing the Security Review System for Mergers and Acquisitions of Domestic Enterprises by Foreign Investors promulgated on February 3, 2011, further provide that, when deciding whether a specific merger or acquisition of a domestic enterprise by foreign investors is subject to the security review by MOFCOM, the principle of substance over form should be applied and foreign investors are prohibited from bypassing the security review requirement by structuring transactions through proxies, trusts, indirect investments, leases, loans, control through agreements control or offshore transactions.
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Further, if the business of any target company that the combined company seeks to acquire falls into the scope of security review, the combined company may not be able to successfully acquire such company either by equity or asset acquisition, capital contribution or through any contractual agreements. The combined company may grow its business in part by acquiring other companies operating in its industry. Complying with the requirements of the relevant regulations to complete such transactions could be time consuming, and any required approval processes, including approval from MOFCOM, may delay or inhibit its ability to complete such transactions, which could affect our ability to maintain or expand our market share.
In addition, SAFE promulgated the Circular on the Settlement of Foreign Currency Capital of Foreign-invested Enterprises, or Circular 19, on June 1, 2015. Under Circular 19, registered capital of a foreign-invested company settled in RMB converted from foreign currencies may only be used within the business scope approved by the applicable governmental authority and the equity investments in the PRC made by the foreign-invested company shall be subject to the relevant laws and regulations about the foreign-invested company’s reinvestment in the PRC. In addition, foreign-invested companies cannot use such capital to make the investments in securities, and cannot use such capital to issue the entrusted RMB loans (except approved in its business scope), repay the RMB loans between the enterprises and the ones which have been transferred to the third party. Circular 19 may significantly limit our ability to effectively use the proceeds from future financing activities as the Chinese subsidiaries may not convert the funds received from us in foreign currencies into RMB, which may adversely affect their liquidity and our ability to fund and expand our business in the PRC.
SAFE issued the Circular on Reforming and Regulating Policies on the Control over Foreign Exchange Settlement of Capital Accounts (“Circular 16”), on June 9, 2016, which became effective simultaneously. Pursuant to Circular 16, enterprises registered in the PRC may also convert their foreign debts from foreign currency to RMB on a self-discretionary basis. Circular 16 provides an integrated standard for conversion of foreign exchange under capital account items (including but not limited to foreign currency capital and foreign debts) on a self-discretionary basis which applies to all enterprises registered in the PRC. Circular 16 reiterates the principle that RMB converted from foreign currency-denominated capital of a company may not be directly or indirectly used for purpose beyond its business scope or prohibited by PRC Laws or regulations, while such converted RMB shall not be utilized as loans to its non-affiliated entities. As Circular 16 is newly issued and SAFE has not provided detailed guidelines with respect to its interpretation or implementation, it is uncertain how these rules will be interpreted and implemented.
Failure to comply with PRC regulations regarding the registration requirements for employee stock ownership plans or share option plans may subject the PRC plan participants or us to fines and other legal or administrative sanctions.
Pursuant to SAFE Circular 37, PRC residents who participate in share incentive plans in overseas non-publicly-listed companies may submit applications to SAFE or its local branches for the foreign exchange registration with respect to offshore special purpose companies. In the meantime, our directors, executive officers and other employees who are PRC citizens or who are non-PRC residents residing in the PRC for a continuous period of not less than one year, subject to limited exceptions, and who have been granted incentive share awards by us, may follow the Notices on Issues Concerning the Foreign Exchange Administration for Domestic Individuals Participating in Stock Incentive Plan of Overseas Publicly-Listed Company, or 2012 SAFE notices, promulgated by the SAFE in 2012. Pursuant to the 2012 SAFE notices, PRC citizens and non-PRC citizens who reside in China for a continuous period of not less than one year who participate in any stock incentive plan of an overseas publicly listed company, subject to a few exceptions, are required to register with SAFE through a domestic qualified agent, which could be the PRC subsidiaries of such overseas listed company, and complete certain other procedures. In addition, an overseas entrusted institution must be retained to handle matters in connection with the exercise or sale of stock options and the purchase or sale of shares and interests. Our executive officers and other employees who are PRC citizens or who reside in the PRC for a continuous period of not less than one year and who have been granted options will be subject to these regulations. It is unclear if these regulations will be expanded to include Hong Kong residents or citizens. Failure to complete the SAFE registrations may subject them to fines, and legal sanctions and may also limit our ability to contribute additional capital into our Hong Kong subsidiaries and limit our Hong Kong subsidiaries’ ability to distribute dividends to us if Hong Kong residents or citizens are covered under these PRC regulations. We also face regulatory uncertainties that could restrict our ability to adopt additional incentive plans for our directors, executive officers and employees under PRC law.
The SAT has issued certain circulars concerning employee share options and restricted shares. Under these circulars, employees working in China who exercise share options or are granted restricted shares will be subject to PRC individual income tax. It is unclear whether these regulations will be expanded in the future to cover our employees in Hong Kong. Our Hong Kong subsidiaries may become obligated to file documents related to employee share options or restricted shares with relevant tax authorities and to withhold individual income taxes of those employees who exercise their share options. If our employees fail to pay or we fail to withhold their income taxes according to relevant laws and regulations, we may face sanctions imposed by the tax authorities or other PRC governmental authorities.
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If we become directly subject to the recent scrutiny, criticism and negative publicity involving U.S.-listed Chinese companies, we may have to expend significant resources to investigate and resolve the matter which could harm our business operations and our reputation and could result in a loss of your investment in our shares, especially if such matter cannot be addressed and resolved favorably.
U.S. public companies that have substantially all of their operations in China have been the subject of intense scrutiny, criticism and negative publicity by investors, financial commentators and regulatory agencies, such as the SEC. Much of the scrutiny, criticism and negative publicity has centered around financial and accounting irregularities, a lack of effective internal controls over financial accounting and reporting, inadequate corporate governance policies or a lack of adherence thereto and, in many cases, allegations of fraud. As a result of the scrutiny, criticism and negative publicity, the publicly traded stock of many U.S. listed Chinese companies has sharply decreased in value and, in some cases, has become virtually worthless. Many of these companies are now subject to shareholder lawsuits and SEC enforcement actions and are conducting internal and external investigations into the allegations. It is not clear what effect this sector-wide scrutiny, criticism and negative publicity will have on our company and our business. If we become the subject of any unfavorable allegations, whether such allegations are proven to be true or untrue, we may have to expend significant resources to investigate such allegations and/or defend the Company. This situation may be a major distraction to our management. If such allegations are not proven to be groundless, our Company and business operations will be severely hampered and your investment in our stock could be rendered worthless.
In addition, major issues with other U.S. listed Chinese companies in the future, could have a negative effect on the value of your investment, even though the Company is not involved.
Substantially all of our assets and a majority of our officers and directors are located in Hong Kong. As a result, it may be difficult for stockholders to enforce any judgment obtained in the United States against us, our officers or directors, which may limit the remedies otherwise available to our stockholders.
Substantially all of our assets are located in Hong Kong. Moreover, a majority of our current directors and officers are Hong Kong nationals or are otherwise located in Hong Kong. All or a substantial portion of their assets are located outside the United States. As a result, it may be difficult for our stockholders to effect service of process within the United States upon our subsidiaries or any individuals. In addition, there is uncertainty as to whether the courts of Hong Kong or the PRC would recognize or enforce judgments of U.S. courts obtained against us or our officers and/or directors predicated upon the civil liability provisions of Hong Kong against us or such persons predicated upon the securities laws of the United States or any state thereof. It is unclear if extradition treaties now in effect between the United States and the PRC would permit effective enforcement against us or our officers and directors of criminal penalties under the United States Federal securities laws or otherwise.
Risks Relating to Securities Markets and Investment in Our Stock
There is not now and there may not ever be an active market for our Common Stock. There are restrictions on the transferability of these securities.
There currently is no market for our Common Stock and, except as otherwise described herein, we have no plans to file any registration statement or otherwise attempt to create a market for the shares. Even if an active market develops for the shares, Rule 144, which provides for an exemption from the registration requirements under the Securities Act under certain conditions, requires, among other conditions, a holding period prior to the resale (in limited amounts) of securities acquired in a non-public offering without having to satisfy the registration requirements under the Securities Act. There can be no assurance that we will fulfill any reporting requirements in the future under the Exchange Act or disseminate to the public any current financial or other information concerning us, as is required by Rule 144 as part of the conditions of its availability.
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Our common stock is subject to the “penny stock” rules of the sec and the trading market in our securities is limited, which makes transactions in our stock cumbersome and may reduce the value of an investment in our stock.
Under U.S. federal securities legislation, our common stock will constitute "penny stock". Penny stock is any equity security that has a market price of less than $5.00 per share, subject to certain exceptions. For any transaction involving a penny stock, unless exempt, the rules require that a broker or dealer approve a potential investor's account for transactions in penny stocks, and the broker or dealer receive from the investor a written agreement to the transaction, setting forth the identity and quantity of the penny stock to be purchased. In order to approve an investor's account for transactions in penny stocks, the broker or dealer must obtain financial information and investment experience objectives of the person, and make a reasonable determination that the transactions in penny stocks are suitable for that person and the 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 sets forth the basis on which the broker or dealer made the suitability determination. Brokers may be less willing to execute transactions in securities subject to the "penny stock" rules. This may make it more difficult for investors to dispose of our common stock and cause a decline in the market value of our stock. Disclosure also has to be made about the risks of investing in penny stocks in both public offerings and in secondary trading and about the 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.
You may experience substantial dilution of your investment in our securities as a result of the potential conversion of certain outstanding preferred stock into shares of our common stock.
We have 200,000 shares issued and outstanding of Series A Convertible Preferred Stock which have potentially dilutive impacts on voting or beneficial ownership. Each one share of Series A Preferred Stock is entitled to convert 20,000 shares of Common Stock and vote 20,000 shares on matters submitted to a vote of our shareholders. ModuLink Inc. owns all 200,000 shares issued and outstanding Series A Convertible Preferred Stock. Our directors, TAM, Hin Wah Anthony, FU, Wah and AU-YEUNG, Sai Kit, holds 50%, 25% and 25% shareholding interests of ModuLink Inc., respectively. As a result, ModuLink Inc. controls the voting power of approximately 50.19% of our common stock, as calculated on a fully diluted basis, as of the date of this registration statement. Pursuant to the Share Exchange Agreement, the aggregate balances of 1,414,027,236 shares of common stock were issued to our directors, TAM, Hin Wah Anthony, FU, Wah and AU-YEUNG, Sai Kit. They will, in aggregate of shareholding interests through ModuLink Inc. and personally, control approximately 67.93% of the voting power of our common stock, as calculated on a fully diluted basis.
We are a controlled company subject to the control of ModuLink Inc., and our directors, TAM, Hin Wah Anthony, FU, Wah and AU-YEUNG, Sai Kit, together with our other insiders beneficially own a significant portion of our stock, and accordingly, have control over stockholder matters, our business and management.
Under NASDAQ stock exchange rule 5615(c)(1), a “controlled company” is defined as a “company of which more than 50% of the voting power for the election of directors is held by an individual, a group or another company.” As of the date of this registration form, ModuLink Inc. beneficially owns 200,000 shares of Series A Convertible Preferred Stock, or approximately 50.19% voting power of our shares of common stock, as calculated on a fully diluted basis. Our directors, TAM, Hin Wah Anthony, FU, Wah and AU-YEUNG, Sai Kit, holds 50%, 25% and 25% shareholding interests of ModuLink Inc., respectively. Pursuant to the Share Exchange Agreement, the aggregate balances of 1,414,027,236 shares of common stock were issued to our directors, TAM, Hin Wah Anthony, FU, Wah and AU-YEUNG, Sai Kit. As a result, our directors beneficially own in aggregate through ModuLink Inc. approximately 67.93% of the voting power of common stock, as calculated on a fully diluted basis. As a result, ModuLink Inc. and our directors will have significant influence to:
· | Elect or defeat the election of our directors; | |
· | Amend or prevent amendment of our articles of incorporation or bylaws; | |
· | Effect or prevent a merger, sale of assets or other corporate transaction; and | |
· | Effect the outcome of any other matter submitted to the stockholders for vote. |
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Moreover, because of the significant ownership position held by our management team, new investors may not be able to effect a change in our business or management, and therefore, shareholders would have no recourse as a result of decisions made by management. In addition, sales of significant amounts of shares held by our management team, or the prospect of these sales, could adversely affect the market price of our common stock. Our management team’s stock ownership may discourage a potential acquirer from making a tender offer or otherwise attempting to obtain control of us, which in turn could reduce our stock price or prevent our stockholders from realizing a premium over our stock price.
State securities laws may limit secondary trading, which may restrict the states in which and conditions under which you can sell the shares offered by this registration statement.
Secondary trading in common stock sold in this offering will not be possible in any state until the common stock is qualified for sale under the applicable securities laws of the state or there is confirmation that an exemption, such as listing in certain recognized securities manuals, is available for secondary trading in the state. If we fail to register or qualify, or to obtain or verify an exemption for the secondary trading of, the common stock in any particular state, the common stock could not be offered or sold to, or purchased by, a resident of that state. In the event that a significant number of states refuse to permit secondary trading in our common stock, the liquidity for the common stock could be significantly impacted thus causing you to realize a loss on your investment.
The Company does not intend to seek registration or qualification of its shares of common stock the subject of this offering in any State or territory of the United States. Aside from a "secondary trading" exemption, other exemptions under state law and the laws of US territories may be available to purchasers of the shares of common stock sold in this offering,
Anti-takeover effects of certain provisions of Nevada state law hinder a potential takeover of our company.
Though not now, in the future we may become subject to Nevada's control share law. A corporation is subject to Nevada's control share law if it has more than 200 stockholders, at least 100 of whom are stockholders of record and residents of Nevada, and it does business in Nevada or through an affiliated corporation. The law focuses on the acquisition of a "controlling interest" which means the ownership of outstanding voting shares sufficient, but for the control share law, to enable the acquiring person to exercise the following proportions of the voting power of the corporation in the election of directors:
(i) one-fifth or more but less than one-third, (ii) one-third or more but less than a majority, or (iii) a majority or more. The ability to exercise such voting power may be direct or indirect, as well as individual or in association with others.
The effect of the control share law is that the acquiring person, and those acting in association with it, obtains only such voting rights in the control shares as are conferred by a resolution of the stockholders of the corporation, approved at a special or annual meeting of stockholders. The control share law contemplates that voting rights will be considered only once by the other stockholders. Thus, there is no authority to strip voting rights from the control shares of an acquiring person once those rights have been approved. If the stockholders do not grant voting rights to the control shares acquired by an acquiring person, those shares do not become permanent non-voting shares. The acquiring person is free to sell its shares to others. If the buyers of those shares themselves do not acquire a controlling interest, their shares do not become governed by the control share law.
If control shares are accorded full voting rights and the acquiring person has acquired control shares with a majority or more of the voting power, any stockholder of record, other than an acquiring person, who has not voted in favor of approval of voting rights is entitled to demand fair value for such stockholder's shares.
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In addition to the control share law, Nevada has a business combination law which prohibits certain business combinations between Nevada corporations and "interested stockholders" for three years after the "interested stockholder" first becomes an "interested stockholder," unless the corporation's board of directors approves the combination in advance. For purposes of Nevada law, an "interested stockholder" is any person who is (i) the beneficial owner, directly or indirectly, of ten percent or more of the voting power of the outstanding voting shares of the corporation, or (ii) an affiliate or associate of the corporation and at any time within the three previous years was the beneficial owner, directly or indirectly, of ten percent or more of the voting power of the then outstanding shares of the corporation. The definition of the term "business combination" is sufficiently broad to cover virtually any kind of transaction that would allow a potential acquirer to use the corporation's assets to finance the acquisition or otherwise to benefit its own interests rather than the interests of the corporation and its other stockholders.
The effect of Nevada's business combination law is to potentially discourage parties interested in taking control of our company from doing so if it cannot obtain the approval of our board of directors.
Because we do not intend to pay any cash dividends on our common stock, our stockholders will not be able to receive a return on their shares unless they sell them.
We intend to retain any future earnings to finance the development and expansion of our business. We do not anticipate paying any cash dividends on our common stock in the foreseeable future. Unless we pay dividends, our stockholders will not be able to receive a return on their shares unless they sell them. Stockholders may never be able to sell shares when desired. Before you invest in our securities, you should be aware that there are various risks. You should consider carefully these risk factors, together with all of the other information included in this annual report before you decide to purchase our securities. If any of the following risks and uncertainties develop into actual events, our business, financial condition or results of operations could be materially adversely affected.
Our stock may be subject to substantial price and volume fluctuations due to a number of factors, many of which are beyond our control and may prevent our stockholders from reselling our Common Stock at a profit.
The market prices for our securities may be volatile and may fluctuate substantially due to many factors, including:
· | market conditions in the business marketing services and digital assets services sectors or the economy as a whole; | |
· | price and volume fluctuations in the overall stock market; | |
· | announcements of the introduction of new products and services by us or our competitors; | |
· | actual fluctuations in our quarterly operating results, and concerns by investors that such fluctuations may occur in the future; | |
· | deviations in our operating results from the estimates of securities analysts or other analyst comments; | |
· | additions or departures of key personnel; | |
· | legislation, including measures affecting e-commerce or infrastructure development; and | |
· | developments concerning current or future strategic collaborations. |
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Item 2. | Financial Information |
Management’s Discussion and Analysis of the Results of Operations
Forward-Looking Statements
Statements in the following discussion and throughout this registration statement that are not historical in nature are “forward-looking statements.” You can identify forward-looking statements by the use of words such as “expect,” “anticipate,” “estimate,” “may,” “will,” “should,” “intend,” “believe,” and similar expressions. Although we believe the expectations reflected in these forward-looking statements are reasonable, such statements are inherently subject to risk and we can give no assurances that our expectations will prove to be correct. Actual results could differ from those described in this registration statement because of numerous factors, many of which are beyond our control. These factors include, without limitation, those described under Item 1A “Risk Factors.” We undertake no obligation to update these forward-looking statements to reflect events or circumstances after the date of this registration statement or to reflect actual outcomes. Please see “Forward Looking Statements” at the beginning of this Form 10.
The following discussion of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and the related notes thereto and other financial information appearing elsewhere in this Form 10.
Overview
The Company is engaged in the business of property development by implementing modular integrated construction technology (“MiC”), embedded with our proprietary atmospheric water generators (“AWG”) and property management system by internet of things technology (“IoT”). We believe that these technologies support the development of sustainable and intelligent properties tailored for a varieties markets, including residential, commercial, industrial, and remote or resource-scarce environments.
We are at a development stage company and during the years ended December 31, 2024 and 2023, the Company only derived revenue from modular building construction and design services business. We reported a net loss of $256,949 and net profit of $28,694 for the years ended December 31, 2024 and 2023, respectively. We had current assets of $1,030,614 and current liabilities of $517,486 as of December 31, 2024. As of December 31, 2023, our current assets and current liabilities were $942,324 and $689,610, respectively. We had net cash used in operating activities of $345,193 for the year ended December 31, 2024 and net cash provided by operating activities of $252,075 for the year ended December 31, 2023. As at December 31, 2024 and 2023, we had accumulated deficit of $437,697 and $180,748, respectively.
Our financial statements for the years ended December 31, 2024 and 2023 have been prepared assuming that we will continue as a going concern. Our continuation as a going concern is dependent upon improving our profitability and the continuing financial support from our stockholders. The Company plans to secure additional funding to support its current operations, expected future growth and strategic objectives. Management is actively pursuing financing opportunities through debt and equity transactions, as well as exploring new development projects and accelerating the commercialization of its products. If successfully executed, these initiatives are expected to generate positive operating cash flows and improve the Company’s financial position.
Based on management’s best estimates, the Company believes it has sufficient financial resources to meet its obligations for at least the next twelve months.
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Results of Operations for the Year Ended December 31, 2024 and 2023
Comparison of the fiscal years ended December 31, 2024 and 2023
The following table sets forth certain operational data for the years indicated:
Years Ended December 31, | ||||||||
2024 | 2023 | |||||||
Revenues: | ||||||||
Design and build services | $ | 114,482 | $ | 1,624,302 | ||||
Project design and management services | 294,860 | – | ||||||
Total revenue | 409,342 | 1,624,302 | ||||||
Cost of services | (349,179 | ) | (1,580,073 | )) | ||||
Gross profit | 60,163 | 44,229 | ||||||
Operating expenses: | ||||||||
General and administrative expenses | (283,675 | ) | (10,908 | ) | ||||
(Loss) / profit from operation | (223,512 | ) | 33,321 | |||||
Other income, net | 4,244 | 733 | ||||||
(Loss) / profit before income taxes | (219,268 | ) | 34,054 | |||||
Income tax expense | (37,681 | ) | (5,360 | ) | ||||
Net (loss) / profit | $ | (256,949 | ) | $ | 28,694 |
Revenue
During the year ended December 31, 2024 and 2023, the following customers accounted for 10% or more of our total net revenues.
Year ended December 31, 2024 | ||||||||
Customer | Revenues | Percentage of revenues | ||||||
CRCC - Kwan Lee - Paul Y. JV | $ | 114,482 | 28% | |||||
Zenith (HK) Engineering Limited | 294,860 | 72% | ||||||
Total: | $ | 409,342 | 100% |
Year ended December 31, 2023 | ||||||||
Customer | Revenues | Percentage of revenues | ||||||
CRCC - Kwan Lee - Paul Y. JV | $ | 1,624,302 | 100% | |||||
Total: | $ | 1,624,302 | 100% |
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The significant decrease in revenue by approximately 75% was primarily due to the drop in revenue derived from the design and build services from $1,624,302 in 2023 to $114,482 in 2024. Revenues derived from design and building services are recognized over time by using the cost-to-cost method to measure the progress towards the completion of the performance obligation.
Cost of Revenue
Cost of services were $349,179 and $1,580,073, for the year ended December 31, 2024 and 2023 respectively. The decrease was in consistent with the revenue recognised during the years.
Gross Profit
We achieved a gross profit of $60,163 and $44,229 for the years ended December 31, 2024 and 2023, respectively. The increase in gross profit is attributable to the addition of project design and management services income in 2024.
General and administrative expenses (“G&A expenses”)
General and administrative expenses of $283,675 and $10,908 for the years ended December 31, 2024 and 2023, respectively. These expenses primarily include advertising and marketing expenses, business development and consultancy fees, personnel related expenses, as well as costs incurred in connection with general operations of the Company. The significant increase in general and administrative expenses was primarily due to the Group’s strategic initiatives, including the diversification of our business operations into overseas markets beyond Hong Kong starting from August 2024, as part of a broader restructuring of the Group.
Income Tax Expense
We incurred income tax expense of $37,681 and $5,360 during the years ended December 31, 2024 and 2023, respectively. Income is subject to taxation in various countries in which the Company and its subsidiaries operate or are incorporated. The income tax expense incurred in 2024 and 2023 was Hong Kong profits tax in which the subsidiaries are subject to a 16.5% income tax rate on its taxable income generated from operations in Hong Kong.
Liquidity and Capital Resources
The following summarizes the key component of our cash flows for the years ended December 31, 2024 and 2023.
Years ended December 31, | ||||||||
2024 | 2023 | |||||||
Net cash (used in) / provided by operating activities | $ | (345,193 | ) | $ | 252,075 | |||
Net cash used in investing activities | $ | (25,658 | ) | $ | – | |||
Net cash provided by financing activities | $ | 392,509 | $ | – |
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Net Cash (Used In) / provided by Operating Activities
For the year ended December 31, 2024, net cash used in operating activities was $345,193, primarily consisting of a net loss of $219,268, increase in prepaid expenses and other current assets of $97,021, decrease in amount due to related companies of $415,548, with were partly offset by decrease in other receivables of $194,951 and increase in contract liabilities of $149,571.
For the year ended December 31, 2023, net cash provided by operating activities was $252,075, which consisted primarily of a net profit of $34,054 and increase in amount due to related companies of 408,126. These were offset by increase in accounts receivable and contract assets of $82,545 and $115,500, respectively.
Net Cash Used In Investing Activities
For the year ended December 31, 2024, net cash used in investing activities was $25,658, which mainly consisted of purchase of equipment of $25,655.
No investing activities incurred for the year ended December 31, 2023.
Net Cash Provided by Financing Activities
For the year ended December 31, 2024, net cash provided by financing activities was $392,509, which consisted of proceeds from share issuance in a subsidiary of $542,308 with offset by the loan of $149,799 advanced to an independent property development entity based in Canada.
No financing activities incurred for the year ended December 31, 2023.
Working Capital
As of December 31, 2024 and 2023, our cash and cash equivalents amounted to $382,127 and $360,469 and our working capital was $513,128 and $252,714, respectively.
We expect to incur significantly greater expenses in the near future as we are expanding our business in various geographical locations.
We also expect our business development, sales and marketing expenses to increase as we would spend more efforts in building up customers, exploring new projects and sales network, and incur additional costs in professional and consultancy fees, administrative expenses associated with our corporate restructurings and filings with the Commission.
During the year, we did not pay dividends on our Common Stock. Our present policy is to apply cash to investments in business development and expansion; consequently, we do not expect to pay dividends on Common Stock in the foreseeable future.
Going Concern
Our continuation as a going concern is dependent upon improving our profitability and the continuing financial support from our stockholders. Our sources of capital may include the sale of equity securities, which include common stock sold in private transactions and short-term and long-term debts. While we believe that we will obtain external financing and the existing shareholders will continue to provide the additional cash to meet our obligations as they become due, there can be no assurance that we will be able to raise such additional capital resources on satisfactory terms. We believe that our current cash and other sources of liquidity discussed below are adequate to support operations for at least the next 12 months.
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We require additional funding to meet its ongoing obligations and to fund anticipated operating losses. Our ability to continue as a going concern is dependent on raising capital to fund its initial business plan and ultimately to attain profitable operations. These consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets and liabilities that may result in the Company not being able to continue as a going concern.
We expect to incur business development, sales and marketing, professional and administrative expenses as well expenses associated with maintaining our filings with the Commission. We will require additional funds during this time and will seek to raise the necessary additional capital. If we are unable to obtain additional financing, we may be required to reduce the scope of our business development activities, which could harm our business plans, financial condition and operating results. Additional funding may not be available on favorable terms, if at all. We intend to continue to fund its business by way of equity or debt financing and advances from related parties. Any inability to raise capital as needed would have a material adverse effect on our business, financial condition and results of operations.
If we cannot raise additional funds, we will have to cease business operations. As a result, our common stock investors would lose all of their investment.
Material Cash Requirements
We incurred loss of $256,949 for the year ended December 31, 2024 and we expect to continue to incur net losses for the foreseeable future. We expect net cash expended in 2025 to be significantly higher than 2024. As of December 31, 2024, we had an accumulated deficit of $437,697. Our material cash requirements are highly dependent upon the additional financial support from our major shareholders and external financing in the next 12 - 18 months.
We had the following contractual obligations and commercial commitments as of December 31, 2024:
Contractual Obligations | Total | Less than 1 year | 1-3 Years | 3-5 Years | More than 5 Years | |||||||||||||||
$ | $ | $ | $ | $ | ||||||||||||||||
Account payables | 55,772 | 55,772 | – | – | – | |||||||||||||||
Accrued expenses | 55,000 | 55,000 | – | – | – | |||||||||||||||
Contract liabilities | 149,571 | 149,571 | – | – | – | |||||||||||||||
Tax liabilities | 55,498 | 55,498 | – | – | – | |||||||||||||||
Amount due to related companies | 201,645 | 201,645 | – | – | – | |||||||||||||||
Total obligations | 517,486 | 517,486 | – | – | – |
Off-Balance Sheet Arrangements
We are not party to any off-balance sheet transactions. We have no guarantees or obligations other than those which arise out of normal business operations.
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Critical Accounting Policies and Estimates.
The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States requires our management to make assumptions, estimates and judgments that affect the amounts reported, including the notes thereto, and related disclosures of commitments and contingencies, if any. We have identified certain accounting policies that are significant to the preparation of our consolidated financial statements. These accounting policies are important for an understanding of our financial condition and results of operations. Critical accounting policies are those that are most important to the presentation of our financial condition and results of operations and require management's subjective or complex judgment, often as a result of the need to make estimates about the effect of matters that are inherently uncertain and may change in subsequent periods. Certain accounting estimates are particularly sensitive because of their significance to consolidated financial statements and because of the possibility that future events affecting the estimate may differ significantly from management's current judgments. We believe the following accounting policies are critical in the preparation of our consolidated financial statements.
· | Use of estimates and assumptions |
In preparing these consolidated financial statements, management makes estimates and assumptions that affect the reported amounts of assets and liabilities in the balance sheet and revenues and expenses during the years reported. Actual results may differ from these estimates. If actual results significantly differ from the Company’s estimates, the Company’s financial condition and results of operations could be materially impacted. Significant estimates in the period include the revenue recognition, allowance for Expected Credit Losses and deferred tax valuation allowance.
· | Basis of consolidation |
The consolidated financial statements include the financial statements of ModuLink Investment Limited and its subsidiaries and associated company for which it is the primary beneficiary. Upon making this determination, the Company is deemed to be the primary beneficiary of these entities, which are then required to be consolidated for financial reporting purpose. All significant intercompany transactions and balances have been eliminated upon consolidation.
Transactions involving entities under common control are accounted for using the merger accounting. The consolidated financial statements of the combining entities are presented as if the reorganization occurred at the beginning of the earliest reporting period presented. No gain or loss is recognized in the consolidated financial statements as a result of the reorganization. The historical financial information of all entities under common control is combined retroactively for all periods presented. The financial statements reflect consistent accounting policies and principles across all entities.
· | Cash and cash equivalents |
Cash and cash equivalents are carried at cost and represent cash on hand, demand deposits placed with banks or other financial institutions and all highly liquid investments with an original maturity of three months or less as of the purchase date of such investments.
· | Impairment of long-lived assets |
In accordance with the provisions of ASC Topic 360, “Impairment or Disposal of Long-Lived Assets”, all long-lived assets such as plant and equipment and intangible assets held and used by the Company are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is evaluated by a comparison of the carrying amount of an asset to its estimated future undiscounted cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amounts of the assets exceed the fair value of the assets. There has been no impairment charge for the years presented.
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· | Revenue recognition |
The Company derives a significant portion of revenues from contracts with its customers during the years ended December 31, 2024 and 2023, predominantly by performing design and building services and project design and management services for both public and private projects, with an emphasis on commercial and residential developments.
In accordance with ASC 606, Revenue From Contracts with Customers, an entity recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration the entity expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements that are within the scope of the standard, the entity performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. The standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The standard also includes criteria for the capitalization and amortization of certain contract acquisition and fulfillment costs.
Design and building services
Revenues derived from design and building services are recognized over time by using the cost-to-cost method to measure the progress towards the completion of the performance obligation as the customer simultaneously receives and consumes the benefits from the services rendered by the Company.as the Company satisfies its performance obligations by transferring control of the asset created or enhanced by the project to the customer. The contracts for design and building services are legally enforceable and binding agreements between the Company and customers. Recognition of revenues for construction projects requires significant judgment by management, including, among other things, estimating total costs expected to be incurred to complete a project and measuring progress toward completion. Management reviews contract estimates regularly to assess revisions of estimated costs to complete a project and for measurement of progress toward completion. No material adjustments to a contract were noted in the fiscal years ended December 31, 2024 and 2023.
The Company reviews and updates the estimated total costs of the contracts at least annually. Revisions to contract revenue and estimated total costs of the contracts are made in the period in which the facts and circumstances that cause the revision become known and are accounted for as changes in estimates. Management believes the Company maintains reasonable estimates based on prior experience; however, many factors contribute to changes in estimates of contract costs. Accordingly, estimates made with respect to uncompleted projects are subject to change as each project progresses and better estimates of contract costs become available. All contract costs are recorded as incurred, and revisions to estimated total costs are reflected as soon as the obligation to perform is determined. Provisions are recognized for the full amount of estimated losses on uncompleted contracts whenever evidence indicates that the estimated total cost of a contract exceeds its estimated total revenue, regardless of the stage of completion. When the Company incurs additional costs related to work performed by subcontractors, the Company may be able to utilize contractual provisions to back charge the subcontractors for those costs.
Revenue in excess of billings on the contracts is recorded as costs and estimated earnings in excess of billings. Billings in excess of revenues recognized on the contracts are recorded as deferred revenue until the above revenue recognition criteria are met. Recognition of accounts receivable and costs and estimated earnings in excess of billings are stated set out in Note 2(I) of ModuLink Investment Limited of notes to consolidated financial statements for the years ended December 31, 2024 and 2023.
If at any time the costs to complete the contract are estimated to exceed the remaining amount of the consideration under the contract, then a provision is recognized.
Project design and management services
Revenues derived from design and management services are recognized over time by using percentage of completion certified by engineer to measure the progress towards the completion of the performance obligation as the customer simultaneously receives and consumes the benefits from the services rendered by the Company. The contracts for design and building services are legally enforceable and binding agreements between the Company and customers.
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· | Income taxes |
The Company adopted the ASC 740 “Income tax” provisions of paragraph 740-10-25-13, which addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the consolidated financial statements. Under paragraph 740-10-25-13, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the consolidated financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent (50%) likelihood of being realized upon ultimate settlement. Paragraph 740-10-25-13 also provides guidance on de-recognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures. The Company had no material adjustments to its liabilities for unrecognized income tax benefits according to the provisions of paragraph 740-10-25-13.
The estimated future tax effects of temporary differences between the tax basis of assets and liabilities are reported in the accompanying balance sheets, as well as tax credit carry-backs and carry-forwards. The Company periodically reviews the recoverability of deferred tax assets recorded on its balance sheets and provides valuation allowances as management deems necessary.
· | Uncertain tax positions |
The Company did not take any uncertain tax positions and had no adjustments to its income tax liabilities or benefits pursuant to the ASC 740 provisions of Section 740-10-25 for the years ended December 31, 2024 and 2023.
· | 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 consolidated statement of operations.
The reporting currency of the Company is United States Dollar ("US$") and the accompanying consolidated financial statements have been expressed in US$. In addition, the Company is operating in Hong Kong, and maintains its books and record in its local currencies, Hong Kong Dollars (“HKD”) respectively, which is a functional currency as being the primary currency of the economic environment in which their operations are conducted. In general, for consolidation purposes, assets and liabilities of its subsidiaries whose functional currency is not US$ are translated into US$, in accordance with ASC Topic 830-30, “Translation of Financial Statement”, using the exchange rate on the balance sheet date. Revenues and expenses are translated at average rates prevailing during the period. The gains and losses resulting from translation of financial statements of foreign subsidiary are recorded as a separate component of accumulated other comprehensive income within the statements of changes in shareholders’ equity.
Translation of amounts from HKD into US$ has been made at the following exchange rates for the years ended December 31, 2024 and 2023:
December 31, 2024 | December 31, 2023 | |||||||
Year-end HKD:US$ exchange rate | 0.1282 | 0.1282 | ||||||
Average HKD:US$ exchange rate | 0.1282 | 0.1277 |
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· | 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 consolidated statements of changes in shareholders’ equity, consists of changes in unrealized gains and losses on foreign currency translation. This comprehensive income is not included in the computation of income tax expense or benefit.
· | Related parties |
The Company follows the ASC 850-10, “Related Party Disclosures” for the identification of related parties and disclosure of related party transactions.
Pursuant to section 850-10-20 the related parties include a) affiliates of the Company; b) entities for which investments in their equity securities would be required, absent the election of the fair value option under the Fair Value Option Subsection of section 825-10-15, to be accounted for by the equity method by the investing entity; c) trusts for the benefit of employees, such as pension and Income-sharing trusts that are managed by or under the trusteeship of management; d) principal owners of the Company; e) management of the Company; f) other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests; and g) other parties that can significantly influence the management or operating policies of the transacting parties or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests.
The consolidated financial statements shall include disclosures of material related party transactions, other than compensation arrangements, expense allowances, and other similar items in the ordinary course of business. However, disclosure of transactions that are eliminated in the preparation of consolidated or combined financial statements is not required in those statements. The disclosures shall include: a) the nature of the relationship(s) involved; b) a description of the transactions, including transactions to which no amounts or nominal amounts were ascribed, for each of the periods for which income statements are presented, and such other information deemed necessary to an understanding of the effects of the transactions on the financial statements; c) the dollar amounts of transactions for each of the periods for which income statements are presented and the effects of any change in the method of establishing the terms from that used in the preceding period; and d) amount due from or to related parties as of the date of each balance sheet presented and, if not otherwise apparent, the terms and manner of settlement.
· | Fair value of financial instruments |
The Company follows paragraph 825-10-50-10 of the FASB Accounting Standards Codification for disclosures about fair value of its financial instruments and has adopted paragraph 820-10-35-37 of the FASB Accounting Standards Codification (“Paragraph 820-10-35-37”) to measure the fair value of its financial instruments. Paragraph 820-10-35-37 of the FASB Accounting Standards Codification establishes a framework for measuring fair value in generally accepted accounting principles (GAAP), and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, paragraph 820-10-35-37 of the FASB Accounting Standards Codification establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three (3) levels of fair value hierarchy defined by paragraph 820-10-35-37 of the FASB Accounting Standards Codification are described below:
Level 1 | Quoted market prices available in active markets for identical assets or liabilities as of the reporting date. | |
Level 2 | Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. | |
Level 3 | Pricing inputs that are generally observable inputs and not corroborated by market data. |
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Financial assets are considered Level 3 when their fair values are determined using pricing models, discounted cash flow methodologies or similar techniques and at least one significant model assumption or input is unobservable.
The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. If the inputs used to measure the financial assets and liabilities fall within more than one level described above, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument.
The carrying amounts of the Company’s financial assets and liabilities, such as cash and cash equivalents, prepaid expense and other current assets, accrued liabilities and other payables, accrued consulting service fee, amounts due to related parties and income tax payable approximate their fair values because of the short maturity of these instruments.
· | Recent accounting pronouncements |
In March 2022, the Financial Accounting Standards Board (“FASB”) issued ASU No 2022-02, “Financial Instruments—Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures” (“ASU 2022-02”). ASU 2022-02 eliminates the accounting guidance for troubled debt restructurings by creditors while enhancing disclosure requirements for certain loan refinancing and restructurings by creditors made to borrowers experiencing financial difficulty. In addition, the amendments require disclosure of current period gross write-offs for financing receivables and net investment in leases by year of origination in the vintage disclosures. ASU 2022-02 is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Except for expanded disclosures to its vintage disclosures, ASU 2022-02 did not have a material effect on the Company’s current financial position, results of operations or financial statements.
In October 2023, the FASB issued ASU No 2023-06, “Disclosure Agreements – Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative” (“ASU 2023-06”). ASU 2023-06 will align the disclosure and presentation requirements in the FASB Accounting Standards Codification with the SEC’s regulations. The amendments in ASU 2023-06 will be applied prospectively and are effective when the SEC removes the related requirements from Regulations S-X or S-K. Any amendments the SEC does not remove by June 30, 2027 will not be effective. As the Company is currently subject to these SEC requirements, ASU 2023-06 is not expected to have a material effect on the Company’s current financial position, results of operations or financial statement disclosures.
In November 2023, the FASB issued ASU No 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures” (“ASU 2023-07”). ASU 2023-07 expands disclosures about a public entity’s reportable segments and requires more enhanced information about a reportable segment’s expenses, interim segment profit or loss, and how a public entity’s chief operating decision maker uses reported segment profit or loss information in assessing segment performance and allocating resources. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted. ASU 2023-07 should be applied retrospectively to all prior periods presented in the financial statements. The Company does not expect ASU 2023-07 to have a material effect on the Company’s current financial position, results of operations or financial statement disclosures.
In December 2023, the FASB issued ASU No 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures” (“ASU 2023-09”). ASU 2023-09 expands disclosures in the rate reconciliation and requires disclosure of income taxes paid by jurisdiction. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024. Early adoption is permitted. ASU 2023-09 should be applied prospectively; however, retrospective application is permitted. The Company does not expect ASU 2023-09 to have a material effect on the Company’s current financial position, results of operations or financial statement disclosures.
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In June 2016, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2016-13, Financial Instruments Credit Losses (Topic 326), which requires entities to measure all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. This replaces the existing incurred loss model and is applicable to the measurement of credit losses on financial assets measured at amortized cost. This standard was effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years with early adoption permitted. In November 2019, the FASB issued ASU No. 2019-10, Financial Instruments— Credit Losses (Topic 326), Derivatives and Hedging (Topic 815) and Leases (Topic 842). Effective Dates, which defers the effective date of Topic 326. As a smaller reporting Company, Topic 326 will now be effective for the Company beginning January I, 2023. The Company adopted this ASU January I, 2023 and it did not have a significant impact on its consolidated financial statements and related disclosures.
In August 2020, the FASB issued ASU No. 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 4 70- 20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40). Accounting for Convertible Instruments and Contracts in an Entity ’s Owner Equity (ASU 2020-06). ASU 2020-06 simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts in an entity’s own equity. Those instruments that do not have a separately recognized embedded conversion feature will no longer recognize a debt issuance discount related to such a conversion feature and would recognize less interest expense on a periodic basis. It also removes from ASC 815-40-25-10 certain conditions for equity classification and amends certain guidance in ASC Topic 260 on the computation of EPS for convertible instruments and contracts in an entity’s own equity. An entity can use either a full or modified retrospective approach to adopt the ASU’s guidance. As a smaller reporting Company, the Company is required to adopt this ASU for the fiscal year beginning January 1, 2024, with early adoption permitted for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years. The Company adopted this ASU January 1, 2022 and it did not have a significant impact on its consolidated financial statements and related disclosures.
In May 2021, the FASB issued ASU No. 2021-04, Earnings Per Share (Topic 260), Debt— Modifications and Extinguishments (Subtopic 4 70-50), Compensation—Stock Compensation (Topic 718), and Derivatives and Hedging— Contracts in Entity’s’ Owen Equity (Subtopic 815-40) (ASU 2022-04). ASU 2022-04 updates current accounting guidance for modifications or exchanges of freestanding equity-classified written call options that remain equity-classified after modification or exchange as an exchange of the original instrument for a new instrument. The ASU specifies that the effects of modifications or exchanges of freestanding equity-classified written call options that remain equity after modification or exchange should be recognized depending on the substance of the transaction, whether it be a financing transaction to raise equity (topic 340), to raise or modify debt (topic 470 and 835), or other modifications or exchanges. If the modification or exchange does not fall under topics 340, 470, or 835, an entity may be required to account for the effects of such modifications or exchanges as dividends which should adjust net income (or loss) in the basic EPS calculation. This guidance was effective for fiscal years beginning after December 15, 2022, with early adoption permitted. The Company is required to apply the amendments within this ASU prospectively to modifications or exchanges occurring on or after the effective date of the amendment. The Company adopted this ASU January I, 2023 and it did not have a significant impact on its consolidated financial statements and related disclosures.
Recently Issued Accounting Pronouncements Not Yet Adopted
In December 2023, FASB issued ASU 2023- 09, Income Taxes (Topic 740). Improvements to Income Tax Disclosures (ASU 2023-09). The ASU focuses on income tax disclosures around effective tax rates and cash income taxes paid. ASU 2023-09 requires public business entities to disclose, on an annual basis, a rate reconciliation presented in both dollars and percentages. The guidance requires the rate reconciliation to include specific categories and provides further guidance on disaggregation of those categories based on a quantitative threshold equal to 5% or more of the amount determined by multiplying pretax income (loss) from continuing operations by the applicable statutory rate. For entities reconciling to the US statutory rate of 21%, this would generally require disclosing any reconciling items that impact the rate by 1.05% or more. ASU 2023-09 is effective for public business entities for annual periods beginning after Dec. 15, 2024 (generally, calendar year 2025) and effective for all other business entities one year later. Entities should adopt this guidance on a prospective basis, though retrospective application is permitted. The adoption of ASU 2023-09 is expected to have a financial statement disclosure impact only and is not expected to have a material impact on the Company’s consolidated financial statements.
Other pronouncements issued by the FASB or other authoritative accounting standards groups with future effective dates are either not applicable or are not expected to be significant to the Company’s financial position, results of operations or cash flows.
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Results of Operations for the Three Months Ended March 31, 2025 and 2024
Comparison of the three months ended March 31, 2025 and 2024
The following table sets forth certain operational data for the periods indicated:
Three Months Ended March 31, | ||||||||
2025 | 2024 | |||||||
Revenues: | ||||||||
Design and build services | $ | 300,019 | $ | 114,487 | ||||
Project design and management services | 129,077 | – | ||||||
Total revenue | 429,096 | 114,487 | ||||||
Cost of services | (379,550 | ) | (103,467 | )) | ||||
Gross profit | 49,546 | 11,020 | ||||||
Operating expenses: | ||||||||
General and administrative expenses | (234,712 | ) | (7,858 | ) | ||||
(Loss) / profit from operation | (185,166 | ) | 3,162 | |||||
Other income, net | 1,938 | 434 | ||||||
(Loss) / profit before income taxes | (183,228 | ) | 3,596 | |||||
Income tax expense | (8,822 | ) | (1,809 | ) | ||||
Net (loss) / profit | $ | (192,050 | ) | $ | 1,787 |
Revenue
During the three months ended March 31, 2025 and 2024, the following customers accounted for 10% or more of our total net revenues.
Three months ended March 31, 2025 | ||||||||
Customer | Revenues | Percentage of revenues | ||||||
An individual customer based in Hong Kong | $ | 300,019 | 70% | |||||
Zenith (HK) Engineering Limited | 129,077 | 30% | ||||||
Total: | $ | 429,096 | 100% |
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Three months ended March 31, 2024 | ||||||||
Customer | Revenues | Percentage of revenues | ||||||
CRCC - Kwan Lee - Paul Y. JV | $ | 114,487 | 100% | |||||
Total: | $ | 114,487 | 100% |
The increase in revenue by approximately 275% was primarily due to the income recognised from new design and management service project during the three months ended March 31, 2025.
Cost of Revenue
Cost of services were $379,550 and $103,467, for the three months ended March 31, 2025 and 2024 respectively. The increase was in consistent with the revenue recognised during the periods.
Gross Profit
We achieved a gross profit of $49,546 and $11,020 for the three months ended March 31, 2025 and 2024, respectively. The increase in gross profit is attributable to the addition of project design and management services income during the three months ended March 31, 2025.
General and administrative expenses (“G&A expenses”)
General and administrative expenses of $234,712 and $7,858 for the three months ended March 31, 2025 and 2024, respectively. These expenses primarily include advertising and marketing expenses, business development, professional and consultancy fees, personnel related expenses, as well as costs incurred in connection with general operations of the Company. The significant increase in G&A expenses was primarily due to continued business expansion of our subsidiaries and professional fees incurred in relation to the business combination.
Income Tax Expense
We incurred income tax expense of $8,822 and $1,809 during the three months ended March 31, 2025 and 2024, respectively. The Company’s subsidiaries operating in Hong Kong are subject to the Hong Kong Profits Tax at the two-tiered profits tax rates from 8.25% to 16.5% on the estimated assessable profits derived during the current period, after deducting a tax concession for the tax year.
Liquidity and Capital Resources
The following summarizes the key component of our cash flows for the three months ended March 31, 2025 and 2024.
Three months ended March 31 | ||||||||
2025 | 2024 | |||||||
Net cash used in operating activities | $ | (811,255 | ) | $ | (36,711 | ) | ||
Net cash used in investing activities | $ | (2,100 | ) | $ | – | |||
Net cash provided by financing activities | $ | 668,026 | $ | – |
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Net Cash Used In Operating Activities
For the three months ended March 31, 2025, net cash used in operating activities was $811,255, primarily consisting of a net loss of $183,228, increase in accounts receivables, amount due from an associate and other receivables of $129,077, $104,447 and $272,785, respectively, and also the decrease in contract liabilities and amount due to related companies of $149,571 and $61,413, respectively.
For the three months ended March 31, 2024, net cash used in operating activities was $36,711, was primarily due to the decrease in accounts payable and contract liabilities of $46,857 and 86,735, respectively, partly offset by the decrease in accounts receivable of $82,545.
Net Cash Used In Investing Activities
For the three months ended March 31, 2025, net cash used in investing activities of $2,100 was related to the purchase of equipment.
No investing activities incurred for the three months ended March 31, 2024.
Net Cash Provided by Financing Activities
For the three months ended March 31, 2025, net cash provided by financing activities was $668,026, which was primarily due to the proceeds from share issuance in a subsidiary of $669,872.
No financing activities incurred for the three months ended March 31, 2024.
Working Capital
As of March 31, 2025, our cash and cash equivalents amounted to $236,798 and our working capital was $991,098. The increase was attributable to the proceeds from share issuance in a subsidiary.
We expect to incur significantly greater expenses in the near future as we are expanding our business in various geographical locations.
We also expect our business development, sales and marketing expenses to increase as we would spend more efforts in building up customers, exploring new projects and sales network, and incur additional costs in professional and consultancy fees, administrative expenses associated with our corporate restructurings and filings with the Commission.
Item 3. | Properties |
Our corporate and executive office is located at Unit 2, Level 6, Westin Centre, 26 Hung To Road, Kwun Tong, Hong Kong, telephone number +1 888-493-8028. We are parties to an office service arrangement without a specified term at a monthly rate of $3,270 with AY Consulting Company, a sole proprietorship of Au-Yeung Sai Kit, our director.
We believe that our current facilities are adequate for our current needs. We expect to secure new facilities or expand existing facilities as necessary to support future growth. We believe that suitable additional space will be available on commercially reasonable terms as needed to accommodate our operations.
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Item 4. | Security Ownership of Certain Beneficial Owners and Management |
The following table sets forth certain information with respect to the beneficial ownership of our common stock, as of May ___, 2025, for: (i) each of our named executive officers; (ii) each of our directors; (iii) all of our current executive officers and directors as a group; and (iv) each person, or group of affiliated persons, known by us to be the beneficial owner of more than 5% of our outstanding shares of common stock.
Except as indicated in footnotes to this table, we believe that the stockholders named in this table will have sole voting and investment power with respect to all shares of common stock shown to be beneficially owned by them, based on information provided to us by such stockholders. Unless otherwise indicated, the address for each director and executive officer listed is: c/o International Endeavors Corporation, Unit 2, Level 6, Westin Centre, 26 Hung To Road, Kwun Tong, Hong Kong.
Common Stock Beneficially Owned | Series A Preferred Stock Owned | |||||||||||||||
Name and Address of Beneficial Owner | Number
of Shares and Nature of Beneficial Ownership | Percentage
of Total Common Equity (1) | Number
of Shares and Nature of Beneficial Ownership | Percentage
of Total Series A Preferred Equity (1) | ||||||||||||
TAM, Hin Wah Anthony (2) | 707,013,618 | 17.81% | 200,000 | 100% | ||||||||||||
AU Yeung Sai Kit (3) | 353,506,809 | 8.90% | – | – | ||||||||||||
FU, Wah (4) | 353,506,809 | 8.90% | – | – | ||||||||||||
All executive officers and directors as a Group (5 persons) | 1,414,027,236 | 35.62% | 200,000 | 100% | ||||||||||||
5% or Greater Stockholders: | ||||||||||||||||
ModuLink Inc. (2) | – | – | 200,000 | 100% |
________________
(1) | Applicable percentage ownership is based on 3,969,933,920 shares of common stock outstanding and issuable as of May 28, 2025. Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission and generally includes voting or investment power with respect to securities. Shares of common stock that a person has the right to acquire beneficial ownership of upon the exercise or conversion of options, convertible stock, warrants or other securities that are currently exercisable or convertible or that will become exercisable or convertible within 60 days of May 28, 2025, are deemed to be beneficially owned by the person holding such securities for the purpose of computing the number of shares beneficially owned and percentage of ownership of such person, but are not treated as outstanding for the purpose of computing the percentage ownership of any other person. |
(2) | TAM, Hin Wah Anthony, our Chairman of the Board, directly owns 707,013,618 shares of our common stock. Modulink Inc., of which Mr. TAM is the controlling shareholder, beneficially owns 200,000 shares of our Series A Preferred Stock. Each one share of Series A Preferred Stock is entitled to vote as, and is convertible into, twenty thousand shares of common stock. The Series A Preferred Stock has the voting rights, powers, preferences and privileges more fully described in the section entitled “Description of Registrant’s Securities to be Registered.” |
(3) | AU-YEUNG, Sai Kit was appointed to serve as our Director, Chief Financial Officer and Secretary on February 10, 2025 |
(4) | FU, Wah was appointed to serve as our Director and Chief Executive Officer on February 10, 2025. |
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Item 5. | Directors and Executive Officers |
Set forth below are the present directors, director nominees and executive officers of the Company. There are no other persons who have been nominated or chosen to become directors nor are there any other persons who have been chosen to become executive officers. There are no arrangements or understandings between any of the directors, officers and other persons pursuant to which such person was selected as a director or an officer. Directors are elected to serve until the next annual meeting of stockholders and until their successors have been elected and have qualified. Officers are appointed to serve until the meeting of the board of directors following the next annual meeting of stockholders and until their successors have been elected and qualified.
Name | Age | Position | ||
TAM, Hin Wah Anthony (“Anthony Tam”) | 57 | Chairman of the Board | ||
FU, Wah (“William Fu”) | 56 | Director and Chief Executive Officer | ||
AU-YEUNG Sai Kit (“Alex Au Yeung”) | 46 | Director, Chief Financial Officer and Secretary | ||
WONG, Ho Man Alex (“Alex Wong”) | 70 | Non-Executive Director | ||
FUNG, Kwai Kin (‘KK Fung”) | 76 | Non-Executive Director |
Anthony Tam – Founder & Chairman
Mr. Tam was appointed Chairman of the Board on February 10, 2025. He has over 30 years of experience in the construction industry and is the founder of Zenith Group, established in 2016, a specialized façade design and build contracting company. In 2014, Mr. Tam served as the Director of Singyes MRW JV Co., Ltd., where he led the Xiqu Centre Project until mid-2016. Located in Hong Kong, the Xiqu Centre is a prestigious cultural landmark celebrating traditional Chinese opera. Under his leadership, the project achieved significant milestones, cementing its architectural and cultural prominence. Mr. Tam has extensive expertise in project management and specializes in a diverse range of project types, including Infrastructure, Foundation, Geotechnical, Building Construction, Architectural Builder’s Work and Finishes (ABWF), Fit-out, Architectural Facades, and Modular Integrated Construction (MiC). Recently, he has concentrated on fast-track project management, delivering successful outcomes in Macao, Abu Dhabi, Dubai, and Papua New Guinea. He has also cultivated strong relationships with experts and material suppliers across the PRC, North America, and UAE. Mr. Tam earned his First degree from Mohawk College in 1990 and later completed his Master’s degree in Business Administration at Preston University in 2008. His comprehensive knowledge of international construction project management provides invaluable insight and leadership to the Board.
William Fu – Director and Chief Executive Officer.
Mr. William Fu was appointed as our Director and Chief Executive Officer on February 10, 2025. He is a seasoned technopreneur with over 30 years of combined experience in managerial leadership and technology development. Mr. Fu possesses extensive expertise in integrated supply chain management, Microsoft licensing programs, and the development of advanced technologies across power systems, IoT, smart city solutions, and atmospheric water harvesting.
Since 2022, he has also served as the CEO and Director of Leidenford Limited, a company dedicated to the research and development of aqua technologies. From December 2021 to April 2024, he held the roles of CEO, Director, CFO, and Secretary at King Resources Inc., a company listed on the OTC Markets. Prior to that, Mr. Fu founded and led PowerTech Corporation Ltd. in 2014, Hong Kong, where he built a research and development team focused on high-efficiency, high-power-density AC/DC power solutions utilizing GaN and proprietary power conversion technologies. PowerTech was acquired by King Resources Inc. in 2021.
Mr. Fu has also been actively engaged in cutting-edge research, including a project on indoor location and object tracking. In 2017, he filed a patent for a “Position Estimating Lighting System and Position Estimating Method.” Mr. Fu brings to the board his deep experience with smart city infrastructure and IoT applications.
Mr. Fu holds a Master’s degree in Technology Management from the Hong Kong University of Science and Technology (2005) and a Bachelor’s degree in Business Administration from the University of Ottawa (1999).
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Alex Au Yeung – Director, Chief Financial Officer and Secretary
Mr. Au Yeung was appointed to serve as our Director, Chief Financial Officer and Secretary on February 10, 2025. He has over 25 years of experience as a finance professional, with a distinguished career that includes leadership roles in publicly listed companies in Hong Kong and Australia. His professional background reflects deep expertise in financial management, accounting, and banking. From September 2001 to October 2008, he began his career at Deloitte Touche Tohmatsu, where he gained extensive experience in audit and assurance services; he also worked at Standard Chartered Bank that further strengthening his capabilities in the banking sector. Mr. Au Yeung has held key executive roles in several multinational enterprises, including Brockman Mining Limited (listed on both the Hong Kong Stock Exchange and the Australian Securities Exchange) from December 2009 to January 2013, and Hargreaves Industrial Services (HK) Limited, a subsidiary of a UK-listed company, from February 2013 to July 2013. From November 2013 to August 2017, he served as an executive with the Marga Group, an international business syndicate focused on real estate development and telecommunications in Myanmar, where he played a strategic role in financial planning and execution. Mr. Au Yeung is an associate member of the Hong Kong Institute of Certified Public Accountants (HKICPA), the Institute of Singapore Chartered Accountants (ISCA), and CPA Australia. Mr. Yeung brings to the board his deep audit, accounting and financial management experience with publicly listed companies.
Alex Wong – Non-Executive Director
Mr. Wong was appointed to serve on our board of directors on February 10, 2025. Mr. Wong is a seasoned civil engineer with over 45 years of experience in the property development and construction industries across China, Hong Kong and Myanmar. Throughout his career, Mr. Wong has held senior leadership roles at several prominent property development and construction companies. Notably, he served as Project Director focus in China market at Shui On Land Limited (HKEX: 0272) from 2010 to 2013, a publicly listed real estate development company in Hong Kong. Among his significant accomplishments, Mr. Wong led a 50-hectare mixed-use urban redevelopment project in Foshan, China, with a total investment of approximately USD 3.8 billion and a gross floor area of 1.5 million square meters. His expertise spans large-scale project development and management in a diverse range of sectors, including hospitality, commercial real estate, and community infrastructure.
From 2003 to 2008, Mr. Wong served as Deputy Secretary General of the Hong Kong Construction Association, where he represented the industry in engagements with the Hong Kong Government on matters related to legislation, regulatory policy, and labor welfare. He obtained his Bachelor’s degree in Applied Science and in civil engineering from the University of Toronto Canada in 1978. Mr. Wong brings to the Board extensive technical knowledge, strategic insight, and international experience in both developed and emerging markets, particularly in the fields of property development and project management.
KK Fung – Non- Executive Director
Mr. Fung was appointed to serve on our board of directors on February 10, 2025. Mr. Fung received his bachelor’s degree in electrical engineering in 1972, a master’s degree in industrial engineering in 1981 and a master’s degree in business administration in 1988 from the University of Hong Kong. He also holds a master’s degree in arbitration & dispute resolution from the City University of Hong Kong in 2001. In relation to the construction industry practices, he also holds the following memberships:
- | A member of the Hong Kong Institution of Engineers | |
- | A fellow of the Chartered Institution of Building Services Engineers, U.K., since 2006 and currently a retired member | |
- | A fellow of the Chartered Institution of Arbitrators, U.K., since 2001 and currently a retired member |
He has over 50 years of extensive working experiences in E&M aspect of construction industry, he led sizable projects, namely, Ocean Park, Hong Kong Jockey Club Shatin Grandstand Extension and Club House, Ma On Shan Rail Stations in Hong Kong and 8-acre renowned property development in Yangon. He held senior management positions of international property development companies, namely Swire Construction Services Ltd., Swire Properties Projects Limited, and prestige listed groups in Hong Kong, namely Shui On Construction Co. Ltd. and Paul Y. (E&M) Contractors Ltd. in his earlier stage of career. From 2014 to 2017, Mr. Fung was a technical director of Marga Landmark Development Co. Ltd., a property developer in the development of an 8-acre commercial and residential complex in Yangon. Since 2017, Mr. Fung has worked as a technical director in a service company focusing on plumbing projects. Mr. Fung brings to the Board his broad expertise and connections in the construction industry and management in listed companies.
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Family Relationships
There is no family relationship between any director, executive officer or person nominated to become a director or executive officer.
Involvement in Certain Legal Proceedings
No executive officer or director is a party in a legal proceeding adverse to us or any of our subsidiaries or has a material interest adverse to us or any of our subsidiaries.
No executive officer or director has been involved in the last ten years in any of the following:
· | Any bankruptcy petition filed by or against any business or property of such person, or of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time; | |
· | Any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses); | |
· | Being subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities; | |
· | Being found by a court of competent jurisdiction (in a civil action), the SEC or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated; | |
· | Being the subject of or a party to any judicial or administrative order, judgment, decree or finding, not subsequently reversed, suspended or vacated relating to an alleged violation of any federal or state securities or commodities law or regulation, or any law or regulation respecting financial institutions or insurance companies, including but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order, or any law or regulation prohibiting mail, fraud, wire fraud or fraud in connection with any business entity; or | |
· | Being the subject of or a party to any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act, any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member. |
Composition of our Board of Directors
Our Bylaws provide that the size of our board of directors may be determined from time to time by resolution of our board of directors or our stockholders. Currently, we have five (5) directors. Our Bylaws may be amended, altered or repealed by our Board of Directors and shareholders holding a majority of our shares.
Our Bylaws also provide that our directors may be removed with or without cause if the votes cast to removal him exceeds the votes cast against removal. An election of our directors by our stockholders will be determined by a plurality of the votes cast by the stockholders entitled to vote on the election.
Our current and future executive officers and significant employees serve at the discretion of our board of directors. Our board of directors may also choose to form certain committees, such as a compensation and an audit committee.
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Item 6. | Executive Compensation |
Compensation Philosophy and Objectives
Our executive compensation philosophy is to create a long-term direct relationship between pay and our performance. Our executive compensation program is designed to provide a balanced total compensation package over the executive’s career with us. The compensation program objectives are to attract, motivate and retain the qualified executives that help ensure our future success, to provide incentives for increasing our profits by awarding executives when corporate goals are achieved and to align the interests of executives and long-term stockholders. The compensation package of our named executive officers consists of two main elements:
1. | base salary for our executives that is competitive relative to the market, and that reflects individual performance, retention and other relevant considerations; and | |
2. | discretionary bonus awards payable in cash and tied to the satisfaction of corporate objectives. |
Process for Setting Executive Compensation
Until such time as we establish a Compensation Committee, our Board is responsible for developing and overseeing the implementation of our philosophy with respect to the compensation of executives and for monitoring the implementation and results of the compensation philosophy to ensure compensation remains competitive, creates proper incentives to enhance stockholder value and rewards superior performance. We expect to annually review and approve for each named executive officer, and particularly with regard to the Chief Executive Officer, all components of the executive’s compensation. We process and factors (including individual and corporate performance measures and actual performance versus such measures) used by the Chief Executive Officer to recommend such awards. Additionally, we expect to review and approve the base salary, equity-incentive awards (if any) and any other special or supplemental benefits of the named executive officers.
The Chief Executive Officer periodically provides the Board with an evaluation of each named executive officer’s performance, based on the individual performance goals and objectives developed by the Chief Executive Officer at the beginning of the year, as well as other factors. The Board provides an evaluation for the Chief Executive Officer. These evaluations serve as the bases for bonus recommendations and changes in the compensation arrangements of our named executives.
Our Compensation Peer Group
We currently engage in informal market analysis in evaluating our executive compensation arrangements. As the Company and its businesses mature, we may retain compensation consultants that will assist us in developing a formal benchmark and selecting a compensation peer group of companies similar to us in size or business for the purpose of comparing executive compensation levels.
Program Components
Our executive compensation program consists of the following elements:
Base Salary
Our base salary structure is designed to encourage internal growth, attract and retain new talent, and reward strong leadership that will sustain our growth and profitability. The base salary for each named executive officer reflects our past and current operating profits, the named executive officer’s individual contribution to our success throughout his career, internal pay equity and informal market data regarding comparable positions within similarly situated companies. In determining and setting base salary, the Board considers all of these factors, though it does not assign specific weights to any factor. The Board generally reviews the base salary for each named executive officer on an annual basis. For each of our named executive officers, we review base salary data internally obtained by the Company for comparable executive positions in similarly situated companies to ensure that the base salary rate for each executive is competitive relative to the market.
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Discretionary Bonus
The objectives of our bonus awards are to encourage and reward our employees, including the named executive officers, who contribute to and participate in our success by their ability, industry, leadership, loyalty or exceptional service and to recruit additional executives who will contribute to that success.
Summary Compensation Table
The following summary compensation table sets forth the aggregate compensation we paid or accrued during the fiscal years ended December 31, 2024 and 2023, to (i) our Chief Executive Officer (principal executive officer), (ii) our Chief Financial Officer (principal financial officer), (iii) our three most highly compensated executive officers other than the principal executive officer and the principal financial officer who were serving as executive officers on December 31, 2024, whose total compensation was in excess of $100,000, and (iv) up to two additional individuals who would have been within the two-other-most-highly compensated but were not serving as executive officers on December 31, 2024.
SUMMARY COMPENSATION TABLE
Name and Principal Position | Year | Salary | Bonus | Stock Awards | Option Awards | Non-Equity Incentive Plan Compensation | Change in Pension Value and Non-qualified Deferred Compensation Earnings | All Other Compensation | Total | |||||||||||||||||||||||||||
William Fu CEO and Director (1) | 2024 | – | – | – | – | – | – | $ | 5,128 | $ | 5,128 | |||||||||||||||||||||||||
2023 | – | – | – | – | – | – | $ | – | $ | – | ||||||||||||||||||||||||||
Alex Au-Yeung CFO and Director (2) | 2024 | – | – | – | – | – | – | $ | 2,564 | $ | 2,564 | |||||||||||||||||||||||||
2023 | – | – | – | – | – | – | $ | – | $ | – |
(1) | Mr. Fu joined us as our Chief Executive Officer and Director on February 10, 2025. |
(2) | Mr. Au-Yeung joined us as our Chief Financial Officer and Director on February 10, 2025. |
Narrative disclosure to Summary Compensation Table
The Company is not a party to written compensation agreements with its executive officers. The Company, however, has orally agreed to pay each of Messrs. Fu and Au-Yeung a monthly fee of HK$20,000 (approximately $2,564) and HK$10,000 (approximately $1,282) for their services.
Other than set out above and below, there are no arrangements or plans in which we provide pension, retirement or similar benefits for directors or executive officers. We expect to establish one or more incentive compensation plans in the future. Our directors and executive officers may receive securities of the Company as incentive compensation at the discretion of our board of directors in the future. We do not have any material bonus or profit sharing plans pursuant to which cash or non-cash compensation is or may be paid to our directors or executive officers.
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Equity Awards
There are no options, warrants or convertible securities outstanding.
Except as set forth above and below in the director compensation table, at no time during the last fiscal year with respect to any of any of our executive officers was there:
· | any outstanding option or other equity-based award repriced or otherwise materially modified (such as by extension of exercise periods, the change of vesting or forfeiture conditions, the change or elimination of applicable performance criteria, or the change of the bases upon which returns are determined); | |
· | any waiver or modification of any specified performance target, goal or condition to payout with respect to any amount included in non-stock incentive plan compensation or payouts; | |
· | any option or equity grant; | |
· | any non-equity incentive plan award made to a named executive officer; | |
· | any nonqualified deferred compensation plans including nonqualified defined contribution plans; or | |
· | any payment for any item to be included under All Other Compensation in the Summary Compensation Table. |
Director Compensation
During the year ended December 31, 2024, the Company paid the following fees to its directors.
Name | Fees earned or paid in cash ($) | Stock awards ($) | Option awards ($) | Non-equity incentive plan compensation ($) | Change in pension value and nonqualified deferred compensation earnings | All other compensation ($) | Total ($) | |||||||||||||||||||||
Anthony Tam (1) | – | – | – | – | – | $ | 2,564 | $ | 2,564 | |||||||||||||||||||
KK Fung (2) | – | – | – | – | – | $ | 641 | $ | 641 | |||||||||||||||||||
Alex Wong (3) | – | – | – | – | – | – | – |
(1) | Mr. Tam joined us as our Director on February 10, 2025. |
(2) | Mr. Fung joined us as our Director on February 10, 2025. |
(3) | Mr. Wong joined us as our Director on February 10, 2025. |
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The Company is not a party to written director compensation agreements. The Company, however, has orally agreed to pay Mr. Tam a monthly director fee of HK$10,000 (approximately $1,282), and each of Messrs. Fung and Wong a monthly director fee of HK$5,000 (approximately $641), with payments to Mr. Wong commencing on January 2025. Directors are entitled to reimbursement for reasonable travel and other out-of-pocket expenses incurred in connection with attendance at meetings of our board of directors. Our board of directors may award special remuneration to any director undertaking for any special services on our behalf other than services ordinarily required of a director.
Except as disclosed in the Director Compensation and Summary Compensation Table, no other compensation was provided to our Directors for the fiscal year ended December 31, 2024.
Compensation Risk Management
Our Board of directors and human resources staff conducted an assessment of potential risks that may arise from our compensation programs. Based on this assessment, we concluded tat our policies and practices do not encourage excessive and unnecessary risk taking that would be reasonably likely to have material adverse effect on the Company. The assessment included our cash incentive programs, which awards executives with cash bonuses on successful of business projects. Our compensation programs are substantially identical among business units, corporate functions and global locations (with modifications to comply with local regulations as appropriate). The risk-mitigating factors considered in this assessment included:
· | the algnment of pay philosophy, peer group companies and compensation amounts relative to local competitive practices to support our business objectives; and | |
· | effective balance of cash, short- and long-term performance periods, caps on performance-based award schedules and financial metrics with individual factors and Board and management discretion. |
Compensation Committee Interlocks and Insider Participation
We have not yet established a Compensation Committee. Our Board of Directors performs the functions that would be performed by a compensation committee. During the fiscal year ended December 31, 2021, none of our executive officers has served: (i) on the compensation committee (or other board committee performing equivalent functions or, in the absence of any such committee, the entire board of directors) of another entity, one of whose executive officers served on our board of directors; (ii) as a director of another entity, one of whose executive officers served on the compensation committee (or other board committee performing equivalent functions or, in the absence of any such committee, the entire board of directors) of the registrant; or (iii) as a member of the compensation committee (or other board committee performing equivalent functions or, in the absence of any such committee, the entire board of directors) of another entity, one of whose executive officers served as a director of the Company.
Item 7. | Certain Relationships and Related Transactions, and Director Independence |
The following is a summary of each transaction or series of similar transactions since the which it was or is a party and that: (i) the amount involved exceeded or exceeds $120,000 or is greater than 1% of our total assets; and (ii) any of our directors or executive officers, any holder of 5% of our capital stock or any member of their immediate family had or will have a direct or indirect material interest.
Agreement with Zenith (Hong Kong) Engineering Limited
ZiM is a party to a design services management agreement with Zenith HK, dated August 1, 2024, pursuant to which ZiM agreed to provide design technical manpower services relating to the Sheung Shui Town Lot No. 263 (F0874), Kwu Tung North – Podium and Tower project. The services scope covered provision of skilled technical personnel, assisting in design development, planning and coordination activities, and collaboration with Zenith HK’s team. Zenith HK holds two convertible promissory notes in the aggregate amount of $124,549 as at March 31, 2025. On February 28, 2025, Zenith HK waived any and all rights to convert the outstanding principal amount and any accrued but unpaid interest under the two convertible promissory notes into equity securities of the Company. PUN, Ah Keung is the sole shareholder of Zenith. The foregoing description of the Design Services Management Agreement is qualified in its entirety by reference to the Design Services Management Agreement which is filed as Exhibit 10.8 to this Registration Statement and is incorporated herein by reference.
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Agreement with Zenith (PMS) Limited
Zenith (PMS) Limited is a party to a design and project services agreement with ZiM, dated August 1, 2024. Under this agreement, Zenith (PMS) Limited provides technical manpower and expertise to support the Company’s ongoing projects. The services scope covered the provision of skilled technical personnel, assistance with project planning, design development, and project management activities, and collaboration with ZiM. TAM, Hin Wah Anthony, our Chairman of the Board, is the director and controlling shareholder of Zenith (PMS) Limited. The foregoing description of the Design and Project Services Management Agreement is qualified in its entirety by reference to the Design and Project Services Agreement which is filed as Exhibit 10.9 to this Registration Statement and is incorporated herein by reference.
During the quarters ended March 31, 2025 and 2024, and the years ended December 31, 2024, and 2023, the Company had the following transactions with Zenith (PMS) Limited:
Three months ended March 31, | ||||||||
2025 | 2024 | |||||||
Project and design management service fees paid to Zenith (PMS) Limited | $ | 134,615 | $ | – |
Year ended December 31, | ||||||||
2024 | 2023 | |||||||
Project and design management service fees paid to Zenith (PMS) Limited | $ | 245,716 | $ | – |
In addition, the Company owed the following amounts to Zenith (PMS) Limited:
March 31, 2025 | December 31, 2024 | |||||||
Zenith (PMS) Limited | $ | 12,022 | $ | 47,798 |
The amounts due to Zenith (PMS) Limited primarily represent advances provided to fund certain development projects. The amounts are unsecured, non-interest-bearing, and repayable on demand.
Agreement with AY Consulting Services Company
Our corporate and executive office is located at Unit 2, Level 6, Westin Centre, 26 Hung To Road, Kwun Tong, Hong Kong, telephone number +1 888-493-8028. ModuLink Corporation Limited is a party to an office service arrangement without a specified term at a monthly rate of $3,270 with AY Consulting Services Company, a sole proprietorship of Au-Yeung Sai Kit, our Chief Financial Officer and director.
During the three months ended March 31, 2025 and 2024, the Company recognized rental expense of $10,522 (2024: $Nil) payable to AY Consulting Services Company Limited. For the year ended December 31, 2024, the Company recognized rental expense of $7,890 (2023: $Nil) payable to AY Consulting Services Company Limited. In addition, the following amounts were due to AY Consulting Services Company:
March 31, 2025 | December 31, 2024 | |||||||
AY Consulting Services Company | $ | 128,210 | $ | 153,847 |
The amounts due to AY Consulting Services Company Limited primarily represent advances provided to fund certain development projects. The amounts are unsecured, non-interest-bearing, and repayable on demand.
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Transactions with Leidenford Ltd.
The Company had the following transactions with the Leidenford Ltd.:
Three months ended March 31, | ||||||||
2025 | 2024 | |||||||
Product development fees paid to Leidenford Ltd. | $ | 11,538 | – |
Year ended December 31, | ||||||||
2024 | 2023 | |||||||
Product development fees paid to Leidenford Ltd. | $ | 30,306 | $ | 1,277 |
Leidenford Ltd is engaged in the business of developing green-technology products. Fu Wah, our Chief Executive Officer and Director, is the major shareholder and sole director of Leidenford Ltd. Leidenford Ltd. has provided product development services to ModuLink InnoTech Limited at a monthly fee of HK$36,800 (approximately US$4,718) and HK$30,000 (equivalent to approximately US$3,846), from June to December 2024 and January 2025 onwards, respectively.
Except as set forth above, the Company has no other significant or material related party transactions during the years ended December 31, 2024 and 2023, and the three month period ended March 31, 2025.
Director Independence
Though not a listed company, we intend to adhere to the corporate governance standards adopted by NASDAQ. NASDAQ rules require our Board to make an affirmative determination as to the independence of each director. Consistent with these rules, our Board conducted its annual review of director independence. During the review, our Board considered relationships and transactions since incorporation between each director or any member of her immediate family, on the one hand, and us and our subsidiaries and affiliates, on the other hand. The purpose of this review was to determine whether any such relationships or transactions were inconsistent with a determination that the director is independent. Based on this review, our Board determined that WONG, Ho Man Alex and FUNG, Kwai Kin are independent directors under the criteria established by NASDAQ and by our Board.
Item 8. | Legal Proceedings |
We are not involved in any litigation that we believe could have a material adverse effect on our financial position or results of operations. There is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of our executive officers, threatened against or affecting our company or our officers or directors in their capacities as such.
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Item 9. | Market Price of and Dividends of the Registrant’s Common Equity and Related Stockholder Matters |
Market information
There is no established public trading market in our common stock, and a regular trading market may not develop, or if developed, may not be sustained. Our securities are quoted on the OTC Markets Pink under the symbol “IDVV”. As of May 28, 2025, the last closing price of our securities was $0.0005.
Quarterly period | High | Low | ||||||
Fiscal year ended December 31, 2025: | ||||||||
First Quarter | $ | 0.0007 | $ | 0.0002 | ||||
Fiscal year ended December 31, 2024: | ||||||||
Fourth Quarter | $ | 0.0007 | $ | 0.0004 | ||||
Third Quarter | $ | 0.0010 | $ | 0.0004 | ||||
Second Quarter | $ | 0.0007 | $ | 0.0003 | ||||
First Quarter | $ | 0.0016 | $ | 0.0003 | ||||
Fiscal year ended December 31, 2023: | ||||||||
Fourth Quarter | $ | 0.0017 | $ | 0.0008 | ||||
Third Quarter | $ | 0.0018 | $ | 0.0009 | ||||
Second Quarter | $ | 0.0027 | $ | 0.0007 | ||||
First Quarter | $ | 0.0029 | $ | 0.0016 |
Holders
As of May 28, 2025, there were 3,969,933,920 shares of Common Stock outstanding and issuable held by approximately 676 record holders.
Dividends
We have never paid cash dividends on any of our capital stock and currently intend to retain our future earnings, if any, to fund the development and growth of our business. We do not expect to pay any dividends on any of our capital stock in the foreseeable future.
Stock Not Registered Under the Securities Act; Rule 144 Eligibility
Our Common Stock has not been registered under the Securities Act. Accordingly, the shares of Common Stock issued and outstanding may not be resold absent registration under the Securities Act and applicable state securities laws or an available exemption thereunder.
Rule 144
Shares of our common stock that are restricted securities will be eligible for resale in compliance with Rule 144 (“Rule 144”) of the Securities Act, subject to the requirements described below. “Restricted Securities,” as defined under Rule 144, were issued and sold by us in reliance on exemptions from the registration requirements of the Securities Act. These shares may be sold in the public market only if registered or if they qualify for an exemption from registration, such as Rule 144. Below is a summary of the requirements for sales of our common stock pursuant to Rule 144, as in effect on the date of this Form 10, after the effectiveness of this Form 10.
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Affiliates
Affiliates will be able to sell their shares under Rule 144 beginning 90 days after the effectiveness of this Form 10, subject to all other requirements of Rule 144. In general, under Rule 144, an affiliate would be entitled to sell within any three-month period a number of shares that does not exceed one percent of the number of shares of our common stock then outstanding. Sales under Rule 144 are also subject to manner of sale provisions and notice requirements and to the availability of current public information about us.
Persons who may be deemed to be our affiliates generally include individuals or entities that control, or are controlled by, or are under common control with, us and may include our directors and officers, as well as our significant stockholders.
Non-Affiliates
For a person who has not been deemed to have been one of our affiliates at any time during the 90 days preceding a sale, sales of our shares of common stock held longer than six months, but less than one year, will be subject only to the current public information requirement and can be sold under Rule 144 beginning 90 days after the effectiveness of this Form 10. A person who is not deemed to have been one of our affiliates at any time during the 90 days preceding a sale, and who has beneficially owned the shares proposed to be sold for at least one year, is entitled to sell the shares without complying with the manner of sale, public information, volume limitation or notice provisions of Rule 144 upon the effectiveness of this Form 10.
Item 10. | Recent Sales of Unregistered Securities |
On March 28, 2025, the Company entered into a Share Exchange Agreement (the “Share Exchange”) of all the issued and outstanding shares with the shareholders of ModuLink Investment Limited (hereafter referred to as, ModuLink), a British Virgin Islands limited liability company. ModuLink and its subsidiaries engage in the property development industry adopting modular construction technology by leveraging Modular Integrated Construction (MiC), Atmospheric Water Generators (AWG), and Internet of Things (IoT) technology enhanced by AI to redefine property development. Pursuant to the Share Exchange Agreement, the Company issued 2,356,712,066 shares of common stock, at a valuation of $0.0034 per share, in exchange for all the issued and outstanding shares with the shareholders of ModuLink. The Company relied on the exemption from registration pursuant to Section 4(2) of, and Regulation D and/or Regulation S promulgated under the Act in selling the Company’s securities to the shareholders of ModuLink. The Share Exchange was consummated on May 1, 2025.
The foregoing description of the Share Exchange Agreement is qualified in its entirety by reference to the Share Exchange Agreement which is filed as Exhibit 10.5 to this Registration Statement and is incorporated herein by reference.
Item 11. | Description of Registrant’s Securities to Be Registered |
The following description summarizes the material terms of our capital stock as of the date of this registration statement. Because it is only a summary, it does not contain all the information that may be important to you. For a complete description of our capital stock, you should refer to our Amended and Restated Articles of Incorporation and our Bylaws, and to the provisions of applicable Nevada law.
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Common Stock
We are authorized to issue up to four billion (4,000,000,000) shares of common stock, par value $0.001. Each share of common stock entitles the holder to one (1) vote on each matter submitted to a vote of our shareholders, including the election of Directors. There is no cumulative voting. Subject to preferences that may be applicable to any outstanding preferred stock, our Shareholders are entitled to receive ratably such dividends, if any, as may be declared from time to time by the Board of Directors. Shareholders have no preemptive, conversion or other subscription rights. There are no redemption or sinking fund provisions related to the common stock. In the event of liquidation, dissolution or winding up of the Company, our Shareholders are entitled to share ratably in all assets remaining after payment of liabilities, subject to prior distribution rights of preferred stock, if any, then outstanding.
Preferred Stock
We are authorized to issue up to ten million (10,000,000) shares of preferred stock, par value $0.001, issuable in one series as may be determined by the Board. Preferred Stock may be issued from time to time in one or more series as determined by the Board of Directors in its sole discretion. On October 3, 2017, the Board designated a class of Preferred Stock as the “Preferred A Stock,” par value $0.001, with 50,000 authorized shares, and a class of Preferred Stock as the “Preferred B Stock,” par value $0.001, with 5,000,000 authorized shares. On December 11, 2023, the Board increased the amount of preferred stock designated as Preferred A Stock from 50,000 authorized shares to 500,000 authorized shares with each one Preferred A Stock voting as 10,000 shares of common stock. Concurrently, therewith, the Board also eliminated the Preferred B Stock. On February 7, 2025, the Board amended and restated our Articles of Incorporation, which among other things, amended and restated the rights, preferences, privileges, powers and restrictions of the Preferred A Stock as set forth below and confirmed the cancellation of the Preferred B Stock.
Series A Convertible Preferred Stock
On February 7, 2025, the Board changed the name of the Preferred A Stock to “the Series A Convertible Preferred” stock. The Series A Convertible Preferred Stock has a par value of $0.001 and 500,000 authorized shares, of which 200,000 are issued and outstanding.
Currently, holders of Series A Convertible Preferred Stock are: (i) entitled to receive dividends or other distributions and rank prior to the Company’s Common Stock as to distribution of assets upon liquidation, dissolution; (ii) entitled to vote on all matters submitted to a vote of the shareholders together with the Common Stock holders with each one share of Series A Convertible Preferred Stock having 20,000 votes; (iii) entitled to convert Series A Preferred Stock into shares of Common Stock with each one share of Series A Convertible Preferred Stock be converted to 20,000 shares of Common Stock.
Redemption. The Corporation is not entitled to redeem shares of the Series A Convertible Preferred Stock.
Options
We have no options to purchase shares of our common stock or any other of our securities outstanding as of the date of this Prospectus.
Warrants
We have no warrants to purchase shares of our common stock or any other of our securities outstanding as of the date of this Prospectus.
Dividends
Holders of our common stock are entitled to receive such dividends as may be declared by our board of directors. We paid no dividends during the periods reported herein, nor do we anticipate declaring any dividends in the foreseeable future.
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Transfer Agent and Registrar
VStock Transfer, LLC located at 18 Lafayette Place, Woodmere, New York 11598, telephone number (212) 828-8436, facsimile (646) 536-3179, serves as our stock transfer agent.
Anti-takeover Effects of Our Amended and Restated Articles of Incorporation and Amended and Restated Bylaws
Our Amended and Restated Articles of Incorporation and Bylaws contain certain provisions that may have anti-takeover effects, making it more difficult for or preventing a third party from acquiring control of the Company or changing our board of directors and management. According to our bylaws and articles of incorporation, neither the holders of our common stock nor the holders of our preferred stock have cumulative voting rights in the election of our directors.
· | No Cumulative Voting. The Nevada Revised Statutes provide that stockholders are not entitled to the right to cumulate votes in the election of directors unless a corporation’s certificate of incorporation provides otherwise. Our Restated Articles of Incorporation and Bylaws do not provide for cumulative voting. The combination of the present ownership by a few stockholders of a significant portion of our issued and outstanding common stock and lack of cumulative voting makes it more difficult for other stockholders to replace our board of directors or for a third party to obtain control of the Company by replacing its board of directors. | |
· | Issuance of “Blank Check” Preferred Stock. Our board of directors has the authority, without further action by the stockholders, to issue up to 10,000,000 shares of “blank check” preferred stock with rights and preferences, including voting rights, designated from time to time by our board of directors. The existence of authorized but unissued shares of preferred stock enables our board of directors to render more difficult or to discourage an attempt to obtain control of us by means of a merger, tender offer, proxy contest, or otherwise; | |
· | Bylaws Amendments Without Stockholder Approval. Our Amended and Restated Articles provide our directors with the power to adopt, amend or repeal our bylaws without stockholder approval except that the Board of Directors shall have no power to change the quorum for meetings of stockholders or of the Board of Directors or to change any provisions of the bylaws with respect to the removal of directors of the filling of vacancies in the Board resulting from the removal by the stockholders. | |
· | Broad Indemnity. We are permitted to indemnify directors and officers against losses that they may incur in investigations and legal proceedings resulting from their services to us, which may include services in connection with takeover defense measures. This provision may make it more difficult to remove directors and officers and delay a change in control of our management. |
Anti-takeover Effects of Nevada Law
Business Combinations
The “business combination” provisions of Sections 78.411 to 78.444, inclusive, of the Nevada Revised Statutes, or NRS, generally prohibit a Nevada corporation with at least 200 stockholders from engaging in various “combination” transactions with any interested stockholder for a period of three years after the date of the transaction in which the person became an interested stockholder, unless the transaction is approved by the board of directors prior to the date the interested stockholder obtained such status; and extends beyond the expiration of the three-year period, unless:
· | the transaction was approved by the board of directors prior to the person becoming an interested stockholder or is later approved by a majority of the voting power held by disinterested stockholders, or | |
· | if the consideration to be paid by the interested stockholder is at least equal to the highest of: (a) the highest price per share paid by the interested stockholder within the three years immediately preceding the date of the announcement of the combination or in the transaction in which it became an interested stockholder, whichever is higher, (b) the market value per share of common stock on the date of announcement of the combination and the date the interested stockholder acquired the shares, whichever is higher, or (c) for holders of preferred stock, the highest liquidation value of the preferred stock, if it is higher. |
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A “combination” is generally defined to include mergers or consolidations or any sale, lease exchange, mortgage, pledge, transfer or other disposition, in one transaction or a series of transactions, with an “interested stockholder” having: (a) an aggregate market value equal to 5% or more of the aggregate market value of the assets of the corporation, (b) an aggregate market value equal to 5% or more of the aggregate market value of all outstanding shares of the corporation, (c) 10% or more of the earning power or net income of the corporation, and (d) certain other transactions with an interested stockholder or an affiliate or associate of an interested stockholder.
In general, an “interested stockholder” is a person who, together with affiliates and associates, owns (or within three years, did own) 10% or more of a corporation’s voting stock. The statute could prohibit or delay mergers or other takeover or change in control attempts and, accordingly, may discourage attempts to acquire our company even though such a transaction may offer our stockholders the opportunity to sell their stock at a price above the prevailing market price.
Because we have less than 200 shareholders of record, these “business combination” provisions do not currently apply to us. Our Amended and Restated Articles of Incorporation state that we have elected not to be governed by the “business combination” provisions.
Control Share Acquisitions
The “control share” provisions of Sections 78.378 to 78.3793, inclusive, of the NRS apply to “issuing corporations,” which are Nevada corporations with at least 200 stockholders, including at least 100 stockholders of record who are Nevada residents, and which conduct business directly or indirectly in Nevada. The control share statute prohibits an acquirer, under certain circumstances, from voting its shares of a target corporation’s stock after crossing certain ownership threshold percentages, unless the acquirer obtains approval of the target corporation’s disinterested stockholders. The statute specifies three thresholds: one-fifth or more but less than one-third, one-third but less than a majority, and a majority or more, of the outstanding voting power. Generally, once an acquirer crosses one of the above thresholds, those shares in an offer or acquisition and acquired within 90 days thereof become “control shares” and such control shares are deprived of the right to vote until disinterested stockholders restore the right.
These provisions also provide that if control shares are accorded full voting rights and the acquiring person has acquired a majority or more of all voting power, all other stockholders who do not vote in favor of authorizing voting rights to the control shares are entitled to demand payment for the fair value of their shares in accordance with statutory procedures established for dissenters’ rights.
The effect of the Nevada control share statutes is that the acquiring person, and those acting in association with the acquiring person, will obtain only such voting rights in the control shares as are conferred by a resolution of the disinterested stockholders at an annual or special meeting. The Nevada control share law, if applicable, could have the effect of discouraging takeovers of our company.
A corporation may elect to not be governed by, or “opt out” of, the control share provisions by making an election in its articles of incorporation or bylaws, provided that the opt-out election must be in place on the 10th day following the date an acquiring person has acquired a controlling interest, that is, crossing any of the three thresholds described above. Our Amended and Restated Articles of Incorporation state that we have elected not to be governed by the “control share” provisions.
Item 12. | Indemnification of Directors and Officers |
Subsection 7 of Section 78.138 of the Nevada Revised Statutes (the "Nevada Law") provides that, subject to certain very limited statutory exceptions, a director or officer is not individually liable to the corporation or its stockholders or creditors for any damages as a result of any act or failure to act in his or her capacity as a director or officer, unless it is proven that the act or failure to act constituted a breach of his or her fiduciary duties as a director or officer and such breach of those duties involved intentional misconduct, fraud or a knowing violation of law. The statutory standard of liability established by Section 78.138 controls even if there is a provision in the corporation's articles of incorporation unless a provision in the Company's Articles of Incorporation provides for greater individual liability.
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Subsection 1 of Section 78.7502 of the Nevada Law empowers a corporation to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation) by reason of the fact that he or she is or was a director, officer, employee or agent of the corporation or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise (any such person, a "Covered Person"), against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by the Covered Person in connection with such action, suit or proceeding if the Covered Person is not liable pursuant to Section 78.138 of the Nevada Law or the Covered Person acted in good faith and in a manner the Covered Person reasonably believed to be in or not opposed to the best interests of the corporation and, with respect to any criminal action or proceedings, had no reasonable cause to believe the Covered Person's conduct was unlawful.
Subsection 2 of Section 78.7502 of the Nevada Law empowers a corporation to indemnify any Covered Person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that such person acted in the capacity of a Covered Person against expenses, including amounts paid in settlement and attorneys' fees actually and reasonably incurred by the Covered Person in connection with the defense or settlement of such action or suit, if the Covered Person is not liable pursuant to Section 78.138 of the Nevada Law or the Covered Person acted in good faith and in a manner the Covered Person reasonably believed to be in or not opposed to the best interests of the Company. However, no indemnification may be made in respect of any claim, issue or matter as to which the Covered Person shall have been adjudged by a court of competent jurisdiction (after exhaustion of all appeals) to be liable to the corporation or for amounts paid in settlement to the corporation unless and only to the extent that the court in which such action or suit was brought or other court of competent jurisdiction determines upon application that in view of all the circumstances the Covered Person is fairly and reasonably entitled to indemnity for such expenses as the court deems proper.
Section 78.7502 of the Nevada Law further provides that to the extent a Covered Person has been successful on the merits or otherwise in the defense of any action, suit or proceeding referred to in Subsection 1 or 2, as described above, or in the defense of any claim, issue or matter therein, the corporation shall indemnify the Covered Person against expenses (including attorneys' fees) actually and reasonably incurred by the Covered Person in connection with the defense.
Subsection 1 of Section 78.751 of the Nevada Law provides that any discretionary indemnification pursuant to Section 78.7502 of the Nevada Law, unless ordered by a court or advanced pursuant to Subsection 2 of Section 78.751, may be made by a corporation only as authorized in the specific case upon a determination that indemnification of the Covered Person is proper in the circumstances. Such determination must be made (a) by the stockholders, (b) by the board of directors of the corporation by majority vote of a quorum consisting of directors who were not parties to the action, suit or proceeding, (c) if a majority vote of a quorum of such non-party directors so orders, by independent legal counsel in a written opinion, or (d) by independent legal counsel in a written opinion if a quorum of such non-party directors cannot be obtained.
Subsection 2 of Section 78.751 of the Nevada Law provides that a corporation's articles of incorporation or bylaws or an agreement made by the corporation may require the corporation to pay as incurred and in advance of the final disposition of a criminal or civil action, suit or proceeding, the expenses of officers and directors in defending such action, suit or proceeding upon receipt by the corporation of an undertaking by or on behalf of the officer or director to repay the amount if it is ultimately determined by a court of competent jurisdiction that he or she is not entitled to be indemnified by the corporation. Subsection 2 of Section 78.751 further provides that its provisions do not affect any rights to advancement of expenses to which corporate personnel other than officers and directors may be entitled under contract or otherwise by law.
Subsection 3 of Section 78.751 of the Nevada Law provides that indemnification pursuant to Section 78.7502 of the Nevada Law and advancement of expenses authorized in or ordered by a court pursuant to Section 78.751 does not exclude any other rights to which the Covered Person may be entitled under the articles of incorporation or any bylaw, agreement, vote of stockholders or disinterested directors or otherwise, for either an action in his or her official capacity or in another capacity while holding his or her office. However, indemnification, unless ordered by a court pursuant to Section 78.7502 or for the advancement of expenses under Subsection 2 of Section 78.751 of the Nevada Law, may not be made to or on behalf of any director or officer of the corporation if a final adjudication establishes that his or her acts or omissions involved intentional misconduct, fraud or a knowing violation of the law and were material to the cause of action. Additionally, the scope of such indemnification and advancement of expenses shall continue for a Covered Person who has ceased to be a director, officer, employee or agent of the corporation, and shall inure to the benefit of his or her heirs, successors, assigns, executors, and legal representatives.
69 |
Section 78.752 of the Nevada Law empowers a corporation to purchase and maintain insurance or make other financial arrangements on behalf of a Covered Person for any liability asserted against such person and liabilities and expenses incurred by such person in his or her capacity as a Covered Person or arising out of such person's status as a Covered Person whether or not the corporation has the authority to indemnify such person against such liability and expenses.
Our Amended and Restated Articles of Incorporation provide that the liability of our directors and officers shall be eliminated or limited to the fullest extent permitted by Nevada Law. In addition, our Restated Articles of Incorporation and our Bylaws also provide that we will indemnify our directors and may indemnify our other officers and employees and other agents to the fullest extent permitted by law. Our Restated Articles of Incorporation and Bylaws provide that the expenses of directors and officers of the Company incurred in defending any action, suit or proceeding, whether civil, criminal, administrative or investigative, must be paid by the Company as they are incurred and in advance of the final disposition of the action, suit or proceeding, upon receipt of an undertaking by or on behalf of such director or officer to repay all amounts so advanced if it is ultimately determined by a court of competent jurisdiction that the director or officer is not entitled to be indemnified by the Company.
This limitation of liability does not apply to liabilities arising under the federal securities laws and does not affect the availability of equitable remedies such as injunctive relief or rescission.
Item 13. | Financial Statements and Supplementary Data |
The information required by this item may be found beginning on page F-1 of this Form 10.
Item 14. | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure |
None
Item 15a. | List of Financial Statements and Exhibits Part of Form 10 |
(a) | Financial Statements. |
The following financial statements are filed as part of this registration statement:
(i) | Unaudited interim consolidated financial statements as of and for the three months ended March 31, 2025 and 2024; and | |
(ii) | Audited consolidated financial statements as of and for the fiscal years ended December 31, 2024, and 2023. |
70 |
Item 15b. | Exhibits of Financial Statements |
(b) | Exhibits. |
_______________________
* | Filed herewith. | |
** | To be filed by amendment. |
71 |
INTERNATIONAL ENDEAVORS CORPORATION
MODULINK INVESTMENT LIMITED
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Contents | Page |
Unaudited Interim Financial Statements as of and for the three months ended March 31, 2025 and 2024 | |
Consolidated Balance Sheets | F-2 |
Consolidated Statements of Operations and Comprehensive (Loss) / Income | F-3 |
Consolidated Statements of Stockholders’ Equity | F-4 |
Consolidated Statements of Cash Flows | F-5 |
Notes to Unaudited Consolidated Financial Statements | F-6– F-14 |
Audited Financial Statements as of and for the year ended December 31, 2024 and 2023
Unaudited Pro Forma Condensed Combined Financial Information as of and for the year ended December 31, 2024 and 2023
F-1 |
MODULINK INVESTMENT LIMITED
(In US dollars except for number of shares and per share data)
Note(s) | March 31, 2025 | December 31, 2024 | ||||||||
(Unaudited) | (Audited) | |||||||||
ASSETS | ||||||||||
Current Assets | ||||||||||
Cash and bank balance | $ | 236,798 | $ | 382,127 | ||||||
Accounts receivable | 4 | 220,243 | 91,166 | |||||||
Contract assets including retainage, net | 5 | 350,796 | 301,502 | |||||||
Prepaid expenses and other current assets, net | 7 | 73,359 | 97,021 | |||||||
Amount due from an associate | 11 | 113,446 | 8,999 | |||||||
Loan receivable | 8 | 151,645 | 149,799 | |||||||
Amount due from related companies | 9 | 272,785 | – | |||||||
Total Current Assets | 1,419,072 | 1,030,614 | ||||||||
Equipment, net | 10 | 24,794 | 24,942 | |||||||
Investment in an associate | 11 | 3 | 3 | |||||||
Total Non-Current Assets | 24,797 | 24,945 | ||||||||
TOTAL ASSETS | $ | 1,443,869 | $ | 1,055,559 | ||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||
Current Liabilities | ||||||||||
Accounts payable | 12 | $ | 165,992 | $ | 55,772 | |||||
Accrued expenses | 57,430 | 55,000 | ||||||||
Contract liabilities | 6 | – | 149,571 | |||||||
Tax liabilities | 64,320 | 55,498 | ||||||||
Amount due to related companies | 13 | 140,232 | 201,645 | |||||||
Total Current Liabilities | 427,974 | 517,486 | ||||||||
TOTAL LIABILITIES | 427,974 | 517,486 | ||||||||
STOCKHOLDERS’ EQUITY | ||||||||||
Share capital | 10,000 | 10,000 | ||||||||
Additional paid-in capital | 1,635,276 | 965,404 | ||||||||
Exchange reserve | 366 | 366 | ||||||||
Accumulated deficit | (629,747 | ) | (437,697 | ) | ||||||
TOTAL STOCKHOLDERS’ EQUITY | 15 | 1,015,895 | 538,073 | |||||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 1,443,869 | $ | 1,055,559 |
The accompanying notes are an integral part of the consolidated financial statements.
F-2 |
MODULINK INVESTMENT LIMITED
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS)/INCOME
(UNAUDITED)
(In US dollars except for number of shares and per share data)
Three months ended March 31, | ||||||||||
Note(s) | 2025 | 2024 | ||||||||
REVENUES | ||||||||||
Service income | 18 | $ | 429,096 | $ | 114,487 | |||||
COST OF REVENUES | ||||||||||
Cost of services | (379,550 | ) | (103,467 | ) | ||||||
GROSS PROFIT | 49,546 | 11,020 | ||||||||
OPERATING EXPENSES | ||||||||||
General and administrative | (234,712 | ) | (7,858 | ) | ||||||
Total operating expenses | (234,712 | ) | (7,858 | ) | ||||||
(LOSS)/PROFIT FROM OPERATIONS | (185,166 | ) | 3,162 | |||||||
OTHER INCOME | ||||||||||
Interest income | 1,938 | 434 | ||||||||
Total other income | 1,938 | 434 | ||||||||
NET (LOSS) PROFIT BEFORE INCOME TAX | (183,228 | ) | 3,596 | |||||||
Income tax | 19 | (8,822 | ) | (1,809 | ) | |||||
NET (LOSS)/PROFIT | (192,050 | ) | 1,787 | |||||||
OTHER COMPREHENSIVE (LOSS)/INCOME | – | – | ||||||||
Other comprehensive (loss)/income | ||||||||||
COMPREHENSIVE (LOSS)/INCOME | $ | (192,050 | ) | $ | 1,787 | |||||
NET LOSS PER ORDINARY SHARE – BASIC AND DILUTED | 17 | $ | (19.21 | ) | $ | 0.18 | ||||
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING – BASIC AND DILUTED | 17 | 10,000 | 10,000 |
The accompanying notes are an integral part of the consolidated financial statements.
F-3 |
MODULINK INVESTMENT LIMITED
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(UNAUDITED)
(In US dollars except for number of shares and per share data)
For the three months ended March 31, 2025
Ordinary Shares | Amount | Additional paid-in capital (Note 1) | Exchange reserve | Accumulated deficit | Total | |||||||||||||||||||
Balance as of January 1, 2025 | 10,000 | $ | 10,000 | $ | 965,404 | $ | 366 | $ | (437,697 | ) | $ | 538,073 | ||||||||||||
Capital contributions | – | – | 669,872 | – | – | 669,872 | ||||||||||||||||||
Net loss for the period | – | – | – | – | (192,050 | ) | (192,050 | ) | ||||||||||||||||
Balance as of March 31, 2025 | 10,000 | $ | 10,000 | $ | 1,635,276 | $ | 366 | $ | (629,747 | ) | $ | 1,015,895 |
For the three months ended March 31, 2024
Ordinary Shares | Amount | Additional paid-in capital (Note 1) |
Exchange reserve | Accumulated deficit | Total | |||||||||||||||||||
Balance as of January 1, 2024 | 10,000 | $ | 10,000 | $ | 423,096 | $ | 366 | $ | (180,748 | ) | $ | 252,714 | ||||||||||||
Net profit for the period | – | – | – | – | 1,787 | 1,787 | ||||||||||||||||||
Balance as of March 31, 2024 | 10,000 | $ | 10,000 | $ | 423,096 | $ | 366 | $ | (178,961 | ) | $ | 254,501 |
The accompanying notes are an integral part of the consolidated financial statements.
F-4 |
MODULINK INVESTMENT LIMITED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(In US dollars except for number of shares and per share data)
Three months ended March 31, | ||||||||
2025 | 2024 | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
Net (loss) / profit | $ | (183,228 | ) | $ | 3,596 | |||
Adjustments to reconcile net loss to net cash used in operating activities | ||||||||
Depreciation of equipment | 2,248 | – | ||||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable | (129,077 | ) | 82,545 | |||||
Contract assets including retainage, net | (49,294 | ) | 3,343 | |||||
Prepaid expenses and other current assets, net | 23,662 | – | ||||||
Amount due from an associate | (104,447 | ) | – | |||||
Other receivables | (272,785 | ) | (5,171 | ) | ||||
Accounts payable | 110,220 | (46,857 | ) | |||||
Contract liabilities | (149,571 | ) | (86,375 | ) | ||||
Accrued expenses | 2,430 | – | ||||||
Amount due to related companies | (61,413 | ) | 12,208 | |||||
Net cash used in operating activities | (811,255 | ) | (36,711 | ) | ||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
Purchase of equipment | (2,100 | ) | – | |||||
Net cash used in investing activities | (2,100 | ) | – | |||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
Proceeds from share issuance in a subsidiary | 669,872 | – | ||||||
Loan receivable | (1,846 | ) | – | |||||
Net cash provided by financing activities | 668,026 | – | ||||||
NET DECREASE IN CASH | (145,329 | ) | (36,711 | ) | ||||
CASH, BEGINNING OF PERIOD | 382,127 | 360,469 | ||||||
CASH, END OF PERIOD | $ | 236,798 | $ | 323,758 |
The accompanying notes are an integral part of the consolidated financial statements.
F-5 |
MODULINK INVESTMENT LIMITED
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 2025 AND 2024
(UNAUDITED)
NOTE 1 | ORGANIZATION AND PRINCIPAL ACTIVITIES |
ModuLink Investment Limited (the “Company”) was incorporated on March 13, 2025 in the British Virgin Islands. The Company together with its subsidiaries and associated company (collectively referred to the “Group”) are engaged in the business of modular building construction and design services, property development utilizing modular construction technology, the integration of smart home devices and atmospheric water generation systems. The headquarter of the Group is located in the Hong Kong Special Administrative Region of the People’s Republic of China (“PRC” or “China”). During the three months ended March 31, 2025 and 2024, the Group only derived revenue from modular building construction and design services business. The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries including ModuLink Corporation Limited (“MCL”), Zenith Integrated Modular Limited (“ZIML”), Zenith AY Modular Buildings Company Limited (“ZAMBCL”) and ModuLink InnoTech Company Limited (“MICL”).
Details of the Company’s principal subsidiaries as of March 31, 2025 and December 31, 2024 are described in Note 3 – Subsidiaries.
The Company’s fiscal year end is December 31.
The Reorganization and Company Restructuring
On March 25, 2025, the Company undertook a group restructuring through a share exchange transaction. Pursuant to the transaction, all shareholders of ModuLink Corporation Limited exchanged their respective shareholdings for proportionate shareholdings in the Company. The Company issued a total of 10,000 shares to the shareholders of MCL and following the completion of the share exchange, the Company became the holding company of MCL.
MCL was incorporated on June 26, 2024, and 10,000 ordinary shares were issued to the founder members at HK$1 each on date of incorporation totalling HK$10,000 for raising the initial working capital. Since its incorporation, the Company has undergone a series of reorganizations in 2024, including the share exchange of its shares for acquisition of certain equity interests in three Hong Kong limited companies, namely ZIML, ZAMBCL and MICL, from the three founder members of the Company, who are the major shareholders of the Company. In September, 2024, 70,000 shares were issued to the three founder members for the exchange of shares in these companies. After the share exchange transaction, ZIML, ZAMBCL and MICL became the wholly-owned subsidiaries of MCL. Details of which can be referred to Note 3. In 2024, MCL entered into the subscription agreement with 8 individuals under which these individuals being the subscriber agreed to purchase the shares of the Company at HK$625 or US$80.13 per share. A total of 20,000 ordinary shares were issued to the subscribers.
As the Company and its consolidated entities were under the common control of the major shareholders before and after the reorganization, the transaction was therefore accounted for as a reorganization of entities under common control in accordance with U.S. GAAP. Under the guidance for transactions among entities under common control, the Company recognized the acquired subsidiaries at their historical carrying amounts. Consequently, the accompanying consolidated financial statements were presented as if the current corporate structure had been in place since the date the subsidiaries were initially under common control of the major shareholders.
Going Concern
The Company's consolidated financial statements are prepared using accounting principles generally accepted in the United States of America, or U.S. GAAP, applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has incurred losses of $192,050 and has net cash used in operating activities of $811,255 for the three months ended March 31, 2025. In addition, as at the reporting date, the Company has accumulated deficit of $629,747. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The Company’s plans regarding those concerns are addressed in the following paragraph. The accompany consolidated financial statements do not reflect any adjustments that might result from the outcome of these uncertainties.
The Company plans to secure additional funding to support its current operations, expected future growth and strategic objectives. Management is actively pursuing financing opportunities through debt and equity transactions, as well as exploring new development projects and accelerating the commercialization of its products. If successfully executed, these initiatives are expected to generate positive operating cash flows and improve the Company’s financial position.
Based on management’s best estimates, the Company believes it has sufficient financial resources to meet its obligations for at least the next twelve months.
F-6 |
MODULINK INVESTMENT LIMITED
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 2025 AND 2024
(UNAUDITED)
NOTE 2 | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
(A) Basis of Presentation and Preparation
These consolidated financial statements of the Company have been prepared in conformity with generally accepted accounting principles in the United States of America (“GAAP”) and are expressed in United States dollars. In the opinion of management, the Company has made all necessary adjustments, which include normal recurring adjustments, for a fair statement of the Company’s consolidated financial position and results of operations for the periods presented. Certain information and disclosure included in these interim consolidated financial statements have been condensed or omitted pursuant to the U.S. Securities and Exchange Commission (“SEC”) rules. These condensed consolidated financial statements should be read in conjunction with our audited consolidated financial statements and accompanying notes for the year ended December 31, 2024. The results for the three months periods ended March 31, 2025 and 2024, are not necessarily indicative of the results to be expected for a full year, any other interim periods or future years or periods.
(B) Principles of Consolidation
The consolidated financial statements include the financial statements of ModuLink Investment Limited and its subsidiaries and associated companies for which it is the primary beneficiary. Upon making this determination, the Company is deemed to be the primary beneficiary of these entities, which are then required to be consolidated for financial reporting purpose. All significant intercompany transactions and balances have been eliminated upon consolidation.
Transactions involving entities under common control are accounted for using the merger accounting. The consolidated financial statements of the combining entities are presented as if the reorganization occurred at the beginning of the earliest reporting period presented. No gain or loss is recognized in the consolidated financial statements as a result of the reorganization. The historical financial information of all entities under common control is combined retroactively for all periods presented. The financial statements reflect consistent accounting policies and principles across all entities.
(C) Use of Estimates
The Company’s consolidated financial statements require management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and reported amounts of revenue and expense during the reporting period. Estimates are used when accounting for certain items such as accounting for income tax valuation allowances. Estimates are based on historical experience, where applicable, and assumptions that management believes are reasonable under the circumstances. Due to the inherent uncertainty involved with estimates, actual results may differ.
F-7 |
MODULINK INVESTMENT LIMITED
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 2025 AND 2024
(UNAUDITED)
NOTE 3 | SUBSIDIARIES |
Details of the Company’s principal consolidated subsidiaries as of March 31, 2025 and December 31, 2024 were as follows:
Name | Place of Incorporation | Ownership/Control interest attributable to the Company March 31, 2025 and December 31, 2024 | Principal activities | |||
ModuLink Corporation Limited (“MCL”) (i) | Hong Kong | 100% | Holding company and provision of intergroup management services | |||
Zenith Integrated Modular Limited (“ZIML”) (ii) | Hong Kong | 100% | Provision of construction and engineering services | |||
Zenith AY Modular Buildings Company Limited (“ZAMBCL”) (iii) | Hong Kong | 100% | Provision of project management services in overseas (v) | |||
ModuLink InnoTech Company Limited (“MICL”) (iv) | Hong Kong | 100% | Provision of technology management services (vi) |
Remarks:
i) |
ModuLink Corporation Limited was incorporated on June 26, 2024 in Hong Kong. |
ii) |
ZIML was incorporated on August 13, 2021, as a wholly owned subsidiary of a Hong Kong limited company, which was beneficially held by Anthony Hin Wah TAM (“Mr. TAM”), a major shareholder, director and chairman of the Company. On August 1, 2024, a share swap agreement was executed among ZIML, MCL, the Hong Kong entity held by Mr. TAM, and two other major shareholders of the Company. Pursuant to this agreement, Mr. TAM exchanged his entire ultimate shareholding in ZIML for a 50% equity interest in MCL prior to private placements to other shareholders. After the transaction, ZIML became the wholly-owned subsidiary of MCL. |
iii) |
ZAMBCL was incorporated on March 4, 2024, and was jointly owned by a Hong Kong company, which was beneficially held by Sai Kit AU-YEUNG (“Mr. AU-YEUNG”) (70%) and ZIML (30%). Mr. AU-YEUNG is also a major shareholder, director and chief financial officer of the Company. On August 1, 2024, a share swap agreement was signed among ZAMBCL, MCL, ZIML, Mr. AU YEUNG and his company. Pursuant to this agreement, Mr. AU-YEUNG transferred his 70% shareholding in ZAMBCL in exchange for a 25% equity interest in MCL prior to private placements to other shareholders. After the transaction, ZAMBCL became the wholly-owned subsidiary of ZIML. |
iv) | MICL was incorporated on December 17, 2021, and was jointly owned a Hong Kong limited company, which was beneficially held by Wah FU (“Mr. FU”) (40%) and ZIML (60%). Mr. FU is a major shareholder, director and chief executive officer of the Company. On August 1, 2024, a share swap agreement was executed among MICL, MCL, ZIML, Mr. FU and his company. Pursuant to this agreement, Mr. FU exchanged his 40% shareholding in MICL for a 25% equity interest in MCL prior to private placements to other shareholders. After the transaction, MICL became the wholly-owned subsidiary of ZIML. |
v) | ZAMBCL has not commenced business during the three months ended March 31, 2025. |
vi) | MICL has not commenced business during the three months ended March 31, 2025 |
F-8 |
MODULINK INVESTMENT LIMITED
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 2025 AND 2024
(UNAUDITED)
NOTE 4 | ACCOUNTS RECEIVABLE |
Accounts receivable as of March 31, 2025 and December 31, 2024 were as follows:
March 31, 2025 | December 31, 2024 | |||||||
Accounts receivable | $ | 220,243 | $ | 91,166 | ||||
Less: provision for credit losses | – | – | ||||||
Total | $ | 220,243 | $ | 91,166 |
For the three months ended March 31, 2025 and 2024, the Company recorded no provision for credit losses for accounts receivable.
NOTE 5 | CONTRACT ASSETS INCLUDING RETAINAGE, NET |
Contract assets including retainage, net consisted of the following as of March 31, 2025 and December 31, 2024:
March 31, 2025 | December 31, 2024 | |||||||
Contract assets (Note 6) | $ | 242,698 | $ | 193,404 | ||||
Retainage | 108,098 | 108,098 | ||||||
Less: provision for credit losses | – | – | ||||||
Contract assets including retainage, net | $ | 350,796 | $ | 301,502 |
Retainage receivables have been billed and the Company has an unconditional right to receive payment, but are not due until satisfactory contract completion and acceptance by the customer.
NOTE 6 | CONTRACT ASSETS AND LIABILITIES |
Costs and estimated earnings compared to billings on uncompleted contracts as of March 31, 2025 and December 31, 2024 consisted of the following:
Costs and estimated earnings in excess of billings on uncompleted contracts
March 31, 2025 | December 31, 2024 | |||||||
Contract costs incurred plus estimated earnings | $ | 5,053,580 | $ | 4,323,927 | ||||
Less: Progress billings | (4,810,882 | ) | (4,130,523 | ) | ||||
$ | 242,698 | $ | 193,404 |
Billings in excess of costs and estimated earnings on uncompleted contracts
March 31, 2025 | December 31, 2024 | |||||||
Contract costs incurred plus estimated earnings | $ | – | $ | 273,505 | ||||
Less: Progress billings | – | (423,076 | ) | |||||
$ | – | $ | (149,571 | ) |
F-9 |
MODULINK INVESTMENT LIMITED
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 2025 AND 2024
(UNAUDITED)
NOTE 7 | PREPAID EXPENSES AND OTHER CURRENT ASSETS, NET |
Prepaid expenses and other current assets, net as of March 31, 2025 and December 31, 2024 were as follows:
March 31, 2025 | December 31, 2024 | |||||||
Prepaid expenses | $ | 32,534 | $ | 45,000 | ||||
Deposit paid | 10,825 | 52,021 | ||||||
Other receivables | 30,000 | – | ||||||
$ | 73,359 | $ | 97,021 |
NOTE 8 | LOAN RECEIVABLES |
The amount was due from an independent property development entity based in Canada. The amount due is unsecured, carries interest at a rate of 5% per annum and repayable on demand.
NOTE 9 | AMOUNT DUE FROM RELATED COMPANIES |
The summary of amount due from related companies as of March 31, 2025 and December 31, 2024 is as follows:
March 31, 2025 | December 31, 2024 | |||||||
ModuLink Inc. | $ | 265,384 | $ | – | ||||
International Endeavors Corporation | 7,401 | – | ||||||
Total | $ | 272,785 | $ | – |
The amount due from related companies in which the Company's directors also serve as directors. The amounts are unsecured, non-interest-bearing, and repayable on demand.
NOTE 10 | EQUIPMENT, NET |
Equipment, net as of March 31, 2025 and December 31, 2024 consisted of the following:
March 31, 2025 | December 31, 2024 | |||||||
Computer equipment | $ | 2,100 | $ | – | ||||
Office equipment | 4,900 | 4,900 | ||||||
Furniture and Fixtures | 5,936 | 5,936 | ||||||
Leasehold improvement | 14,819 | 14,819 | ||||||
Less: accumulated depreciation | (2,961 | ) | (713 | ) | ||||
Total | $ | 24,794 | $ | 24,942 |
Depreciation for the three months ended March 31, 2025 and 2024 amounted to $2,248 and $Nil, respectively.
Pledge of Equipment
No equipment has been pledged by the Company
F-10 |
MODULINK INVESTMENT LIMITED
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 2025 AND 2024
(UNAUDITED)
NOTE 11 | INVESTMENT IN AN ASSOCIATE |
Name | Place of Incorporation | Ownership/Control interest attributable to the Company March 31, 2025 and December 31, 2024 | Principal activities | |||
ModuLink Australia Pty Limited | Australia | 40% | Provision of construction and engineering services in Australia |
ModuLink Australia Pty Limited was incorporated on 30 July 2024 for providing construction and engineering services in Australia.
The amount due from the associate represented the advances from the Company for the development project in Australia, which is unsecured, non-interest-bearing, and repayable on demand.
NOTE 12 | ACCOUNTS PAYABLE |
Accounts payable as of March 31, 2025 and December 31, 2024 consisted of the following:
NOTE 13 | AMOUNT DUE TO RELATED COMPANIES |
The summary of amount due to related companies as of March 31, 2025 and December 31, 2024 is as follows:
March 31, 2025 | December 31, 2024 | |||||||
Zenith (PMS) Limited | $ | 12,022 | $ | 47,798 | ||||
AY Consulting Services Company | 128,210 | 153,847 | ||||||
Total | $ | 140,232 | $ | 201,645 |
The amount due to related companies in which the Company's directors also serve as directors. These balances primarily represent advances provided to fund certain development projects. The amounts are unsecured, non-interest-bearing, and repayable on demand.
F-11 |
MODULINK INVESTMENT LIMITED
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 2025 AND 2024
(UNAUDITED)
NOTE 14 | COMMITMENTS AND CONTINGENCIES |
Contingencies
The Company accounts for loss contingencies in accordance with ASC Topic 450 and other related guidelines.
At the end of the reporting period, there were contingent liabilities of maximum USD 1.91 million (December 31, 2024: USD 1.91 million) in respect of the subsidiary providing a corporate guarantee to a bank for securing the general banking facilities granted to both the subsidiary and the shareholder of the immediate holding company.
As of March 31, 2025 and December 31, 2024, the Company’s management is of the opinion that there are no other commitments and contingencies to account for, except for those mentioned above.
NOTE 15 | STOCKHOLDERS’ EQUITY |
(A) Share capital
The Company was incorporated on March 13, 2025. On March 25, 2025, the Company undertook a group restructuring through a share exchange transaction. Pursuant to the transaction, all shareholders of ModuLink Corporation Limited (“MCL”) exchanged their respective shareholdings for proportionate shareholdings in the Company. The Company issued a total of 10,000 shares of US$1 each to the shareholders of MCL and following the completion of the share exchange, the Company became the holding company of MCL.
(B) Dividends
The Company has not declared any dividends since incorporation.
NOTE 16 | RELATED PARTY TRANSACTIONS |
Except as set forth below, during the three months ended March 31, 2025 and 2024, the Company did not enter into any material transactions or series of transactions that would be considered material in which any officer, director or beneficial owner of 5% or more of any class of the Company’s capital stock, or any immediate family member of any of the preceding persons, had a direct or indirect material interest.
During the three months ended March 31, 2025 and 2024, the Company recognized rental expense of $10,522 (2024: $Nil) payable to AY Consulting Services Company Limited. The Company’s Chief Financial Officer is a director and shareholder of AY Consulting Services Company Limited.
In addition to the transactions and balances detailed elsewhere in these financial statements, the Company had the following transactions with the related company:
Three months ended March 31, | ||||||||
2025 | 2024 | |||||||
Project and design management service fees paid to Zenith (PMS) Limited | $ | 134,615 | $ | – | ||||
Product development fees paid to Leidenford Ltd. | $ | 11,538 | $ | – |
F-12 |
MODULINK INVESTMENT LIMITED
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 2025 AND 2024
(UNAUDITED)
NOTE 17 | NET (LOSS) / PROFIT PER ORDINARY SHARE |
Net (loss) / profit per share information for the three months ended March 31, 2025 and 2024 was as follows:
Three months ended March 31, | ||||||||
2025 | 2024 | |||||||
Numerator: | ||||||||
Net (loss) / profit attributable to common stockholders | $ | (192,050 | ) | $ | 1,787 | |||
Denominator: | ||||||||
Weighted average number of shares outstanding, basic and diluted | 10,000 | 10,000 | ||||||
Net (loss) / profit per ordinary share – basic and diluted | $ | (19.21 | ) | $ | 0.18 |
The diluted net (loss) profit per ordinary share is the same as the basic net (loss) profit per ordinary share for the three months ended March 31, 2025 and 2024 as the Company did not have any stock options and warrants in issue and outstanding. As mentioned in Note 1, as the Company and its consolidated entities were under the common control of the major shareholders before and after the reorganization, the transaction was therefore accounted for as a reorganization of entities under common control in accordance with U.S. GAAP. The weighted average number of shares outstanding for the three months ended March 31, 2025 and 2024 was presented as if all the shares of the Company issued during the three months ended March 31, 2024 occurred at the beginning of the earliest reporting period.
NOTE 18 | REVENUE |
The breakdown of revenue for the three months ended March 31, 2025 and 2024 is as follows: | ||||||||
Three months ended March 31, | ||||||||
2025 | 2024 | |||||||
Design and build services | $ | 300,019 | $ | 114,487 | ||||
Project design and management services | 129,077 | – | ||||||
Total | $ | 429,096 | $ | 114,487 |
NOTE 19 | INCOME TAXES |
The Company incorporated in the British Virgin Islands are not subject to income tax under the relevant regulations. Under the current Hong Kong Inland Revenue Ordinance, the Company’s subsidiaries operating in Hong Kong are subject to the Hong Kong Profits Tax at the two-tiered profits tax rates from 8.25% to 16.5% on the estimated assessable profits derived during the current period, after deducting a tax concession for the tax year.
Income is subject to taxation in various countries in which the Company and its subsidiaries operate or are incorporated. The (loss) profit before income taxes by geographical locations for the three months ended March 31, 2025 and 2024 were summarized as follows:
Three months ended March 31, | ||||||||
2025 | 2024 | |||||||
British Virgin Islands | $ | (7,000 | ) | $ | – | |||
Hong Kong | (176,228 | ) | 3,596 | |||||
$ | (183,228 | ) | $ | 3,596 |
F-13 |
MODULINK INVESTMENT LIMITED
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 2025 AND 2024
(UNAUDITED)
NOTE 19 | INCOME TAXES (CONTINUED) |
The provision for income taxes consisted for the three months ended March 31, 2025 and 2024 was as follows:
Three months ended March 31, | ||||||||
2025 | 2024 | |||||||
(Loss) Profit before income taxes | $ | (183,228 | ) | $ | 3,596 | |||
Statutory income tax rate | 16.5% | 16.5% | ||||||
Income tax (credit) / expense computed at statutory income rate | (30,233 | ) | 593 | |||||
Reconciling items: | ||||||||
Non-taxable income | (15 | ) | (72 | ) | ||||
Valuation allowance on deferred tax assets | 39,070 | 1,288 | ||||||
Income tax expense | $ | 8,822 | $ | 1,809 |
Under Hong Kong tax laws, deferred tax assets are recognized for tax loss carried forward to the extent that the realization of the related tax benefit through future taxable profits is probable. These tax losses do not expire under current Hong Kong tax legislation.
At March 31, 2025, the Company had an unused net operating loss carryforward of approximately $641,600 for income tax purposes. This net operating loss carryforward may result in future income tax benefits of approximately $105,863.
At December 31, 2024, the Company had an unused net operating loss carryforward of approximately $404,802 for income tax purposes. This net operating loss carryforward may result in future income tax benefits of approximately $66,793.
NOTE 20 | SUBSEQUENT EVENTS |
The Company has evaluated all transactions and events after the balance sheet date and except as included below, has determined that no additional disclosures are required.
Share Exchange with International Endeavors Corporation
On 28 March 2025, International Endeavors Corporation (“IDVV”), a Nevada corporation and a publicly traded company on the Over-the-Counter Market in the United States, entered into a share exchange agreement with all shareholders of the Company. Under the terms of the agreement, IDVV will acquire 100% of the issued and outstanding shares of the Company by issuing a total of 2,356,712,066 shares of IDVV common stock at a valuation of $0.0034 per share to the shareholders of the Company on a pro-rata basis, representing an aggregate valuation of approximately $8,013,000. The transaction was consummated on May 1, 2025 and the Company has become a wholly owned subsidiary of IDVV, and IDVV would be regarded as the ultimate holding company of the Group.
F-14 |
Report of Independent Registered Public Accounting Firm
To the Stockholders and the Board of Directors of ModuLink Investment Limited.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of ModuLink Investment Limited and its subsidiaries (the “Company”) as of December 31, 2024 and 2023, and the related consolidated statements of comprehensive income, changes in stockholders’ equity and cash flows for each of the two years in the period ended December 31, 2024, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated 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 audits to obtain reasonable assurance about whether the consolidated 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.
Basis for Opinion
Our audits included performing procedures to assess the risks of material misstatement of the consolidated 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 supporting the amounts and disclosures in the consolidated 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 consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.
/s/ Vocation HK CPA Limited
We have served as the Company’s auditor since 2025.
Hong Kong
May 30, 2025
F-15 |
MODULINK INVESTMENT LIMITED
AS OF DECEMBER 31, 2024 AND 2023
(In US dollars except for number of shares and per share data)
The accompanying notes are an integral part of the consolidated financial statements.
F-16 |
MODULINK INVESTMENT LIMITED
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS)/INCOME
FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023
(In US dollars except for number of shares and per share data)
December 31, | ||||||||||
Note(s) | 2024 | 2023 | ||||||||
REVENUES | ||||||||||
Service income | 18 | $ | 409,342 | $ | 1,624,302 | |||||
COST OF REVENUES | ||||||||||
Cost of services | (349,179 | ) | (1,580,073 | ) | ||||||
GROSS PROFIT | 60,163 | 44,229 | ||||||||
OPERATING EXPENSES | ||||||||||
General and administrative | (283,675 | ) | (10,908 | ) | ||||||
Total operating expenses | (283,675 | ) | (10,908 | ) | ||||||
(LOSS)/PROFIT FROM OPERATIONS | (223,512 | ) | 33,321 | |||||||
OTHER INCOME/(EXPENSES) | ||||||||||
Interest income | 4,244 | 733 | ||||||||
Total other income/(expenses) | 4,244 | 733 | ||||||||
NET (LOSS) PROFIT BEFORE INCOME TAX | (219,268 | ) | 34,054 | |||||||
Income tax | 19 | (37,681 | ) | (5,360 | ) | |||||
NET (LOSS)/PROFIT | (256,949 | ) | 28,694 | |||||||
OTHER COMPREHENSIVE (LOSS)/INCOME | ||||||||||
Other comprehensive (loss)/income | – | – | ||||||||
COMPREHENSIVE (LOSS)/INCOME | $ | (256,949 | ) | $ | 28,694 | |||||
NET (LOSS) / PROFIT PER ORDINARY SHARE – BASIC AND DILUTED | 17 | $ | (25.69 | ) | $ | 2.87 | ||||
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING – BASIC AND DILUTED | 17 | 10,000 | 10,000 |
The accompanying notes are an integral part of the consolidated financial statements.
F-17 |
MODULINK INVESTMENT LIMITED
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023
(In US dollars except for number of shares and per share data)
Ordinary Shares | Amount | Additional paid-in capital | Exchange reserve | Accumulated deficit | Total | |||||||||||||||||||
Balance as of January 1, 2023 | 10,000 | $ | 10,000 | $ | 423,096 | $ | 366 | $ | (209,442 | ) | $ | 224,020 | ||||||||||||
Net profit for the year | – | – | – | – | 28,694 | 28,694 | ||||||||||||||||||
Balance as of December 31, 2023 | 10,000 | $ | 10,000 | $ | 423,096 | $ | 366 | $ | (180,748 | ) | $ | 252,714 | ||||||||||||
Balance as of January 1, 2024 | 10,000 | $ | 10,000 | $ | 423,096 | $ | 366 | $ | (180,748 | ) | $ | 252,714 | ||||||||||||
Capital contributions | – | – | 542,308 | – | – | 542,308 | ||||||||||||||||||
Net loss for the year | – | – | – | – | (256,949 | ) | (256,949 | ) | ||||||||||||||||
Balance as of December 31, 2024 | 10,000 | $ | 10,000 | $ | 965,404 | $ | 366 | $ | (437,697 | ) | $ | 538,073 |
The accompanying notes are an integral part of the consolidated financial statements.
F-18 |
MODULINK INVESTMENT LIMITED
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023
(In US dollars except for number of shares and per share data)
December 31, | ||||||||
2024 | 2023 | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
Net (loss) / profit | $ | (219,268 | ) | $ | 34,054 | |||
Adjustments to reconcile net loss to net cash used in operating activities | ||||||||
Depreciation of equipment | 713 | – | ||||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivables | (8,621 | ) | (82,545 | ) | ||||
Contract assets including retainage, net | 2,857 | (115,500 | ) | |||||
Prepaid expenses and other current assets, net | (97,021 | ) | – | |||||
Amount due from an associate | (8,999 | ) | – | |||||
Other receivables | 194,951 | (12,820 | ) | |||||
Accounts payable | 1,172 | 20,760 | ||||||
Contract liabilities | 149,571 | – | ||||||
Accrued expenses | 55,000 | – | ||||||
Amount due to related companies | (415,548 | ) | 408,126 | |||||
Net cash (used in) / provided by operating activities | (345,193 | ) | 252,075 | |||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
Purchase of equipment | (25,655 | ) | – | |||||
Payment for investment in an associate | (3 | ) | – | |||||
Net cash used in investing activities | (25,658 | ) | – | |||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
Proceeds from share issuance in a subsidiary | 542,308 | – | ||||||
Loan receivable | (149,799 | ) | – | |||||
Net cash provided by financing activities | 392,509 | – | ||||||
NET INCREASE IN CASH | 21,658 | 252,075 | ||||||
CASH, BEGINNING OF YEAR | 360,469 | 108,394 | ||||||
CASH, END OF YEAR | $ | 382,127 | $ | 360,469 |
The accompanying notes are an integral part of the consolidated financial statements.
F-19 |
MODULINK INVESTMENT LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023
NOTE 1 | ORGANIZATION AND PRINCIPAL ACTIVITIES |
ModuLink Investment Limited (the “Company”) was incorporated on March 13, 2025 in the British Virgin Islands. The Company together with its subsidiaries and associated company (collectively referred to the “Group”) are engaged in the business of modular building construction and design services, property development utilizing modular construction technology, the integration of smart home devices and atmospheric water generation systems. The headquarter of the Group is located in the Hong Kong Special Administrative Region of the People’s Republic of China (“PRC” or “China”). During the years ended December 31, 2024 and 2023, the Group only derived revenue from modular building construction and design services business. The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries including ModuLink Corporation Limited (“MCL”), Zenith Integrated Modular Limited (“ZIML”), Zenith AY Modular Buildings Company Limited (“ZAMBCL”) and ModuLink InnoTech Company Limited (“MICL”).
Details of the Company’s principal subsidiaries as of December 31, 2024 are described in Note 3 – Subsidiaries.
The Reorganization and Company Restructuring
On March 25, 2025, the Company undertook a group restructuring through a share exchange transaction. Pursuant to the transaction, all shareholders of ModuLink Corporation Limited exchanged their respective shareholdings for proportionate shareholdings in the Company. The Company issued a total of 10,000 shares to the shareholders of MCL and following the completion of the share exchange, the Company became the holding company of MCL.
MCL was incorporated on June 26, 2024, and 10,000 ordinary shares were issued to the founder members at HK$1 each on date of incorporation totalling HK$10,000 for raising the initial working capital. Since its incorporation, the Company has undergone a series of reorganizations in 2024, including the share exchange of its shares for acquisition of certain equity interests in three Hong Kong limited companies, namely ZIML, ZAMBCL and MICL, from the three founder members of the Company, who are the major shareholders of the Company. In September, 2024, 70,000 shares were issued to the three founder members for the exchange of shares in these companies. After the share exchange transaction, ZIML, ZAMBCL and MICL became the wholly-owned subsidiaries of MCL. Details of which can be referred to Note 3. In 2024, MCL entered into the subscription agreement with 8 individuals under which these individuals being the subscriber agreed to purchase the shares of the Company at HK$625 or US$80.13 per share. A total of 20,000 ordinary shares were issued to the subscribers.
As the Company and its consolidated entities were under the common control of the major shareholders before and after the reorganization, the transaction was therefore accounted for as a reorganization of entities under common control in accordance with U.S. GAAP. Under the guidance for transactions among entities under common control, the Company recognized the acquired subsidiaries at their historical carrying amounts. Consequently, the accompanying consolidated financial statements were presented as if the current corporate structure had been in place since the date the subsidiaries were initially under common control of the major shareholders.
Going Concern
The Company's consolidated financial statements are prepared using accounting principles generally accepted in the United States of America, or U.S. GAAP, applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has incurred losses of $256,949 and has net cash used in operating activities of $345,193 for the year ended December 31, 2024. In addition, as at the reporting date, the Company has accumulated deficit of $437,697. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The Company’s plans regarding those concerns are addressed in the following paragraph. The accompany consolidated financial statements do not reflect any adjustments that might result from the outcome of these uncertainties.
The Company plans to secure additional funding to support its current operations, expected future growth and strategic objectives. Management is actively pursuing financing opportunities through debt and equity transactions, as well as exploring new development projects and accelerating the commercialization of its products. If successfully executed, these initiatives are expected to generate positive operating cash flows and improve the Company’s financial position.
Based on management’s best estimates, the Company believes it has sufficient financial resources to meet its obligations for at least the next twelve months.
F-20 |
MODULINK INVESTMENT LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023
NOTE 2 | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
(A) Basis of Presentation and Preparation
These consolidated financial statements of the Company have been prepared in conformity with generally accepted accounting principles in the United States of America (“GAAP”) and are expressed in United States dollars.
(B) Principles of Consolidation
The consolidated financial statements include the financial statements of ModuLink Investment Limited and its subsidiaries and associated companies for which it is the primary beneficiary. Upon making this determination, the Company is deemed to be the primary beneficiary of these entities, which are then required to be consolidated for financial reporting purpose. All significant intercompany transactions and balances have been eliminated upon consolidation.
Transactions involving entities under common control are accounted for using the merger accounting. The consolidated financial statements of the combining entities are presented as if the reorganization occurred at the beginning of the earliest reporting period presented. No gain or loss is recognized in the consolidated financial statements as a result of the reorganization. The historical financial information of all entities under common control is combined retroactively for all periods presented. The financial statements reflect consistent accounting policies and principles across all entities.
(C) Use of Estimates
The Company’s consolidated financial statements require management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and reported amounts of revenue and expense during the reporting period. Estimates are used when accounting for certain items such as accounting for income tax valuation allowances. Estimates are based on historical experience, where applicable, and assumptions that management believes are reasonable under the circumstances. Due to the inherent uncertainty involved with estimates, actual results may differ.
(D) Cash
Cash includes cash on hand, cash accounts, and interest-bearing savings accounts placed with banks and financial institutions. For the purposes of the statements of cash flow, the Company considers all highly liquid investments with original maturities of three months or less at the time of purchase to be cash equivalents. There were no cash equivalents balance as of December 31, 2024 and December 31, 2023.
(E) Fixed Assets, Net
Equipment is stated at cost less accumulated depreciation and impairment losses, if any. Depreciation is provided on a straight-line basis, less estimated residual values over the assets’ estimated useful lives. The estimated useful lives are as follows:
Office equipment |
3 years |
Furniture and fixtures | 3 years |
Leasehold improvement | 3 years |
When equipment is retired or otherwise disposed of, the related cost, accumulated depreciation and provision for impairment loss, if any, are removed from the respective accounts, and any gain or loss is reflected in the consolidated statements of operations and comprehensive loss. Repairs and maintenance costs on equipment are expensed as incurred.
F-21 |
MODULINK INVESTMENT LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023
NOTE 2 | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) |
(F) Impairment of Long-Lived Assets
Long-lived assets, such as equipment, are reviewed for impairment whenever events or changes in circumstance indicate that the carrying amount of the assets may not be recoverable. An impairment loss is recognized when the carrying amount of a long-lived asset exceeds the sum of the undiscounted cash flows expected to be generated from the asset’s use and eventual disposition. An impairment loss is measured as the amount by which the carrying amount exceeds the fair value of the asset calculated using a undiscounted cash flow analysis. There was no impairment of long-lived assets for the years ended December 31, 2024 and 2023.
(G) Accounts Receivable Net of Allowance for Expected Credit Losses
Accounts receivable primarily represents revenue recognized that was not invoiced at the balance sheet date and is primarily billed and collected in the following month. Trade accounts receivable are carried at the original invoiced amount less an estimated allowance for expected credit losses based on the probability of future collection. Management determines the adequacy of the allowance based on historical loss patterns, the number of days that customer invoices are past due, reasonable and supportable forecasts of future economic conditions to inform adjustments over historical loss data, and an evaluation of the potential risk of loss associated with specific accounts. When management becomes aware of circumstances that may further decrease the likelihood of collection, it records a specific allowance against amounts due, which reduces the receivable to the amount that management reasonably believes will be collected. The Company records changes in the estimate to the allowance for expected credit losses through provision for expected credit losses and reverses the allowance after the potential for recovery is considered remote.
(H) Contract Assets Including Retainage, Net
Contract assets are generally based on amounts billed and currently due from customers, amounts currently due but unbilled and amounts retained by customers pending satisfactory completion of a project. It is common in the Company’s industry for a small portion of either progress billings or the contract price, typically 5%, to be withheld by the customer until the Company completes a project to the satisfaction of the customer in accordance with the applicable contract terms. Such amounts, defined as retainage, are included on the Consolidated Balance Sheets as “Contract assets including retainage, net.” Based on the Company’s experience with similar contracts in recent years, billings for such retainage balances are generally collected within one year of the completion of the project.
Contract assets including retainage, net is stated at the amount management expects to collect from outstanding balances. Management provides for uncollectible accounts through a charge to earnings and a credit to the allowance for doubtful accounts based on its assessment of the current status of individual accounts, type of service performed, current economic conditions, historical losses and other information available to management. Balances that are still outstanding after management has used reasonable collection efforts are written off through a charge to the allowance for doubtful accounts and an adjustment to the contract receivable.
F-22 |
MODULINK INVESTMENT LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023
NOTE 2 | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) |
(I) Contract Assets and Contract Liabilities
Billing practices for the Company’s contracts are governed by the contract terms of each project based on (i) progress toward completion approved by the owner, (ii) achievement of milestones or (iii) pre-agreed schedules. Billings do not necessarily correlate with revenues recognized under the cost-to-cost input method. The Company records contract assets and contract liabilities to account for these differences in timing.
The contract asset, “Costs and estimated earnings in excess of billings on uncompleted contracts,” arises when the Company recognizes revenues for services performed under its construction projects, but the Company is not yet entitled to bill the customer under the terms of the contract. Amounts billed to customers are excluded from this asset and reflected on the Consolidated Balance Sheets as “Contract assets including retainage, net.” Included in costs and estimated earnings on uncompleted contracts are amounts the Company seeks or will seek to collect from customers or others for (i) errors, (ii) changes in contract specifications or design, (iii) contract change orders in dispute, unapproved as to scope and price, or (iv) other customer-related causes of unanticipated additional contract costs (such as claims). Such amounts are recorded to the extent that the amount can be reasonably estimated and recovery is probable. Claims and unapproved change orders made by the Company may involve negotiation and, in rare cases, litigation. Unapproved change orders and claims also involve the use of estimates, and revenues associated with unapproved change orders and claims are included in the transaction price for which it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty is resolved. The Company did not recognize any material amounts associated with claims and unapproved change orders during the periods presented.
The contract liability, “Billings in excess of costs and estimated earnings on uncompleted contracts,” represents the Company’s obligation to transfer goods or services to a customer for which the Company has been paid by the customer or for which the Company has billed the customer under the terms of the contract. Revenue for future services reflected in this account are recognized, and the liability is reduced, as the Company subsequently satisfies the performance obligation under the contract.
Costs and estimated earnings in excess of billings on uncompleted contracts and billings in excess of costs and estimated earnings on uncompleted contracts are typically resolved within one year and are not considered significant financing components.
(J) Equity Method Investments
The Company uses the equity method of accounting for investments in companies in which it has a minority equity interest and the ability to exert significant influence over operating decisions of the companies. Significant influence is generally presumed to exist when the Company owns between 20% and 50% of the voting interests in the investee, holds substantial management rights or holds an interest of less than 20% in an investee that is a limited liability partnership or limited liability corporation that is treated as a flow- through entity.
Under the equity method of accounting, the Company’s share of the investee’s earnings (losses) are included in the “equity interests income (loss)” line item in the consolidated statement of operations. The Company recorded its share of the income or loss generated by these entities for the years ended December 31, 2024 and 2023.
F-23 |
NOTE 2 | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) |
(J) Equity Method Investments (Continued)
Dividends and other distributions from equity method investees are recorded as a reduction of the Company’s investment. Distributions received up to the Company’s interest in the investee’s retained earnings are considered returns on investments and are classified within cash flows from operating activities in the consolidated statement of cash flows. Distributions from equity method investments in excess of the Company’s interest in the investee’s retained earnings are considered returns of investments and are classified within cash flows provided by investing activities in the statement of cash flows.
Other Equity Investments: Investments in nonconsolidated affiliates in which the Company owns less than 20% of the voting common stock or does not exercise significant influence over operating and financial policies, are recorded at fair value using quoted market prices if the investment has a readily determinable fair value. If an equity investment’s fair value is not readily determinable, the Company will recognize it at cost less any impairment, adjusted for observable price changes in orderly transactions in the investees’ securities that are identical or similar to the Company’s investments in the investee. The unrealized gains and losses and the adjustments related to the observable price changes are recognized in net income (loss).
Impairments of Investments
The Company regularly reviews its investments for impairment, including when the carrying value of an investment exceeds its market value. If the Company determines that an investment has sustained an other-than-temporary decline in its value, the investment is written down to its fair value by a charge to earnings. Factors that are considered by the Company in determining whether an other-than-temporary decline in value has occurred include (i) the market value of the security in relation to its cost basis, (ii) the financial condition of the investee, and (iii) the Company’s intent and ability to retain the investment for a sufficient period of time to allow for recovery in the market value of the investment.
For investments accounted for using the equity method of accounting or equity investments without a readily determinable fair value, the Company evaluates information available (e.g., budgets, business plans, financial statements, etc.) in addition to quoted market prices, if any, in determining whether an other-than temporary decline in value exists. Factor’s indicative of an other-than-temporary decline include recurring operating losses, credit defaults and subsequent rounds of financing at an amount below the cost basis of the Company’s investment.
(K) Revenue Recognition
The Company derives a significant portion of revenues from contracts with its customers during the years ended December 31, 2024 and 2023, predominantly by performing design and building services and project design and management services for both public and private projects, with an emphasis on commercial and residential developments.
In accordance with ASC 606, Revenue From Contracts with Customers, an entity recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration the entity expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements that are within the scope of the standard, the entity performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. The standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The standard also includes criteria for the capitalization and amortization of certain contract acquisition and fulfillment costs.
F-24 |
MODULINK INVESTMENT LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023
NOTE 2 | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) |
Design and building services
Revenues derived from design and building services are recognized over time by using the cost-to-cost method to measure the progress towards the completion of the performance obligation as the customer simultaneously receives and consumes the benefits from the services rendered by the Company.as the Company satisfies its performance obligations by transferring control of the asset created or enhanced by the project to the customer. The contracts for design and building services are legally enforceable and binding agreements between the Company and customers. Recognition of revenues for construction projects requires significant judgment by management, including, among other things, estimating total costs expected to be incurred to complete a project and measuring progress toward completion. Management reviews contract estimates regularly to assess revisions of estimated costs to complete a project and for measurement of progress toward completion. No material adjustments to a contract were noted in the fiscal years ended December 31, 2024 and 2023.
The Company reviews and updates the estimated total costs of the contracts at least annually. Revisions to contract revenue and estimated total costs of the contracts are made in the period in which the facts and circumstances that cause the revision become known and are accounted for as changes in estimates. Management believes the Company maintains reasonable estimates based on prior experience; however, many factors contribute to changes in estimates of contract costs. Accordingly, estimates made with respect to uncompleted projects are subject to change as each project progresses and better estimates of contract costs become available. All contract costs are recorded as incurred, and revisions to estimated total costs are reflected as soon as the obligation to perform is determined. Provisions are recognized for the full amount of estimated losses on uncompleted contracts whenever evidence indicates that the estimated total cost of a contract exceeds its estimated total revenue, regardless of the stage of completion. When the Company incurs additional costs related to work performed by subcontractors, the Company may be able to utilize contractual provisions to back charge the subcontractors for those costs.
Revenue in excess of billings on the contracts is recorded as costs and estimated earnings in excess of billings. Billings in excess of revenues recognized on the contracts are recorded as deferred revenue until the above revenue recognition criteria are met. Recognition of accounts receivable and costs and estimated earnings in excess of billings are stated set out in Note 2(I).
If at any time the costs to complete the contract are estimated to exceed the remaining amount of the consideration under the contract, then a provision is recognized.
Project design and management services
Revenues derived from design and management services are recognized over time by using percentage of completion certified by engineer to measure the progress towards the completion of the performance obligation as the customer simultaneously receives and consumes the benefits from the services rendered by the Company. The contracts for design and building services are legally enforceable and binding agreements between the Company and customers.
(L) Income Taxes
The Company recognizes deferred tax liabilities and assets for the expected future tax consequences of events that have been included in the consolidated financial statements or tax returns. Deferred tax liabilities and assets are determined based on the difference between the financial statement basis and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The Company estimates the degree to which tax assets and credit carryforwards will result in a benefit based on expected profitability by tax jurisdiction. A valuation allowance for such tax assets and loss carryforwards is provided when it is determined to be more likely than not that the benefit of such deferred tax asset will not be realized in future periods. Tax benefits of operating loss carryforwards are evaluated on an ongoing basis, including a review of historical and projected future operating results, the eligible carryforward period, and other circumstances. If it becomes more likely than not that a tax asset will be used, the related valuation allowance on such assets would be reduced.
The Company recognizes tax benefits from uncertain tax positions only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. Once this threshold has been met, the Company’s measurement of its expected tax benefits is recognized in its consolidated financial statements. The Company accrues interest on unrecognized tax benefits as a component of income tax expense. Penalties, if incurred, would be recognized as a component of income tax expense.
F-25 |
MODULINK INVESTMENT LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023
NOTE 2 | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) |
(M) Comprehensive Income (Loss)
The Company follows ASC Topic 220, Comprehensive Income, for the reporting and display of its comprehensive income (loss) and related components in the consolidated financial statements and thereby reports a measure of all changes in equity of an enterprise that results from transactions and economic events other than transactions with the shareholders. Items of comprehensive income (loss) are reported in both the consolidated statements of operations and comprehensive income and the consolidated statement of stockholders’ deficit.
Accumulated other comprehensive income as presented on the consolidated balance sheets consisted of the accumulative foreign currency translation adjustment at period end.
(N) Earnings (Loss) Per Common Share
Basic earnings (loss) per common share are computed in accordance with ASC Topic 260, Earning per Share, by dividing the net income (loss) attributable to holders of common stock by the weighted average number of shares of common stock outstanding during the period. Diluted earnings (loss) per common share is computed by dividing net income (loss) by the weighted average number of common shares including the dilutive effect of common share equivalents then outstanding.
The diluted net profit/(loss) per common share is the same as the basic net profit/(loss) per share for the years ended December 31, 2024 and 2023 as all potential common shares including stock options and warrants are anti-dilutive and are therefore excluded from the computation of diluted net profit/(loss) per share.
(O) Foreign Currency Translation
The assets and liabilities of the Company’s subsidiaries and variable interest entity denominated in currencies other than U.S. dollars are translated into U.S. dollars using the applicable exchange rates at the balance sheet date. For consolidated statements of operations and comprehensive loss’ items, amounts denominated in currencies other than U.S. dollars were translated into U.S. dollars using the average exchange rate during the period. Equity accounts were translated at their historical exchange rates. Net gains and losses resulting from translation of foreign currency on consolidated financial statements are included in the statements of stockholders’ equity as accumulated other comprehensive income (loss). Foreign currency transaction gains and losses are reflected in the unaudited consolidated statements of operations and comprehensive income.
(P) Fair Value of Financial Instruments
ASC Topic 820, Fair Value Measurements and Disclosure, defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact, and it considers assumptions that market participants would use when pricing the asset or liability.
F-26 |
NOTE 2 | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) |
(P) Fair Value of Financial Instruments (Continued)
It establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. It establishes three levels of inputs that may be used to measure fair value:
Level 1 - Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.
Level 2 - Level 2 applies to assets or liabilities for which there are inputs other than quoted prices included within Level 1 that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.
Level 3 - Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.
The carrying value of the Company’s financial instruments, which consist of cash, prepaid expenses and other current assets, accounts payable, accrued expenses and other payables approximates fair value due to the short-term maturities.
(Q) Recent Accounting Pronouncements
In March 2022, the Financial Accounting Standards Board (“FASB”) issued ASU No 2022-02, “Financial Instruments—Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures” (“ASU 2022-02”). ASU 2022-02 eliminates the accounting guidance for troubled debt restructurings by creditors while enhancing disclosure requirements for certain loan refinancing and restructurings by creditors made to borrowers experiencing financial difficulty. In addition, the amendments require disclosure of current period gross write-offs for financing receivables and net investment in leases by year of origination in the vintage disclosures. ASU 2022-02 is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Except for expanded disclosures to its vintage disclosures, ASU 2022-02 did not have a material effect on the Company’s current financial position, results of operations or financial statements.
In October 2023, the FASB issued ASU No 2023-06, “Disclosure Agreements – Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative” (“ASU 2023-06”). ASU 2023-06 will align the disclosure and presentation requirements in the FASB Accounting Standards Codification with the SEC’s regulations. The amendments in ASU 2023-06 will be applied prospectively and are effective when the SEC removes the related requirements from Regulations S-X or S-K. Any amendments the SEC does not remove by June 30, 2027 will not be effective. As the Company is currently subject to these SEC requirements, ASU 2023-06 is not expected to have a material effect on the Company’s current financial position, results of operations or financial statement disclosures.
In November 2023, the FASB issued ASU No 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures” (“ASU 2023-07”). ASU 2023-07 expands disclosures about a public entity’s reportable segments and requires more enhanced information about a reportable segment’s expenses, interim segment profit or loss, and how a public entity’s chief operating decision maker uses reported segment profit or loss information in assessing segment performance and allocating resources. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted. ASU 2023-07 should be applied retrospectively to all prior periods presented in the financial statements. The Company does not expect ASU 2023-07 to have a material effect on the Company’s current financial position, results of operations or financial statement disclosures.
F-27 |
MODULINK INVESTMENT LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023
NOTE 2 | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) |
(Q) Recent Accounting Pronouncements (continued)
In December 2023, the FASB issued ASU No 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures” (“ASU 2023-09”). ASU 2023-09 expands disclosures in the rate reconciliation and requires disclosure of income taxes paid by jurisdiction. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024. Early adoption is permitted. ASU 2023-09 should be applied prospectively; however, retrospective application is permitted. The Company does not expect ASU 2023-09 to have a material effect on the Company’s current financial position, results of operations or financial statement disclosures.
In June 2016, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2016-13, Financial Instruments Credit Losses (Topic 326), which requires entities to measure all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. This replaces the existing incurred loss model and is applicable to the measurement of credit losses on financial assets measured at amortized cost. This standard was effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years with early adoption permitted. In November 2019, the FASB issued ASU No. 2019-10, Financial Instruments— Credit Losses (Topic 326), Derivatives and Hedging (Topic 815) and Leases (Topic 842). Effective Dates, which defers the effective date of Topic 326. As a smaller reporting Company, Topic 326 will now be effective for the Company beginning January I, 2023. The Company adopted this ASU January I, 2023 and it did not have a significant impact on its consolidated financial statements and related disclosures.
In August 2020, the FASB issued ASU No. 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 4 70- 20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40). Accounting for Convertible Instruments and Contracts in an Entity ’s Owner Equity (ASU 2020-06). ASU 2020-06 simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts in an entity’s own equity. Those instruments that do not have a separately recognized embedded conversion feature will no longer recognize a debt issuance discount related to such a conversion feature and would recognize less interest expense on a periodic basis. It also removes from ASC 815-40-25-10 certain conditions for equity classification and amends certain guidance in ASC Topic 260 on the computation of EPS for convertible
instruments and contracts in an entity’s own equity. An entity can use either a full or modified retrospective approach to adopt the ASU’s guidance. As a smaller reporting Company, the Company is required to adopt this ASU for the fiscal year beginning January 1, 2024, with early adoption permitted for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years. The Company adopted this ASU January 1, 2022 and it did not have a significant impact on its consolidated financial statements and related disclosures.
In May 2021, the FASB issued ASU No. 2021-04, Earnings Per Share (Topic 260), Debt— Modifications and Extinguishments (Subtopic 4 70-50), Compensation—Stock Compensation (Topic 718), and Derivatives and Hedging— Contracts in Entity’s’ Owen Equity (Subtopic 815-40) (ASU 2022-04). ASU 2022-04 updates current accounting guidance for modifications or exchanges of freestanding equity-classified written call options that remain equity-classified after modification or exchange as an exchange of the original instrument for a new instrument. The ASU specifies that the effects of modifications or exchanges of freestanding equity-classified written call options that remain equity after modification or exchange should be recognized depending on the substance of the transaction, whether it be a financing transaction to raise equity (topic 340), to raise or modify debt (topic 470 and 835), or other modifications or exchanges. If the modification or exchange does not fall under topics 340, 470, or 835, an entity may be required to account for the effects of such modifications or exchanges as dividends which should adjust net income (or loss) in the basic EPS calculation. This guidance was effective for fiscal years beginning after December 15, 2022, with early adoption permitted. The Company is required to apply the amendments within this ASU prospectively to modifications or exchanges occurring on or after the effective date of the amendment. The Company adopted this ASU January I, 2023 and it did not have a significant impact on its consolidated financial statements and related disclosures.
F-28 |
MODULINK INVESTMENT LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023
NOTE 2 | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) |
(Q) Recent Accounting Pronouncements (Continued)
Recently Issued Accounting Pronouncements Not Yet Adopted
In December 2023, FASB issued ASU 2023- 09, Income Taxes (Topic 740). Improvements to Income Tax Disclosures (ASU 2023-09). The ASU focuses on income tax disclosures around effective tax rates and cash income taxes paid. ASU 2023-09 requires public business entities to disclose, on an annual basis, a rate reconciliation presented in both dollars and percentages. The guidance requires the rate reconciliation to include specific categories and provides further guidance on disaggregation of those categories based on a quantitative threshold equal to 5% or more of the amount determined by multiplying pretax income (loss) from continuing operations by the applicable statutory rate. For entities reconciling to the US statutory rate of 21%, this would generally require disclosing any reconciling items that impact the rate by 1.05% or more. ASU 2023-09 is effective for public business entities for annual periods beginning after Dec. 15, 2024 (generally, calendar year 2025) and effective for all other business entities one year later. Entities should adopt this guidance on a prospective basis, though retrospective application is permitted. The adoption of ASU 2023-09 is expected to have a financial statement disclosure impact only and is not expected to have a material impact on the Company’s consolidated financial statements.
Other pronouncements issued by the FASB or other authoritative accounting standards groups with future effective dates are either not applicable or are not expected to be significant to the Company’s financial position, results of operations or cash flows.
NOTE 3 | SUBSIDIARIES |
Details of the Company’s principal consolidated subsidiaries as of December 31, 2024 and 2023 were as follows:
Name |
Place of Incorporation |
Ownership/Control interest attributable to the Company 2024 2023 |
Principal activities | ||
ModuLink Corporation Limited (“MCL”) (i) | Hong Kong | 100% Nil | Holding company and provision of intergroup management services | ||
Zenith Integrated Modular Limited (“ZIML”) (ii) | Hong Kong | 100% Nil | Provision of construction and engineering services | ||
Zenith AY Modular Buildings Company Limited (“ZAMBCL”) (iii) | Hong Kong | 100% Nil | Provision of project management services in overseas (v) | ||
ModuLink InnoTech Company Limited (“MICL”) (iv) | Hong Kong | 100% Nil | Provision of technology management services (vi) |
F-29 |
MODULINK INVESTMENT LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023
NOTE 3 | SUBSIDIARIES (CONTINUED) |
Remarks:
i) |
ModuLink Corporation Limited was incorporated on June 26, 2024 in Hong Kong. |
ii) |
ZIML was incorporated on August 13, 2021, as a wholly owned subsidiary of a Hong Kong limited company, which was beneficially held by Anthony Hin Wah TAM (“Mr. TAM”), a major shareholder, director and chairman of the Company. On August 1, 2024, a share swap agreement was executed among ZIML, MCL, the Hong Kong entity held by Mr. TAM, and two other major shareholders of the Company. Pursuant to this agreement, Mr. TAM exchanged his entire ultimate shareholding in ZIML for a 50% equity interest in MCL prior to private placements to other shareholders. After the transaction, ZIML became the wholly-owned subsidiary of MCL. |
iii) |
ZAMBCL was incorporated on March 4, 2024, and was jointly owned by a Hong Kong company, which was beneficially held by Sai Kit AU-YEUNG (“Mr. AU-YEUNG”) (70%) and ZIML (30%). Mr. AU-YEUNG is also a major shareholder, director and chief financial officer of the Company. On August 1, 2024, a share swap agreement was signed among ZAMBCL, MCL, ZIML, Mr. AU YEUNG and his company. Pursuant to this agreement, Mr. AU-YEUNG transferred his 70% shareholding in ZAMBCL in exchange for a 25% equity interest in MCL prior to private placements to other shareholders. After the transaction, ZAMBCL became the wholly-owned subsidiary of ZIML. |
iv) | MICL was incorporated on December 17, 2021, and was jointly owned a Hong Kong limited company, which was beneficially held by Wah FU (“Mr. FU”) (40%) and ZIML (60%). Mr. FU is a major shareholder, director and chief executive officer of the Company. On August 1, 2024, a share swap agreement was executed among MICL, MCL, ZIML, Mr. FU and his company. Pursuant to this agreement, Mr. FU exchanged his 40% shareholding in MICL for a 25% equity interest in MCL prior to private placements to other shareholders. After the transaction, MICL became the wholly-owned subsidiary of ZIML. |
v) | ZAMBCL has not commenced business during the years ended December 31, 2024. |
vi) | MICL has not commenced business during the years ended December 31, 2024 and 2023. |
NOTE 4 | ACCOUNTS RECEIVABLE |
Accounts receivable as of December 31, 2024 and December 31, 2023 were as follows:
2024 | 2023 | |||||||
Accounts receivable | $ | 91,166 | $ | 82,545 | ||||
Less: provision for credit losses | – | – | ||||||
Total | $ | 91,166 | $ | 82,545 |
For the years ended December 31, 2024 and 2023, the Company recorded no provision for credit losses for accounts receivable.
F-30 |
MODULINK INVESTMENT LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023
NOTE 5 | CONTRACT ASSETS INCLUDING RETAINAGE, NET |
Contract assets including retainage, net consisted of the following at December 31, 2024 and 2023:
2024 | 2023 | |||||||
Contract assets (Note 6) | $ | 193,404 | $ | 196,261 | ||||
Retainage | 108,098 | 108,098 | ||||||
Less: provision for credit losses | – | – | ||||||
Contract assets including retainage, net | $ | 301,502 | $ | 304,359 |
Retainage receivables have been billed and the Company has an unconditional right to receive payment, but are not due until satisfactory contract completion and acceptance by the customer.
NOTE 6 | CONTRACT ASSETS AND LIABILITIES |
Costs and estimated earnings compared to billings on uncompleted contracts at December 31, 2024 and 2023 consisted of the following:
Costs and estimated earnings in excess of billings on uncompleted contracts
2024 | 2023 | |||||||
Contract costs incurred plus estimated earnings | $ | 4,323,927 | $ | 4,209,441 | ||||
Less: Progress billings | (4,130,523 | ) | (4,013,180 | ) | ||||
$ | 193,404 | $ | 196,261 |
Billings in excess of costs and estimated earnings on uncompleted contracts
2024 | 2023 | |||||||
Contract costs incurred plus estimated earnings | $ | 273,505 | $ | – | ||||
Less: Progress billings | (423,076 | ) | – | |||||
$ | (149,571 | ) | $ | – |
F-31 |
MODULINK INVESTMENT LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023
NOTE 7 | PREPAID EXPENSES AND OTHER CURRENT ASSETS, NET |
Prepaid expenses and other current assets, net as of December 31, 2024 and 2023 were as follows:
2024 | 2023 | |||||||
Prepaid expenses | $ | 45,000 | $ | – | ||||
Deposit paid | 52,021 | – | ||||||
$ | 97,021 | $ | – |
NOTE 8 | LOAN RECEIVABLES |
The amount was due from an independent property development entity based in Canada. The amount due is unsecured, carries interest at a rate of 5% per annum and repayable on demand.
NOTE 9 | OTHER RECEIVABLES |
The Company has other receivables of $Nil and $194,951 as of December 31, 2024 and 2023.
For the years ended December 31, 2024 and 2023, no provision for credit losses was charged to expenses.
NOTE 10 | EQUIPMENT, NET |
Equipment, net as of December 31, 2024 and 2023 consisted of the following:
2024 | 2023 | |||||||
Office equipment | $ | 4,900 | $ | – | ||||
Furniture and Fixtures | 5,936 | – | ||||||
Leasehold improvement | 14,819 | – | ||||||
Less: accumulated depreciation | (713 | ) | – | |||||
Total | $ | 24,942 | $ | – |
Depreciation for the years ended December 31, 2024 and 2023 amounted to $713 and $Nil respectively.
Pledge of Equipment
No equipment has been pledged by the Company.
F-32 |
MODULINK INVESTMENT LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023
NOTE 11 |
INVESTMENT IN AN ASSOCIATE |
Name |
Place of Incorporation |
Ownership/Control interest attributable to the Company |
Principal activities |
ModuLink Australia Pty Limited | Australia | 40% | Provision of construction and engineering services in Australia |
ModuLink Australia Pty Limited was incorporated on 30 July 2024 for providing construction and engineering services in Australia. During the year ended December 31, 2024, the associated company has not commenced business.
NOTE 12 | ACCOUNTS PAYABLE |
Accounts payable as of December 31, 2024 and 2023 consisted of the following:
2024 | 2023 | |||||||
Retention payable | $ | 55,772 | $ | 54,600 | ||||
The retention payable is not due until satisfactory contract completion and acceptance by the customer. |
NOTE 13 | AMOUNT DUE TO RELATED COMPANIES |
The summary of amount due to related companies as of December 31, 2024 and 2023 is as follows:
2024 | 2023 | |||||||
Zenith (PMS) Limited | $ | 47,798 | $ | 617,193 | ||||
AY Consulting Services Company | 153,847 | – | ||||||
Total | $ | 201,645 | $ | 617,193 |
The amount due to related companies in which the Company's directors also serve as directors. These balances primarily represent advances provided to fund certain development projects. The amounts are unsecured, non-interest-bearing, and repayable on demand.
F-33 |
MODULINK INVESTMENT LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023
NOTE 14 | COMMITMENTS AND CONTINGENCIES |
Contingencies
The Company accounts for loss contingencies in accordance with ASC Topic 450 and other related guidelines.
At the end of the reporting period, there were contingent liabilities of maximum USD 1.91 million (2023: USD 1.91 million) in respect of the subsidiary providing a corporate guarantee to a bank for securing the general banking facilities granted to both the subsidiary and the shareholder of the immediate holding company.
As of December 31, 2024 and 2023, the Company’s management is of the opinion that there are no other commitments and contingencies to account for, except for those mentioned above.
NOTE 15 | STOCKHOLDERS’ EQUITY |
(A) Share capital
The Company was incorporated on March 13, 2025. On March 25, 2025, the Company undertook a group restructuring through a share exchange transaction. Pursuant to the transaction, all shareholders of ModuLink Corporation Limited (“MCL”) exchanged their respective shareholdings for proportionate shareholdings in the Company. The Company issued a total of 10,000 shares of US$1 each to the shareholders of MCL and following the completion of the share exchange, the Company became the holding company of MCL.
(B) Dividends
The Company has not declared any dividends since incorporation.
NOTE 16 | RELATED PARTY TRANSACTIONS |
Except as set forth below, during the years ended December 31, 2024 and 2023, the Company did not enter into any material transactions or series of transactions that would be considered material in which any officer, director or beneficial owner of 5% or more of any class of the Company’s capital stock, or any immediate family member of any of the preceding persons, had a direct or indirect material interest.
For the year ended December 31, 2024, the Company recognized rental expense of $7,890 (2023: $Nil) payable to AY Consulting Services Company Limited. The Company’s Chief Financial Officer is a director and shareholder of AY Consulting Services Company Limited.
In addition to the transactions and balances detailed elsewhere in these financial statements, the Company had the following transactions with the related company:
2024 | 2023 | |||||||
Project and design management service fees paid to Zenith (PMS) Limited | $ | 245,716 | $ | – | ||||
Product development fees paid to Leidenford Ltd. | 30,306 | 1,277 |
F-34 |
MODULINK INVESTMENT LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023
NOTE 17 | NET (LOSS) / PROFIT PER ORDINARY SHARE |
Net (loss) / profit per share information for the years ended December 31, 2024 and 2023 was as follows:
2024 | 2023 | |||||||
Numerator: | ||||||||
Net (loss) / profit attributable to common stockholders | $ | (256,949 | ) | $ | 28,694 | |||
Denominator: | ||||||||
Weighted average number of shares outstanding, basic and diluted | 10,000 | 10,000 | ||||||
Net (loss) / profit per ordinary share – basic and diluted | $ | (25.69 | ) | $ | 2.87 |
The diluted net (loss) profit per ordinary share is the same as the basic net (loss) profit per ordinary share for the years ended December 31, 2024 and 2023 as the Company did not have any stock options and warrants in issue and outstanding. As mentioned in Note 1, as the Company and its consolidated entities were under the common control of the major shareholders before and after the reorganization, the transaction was therefore accounted for as a reorganization of entities under common control in accordance with U.S. GAAP. The weighted average number of shares outstanding for the year ended December 31, 2024 and 2023 was presented as if all the shares of the Company issued during the year ended December 31, 2024 occurred at the beginning of the earliest reporting period.
NOTE 18 | REVENUE |
The breakdown of revenue for the year ended December 31, 2024 and 2023 is as follows: | ||||||||
2024 | 2023 | |||||||
Design and build services | $ | 114,482 | $ | 1,624,302 | ||||
Project design and management services | 294,860 | – | ||||||
Total | $ | 409,342 | $ | 1,624,302 |
NOTE 19 | INCOME TAXES |
The Company incorporated in the British Virgin Islands are not subject to income tax under the relevant regulations. Under the current Hong Kong Inland Revenue Ordinance, the subsidiaries are subject to a 16.5% income tax rate on its taxable income generated from operations in Hong Kong.
Income is subject to taxation in various countries in which the Company and its subsidiaries operate or are incorporated. The (loss) profit before income taxes by geographical locations for the years ended December 31, 2024 and 2023 were summarized as follows:
2024 | 2023 | |||||||
British Virgin Islands | $ | (55,000 | ) | $ | – | |||
Hong Kong | (164,268 | ) | 34,054 | |||||
$ | (219,268 | ) | $ | 34,054 |
F-35 |
MODULINK INVESTMENT LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023
NOTE 19 | INCOME TAXES (CONTINUED) |
The provision for income taxes consisted for the years ended December 31, 2024 and 2023 was as follows:
2024 | 2023 | |||||||
(Loss) Profit before income taxes | $ | (164,268 | ) | $ | 34,054 | |||
Statutory income tax rate | 16.5% | 16.5% | ||||||
Income tax expense / (credit) computed at statutory income rate | (27,104 | ) | 5,617 | |||||
Reconciling items: | ||||||||
Non-taxable income | (346 | ) | (121 | ) | ||||
Valuation allowance on deferred tax assets | 66,521 | 247 | ||||||
Others | (1,390 | ) | (383 | ) | ||||
Income tax expense | $ | 37,681 | $ | 5,360 |
Under Hong Kong tax laws, deferred tax assets are recognized for tax loss carried forward to the extent that the realization of the related tax benefit through future taxable profits is probable. These tax losses do not expire under current Hong Kong tax legislation.
At December 31, 2024, the Company had an unused net operating loss carryforward of approximately $404,802 for income tax purposes. This net operating loss carryforward may result in future income tax benefits of approximately $66,793.
At December 31, 2023, the Company had an unused net operating loss carryforward of approximately $1,643 for income tax purposes. This net operating loss carryforward may result in future income tax benefits of approximately $272.
The realization of net operating loss carryforward is uncertain at this time, a valuation allowance in the same amount has been established. Deferred income taxes reflect the net effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.
Significant components of the Company’s deferred tax assets and liabilities of December 31, 2024 and 2023 are as follows:
2024 | 2023 | |||||||
Deferred tax assets | $ | 66,793 | $ | 272 | ||||
Less: valuation allowance | (66,793 | ) | (272 | ) | ||||
Net deferred tax assets | $ | – | $ | – |
Movement of valuation allowance:
2024 | 2023 | |||||||
At the beginning of the year | $ | 272 | $ | 25 | ||||
Current year addition (reduction) | 66,521 | 247 | ||||||
At the end of the year | $ | 66,793 | $ | 272 |
F-36 |
MODULINK INVESTMENT LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023
NOTE 20 | CONCENTRATION OF RISK |
Credit risk
Financial instruments that potentially subject the Group to significant concentrations of credit risk consist primarily of cash. As of December 31, 2024 and 2023, cash balance of $382,127 and $360,469 was maintained at financial institutions in Hong Kong and approximately HK$800,000 were insured by the Hong Kong Deposit Protection Board. While management believes that these financial institutions are of high credit quality, it also continually monitors their credit worthiness.
Customer risk
Details of the customer accounting for 10% or more of total revenues are as follows:
2024 | 2023 | |||||||
Customer A | 28% | 100% | ||||||
Customer B | 72% | – |
Details of the customer which accounted for 10% or more of accounts receivable are as follows:
2024 | 2023 | |||||||
Customer A | 100% | 100% |
Supplier risk
Details of the suppliers accounting for 10% or more of cost of services are as follows:
2024 | 2023 | |||||||
Supplier A | 70% | – | ||||||
Supplier B | – | 34% | ||||||
Supplier C | 9% | 31% |
Details of the suppliers accounting for 10% or more of account payable are as follows:
2024 | 2023 | |||||||
Supplier B | 38% | 39% | ||||||
Supplier C | 58% | 60% |
F-37 |
MODULINK INVESTMENT LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023
NOTE 21 | 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 up to the filing date, the date the audited financial statements were available to issue. Based upon this review, other than as described below, the Company did not identify any subsequent events that would have required adjustment or disclosure in the financial statements.
Share Exchange with International Endeavors Corporation
On 28 March 2025, International Endeavors Corporation (“IDVV”), a Nevada corporation and a publicly traded company on the Over-the-Counter Market in the United States, entered into a share exchange agreement with all shareholders of the Company. Under the terms of the agreement, IDVV will acquire 100% of the issued and outstanding shares of the Company by issuing a total of 2,356,712,066 shares of IDVV common stock at a valuation of $0.0034 per share to the shareholders of the Company on a pro-rata basis, representing an aggregate valuation of approximately $8,013,000. The transaction was consummated on May 1, 2025 and the Company has become a wholly owned subsidiary of IDVV, and IDVV would be regarded as the ultimate holding company of the Group.
F-38 |
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION
Introduction
The following unaudited pro forma condensed combined financial information presents the combination of the financial information of ModuLink Investment Limited and International Endeavors Corporation (“IDVV”), adjusted to give effect to the business acquisition and related share exchange transaction. The following unaudited pro forma condensed combined financial information has been prepared in accordance with Article 11 of Regulation S-X as amended by the final rule, Release 33-10786 “Amendments to Financial Disclosures about Acquired and Disposed Businesses”.
The unaudited pro forma condensed combined balance sheet as March 31, 2025 combines the historical unaudited balance sheet of ModuLink Investment Limited and the historical unaudited balance sheet of IDVV on a pro forma basis as if the share exchange transaction had been consummated on March 31, 2025. The unaudited pro forma condensed combined statement of operations for the year ended March 31, 2025 combine the historical unaudited statements of operations of ModuLink Investment Limited and historical unaudited statements of operations of IDVV for such periods on a pro forma basis as if share exchange transaction had been consummated on 1 January, 2025, the beginning of the earliest period presented.
The unaudited pro forma condensed combined financial statements have been developed from and should be read in conjunction with:
· | the accompanying notes to the unaudited pro forma condensed combined financial statements; |
· | the historical audited financial statements of ModuLink Investment Limited as of and for the years ended December 31, 2024 and 2023 and the related notes, found elsewhere in this Form-10; |
· | the historical unaudited financial statements of IDVV as of and for the three months ended March 31, 2025 and the year ended December 31, 2024 and the related notes, found elsewhere in this Form-10; |
· | other information relating to ModuLink Investment Limited and IDVV contained in this Form-10, including the Share Exchange Agreement. |
F-39 |
UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET
AS OF MARCH 31, 2025
(In US dollars except for number of shares and per share data)
A | Reflects the disposal of the Witech business to Raymond Valdez, the former Chief Executive Officer and Director of the Company, on May 1, 2025. | |
B | Reflects the elimination of inter-company balances. | |
C | Represents the issuance of 2,356,712,066 shares of the Company’s common stock, par value $0.001, at a per share price of $0.0034 and reverse recapitalization adjustments. |
F-40 |
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT
OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2025
(In US dollars except for number of shares and per share data)
(In US$) | IDVV | Modulink BVI | Proforma | |||||||||
(Historical) | (Historical) | Combined | ||||||||||
REVENUES | ||||||||||||
Service income | – | 429,096 | 429,096 | |||||||||
COST OF REVENUES | ||||||||||||
Cost of services | – | (379,550 | ) | (379,550 | ) | |||||||
GROSS PROFIT | – | 49,546 | 49,546 | |||||||||
OPERATING EXPENSES | ||||||||||||
General and administrative | (15,213 | ) | (234,712 | ) | (249,925 | ) | ||||||
Total operating expenses | (15,213 | ) | (234,712 | ) | (249,925 | ) | ||||||
LOSS FROM OPERATIONS | (15,213 | ) | (185,166 | ) | (200,379 | ) | ||||||
OTHER INCOME (EXPENSES) | ||||||||||||
Interest income | – | 1,938 | 1,938 | |||||||||
Interest expense | (2,425 | ) | – | (2,425 | ) | |||||||
Total other income / (expenses) | (2,425 | ) | 1,938 | (487 | ) | |||||||
NET LOSS BEFORE INCOME TAX | (17,638 | ) | (183,228 | ) | (200,866 | ) | ||||||
Income tax | – | (8,822 | ) | (8,822 | ) | |||||||
NET LOSS AND COMPREHENSIVE LOSS | (17,638 | ) | (192,050 | ) | (209,688 | ) | ||||||
NET LOSS PER ORDINARY SHARE - BASIC AND DILUTED | (0.0000 | ) | (19.21 | ) | (0.0001 | ) | ||||||
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING - BASIC AND DILUTED | 1,613,221,854 | 10,000 | 3,969,933,920 |
F-41 |
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION
Notes to Unaudited Pro Forma Condensed Combined Financial Statements
1. Basis of Presentation
The share exchange was accounted for as a reverse recapitalization in accordance with GAAP. Under this method of accounting, IDVV was treated as the “acquired” company for financial reporting purposes. Accordingly, the share exchange was treated as the equivalent of ModuLink BVI issuing stock for the net assets of IDVV, accompanied by a recapitalization, whereby no goodwill or other intangible assets was recorded. Operations prior to the share exchange are those of ModuLink BVI.
The unaudited pro forma condensed combined balance sheet as of March 31, 2025 assumes that the share exchange occurred on March 31, 2025. The unaudited pro forma condensed combined statements of operations for the three months ended March 31, 2025 present pro forma effect to the share exchange as if it had been completed on January 1, 2025.
The unaudited pro forma condensed combined balance sheet as of March 31, 2025 has been prepared using, and should be read in conjunction with, the following:
· | IDVV’s unaudited condensed balance sheet as of March 31, 2025 and the related notes for the three months period ended March 31, 2025, incorporated by reference; and | ||
· | ModuLink’s unaudited consolidated balance sheet as of March 31, 2025 and the related notes for the three months period ended March 31, 2025, included herein. |
The unaudited pro forma combined statement of operations for the three months period ended March 31, 2025 has been prepared using, and should be read in conjunction with, the following:
· | IDVV’s unaudited financial statement of operations for the three months period ended March 31, 2025 and the related notes, incorporated by reference; and | ||
· | ModuLink’s unaudited consolidated financial statement of operations for the three months period ended March 31, 2025 and the related notes, included herein. |
Management has made significant estimates and assumptions in its determination of the pro forma adjustments. As the unaudited pro forma condensed combined financial information has been prepared based on these preliminary estimates, the final amounts recorded may differ materially from the information presented.
The unaudited pro forma condensed combined financial information does not give effect to any anticipated synergies, operating efficiencies, tax savings, or cost savings that may be associated with the share exchange transaction.
The pro forma adjustments reflecting the consummation of the share exchange are based on certain currently available information and certain assumptions and methodologies that the Company believes are reasonable under the circumstances. The unaudited condensed pro forma adjustments, which are described in the accompanying notes, may be revised as additional information becomes available and is evaluated.
Therefore, it is likely that the actual adjustments will differ from the pro forma adjustments and it is possible the difference may be material. The Company believes that its assumptions and methodologies provide a reasonable basis for presenting all of the significant effects of the share exchange based on information available to management at this time and that the pro forma adjustments give appropriate effect to those assumptions and are properly applied in the unaudited pro forma condensed combined financial information.
The unaudited pro forma condensed combined financial information is not necessarily indicative of what the actual results of operations and financial position would have been had the share exchange taken place on the dates indicated, nor are they indicative of the future consolidated results of operations or financial position of the post-acquisition company. They should be read in conjunction with the historical financial statements and notes thereto of IDVV and ModuLink BVI.
F-42 |
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION
Notes to Unaudited Pro Forma Condensed Combined Financial Statements
2. Accounting Policies
Upon consummation of the share exchange transaction, management will perform a comprehensive review of the two entities’ accounting policies. As a result of the review, management may identify differences between the accounting policies of the two entities which, when conformed, could have a material impact on the financial statements of the post-acquisition company. Based on its initial analysis, management had not identified material differences that would have an impact on the unaudited pro forma condensed combined financial information.
3. Adjustments to Unaudited Pro Forma Condensed Combined Financial Information
The unaudited pro forma condensed combined financial information has been prepared to illustrate the effect of the share exchange and has been prepared for informational purposes only.
The historical financial statements have been adjusted in the unaudited pro forma condensed combined financial information to give pro forma effect to events that are (1) directly attributable to the share exchange, (2) factually supportable, and (3) with respect to the statements of operations, expected to have a continuing impact on the results of the post-acquisition company. ModuLink BVI and IDVV had a historical relationship prior to the share exchange. Accordingly, pro forma adjustments were required to eliminate activities between the companies.
The pro forma basic and diluted earnings per share amounts presented in the unaudited pro forma condensed combined statements of operations are based upon the number of the post-acquisition company’s shares outstanding, assuming the share exchange occurred on 1 January, 2025.
Adjustments to Unaudited Pro Forma Condensed Combined Balance Sheet
The adjustments included in the unaudited pro forma condensed combined balance sheet as of March 31, 2025 are as follows:
A | Reflects the disposal of the Witech business to Raymond Valdez, the former Chief Executive Officer and Director of the Company, on May 1, 2025. | |
B | Reflects the elimination of inter-company balances. | |
C | Represents the issuance of 2,356,712,066 shares of the Company’s common stock, par value $0.001, at a per share price of $0.0034 and reverse recapitalization adjustments. |
Adjustments to Unaudited Pro Forma Condensed Combined Statements of Operations
No pro forma adjustments have been made in the unaudited pro forma condensed combined statements of operations for the three months ended March 31, 2025.
F-43 |
SIGNATURES
Pursuant to the requirements of Section 12 of the Securities Exchange Act of 1934, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized.
International Endeavors Corporation | ||
By: | /s/ FU, Wah | |
FU, Wah | ||
Title: Chief Executive Officer | ||
May 30, 2025 |
Exhibit 3.1
Business Entity - Filing Acknowledgement 02/07/2025 Work Order Item Number: Filing Number: Filing Type: Filing Date/Time: Filing Page(s): W2025020700818 - 4232636 20254654193 Amendment Before Issuance of Stock 2/7/2025 11:00:00 AM 6 Indexed Entity Information: Entity ID: E0244822014 - 2 Entity Name: INTERNATIONAL ENDEAVORS CORPORATION Expiration Date: None Entity Status: Active Commercial Registered Agent NORTHWEST REGISTERED AGENT, LLC.* 732 S 6th ST, STE N, Las Vegas, NV 89101, USA FRANCISCO V. AGUILAR Secretary of State RUBEN J. RODRIGUEZ Deputy Secretary for Southern Nevada 2250 Las Vegas Blvd North, Suite 400 North Las Vegas, NV 89030 Telephone (702) 486 - 2880 Fax (702) 486 - 2452 STATE OF NEVADA OFFICE OF THE SECRETARY OF STATE GABRIEL DI CHIARA Chief Deputy Secretary of State DEANNA L. REYNOLDS Deputy Secretary for Commercial Recordings 401 N. Carson Street Carson City, NV 89701 Telephone (775) 684 - 5708 Fax (775) 684 - 7141 The attached document(s) were filed with the Nevada Secretary of State, Commercial Recording Division. The filing date and time have been affixed to each document, indicating the date and time of filing. A filing number is also affixed and can be used to reference this document in the future. Respectfully, FRANCISCO V. AGUILAR Secretary of State Page 1 of 1 Commercial Recording 2250 Las Vegas Blvd North North Las Vegas, NV 89030 401 N. Carson Street Carson City, NV 89701 1 State of Nevada Way Las Vegas, NV 89119
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Business Number E0244822014 - 2 Filed in the Office of Filing Number 20254654193 Secretary of State State Of Nevada Filed On 2/7/2025 11:00:00 AM Number of Pages 6
2 |
FRANCISCO V. AGUILAR Secretary of State 401 North Carson Street Carson City, Nevada 89701 - 4201 (775) 684 - 5708 Website: www.nvsos.gov 4 T 5 C c 6 ( Profit Corporation: Certificate of Amendment (PuRsuANTTO NRs 78 . 380 & 78.385/78 . 390) Certificate to Accompany Restated Articles or Amended and Restated Articles (PuRsuANT TO NRs 78.403) Officer's Statement (PuRsuANT TO NRs 80 . 030) Date : 1 02110/2025 - ·· - ·7 Time: [ii Q _ 1 a _ m ೦ (must not be later than 90 days after the certificate is filed) . Effective Date and ime: (Optional) Changes to takes the following effect: D The entity name has been amended. D The registered agent has been changed. (attach Certificate of Acceptance from new registered agent) D The purpose of the entity has been amended . ೦ The authorized shares have been amended. D The directors, managers or general partners have been amended. D IRS tax language has been added. D Articles have been added. D Articles have been deleted . D Other. The articles have been amended as follows: (provide article numbers , if available) - - - - _ - --- = - - - _] (attach additional page(s) if necessary) . Information Being hanged: (Domestic orporations only) X i/ ೦ I Raymond Valdez, Director Signature of Officer or Authorized Signer Title . Signature: Required) X Signature of Officer or Authorized Signer Title * If any proposed amendment would alter or change any preference or any relative or other right given to any class or series of outstanding shares , then the amendment must be approved by the vote , in addition to the affirmative vote otherwise required, of the holders of shares representing a majority of the voting power of each class or series affected by the amendment regardless to lim i tations or restrictions on the voting power thereof . Please include any required or optional information in space below: (attach additional page(s) if necessary) This form must be accompanied by appropriate fees. Page 2 of 2 Rev i sed : 9/1 / 2023
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AMENDED AND RESTATED ARTICLES OF INCORPORATION OF INTERNATIONAL ENDEAVORS CORPORATION I, Raymond Valdez, Chief Executive Officer of International Endeavors Corporation, a Nevada corporation, do hereby certify that the Articles of Incorporation of this corporation are amended and restated to read in full as follows : ARTICLE I NAME The name of the corporation is: INTERNATIONAL ENDEAVORS CORPORATION . ARTICLE II REGISTERED AGENT The principal office in the State of Nevada is 732 S 6 TH ST STE N, LAS VEGAS NEV ADA 89 IO 1 . The name of its registered agent at that address is Northwest Registered Agent, LLC . ARTICLE III PURPOSE The purpose of the corporation is to engage in any lawful act or activity for which corporations may be organized under the Chapter 78 of the Nevada Revised Statutes (together with any successor statutes) . In addition to the powers and privileges conferred upon the corporation by law and those incidental thereto, the corporation shall possess and may exercise all the powers and privileges that are necessary or convenient to the conduct, promotion or attainment of the business for purposes of the corporation . ARTICLE IV AUTHORIZED STOCK 4 . 1 . Authorized Capital Stock . The aggregate number of shares which this Corporation shall have authority to issue is Four Billion Ten Million ( 4 , 010 , 000 , 000 ) shares, consisting of (a) Four Billion ( 4 , 000 , 000 , 000 ) shares of common stock, par value $ 0 . 001 per share (the "Common Stock") and (b) Ten Million (I 0 , 000 , 000 ) shares of preferred stock, par value $ 0 . 00 l per share (the "Preferred Stock") , issuable in one or more series as hereinafter provided . 2. Common Stock . Each outstanding share of Common Stock of the Corporation shall be entitled to one vote and each fractional share of Common Stock shall be entitled to a corresponding fractional vote on each matter submitted to a vote of the shareholders . Cumulative voting shall not be allowed in the election of directors of the Corporation . A majority of all shares of stock, both Common Stock and Preferred Stock, entitled to vote, represented in person or by proxy, shall constitute a quorum at a meeting of shareholders . Except as otherwise provided by these Articles of Incorporation or the NRS, if a quorum is present, the affirmative vote of a majority of the shares represented at the meeting and entitled to vote on the subject matter shall be the act of the shareholders . 3. Preferred Stock . Shares of Preferred Stock may be issued in any number of series from time to time by the Board of Directors, and the Board of Directors, pursuant to the Corporation's Articles of Incorporation and Bylaws, is expressly authorized to fix by resolution or resolutions the designations and the voting powers, preferences, rights and qualifications, limitations or restrictions thereof, of the shares of each series of Preferred Stock . Except as otherwise provided in this Articles of Incorporation or in any resolution of the board directors providing for the issuance of any particular series of the Preferred Stock, shares of the Preferred Stock redeemed or otherwise retired by the Corporation shall assume the status of
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authorized but unissued Preferred Stock and may thereafter, subject to the provisions of this Articles of Incorporation and of any restrictions contained in any resolution of the board of directors providing for the issuance of any particular series of the Preferred Stock, be reissued in the same manner as other authorized but unissued shares of the Preferred Stock . 4. Series A Preferred Stock . The Preferred A Stock was originally designated on October 3 , 2017 , as "Preferred A Stock" . The name and rights, preferences , privileges , powers and restrictions of the Preferred A Stock is hereby amended and restated in its entirety as set forth below . (a) Rename, Designation and Amount . There shall be a series of voting preferred stock of the Corporation which shall be designated as " Series A Convertible Preferred ," par value $ 0 . 001 , and the number of shares constituting such series shall be Five Hundred Thousand ( 500 , 000 ) . Such number of shares may be increased or decreased by resolution of the Board of Directors . (b) Dividends and Distributions . Subject to the rights of the holders of any shares of any series of preferred stock of the Corporation ranking prior and superior to the Series A Convertible Preferred Stock with respect dividends, the holders of shares of Series A Convertible Preferred Stock, in preference to the holders of shares of Common Stock of the Corporation and of any other junior stock, shall be entitled to receive, when, as and if declared by the Board of Directors out of funds legally available for the purpose, dividends payable . (c) Voting Rights . The holders of shares of Series A Convertible Preferred Stock shall have the following voting rights . (i) Each share of Series A Convertible Preferred Stock shall entitle the holder thereof to 20 , 000 votes on all matters submitted to a vote of the stockholders of the Corporation . Each vote is equivalent to the voting rights assigned to a single share of the common stock of the Corporation . (ii) Except as otherwise provided herein, in the Corporation ' s Certificate of Incorporation or by law, the holders of shares of Series A Convertible Preferred Stock, the holders of shares of Common Stock and the holders of shares of any other capital stock of the Corporation having general voting rights shall vote together as one class on all matters submitted to a vote of stockholders of the Corporation . (iii) Except as otherwise set forth herein or in the Corporation's Articles of Incorporation, and except as otherwise provided by law, holder of Series A Convertible Preferred Stock shall have no special voting rights and their consent shall not be required (except to the extent they are entitled to vote with holders of Common Stock as set forth herein) in regards to any corporation actions . (d) Rank . All shares of the Series A Convertible Preferred Stock shall rank (i) prior to the Company's Common Stock and any class or series of capital stock of the Company hereafter created (unless, with the consent of the holders of a majority of the Series A Convertible Preferred Stock, such class or series of capital stock specifically, by its tem 1 s, ranks senior to or pari passu with the Series A Convertible Preferred Stock) (collectively , with the Common Stock, "Junior Securities") ; (ii) pari passu with any class or series of capital stock of the Company hereafter created (with the written consent of the holders of a majority of the Series A Convertible Preferred Stock (the "Pari Passu Securities") ; and (iii) junior to any class or series of capital stock of the Corporation hereafter created (with the written consent of the holders of a majority of the Series A Convertible Preferred Stock) specifically ranking, by its terms , senior to the Series A Convertible Preferred Stock (collectively, the "Senior Securities"), in each case as to distribution of assets upon liquidation , dissolution (e) Liquidation Preference . Shares of the Series A Preferred Stock shall not receive any payments or distributions in the event of any liquidation, dissolution , wind up or similar event of the Company .
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(t) Redemption. The shares of Series A Convertible Preferred Stock shall not be redeemable. (g) Optional Conversion . Subject to and upon compliance with the provisions of this Section 5 , the holder of any shares of Series A Convertible Preferred Stock shall have the right at such holder's option (an "Optional Conversion"), at a date elected by such holder, to convert such Series A Convertible Preferred Stock into fully paid and nonassessable shares of Common Stock of the Company with each one share of Series A Convertible Preferred Stock convertible into Twenty Thousand shares of the Common Stock of the Company ( I for 20 , 000 ) . 5. Series B Preferred Stock . The Corporation hereby confirms the cancellation in full of the Preferred B Stock . 6. No Preemptive Rights . No stockholder of the corporation shall have a right to purchase shares of capital stock of the corporation sold or issued by the corporation except to the extent that such a right may from time to time be set forth in a written agreement between the corporation and a stockholder . ARTICLE V INTERESTED STOCKHOLDER STATUTES The corporation hereby expressly elects not to be governed by : (i) NRS Sections 78 . 411 to 78 . 444 , inclusive, of the Nevada Revised Statutes relating to combinations with interested stockholders and any and all successor statutes ; and (ii) NRS Sections 78 . 378 to 78 . 3792 , inclusive , of the Nevada Revised Statutes, restricting the ability of control shareholders to vote their shares under certain circumstances and any and all successor statutes . ARTICLE VI AMENDMENT OF BYLAWS The Board shall have the power to adopt, amend or repeal the bylaws of the corporation, except as otherwise may be specifically provided in the bylaws . ARTICLE VII DIRECTOR AND OFFICER LIABILITY 1. Elimination of Liability . To the maximum extent permitted under the Nevada Revised Statutes, a director or officer of the corporation shall not be personally liable to the Corporation or its stockholders for damages arising as a result of any act or failure to act in his capacity as a director or officer of the corporation . 2. Mandatory Indemnification . The corporation shall, to the maximum extent and in the manner permitted by Nevada law, indemnify each of its directors and officers against expenses (including attorneys fees) , judgments, fines, settlements and other amounts actually and reasonably incurred in connection with any proceeding, arising by reason of the fact that such person is or was an agent of the corporation . For purposes of this paragraph, a director or officer of the corporation includes any person (i) who is or was a director or officer of the corporation, (ii) who is or was serving at the request of the corporation as a director or officer of another corporation , partnership, joint venture, trust or other enterprise, or (iii) who was a director or officer of a corporation which was a predecessor corporation of the corporation or of another enterprise at the request of such predecessor corporation . 3. Indemnification ; Mandatory Payment of Expenses . The expenses of officers and directors incurred in defending a civil or criminal action, suit or proceeding must be paid by the corporation as they are incurred and in advance of the final disposition of the action, suit or proceeding, upon and
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subject to the receipt by the corporation of an undertaking by or on behalf of the director or officer to repay the amount if it is ultimately determined by a court of competent jurisdiction that he or she is not entitled to be indemnified by the corporation . 7 4. Effect of Amendment or Repeal. Any amendment to or repeal of any of the provisions in this Article VII shall only be prospective and shall not adversely affect any right or protection of a director or officer of the corporation for or with respect to any act or omission of such director or officer occurring prior to such amendment or repeal. The foregoing Amended and Restated Articles of Incorporation have been duly approved by the Board of Directors . The foregoing Amended and Restated Articles of Incorporation have been duly approved by the required vote of stockholders in accordance with Sections 78 . 385 , 78 . 390 and 78 . 403 of the Nevada Revised Statutes . As of the date of such approval, the total number of outstanding shares of Series A Preferred Stock and Common Stock of the Corporation was 200 , 000 and 1 , 613 , 221 , 854 , respectively, of which 200 , 000 and 150 , 000 , 000 shares, respectively, were voted in favor of the Amended and Restated Articles of Incorporation . Each one share of Series A Preferred Stock is entitled to 10 , 000 votes and votes together with the holders of Common Stock . On a fully diluted basis, the number of shares that were voted in favor of the amendment and restatement exceeded fifty percent ( 50 % ) of the outstanding shares of Common Stock, which was the vote required under applicable law and the Articles of Incorporation in effect at the time of this amendment . The foregoing Amended and Restated Articles of Incorporation shall become effective upon filing . EXECUTED this 9th day of February, 2025 I s l Raymond Valdez Name: Raymond Valdez Title : Chief Executive Officer
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Exhibit 3.2
BYLAWS
OF
INTERNATIONAL ENDEAVORS CORPORATION
ARTICLE I-OFFICES
The principal office of the Corporation shall be located at International Endeavors Corporation 3651 Lindell Road, Las Vegas, Nevada 89801, and it may be changed from time to time by the Board of Directors. The Corporation may also maintain offices at such other places within or without the United States as the Board of Directors may, from time to time determine.
ARTICLE II-MEETINGS OF STOCKHOLDERS SECTION
1-ANNUAL MEETINGS:
The annual meeting of the stockholders of the Corporation shall be held within six (6) months after the close of the fiscal year of the Corporation, for the purposes of electing directors, and transacting such other business as may properly come before the meeting.
SECTION 2-SPECIAL MEETINGS:
Special meetings of the stockholders may be called at any time by the Board of Directors or by the President, and shall be called by the President or the Secretary at the written request of the holders of twenty-five percent (25%) of the shares then outstanding and entitled to vote thereat, or as otherwise required by law.
SECTION 3-PLACE OF MEETINGS:
All meetings of the stockholders shall be held at the principal office of the Corporation, or at such other places as shall be designated in the notices or waivers of notice of such meetings.
SECTION 4-NOTICE OF MEETINGS:
(a) | Except as otherwise provided by statute, written notice of each meeting of stockholders, whether annual or special, stating the time when and place where it is to be held, shall be served either personally or by mail, not less than ten or more than sixty (60) days before the meeting, upon each stockholder of record entitled to vote at such meeting, and to any other stockholder to whom the giving of notice may be required by law. Notice of a special meeting shall also state the purpose or purposes for which the meeting is called, and shall indicate that it is being issued by, or at the direction of, the person or persons calling the meeting. If, at any meeting, action is proposed to be taken that would, if taken, entitle stockholders to receive payment for their shares pursuant to statute, the notice of such meeting shall include a statement of that purpose and to that effect. If mailed, such notice shall be directed to each such stockholder at his address, as it appears on the records of the stockholders of the Corporation, unless he shall have previously filed with the Secretary of the Corporation a written request that notices intended for him be mailed to some other address, in which case, it shall be mailed to the address designated in such request. |
(b) | Notice of any meeting need not be given to any person who may become a stockholder of record after the mailing of such notice and prior to the meeting, or to any stockholder who attends such meeting, in person or by proxy, or submits a signed waiver or notice either before or after such a meeting. Notice of any adjourned meeting of stockholders need not be given unless otherwise required by statute. |
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SECTION 5-QUORUM:
(a) | Except as otherwise provided herein, or by statute, or in the Certificate of Incorporation (such certificate and any amendments thereof being hereinafter collectively referred to as the “Certificate of Incorporation”), at all meetings of stockholders of the Corporation, the presence at the commencement of such meetings in person or by proxy of stockholders holding of record 50% of the total number of shares of the Corporation then issued and outstanding and entitled to vote, shall be necessary and sufficient to constitute a quorum for the transaction of any business. The withdrawal of any stockholder after the commencement of a meeting shall have no effect of the existence of a quorum, after a quorum has been established at such meeting. |
(b) | Despite the absence of a quorum at any annual or special meeting of stockholders, the stockholders, by a majority of the votes cast by the holders of shares entitled to vote thereat, may adjourn the meeting. At any such adjourned meeting at which a quorum is present, any business, may be transacted at the meeting as originally called if a quorum had been present. |
SECTION 6-VOTING:
(a) | Except as otherwise provided by statute or by the Certificate of Incorporation, any corporate action, other than the election of directors, to be taken by vote of the stockholders, shall be authorized by a majority of votes cast at a meeting of stockholders by the holders of shares entitled to vote thereat. |
(b) | Except as otherwise provided by statute or by the Certificate of Incorporation, at each meeting of stockholders, each holder of record of stock of the Corporation entitled to vote thereat, shall be entitled to one vote for each share of stock registered in his name on the books of the Corporation. |
(c) | Each stockholder entitled to vote or to express consent or dissent without a meeting, may do so by proxy: provided, however, that the instrument authorizing such proxy to act shall have been executed in writing by the stockholder himself or by his attorney-in-fact thereunto duly authorized in writing. No Proxy shall be valid after the expiration of eleven (11) months from the date of its execution, unless the person executing it shall have specified therein the length of time it is to continue in force. Such instrument shall be exhibited to the Secretary at the meeting and shall be filed with the minutes of the minutes. |
(d) | Any action, except election of directors, which may be taken by a vote of stockholders at a meeting, may be taken without a meeting if authorized by a written consent of shareholders holding at least a majority of the voting power; provided that if a greater proportion of voting power is required by such action at such meeting, then such greater proportion of written consents shall be required. |
ARTICLE III-BOARD OF DIRECTORS
SECTION 1-NUMBER, ELECTION AND TERM OF OFFICE:
(a) | The number of the directors of the Corporation shall be not less than 1 nor more than 9, unless and until otherwise determined by vote of a majority of the entire Board of Directors. The number of Directors shall not be less that three (3), unless all of the outstanding shares of stock are owned beneficially and of record by less than three (3) stockholders, in which event the number of directors shall not be less than the number of stockholders of the minimum permitted by statute. |
(b) | Except as may otherwise be provided herein or in the Certificate of Incorporation by way of cumulative voting rights the members of the Board of Directors of the Corporation, who need not be stockholders, shall be elected by a majority of the votes cast at a meeting of stockholders, by the holders of shares of stock present in person or by proxy, entitled to vote in the election. |
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SECTION 2-DUTIES AND POWERS:
The Board of Directors shall be responsible for the control and management of the affairs, property and interests of the Corporation and may exercise all powers of the Corporation, except as are in the Certificate of Incorporation or by statute expressly conferred upon or reserved to the stockholders.
SECTION 3-ANNUAL AND REGULAR MEETINGS; NOTICE:
(a) | Regular annual meeting of the Board of Directors shall be held immediately following the annual meeting of the stockholders, at the place of such annual meeting of stockholders. |
(b) | The Board of Directors, from time to time, may provide by resolution for the holding of other regular meetings of the Board of Directors, and may fix the time and place thereof. |
(c) | Notice of any regular meeting of the Board of Directors shall not be required to be required to be given and, if given, need not specify the purpose of the meeting; provided, however, that in case the Board of Directors shall fix or change the time or place of any regular meeting, notice of such action shall be given to each director who shall not have been present at the meeting at which such change was made within the time limited, and in the manner set forth in Paragraph (b) Section 4 of this Article III, with respect to special meetings, unless such notice shall be waived in the manner set forth in Paragraph (c) of such Section 4. |
SECTION 4-SPECIAL MEETING; NOTICE:
(a) | Special meetings of the Board of Directors shall be held whenever called by the President or by one of the directors, at such time and place as may be specified in the respective notices or waivers of notice thereof. |
(b) | Except as otherwise required by statute, notice of special meetings shall be mailed directly to each director, addressed to him at his residence or usual place of business, at least four (4) days before the day on which the meeting is to be held, or shall be sent to him at such place by telegram, radio or cable, or shall be delivered to him personally or given to him orally, not later than the day before the day on which the meeting is to be held. A notice, or waiver of notice except as required by Section 8 or this Article III, need not specify the purpose of the meeting. |
(c) | Notice of any special meeting shall not be required to be given to any director who shall attend such meeting without protesting prior thereto or at its commencement, the lack of notice to him or who submits a signed waiver of notice, whether before or after the meeting. Notice of any adjourned meeting shall not be required to be given. |
SECTION 5-CHAIRMAN:
At all meetings of the Board of Directors, the Chairman of the Board, if any and if present, shall preside. If there shall be no Chairman, or he shall be absent, then the Vice Chairman shall preside, and in his absence, a Chairman chosen by the directors shall preside.
SECTION 6-QUORUM AND ADJOURNMENTS:
(a) | At all meetings of the Board of Directors, the presence of a majority of the entire Board shall be necessary and sufficient to constitute a quorum for the transaction of business, except as otherwise provided by law, by the Certificate of Incorporation, or by these Bylaws. |
(b) | A majority of the directors, present at the time and place of any regular or special meeting, although less than a quorum, may adjourn the same from time to time without notice, until a quorum shall be present. |
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SECTION 7-MANNER OF ACTING:
(a) | At all meetings of the Board of Directors, each director present shall have one vote, irrespective of the number of shares of stock, if any, which he may hold. |
(b) | Except as otherwise provided by statute, by the Certificate of Incorporation, or by these Bylaws, the action of a majority of the directors present at any meeting at which a quorum is present shall be the act of the Board of Directors. |
(c) | Unless otherwise required by amendment to the Articles of Incorporation or statue, any action required or permitted to be taken at any meeting of the Board of Directors or any Committee thereof may be taken without a meeting if a written consent thereto is signed by all the members of the Board or Committee. Such written consent shall be filed with the minutes of the proceedings of the Board or Committee. |
(d) | Unless otherwise prohibited by Amendments to the Articles of Incorporation or statute, members of the Board of Directors or of any Committee of the Board of Directors may participate in a meeting of such Board or Committee by means of a conference telephone network or a similar communications method by which all persons participating in the meeting can hear each other. Such participation is constituted presence of all of the participating persons at such meeting, and each person participating in the meeting shall sign the minutes thereof, which may be signed in counterparts. |
SECTION 8-VACANCIES:
Any vacancy in the Board of Directors, occurring by reason of an increase in the number of directors, or by reason of the death, resignation, disqualification, removal (unless vacancy created by the removal of a director by the stockholders shall be filled by the stockholders at the meeting at which the removal was effected) or inability to act of any director, or otherwise, shall be filled for the unexpired portion of the term by a majority vote of the remaining directors, though less that a quorum, at any regular meeting or special meeting of the Board of Directors called for that purpose.
SECTION 9-RESIGNATION:
Any director may resign at any time by giving written notice to the Board of Directors, the President or the Secretary of the Corporation. Unless otherwise specified in such written notice such resignation shall take effect upon receipt thereof by the Board of Directors or such officer, and the acceptance of such resignation shall not be necessary to make it effective.
SECTION 10-REMOVAL:
Any director may be removed with or without cause at any time by the affirmative vote of stockholders holding of record in the aggregate at least a majority of the outstanding shares of stock of the Corporation at a special meeting of the stockholders called for that purpose, and may be removed for cause by action of the Board.
SECTION 11-SALARY:
No stated salary shall be paid to directors, as such, for their services, but by resolution of the Board of Directors a fixed sum and expenses of attendance, if any, may be allowed for attendance at each regular or special meeting of the Board; provided, however, that nothing herein contained shall be construed to preclude any director from serving the Corporation in any other capacity and receiving compensation thereof.
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SECTION 12-CONTRACTS:
(a) | No contract or other transaction between this Corporation and any other corporation shall be impaired, affected or invalidated, nor shall any director be liable in any way by reason of the fact that one or more of the directors of this Corporation is or are interested in, or is a director or officer, or are directors or officers of such other corporations, provided that such facts are disclosed or made known to the Board of Directors, prior to their authorizing such transaction. |
(b) | Any director, personally and individually, may be a party to or may be interested in any contract or transaction of this Corporation, and no directors shall be liable in any way by reason of such interest, provided that the fact of such interest be disclosed or made known to the Board of Directors prior to their authorization of such contract or transaction by the vote (not counting the vote of any such Director) of a majority of a quorum, notwithstanding the presence of any such director at the meeting at which such action is taken. Such director or directors may be counted in determining the presence of a quorum at such meeting. This Section shall not be construed to impair, invalidate or in any way affect any contract or other transaction which would otherwise be valid under the law (common, statutory or otherwise) applicable thereto. |
SECTION 13-COMMITTEES:
The Board of Directors, by resolution adopted by a majority of the entire Board, may from time to time designate from among its members an executive committee and such other committees, and alternate members thereof, as they may deem desirable, with such powers and authority (to the extent permitted by law) as may be provided in such resolution. Each such committee shall serve at the pleasure of the Board.
ARTICLE IV-OFFICERS
SECTION 1-NUMBER, QUALIFICATIONS, ELECTION AND TERM OF OFFICE:
(a) | The officers of the Corporation shall consist of a President, a Secretary, a Treasurer, or a President and Secretary- Treasurer, and such other officers, including a Chairman of the Board of Directors, and one or more Vice Presidents, as the Board of Directors may from time to time deem advisable. Any officer other than the Chairman or Vice Chairman of the Board of Directors may be, but is not required to be a director of the Corporation. Any two or more offices may be held by the same person. |
(b) | The officers of the Corporation shall be elected by the Board of Directors at the regular annual meeting of the Board following the annual meeting of stockholders. |
(c) | Each officer shall hold office until the annual meeting of the Board of Directors next succeeding his election, and until his successor shall have been elected and qualified or until his death, resignation or removal. |
SECTION 2-RESIGNATION:
Any officer may resign at any time by giving written notice of such resignation to the Board of Directors, or to the President or the Secretary of the Corporation. Unless otherwise specified in such written notice, such resignation shall take effect upon receipt thereof by the Board of Directors or by such officer, and the acceptance of such resignation shall not be necessary to make it effective.
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SECTION 3-REMOVAL:
Any officer may be removed, either with or without cause, and a successor elected by a majority of quorum in accordance with the by-laws..
SECTION 4-VACANCIES:
A vacancy in any office by reason of death, resignation, inability to act, disqualification or any other cause, may at any time be filled for the unexpired portion of the term by a majority vote of the Board of Directors.
SECTION 5-DUTIES OF OFFICERS:
Officers of the Corporation shall, unless otherwise provided by the Board of Directors, each have such powers and duties as generally pertain to their respective offices as well as such powers and duties as may be set forth in these Bylaws, or may from time to time be specifically conferred or imposed by the Board of Directors. The President shall be the chief executive officer of the corporation.
SECTION 6-SURETIES AND BONDS:
In case the Board of Directors shall so require any officer, employee or agent of the Corporation shall execute to the Corporation a bond in such sum, and with such surety or sureties as the Board of Directors may direct, conditioned upon the faithful performance of his duties to the Corporation, including responsibility for negligence for the accounting for all property, funds or securities of the Corporation which may come into his hands.
SECTION 7-SHARES OF STOCK OF OTHER CORPORATIONS:
Whenever the Corporation is the holder of shares of stock of any other corporation, any right or power of the Corporation as such stockholder (including the attendance, acting and voting at stockholdersÕ meetings and execution of waivers, consents, proxies or other instruments) may be exercised on behalf of the Corporation by the President, any Vice President or such other person as the Board of Directors may authorize.
ARTICLE V-SHARES OF STOCK SECTION
1 -CERTIFICATE OF STOCK:
(a) | The certificates representing shares of the CorporationÕs stock shall be in such form as shall be adopted by the Board of Directors, and shall be numbered and registered in the order issued. The certificates shall bear the following: the Corporate seal, the holderÕs name, the number of shares of stock and the signatures of: the President and the Secretary or Treasurer. |
(b) | No certificate representing shares of stock shall be issued until the full amount of consideration therefore has been paid, except as otherwise permitted by law. |
(c) | To the extent permitted by law, the Board of Directors may authorize the issuance of certificates for fractions of a share of stock which shall entitle the holder to exercise voting rights, receive dividends and participate in liquidating distributions, in proportion to the fractional holdings; or it may authorize the payment in cash of the fair value of fractions of a share of stock as of the time when those entitled to receive such fractions are determined; or it may authorize the issuance, subject to such conditions as may be permitted by law, or scrip in registered or bearer form over the signature of an officer or agent of the Corporation, exchangeable as therein provided for full shares of stock, but such scrip shall not entitle the holder to any rights of a stockholder, except as therein provided. |
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SECTION 2-LOST OR DESTROYED CERTIFICATES:
The holder of any certificate representing shares of stock of the Corporation shall immediately notify the Corporation of any loss or destruction of the certificate representing the same. The Corporation may issue a new certificate in the place of any certificate theretofore issued by it, alleged to have been lost or destroyed. On production of such evidence of loss or destruction as the Board of Directors in its discretion may require, the Board of Directors may, in its discretion, require the owner of the lost or destroyed certificate, or his legal representatives, to give the Corporation a bond in such sum as the Board may direct, and with such surety or sureties as may be satisfactory to the Board, to indemnify the corporation against any claims, loss, liability or damage it may suffer on account of the issuance of the new certificate. A new certificate may be issued without requiring any such evidence or bond when, in the judgment of the Board of Directors, it is proper to do so.
SECTION 3-TRANSFER OF SHARES:
(a) | Transfer of shares of stock of the Corporation shall be made on the stock ledger of the Corporation only by the holder of record thereof, in person or by his duly authorized attorney, upon surrender for cancellation of the certificate or certificates representing such shares of stock with an assignment or power of transfer endorsed thereon or delivered therewith, duly executed, with such proof of the authenticity of the signature and of authority to transfer and of payment of taxes as the Corporation or its agents may require. |
(b) | The Corporation shall be entitled to treat the holder of record of any share of shares of stock as the absolute owner thereof for all purposes and, accordingly, shall not be bound to recognize any legal, equitable or other claim to, or interest in, such share or shares of stock on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise expressly provided by law. |
SECTION 4-RECORD DATE:
In lieu of closing the stock ledger of the Corporation, the Board of Directors may fix, in advance, a date not exceeding sixty (60) days, nor less than ten (10) days, as the record date for the determination of stockholders entitled to receive notice of, or to vote at, any meeting of stockholders, or to consent to any proposal without a meeting, or for the purpose of determining stockholders entitled to receive payment of any dividends or allotment or any rights, or for the purpose of any other action. If no record date is fixed, the record date for the determination of stockholders entitled to notice of, or to vote at, a meeting of stockholders shall be at the close of business of the day next preceding the day on which the notice is given, or, if no notice is given, the day preceding the day on which the meeting is held. The record date for determining stockholders for any other purpose shall be at the close of business on the day on which the resolution of the directors relating thereto is adopted. When a determination of stockholders of record entitled to notice of, or to vote at, any meeting of stockholders has been made, as provided for herein, such determination shall apply to any adjournment thereof, unless the directors fix a new record date for the adjourned meeting.
ARTICLE VI-DIVIDENDS
Subject to applicable law, dividends may be declared and paid out of any funds available therefor, as often, in such amount, and at such time or times as the Board of Directors may determine.
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ARTICLE VII-FISCAL YEAR
The fiscal year of the Corporation shall be September, and may be changed by the Board of Directors from time to time subject to applicable law.
ARTICLE VIII-CORPORATE SEAL
The corporate seal shall be in such form as shall be approved from time to time by the Board of Directors.
ARTICLE IX-INDEMNITY
(a) | Any person made a party to any action, suit or proceeding, by reason of the fact that he, his testator or interstate representative is or was a director, officer or employee of the Corporation or of any corporation in which he served as such at the request of the Corporation shall be indemnified by the Corporation against the reasonable expenses, including attorneysÕ fees, actually and necessarily incurred by him in connection with the defense of such action, suit or proceedings, or in connection with any appeal therein, except in relation to matters as to which it shall be adjudged in such action, suit or proceeding or in connection with any appeal therein that such officer director or employee is liable for gross negligence or misconduct in the performance of his duties. |
(b) | The foregoing right of indemnification shall not be deemed exclusive of any other rights to which any officer or director or employee may be entitled apart from the provisions of this section. |
(c) | The amount of indemnity to which any officer or any director may be entitled shall be fixed by the Board of Directors, except that in any case in which there is no disinterested majority of the Board available, the amount shall be fixed by arbitration pursuant to the then existing rules of the American Arbitration Association. |
ARTICLE X-AMENDMENTS
SECTION 1-BY STOCKHOLDERS:
All bylaws of the Corporation shall be subject to alteration or repeal, and new bylaws may be made, by the affirmative vote of stockholders holding of record in the aggregate at least a majority of the outstanding shares of stock entitled to vote in the election of directors at any annual or special meeting of stockholders, provided that the notice or waiver of notice of such meeting shall have summarized or set forth in full therein, the proposed amendment.
SECTION 2-BY DIRECTORS:
The Board of Directors shall have power to make, adopt, alter, amend and repeal, from time to time, bylaws of the Corporation, provided, however, that the stockholders entitled to vote with respect there to as in this Article X above-provided may alter, amend or repeal bylaws made by the Board of Directors, except that the Board of Directors shall have no power to change the quorum for meetings of stockholders or of the Board of Directors or to change any provisions of the bylaws with respect to the removal of directors of the filling of vacancies in the Board resulting from the removal by the stockholders. In any bylaw regulating an impending election of directors is adopted, amended or repealed by the Board of Directors, there shall be set forth in the notice of the next meeting of stockholders for the election of Directors, the bylaws so adopted, amended or repealed, together with a concise statement of the changes made.
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CERTIFICATE OF PRESIDENT
THIS IS TO CERTIFY that I am the duly elected, qualified and acting President of International Endeavors Corporation and that the above and foregoing bylaws constituting a true original copy were duly adopted as the bylaws of said Corporation.
IN WITNESS WHEREOF, I have hereunto set my hand.
/S/ Nate Engel | DATED: 5-7-2014 |
PRESIDENT |
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Exhibit 10.1
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY OTHER FEDERAL OR STATE REGULATORY AUTHORITY. THE SHARES BEING SOLD HEREBY ARE SPECULATIVE AND INVOLVE A HIGH DEGREE OF RISK. THE SALE PRICE WAS DETERMINED ARBITRARILY BY THE SELLER AND BEARS NO RELATIONSHIP TO THE ASSETS, EARNINGS, BOOK VALUE, CURRENT OR FUTURE TRADING PRICE OF THE SHARES, OR ANY OTHER CRITERIA.
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT is made and entered into this 22nd day of January, 2025, by and among INTERNATIONAL ENDEAVORS CORPORATION, a Nevada corporation (the “Company”), the Seller set forth on the signature pages hereto (the “Seller”), and the purchasers set forth on Exhibit A, attached hereto and incorporated herein (each, a “Purchaser”, and collectively, the “Purchasers”). Seller owns, or shall own on the date of the Closing Date (as defined in Section 2 below), an aggregate of 200,000 shares of the Series A Preferred Stock, par value $0.001, of the Company, constituting all of the issued and outstanding shares of the Series A Preferred Stock of the Company. Purchasers desire to purchase from Seller, and Seller is willing to sell shares of such securities, subject to the terms and conditions contained in this Agreement. The parties hereto acknowledge and agree that all references to the Company shall include reference to WITech, a division of International Endeavors Corporation also referred to as a (“Witech”), and all references to Witech or International Endeavors Corporation individually shall solely refer to such entity.
NOW THEREFORE, in consideration of the mutual promises contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:
1. | Purchase and Sale. |
1.1. | Disposition of the Company Shares. In consideration of covenants and promises herein and together with the purchase price of Two Hundred Eighty Dollars ($280,000) payable in immediately available funds in United States currency (the “Purchase Price”), Seller hereby agrees to sell to the Purchasers and the Purchasers, in reliance on the representations and warranties contained herein, and subject to the terms and conditions of this Agreement, agree to purchase from the Seller an aggregate of 200,000 shares of Series A Preferred Stock, par value $0.001, of the Company (the “Company Shares”). Purchasers and Seller acknowledge and accept that the trading price of the Company Shares may decrease or increase subsequent to the sale of the Company Shares. Purchaser and Seller waive claims to any losses as a result of the sale of the Company Shares. The Company Shares shall equal 100% of the issued and outstanding shares of the Company’s Series A Preferred Stock. |
1.2. | Good Faith Deposit. |
1.2.1. | The parties agree that Twenty Thousand Dollars ($20,000) of the Purchase Price shall be deemed a good faith deposit (the “Good Faith Deposit”). Subject to the terms and conditions of this Section 1.2.2, the Good Faith Deposit shall be non-refundable and retained by the Seller in the event the Closing does not occur on the Closing Date. |
1.2.2. | The Seller shall not be entitled to keep the Good Faith Deposit upon the occurrence of any of the following: (a) The Closing has failed to occur due to Sellers’s breach of this Agreement or Seller’s failure to satisfy the terms and conditions set forth in Section 2 hereof; or (b) unless specifically waived in writing by the Purchasers, the representations and warranties of Seller set forth in this Agreement are not true as of the date of this Agreement, as of January 25, 2025 and as of the Closing Date. |
1.3. | Disposition of Witech. The Company, the Seller and the Purchasers agree that the parties intend to transfer ownership of Witech to Seller or its designees as part of the sale of the Company shares. The Company shall have until June 30, 2025 to effectuate such transfer. Subsequent to the disposal of Witech, the Seller shall provide financial statements as of the date of disposal and any information requested by the Company relating to Witech for the purpose of financial reporting in accordance with United States generally accepted accounting principles and practices. Prior to the effective date of the transfer of Witech securities to Seller or its designees, the parties agree as follows: |
1.3.1. | Unless the parties otherwise agree, Witech shall continue to operate its business as is normal and customary subject Purchasers reasonable approval, |
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1.3.2. | Witech shall not be entitled to issue any press releases without the prior written approval of the Purchasers; |
1.3.3. | All assets and liabilities of Witech shall remain in Witech as is normal and customary to the business of Witech; |
1.3.4. | None of Seller or Witech shall enter into any agreement or understanding, oral or written, purporting to bind the Company or affect any of the assets or liabilities of the Company; |
1.3.5. | Witech shall not enter into any agreement or understanding, oral or written, without the prior written consent of Purchaser. |
2. | Closing. |
2.1. | Closing Date. The Closing of the purchase and sale of the Company Shares shall occur upon the satisfaction or waiver of all conditions set forth below, but no later than 5 PM EST on the February 10, , 2025, or such other date as may be determined by the parties (the “Closing Date”). |
2.2. | Condition Precedent. As a condition precedent to the obligations of the Purchasers to purchase the Company Shares, the Purchasers shall have conducted a due diligence review of the Company and its books and records to its full satisfaction and shall have delivered written confirmation of the same as set forth in Section 2.3 hereof. |
2.3. | Seller/Company Deliverables: Unless waived in writing by Purchasers, the Seller and the Company shall on or prior to the Closing: |
2.3.1. | File at its expense the Annual Report for the year ended December 31, 2024, together with the required Management Letter with OTC Markets Group by February 1, 2025; |
2.3.2. | File at its expense the Company’s federal and state tax returns attributable to the year ended December 31, 2024, by January 25, 2025; |
2.3.3. | Files at the expense of the Purchaser that certain Amended and Restated Articles of Incorporation as may be mutually determined by the parties hereto; |
2.3.4. | Deliver to the Purchasers the Company books and records up to the date of the Closing, unless otherwise agreed to in writing by the parties; |
2.3.5. | Deliver to Purchasers copies of all Company Contracts by January 25, 2025; |
2.3.6. | Written confirmation of termination of all Company Contracts and performance or payment in full of all obligations and liabilities of the Company, including without limitation: (i) payment in full of all loans of the Company, including without limitation, those made by Seller or affiliates of the Company; (ii) payment in full of all amounts due under the Company Contracts; and (iii) payment in full of all outstanding invoices or invoices that will become outstanding as of Closing or within thirty (30) days thereafter. |
2.3.7. | Signed resignation letters of all existing officers and directors of the Company; |
2.3.8. | Executed Board consents appointing designees of the Purchasers as directors and officers of the Company; |
2.3.9. | Deliver to the Purchasers the original copy of that certain Irrevocable Promissory Note in the principal amount of $65,000, dated November 17, 2019, issued to BearCreek Resourses, a Montana corporation (“Bearcreek Note”) together with that certain fully executed that certain Note Assignment Agreement by and between the Purchaser and Bearcreek Resources or its designees; |
2.3.10. | Deliver to the Purchasers the original copy of that certain Irrevocable Promissory Note in the original principal amount of $75,000, dated October 2, 2017, issued to Tala Media Corp, a Wyoming corporation (“Tala Media Note”), together with that certain fully executed that certain Note Assignment Agreement by and between the Purchaser and Tala Media Corp or its designees; |
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2.3.11. | Deliver to the Purchasers all Edgar and other codes of the Company necessary to make filings with the Securities and Exchange Commission (if applicable) and OTC Markets Group by January 25, 2025; |
2.3.12. | Deliver to the Purchasers contact information of all service providers of the Company necessary or desirable to comply with SEC rules and regulations and to maintain listing on a national securities exchange or over the counter bulletin board, which shall include without limitation, independent auditors, legal counsel, transfer agent, registered agent, market maker and edgarizer by January 25, 2025 ; |
2.3.13. | Deliver to the Purchasers written confirmation from the Company’s stock transfer agent that it has received all documentation necessary to effectuate the transfer of stock certificates representing the Company Shares to the Purchasers, including the issuance of stock certificates representing the Company Shares to the Purchasers or her designee by January 25, 2025. |
2.4. | Purchaser Deliverables: On or prior to the Closing, the Purchasers shall deliver: (i) the Purchase Price to the Escrow Agent; and (ii) upon the satisfaction of the terms set forth in Section 2.2 hereof as determined by Purchasers in their discretion, written acknowledgement that Purchasers are satisfied with the results of their due diligence review of the Company and its books and records. |
3. Resignation of Old and Appointment of New Board of Directors and Officers. The Company and the Seller shall take such corporate action(s) and make such SEC filings on Schedule 14F-1 in compliance with the Exchange Act Rules (if applicable) and as otherwise required by the Company Articles of Incorporation and/or Bylaws to duly (a) appoint the below named persons, or other persons who names shall be delivered to the Company, to their respective positions, to be effective as of the Closing Date, and (b) obtain and submit to the Purchasers, together with all required corporate action(s) the resignation of all members of the board of directors, and any and all corporate officers as of the Closing Date, all of which actions shall be certified and delivered to the Purchasers as effective at Closing by the Seller in such form and substance satisfactory to the Purchasers.
Following the execution of this Agreement and through the date of effectiveness of such resignations, no other officers or directors shall be appointed or elected to serve the Company except as otherwise expressly provided herein.
Name | Position |
TAM, Hin Wah Anthony | Chairman |
FU, Wah | Chief Executive Officer |
AU-YEUNG, Sai Kit | Chief Financial Officer and Secretary |
WONG, Ho Man Alex | Non-Executive Director |
FUNG, Kwai Kin | Non-Executive Director |
4. Representations and Warranties of Seller. Each of the Company and the Seller hereby severally represents and warrants to each of the following as of the date hereof and the Closing Date:
4.1. Corporate Existence and Power. The Company is a corporation duly organized and validly existing and in good standing under the laws of the jurisdiction of its incorporation or formation. The Company has the requisite corporate power and authority to carry on its business as presently conducted and as currently proposed to be conducted, to own and operate its properties and assets, to execute and deliver this Agreement, and to carry out the provisions of this Agreement. The Company is duly qualified to do business and is in good standing as a foreign company in all jurisdictions in which the nature of its activities and of its properties makes such qualification necessary, except for those jurisdictions in which failure to do so would not have a material adverse effect on the Company or its business.
4.2. Subsidiaries. Except for Witech, a division of International Endeavors Corporation also sometimes erroneously referred to as a subsidiary (“Witech”), the Company does not own or control any equity security or other interest of any other corporation, partnership, limited liability company or other business entity. None of the Company or Witech is a participant in any joint venture, partnership, limited liability company or similar arrangement. Since its inception, none of the Company or Witech has consolidated or merged with, acquired all or substantially all of the assets of, or acquired the equity securities of or any interest in any corporation, partnership, limited liability company or other business entity.
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4.3. Authorization; No Contravention. The execution, delivery and performance by Seller of this Agreement and the transactions contemplated hereby (a) have been duly authorized by all necessary action of the Seller and the Company, (b) do not violate, conflict with or result in any breach or default of (or with due notice or lapse of time or both would result in any breach, default or contravention of), or the creation of any lien under, any contractual obligation of the Seller or the Company or any requirement of law applicable to the Company, and (d) do not violate any judgment, injunction, writ, award, decree or order (collectively, “Orders”) of any governmental authority against, or binding upon, the Company. There are no actions, subpoenas, suits, proceedings, claims, complaints, disputes, arbitrations or investigations (collectively, “Claims”) pending, initiated, or, to the knowledge of the Seller, threatened, at law, in equity, in arbitration or before any governmental authority against the Company.
4.4. Governmental Authorization; Third Party Consents. No consent, approval, authorization, order, registration or qualification (each, an “Authorization”) of or with any governmental authority or any other person is required for the execution, delivery or performance (including, without limitation, the sale of the Company Shares) by, or enforcement against, the Company of this Agreement or the consummation by the Company of the transactions contemplated by this Agreement, except (i) such Authorizations as have already been obtained or (ii) as otherwise provided in this Agreement.
4.5. Capitalization.
4.5.1. The Company's authorized capital stock consists of 2,000,000,000 shares of common stock, par value $0.001, of which 1,613,221,854 shares are issued and outstanding, and 500,000 shares of Series A Preferred Stock, par value $0.001, of which 200,000 are issued and outstanding. All shares of Company stock are owned of record and beneficially by the shareholders in the amounts set forth in the Shareholder’s list attached hereto as Exhibit B. There are no outstanding dividends, whether current or accumulated, due or payable on any of the capital stock of the Company.
4.5.2. Seller is the legal owner, and has good and marketable title (beneficially and of record) to all of the Company Shares. The Company Shares, when issued to the Purchasers pursuant to this Agreement, will be: (i) duly authorized, validly issued, and outstanding; (ii) fully paid, non-assessable, and free of preemptive rights; and (iii) free and clear of any and all pledges, claims, restrictions, charges, liens, security interests, encumbrances, or other interests of third parties of any nature whatsoever. As of the date hereof: (i) there are no outstanding options, warrants, rights, commitments, or agreements of any kind for the issuance or sale of, or outstanding securities convertible into, any additional shares of capital stock of any class of the Company; (ii) there are no voting trusts, voting agreements, proxies, or other agreements, instruments, or undertakings with respect to the voting of any Company securities to which the Company or any of its shareholders is a party; and (iii) there are no restrictions on transfer of any Company securities except for restrictions imposed by applicable laws or by the express terms of this Agreement. There are no contracts, commitments, understandings or arrangement by which the Company is bound to issue additional registered capital, share capital or other securities.
4.6. Agreements. Except for this Agreement and the Escrow Agreement (as hereinafter defined), and except as set forth on Exhibit C, there are no agreements, understandings, instruments, contracts or proposed transactions, or judgments, orders, writs or decrees, to which the Company is a party or by which it is bound. All contracts set forth on Exhibit C (the “Company Contracts”) are in writing and are valid and binding and enforceable against the Company and, to the Company’s knowledge, against the other parties thereto in accordance with their respective terms. The Company is not a guarantor or indemnitor of any indebtedness of any other person, party or entity. The Company has not declared or paid any dividends, or authorized or made any distribution upon or with respect to any class or series of its equity securities.
4.7. Absence of Undisclosed Liabilities. As of the dates of the Company's financial statements, the Company had no liabilities, either accrued or contingent, of a nature required to be reflected in the financial statements in accordance with generally accepted accounting principles, and whether due or to become due, which individually or in the aggregate are reasonably likely to have an adverse effect on the Company.
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4.8. Absence of All Liabilities.
4.8.1. The Company has no liabilities, either accrued or contingent, whether or not of a nature required to be reflected in the financial statements in accordance with generally accepted accounting principles, and whether due or to become due. As of the Closing Date, (i) the Company has fully paid all creditors, debtors, vendors and service providers for all obligations that have become due and payable as of the Closing Date and for the period of thirty (30) calendar days after the Closing Date; and (ii) all loans, notes payables, and liabilities, either accrued or contingent, whether or not of a nature required to be reflected in the financial statements in accordance with generally accepted accounting principles, whether due or to become due or whether or not disclosed in the OTC Markets Reports have been paid in full.
4.8.2. There are no lawsuits, actions or administrative, arbitration or other proceedings or governmental investigations ongoing, pending or threatened against or relating to the Company, Seller or the Company's properties or business. The Company has not entered into or been subject to any consent decree, compliance order, or administrative order with respect to any property owned, operated, leased, or used by the Company. The Company has not received any request for information, notice, demand letter, administrative inquiry, or formal or informal complaint or claim with respect to any property owned, operated, leased, or used by the Company or any facilities or operations thereon.
4.8.3. The Company has filed all tax returns required to have been filed since inception. All tax returns were correct and complete in all material respects. All taxes owed by the Company (whether or not shown on any tax return) have been paid. The Company currently is not the beneficiary of any extension of time within which to file any tax return. To the Company's knowledge, no claim has ever been made by an authority in a jurisdiction where the Company does not file tax returns that it is or may be subject to taxation by that jurisdiction. There are no actual, pending or, to the Company's knowledge, threatened liens, encumbrances, or charges against any of the assets of the Company arising in connection with any failure (or alleged failure) to pay any tax. The Company has withheld and paid all taxes required to have been withheld and paid in connection with amounts paid or owing to any employee, independent contractor, creditor, shareholder, or other third party. To the Company's knowledge, there is no dispute or claim concerning any tax liability of the Company either claimed or raised by any authority in writing. The Company has not waived any statute of limitations in respect of taxes or agreed to any extension of time with respect to a tax assessment or deficiency.
4.9. Financial Statements. The Company's financial statements fairly present the financial condition of the Company at the dates of said statements and the results of its operations for the periods covered thereby and have been prepared in accordance with United States generally accepted accounting principles and practices consistently applied and consistent with the books and records of the Company.
4.10. Binding Effect. This Agreement has been duly executed and delivered by the Seller, and constitutes the legal, valid and binding obligation of the Seller, enforceable against the Seller in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, fraudulent conveyance or transfer, moratorium or similar laws affecting the enforcement of creditors' rights generally and by general principles of equity.
4.11. Private Offering. No registration of the Company Shares, pursuant to the provisions of the Securities Act of 1933, as amended, or any state securities or “blue sky” laws, will be required by the sale of the Company Shares in the manner contemplated in Section 1 herein. Seller agrees that neither he or she, nor anyone acting on his or her behalf, shall offer to sell the Company Shares or any other securities of the Company so as to require the registration of the Company Shares pursuant to the provisions of the Securities Act of 1933, as amended, or any state securities or “blue sky” laws.
4.12. Disclosure. Seller understands and confirms that Purchasers are relying on the representations, warranties and covenants contained in this Agreement and the disclosures set forth in the reports, forms and other documents filed with FINRA as reflected on the OTC Markets Group, LLC by the Company (collectively, the “OTC Markets Reports”) in entering into this Agreement. All disclosures contained in the OTC Markets Reports or otherwise provided to Purchaser regarding the Company, its businesses and the transactions contemplated hereby, furnished by or on behalf of Seller or the Company are complete, true and correct and do not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading.
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5. Indemnification. The Seller shall, notwithstanding any termination of this Agreement, indemnify and hold harmless each Purchaser, the Company, the officers, directors, agents, investment advisors, partners, members and employees of each of them, each person who controls any such Purchaser (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) and the officers, directors, agents and employees of each such controlling person, to the fullest extent permitted by applicable law, from and against any and all losses, claims, damages, liabilities, costs (including, without limitation, reasonable costs of preparation and reasonable attorneys' fees) and expenses (collectively, “Losses”), as incurred, arising out of or relating to any breach of the representations, warranties and covenants of Seller or the Company set forth in this Agreement, up to a maximum amount equal to the Purchase Price.
If any Proceeding shall be brought or asserted against any person entitled to indemnity hereunder (an “Indemnified Party”), such Indemnified Party shall promptly notify the Person from whom indemnity is sought (the “Indemnifying Party”) in writing, and the Indemnifying Party shall assume the defense thereof, including the employment of counsel reasonably satisfactory to the Indemnified Party and the payment of all fees and expenses incurred in connection with defense thereof; provided, that the failure of any Indemnified Party to give such notice shall not relieve the Indemnifying Party of its obligations or liabilities pursuant to this Agreement, except (and only) to the extent that it shall be finally determined by a court of competent jurisdiction (which determination is not subject to appeal or further review) that such failure shall have proximately and materially adversely prejudiced the Indemnifying Party.
An Indemnified Party shall have the right to employ separate counsel in any such Proceeding and to participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such Indemnified Party or Parties unless: (1) the Indemnifying Party has agreed in writing to pay such fees and expenses; (2) the Indemnifying Party shall have failed promptly to assume the defense of such Proceeding and to employ counsel reasonably satisfactory to such Indemnified Party in any such Proceeding; or (3) the named parties to any such Proceeding (including any impleaded parties) include both such Indemnified Party and the Indemnifying Party, and such Indemnified Party shall have been advised by counsel that a conflict of interest is likely to exist if the same counsel were to represent such Indemnified Party and the Indemnifying Party (in which case, if such Indemnified Party notifies the Indemnifying Party in writing that it elects to employ separate counsel at the expense of the Indemnifying Party, the Indemnifying Party shall not have the right to assume the defense thereof and such counsel shall be at the expense of the Indemnifying Party). The Indemnifying Party shall not be liable for any settlement of any such Proceeding effected without its written consent, which consent shall not be unreasonably withheld or delayed. No Indemnifying Party shall, without the prior written consent of the Indemnified Party, effect any settlement of any pending Proceeding in respect of which any Indemnified Party is a party, unless such settlement includes an unconditional release of such Indemnified Party from all liability on claims that are the subject matter of such Proceeding.
All fees and expenses of the Indemnified Party (including reasonable fees and expenses to the extent incurred in connection with investigating or preparing to defend such Proceeding in a manner not inconsistent with this Section) shall be paid to the Indemnified Party, as incurred, within ten calendar of written notice thereof to the Indemnifying Party (regardless of whether it is ultimately determined that an Indemnified Party is not entitled to indemnification hereunder; provided, that the Indemnifying Party may require such Indemnified Party to undertake to reimburse all such fees and expenses to the extent it is finally judicially determined that such Indemnified Party is not entitled to indemnification hereunder).
6. Acknowledgement of Escrow Agent as Counsel to Purchaser Representative. The Seller and Purchaser hereby acknowledge that they are parties to that certain Escrow Agreement dated January 22, 2025, by and among the Law Offices of Jenny Chen-Drake, Esq. (“Escrow Agent”), the Purchasers and the Seller (the “Escrow Agreement”), pursuant to which the Seller and Purchasers established an escrow account and appointed Escrow Agent to serve as the escrow agent thereto in accordance with the terms and conditions of the Escrow Agreement. The Seller and Purchasers hereby acknowledge that Escrow Agent: (i) is legal counsel to the representatives of the Purchasers;
(ii) has explained to each of it the potential conflicts arising from having legal counsel to the representatives of the Purchasers serve as the Escrow Agent; and (iii) has advised each of them to seek independent counsel to review the terms of this Agreement and the Escrow Agreement. Each of the Company, Seller and Purchasers hereby acknowledges that it, he or she has had the opportunity to seek such independent counsel and agrees to waive all potential and actual conflicts arising from having Escrow Agent serve as Escrow Agent. The parties further acknowledge that the duties, responsibilities and obligations of Escrow Agent shall be limited to those expressly set forth in the Escrow Agreement and no duties, responsibilities or obligations shall be inferred or implied. Escrow Agent shall not be subject to, nor required to comply with, any other agreement between or among any or all of the Purchasers, the Company and the Seller or to which any of the Purchasers or the Seller are a party, even though reference thereto may be made herein, or to comply with any direction or instruction from any of the Purchasers or the Seller or any entity acting on its behalf. The Purchasers, the Company and the Seller hereby expressly acknowledge their appointment of Escrow Agent to serve as the escrow agent in accordance with the terms and conditions of the Escrow Agreement.
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7. Miscellaneous. This Agreement constitutes the entire agreement between the parties hereto and supersedes all prior agreements and discussions between Purchasers and Seller. No waiver of any of the provisions of this Agreement will be deemed to constitute a waiver of any other provisions hereof. This Agreement may be executed by the parties hereto in separate counterparts, each of which will be deemed to be one and the same instrument. All claims, disputes and other matters in question between the parties to this Agreement, arising out of or relating to this Agreement or breach thereof, shall be filed and heard only in the state courts of Nevada. The Agreement will be government by and construed and enforced in accordance with the internal laws of the State of Nevada, without regard to the principles of conflicts of law thereof.
[The remainder of this page has been intentionally left blank.]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date set forth in the first paragraph.
COMPANY:
INTERNATIONAL ENDEAVORS CORPORATION
a Nevada corporation
By: /s/ Raymond Valdez
Its: Raymond Valdez
Chief Executive Officer
Address:
5451 Avenida Encinas, Ste. B126
Carlsbad, CA 92008
SELLER:
/s/ Raymond Valdez
Raymond Valdez
Address:
5451 Avenida Encinas, Ste. B126
Carlsbad, CA 92008
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PURCHASER:
ModuLink Inc.,
A British Virgin Islands corporation
By: /s/ TAM, Hin Wah Anthony
Name: TAM, Hin Wah Anthony
Its: Chairman
Address: OMC Chambers, Wickhams Cay 1,
Road Town, Tortola, British Virgin Islands
Zenith (Hong Kong) Engineering Limited,
A Hong Kong corporation
By: /s/ PUN, Ah Keung
Name: PUN, Ah Keung
Its: Director
Address: Unit 7, Level 6, Westin Centre,
26 Hung To Road, Kwun Tong, Hong Kong
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EXHIBIT A
PURCHASERS
Purchasers | Subjects | Consideration |
ModuLink Inc. | 200,000 shares of the Series A Preferred Stock | USD$250,000 |
Zenith (Hong Kong) Engineering Limited | Tala Media Note | USD$10,000 |
Zenith (Hong Kong) Engineering Limited | Bearcreek Resources Note | USD$20,000 |
TOTAL | USD$280,000 |
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EXHIBIT B
SHAREHOLDERS LIST
[See Attachment]
11 |
EXHIBIT C
COMPANY CONTRACTS
None
12 |
Exhibit 10.2
DEBT PURCHASE AND ASSIGNMENT AGREEMENT
This Debt Purchase and Assignment Agreement (the “Agreement”) is made and entered into effective as of January 30 2025, by and between Bearcreek Resources, a Montana corporation (“Holder”), and the party executing this Agreement below as assignee (“Assignee”).
RECITALS
WHEREAS, the International Endeavors Corporation, a Nevada corporation (“IDVV”), is currently indebted to the Holder in the principal amount of $65,000, pursuant to that certain Irrevocable Promissory Note dated as of November 17, 2019 (the “Note”), in favor of Holder, a true and correct copy of the Note being attached hereto as Exhibit A; and
WHEREAS, the Note became due and payable on November 17, 2020, and is convertible into shares of the IDVV’s common stock, par value $0.001, in accordance with the terms and conditions of the Note; and
WHEREAS, Assignee desires to purchase the Note from Holder and Holder desires to sell the Note to Assignee, on the terms and conditions set forth in this Agreement; and
NOW, THEREFORE, for good and valuable consideration, the receipt of which is hereby acknowledged, the parties hereby agree as follows:
1. | Transfer and Assignment. Holder hereby irrevocably sells, assigns and transfers to Assignee all of Holder’s rights, title and ownership in and to the Note, and the right to collect all sums now due thereunder, free and clear of all liens, claims, pledges, mortgages, restrictions, obligations, security interests and encumbrances of any kind, nature and description. Hereafter, Holder disclaims any further interest in the Note. In conjunction with the assignment, Holder represents and warrants that: |
1.1. | Holder is the beneficial owner of the Note, and the Note is free and clear of all mortgages, pledges, restrictions, liens, charges, encumbrances, security interests, obligations or other claims. The Note is currently outstanding and represents a bona fide debt obligation of the Company; and |
1.2. | Holder has the right, power and authority to execute this Assignment; |
1.3. | The Note has not been amended or modified; and |
1.4. | That no act or omission on the part of the Holder or the Company, has occurred, which would constitute a default under the Note. |
2. | Consideration. Consideration for the Purchase of the Note shall be $20,000 and other good and valuable consideration, which shall be due at the Closing (defined below) hereunder. |
3. | Closing. The closing of the transactions contemplated by this Agreement shall occur simultaneously with that certain Stock Purchase Agreement whereby Raymond Valdez, Chief Executive Officer would sell all voting control preferred shares of IDVV (the “Closing”). |
4. | Entire Agreement. This Agreement embodies the entire agreement between Holder and Assignee and supersedes any prior agreements, whether written or oral with respect to the subject matter thereof. |
5. | Successors. This Agreement shall be binding upon and shall inure to the benefit of each of the parties to this Agreement and each of their respective successors and assigns. |
6. | Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original as against any party whose signature appears thereon and all of which together shall constitute one instrument. |
[ SIGNATURE PAGE FOLLOWS ]
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IN WITNESS WHEREOF, the parties hereto have caused this Debt Purchase and Assignment Agreement to be duly executed and delivered as of the date first written above.
ASSIGNEE:
Zenith (Hong Kong) Engineering Limited
By: /s/ PUN, Ah Keung
Name: PUN, Ah Keung
Title: Director
APPROVED AND ACCEPTED:
INTERNATIONAL ENDEAVORS CORPORATION
By: /s/ Raymond Valdez
Raymond Valdez, Chief Executive Officer
HOLDER:
Bearcreek Resources, Inc.
a Montana corporation
By: /s/ Gabe Grabowski
Name: Gabe Grabowski
Title: Bearcreek Resources - Pres
Signature Page to Debt Purchase and Assignment Agreement dated January 30, 2025
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EXHIBIT A
Copy of Irrevocable Promissory Note dated as of November 17, 2019 (the “Note”), in favor of Bearcreek Resources, a Montana corporation, in the principal amount of $65,000
IRREVOCABLE PROMISSORY NOTE
$65,000.00 | November 17th, 2019 |
For value received the undersigned, International Endeavors Corporation, a Nevada Corporation, as maker, irrevocably promises to pay without set off, deduction or counterclaim of any kind or nature to Bearcreek Resourses, a Montana Corporation at such place as may be designated in writing by Payee, the principal sum of SIXTY FIVE THOUSAND DOLLARS ($65,000.00) together with interest thereon at a rate of 8% per annum based upon a 365 day year, on all amounts disbursed. Principal and Interest is to be paid in lawful money of the United States as follows:
The sum of $65,000.00 shall be due and payable on the 17th day of November 2020. This note may be converted to common stock of the company using the following conversions based on a 25 trading day look back period at the option of the Payee.
1) | If the stock closes at a price above .02 the stock shall convert at .005 per share. |
2) | If the stock closes at a price of less than .002 the stock shall convert at .0005 per share. |
3) | If the stock closes at a price of less than .001 the stock shall convert at .0001 per share. |
This Note may NEVER be converted to an amount greater than 9.9% of the issued and outstanding common shares or a control position.
In the event that any payment of principal or interest is not made within thirty (30) days after the due date, the entire remaining unpaid principal and all accrued interest shall become immediately due and payable at the option of the Payee. This note shall also become immediately due and payable at the option of the Payee upon the happening of any default or event by which, under the terms of the irrevocable promissory note/and or other security Instruments securing this note hereinafter referred to, this note may or shall become due and payable.
This note may be prepaid in whole or in part without penalty. All payments made upon this note shall be applied first to the payment of accrued interest and, the balance, if any, shall be applied to reduce the principal amount remaining.
The Maker and all endorsers now or hereafter becoming parties hereto, jointly and severally waive presentment and demand for payment, notice of dishonor, protect and notice of protest of this note.
The Maker agrees to pay all costs and expenses of collection of this Note incurred by Payee, in or out of Court, and including all Court related costs and expenses and reasonable attorneys fees (Including fees for Paralegals and legal assistants) and disbursements (and including such costs, fees and disbursements incurred on appeal of any litigation).
No delay by the holder in enforcing any covenant or right hereunder shall be deemed a waiver of such covenant or rights, and no waiver by Payee of any particular provision hereof shall be deemed a waiver of any other provision or a continuing waiver of such particular provision, and except as so expressly waived, all provisions hereof shall continue in full force and effect.
This Note is deemed irrevocable and may not be changed or terminated orally.
Agreed to this day November 17th , 2019
On behalf of: International Endeavors Corporation
/s/ Nathan Engel
Nathan Engel - President
International Endeavors Corporation
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Exhibit 10.3
DEBT PURCHASE AND ASSIGNMENT AGREEMENT
This Debt Purchase and Assignment Agreement (the “Agreement”) is made and entered into effective as of January 30, 2025, by and between Tala Media Corp., a Wyoming corporation (“Holder”), and the party executing this Agreement below as assignee (“Assignee”).
RECITALS
WHEREAS, the International Endeavors Corporation, a Nevada corporation (“IDVV”), is currently indebted to the Holder in the principal amount of $75,000, pursuant to that certain Irrevocable Promissory Note dated as of October 2, 2017 (the “Note”), in favor of Holder, a true and correct copy of the Note being attached hereto as Exhibit A; and
WHEREAS, the Note became due and payable on October 2, 2018, and is convertible into shares of the IDVV’s common stock, par value $0.001, in accordance with the terms and conditions of the Note;
WHEREAS, the outstanding principal balance of the Note is Seven Thousand Five Hundred Dollars ($7,500); and
WHEREAS, Assignee desires to purchase the Note from Holder and Holder desires to sell the Note to Assignee, on the terms and conditions set forth in this Agreement; and
NOW, THEREFORE, for good and valuable consideration, the receipt of which is hereby acknowledged, the parties hereby agree as follows:
1. | Transfer and Assignment. Holder hereby irrevocably sells, assigns and transfers to Assignee all of Holder’s rights, title and ownership in and to the Note, and the right to collect all sums now due thereunder, free and clear of all liens, claims, pledges, mortgages, restrictions, obligations, security interests and encumbrances of any kind, nature and description. Hereafter, Holder disclaims any further interest in the Note. In conjunction with the assignment, Holder represents and warrants that: |
1.1. | Holder is the beneficial owner of the Note, and the Note is free and clear of all mortgages, pledges, restrictions, liens, charges, encumbrances, security interests, obligations or other claims. The Note is currently outstanding and represents a bona fide debt obligation of the Company; and |
1.2. | Holder has the right, power and authority to execute this Assignment; |
1.3. | The Note has not been amended or modified; and |
1.4. | That no act or omission on the part of the Holder or the Company, has occurred, which would constitute a default under the Note. |
2. | Consideration. Consideration for the Purchase of the Note shall be $10,000 and other good and valuable consideration, which shall be due at the Closing (defined below) hereunder. |
3. | Closing. The closing of the transactions contemplated by this Agreement shall occur simultaneously with that certain Stock Purchase Agreement whereby Raymond Valdez, Chief Executive Officer would sell all voting control preferred shares of IDVV (the “Closing”). |
4. | Entire Agreement. This Agreement embodies the entire agreement between Holder and Assignee and supersedes any prior agreements, whether written or oral with respect to the subject matter thereof. |
5. | Successors. This Agreement shall be binding upon and shall inure to the benefit of each of the parties to this Agreement and each of their respective successors and assigns. |
6. | Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original as against any party whose signature appears thereon and all of which together shall constitute one instrument. |
[ SIGNATURE PAGE FOLLOWS ]
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IN WITNESS WHEREOF, the parties hereto have caused this Debt Purchase and Assignment Agreement to be duly executed and delivered as of the date first written above.
ASSIGNEE:
Zenith (Hong Kong) Engineering Limited
By: /s/ PUN, Ah Keung
Name: PUN, Ah Keung
Title: Director
APPROVED AND ACCEPTED:
INTERNATIONAL ENDEAVORS CORPORATION
By: /s/ Raymond Valdez
Raymond Valdez, Chief Executive Officer
HOLDER:
Tala Media Corp.
a Wyoming corporation
By: /s/ Hannah Grabowski
Name: Hannah Grabowski
Title: President – Tala Media Corp
Signature Page to Debt Purchase and Assignment Agreement dated January 30, 2025
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EXHIBIT A
Copy of Irrevocable Promissory Note dated as of October 2, 2017 (the “Note”), in favor of Tala Media Corp., a Wyoming corporation, in the principal amount of $75,000
IRREVOCABLE PROMISSORY NOTE
$75,000.00 | October 2nd, 2017 |
For value received the undersigned, International Endeavors Corporation, a Nevada Corporation, as maker, irrevocably promises to pay without set off, deduction or counterclaim of any kind or nature to Tala Media Corp, a Wyoming Corporation at such place as may be designated in writing by Payee, the principal sum of SEVENTY FIVE THOUSAND DOLLARS ($75,000.00) together with interest thereon at a rate of 8% per annum based upon a 365 day year, on all amounts disbursed. Principal and Interest is to be paid in lawful money of the United States as follows:
The sum of $75,000.00 shall be due and payable on the 2nd day of May 2017. This note may be converted to common stock of the company using the following conversions based on a 25 trading day look back period at the option of the Payee.
1) | If the stock closes at a price above .02 the stock shall convert at .005 per share. |
2) | If the stock closes at a price of less than .002 the stock shall convert at .0005 per share. |
3) | If the stock closes at a price of less than .001 the stock shall convert at .00025 per share |
This Note may NEVER be converted to an amount greater than 9.9% of the issued and outstanding common shares or a control position.
In the event that any payment of principal or interest is not made within thirty (30) days after the due date, the entire remaining unpaid principal and all accrued interest shall become immediately due and payable at the option of the Payee. This note shall also become immediately due and payable at the option of the Payee upon the happening of any default or event by which, under the terms of the irrevocable promissory note/and or other security Instruments securing this note hereinafter referred to, this note may or shall become due and payable.
This note may be prepaid in whole or in part without penalty. All payments made upon this note shall be applied first to the payment of accrued interest and, the balance, if any, shall be applied to reduce the principal amount remaining.
The Maker and all endorsers now or hereafter becoming parties hereto, jointly and severally waive presentment and demand for payment, notice of dishonor, protect and notice of protest of this note.
The Maker agrees to pay all costs and expenses of collection of this Note incurred by Payee, in or out of Court, and including all Court related costs and expenses and reasonable attorneys fees (Including fees for Paralegals and legal assistants) and disbursements (and including such costs, fees and disbursements incurred on appeal of any litigation).
No delay by the holder in enforcing any covenant or right hereunder shall be deemed a waiver of such covenant or rights, and no waiver by Payee of any particular provision hereof shall be deemed a waiver of any other provision or a continuing waiver of such particular provision, and except as so expressly waived, all provisions hereof shall continue in full force and effect.
This Note is deemed irrevocable and may not be changed or terminated orally.
Agreed to this day October 2nd , 2017
On behalf of: International Endeavors Corporation
/s/ Nathan Engel
Nathan Engel - President
International Endeavors Corporation
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Exhibit 10.4
WAIVER AND AMENDMENT AGREEMENT
(the “Agreement”)
This Agreement is made and entered into as of February 28, 2025, by and between:
1. | International Endeavors Corporation, a company incorporated under the laws of State of Nevada, United States (the “Company”); and |
2. | Zenith (Hong Kong) Engineering Limited, a company incorporated under the laws of Hong Kong (“Zenith” or the “Noteholder”). |
RECITALS
WHEREAS, the Company previously issued certain convertible promissory notes (the “Promissory Notes”) to two original noteholders;
WHEREAS, pursuant to Debt Purchase and Assignment Agreements entered into on January 30, 2025, Zenith (Hong Kong) Engineering Limited acquired all rights, title, and interest in and to the Promissory Notes from the former noteholders and is now the sole legal holder of the Promissory Notes (the “Noteholder”);
WHEREAS, the Promissory Notes include provisions allowing for the conversion of outstanding principal and accrued interest into common stock of the Company;
WHEREAS, the Promissory Notes have reached maturity, and the outstanding principal and accrued interest are immediately due and payable in accordance with the terms thereof;
WHEREAS, the Company and the Noteholder desire to waive the conversion rights set forth in the Promissory Notes and amend the terms as provided herein for their mutual benefit and in the best interests of the Company’s shareholders.
AGREEMENT
1. Waiver of Conversion Rights
The Noteholder hereby irrevocably waives any and all rights to convert the outstanding principal amount and any accrued but unpaid interest under the Promissory Notes into equity securities of the Company.
As of the date of this Agreement, the total outstanding principal and accrued but unpaid interest under the Promissory Notes amounted to USD123,708. Accordingly, all provisions of the Promissory Notes relating to the conversion feature are deemed null and void as of the date hereof.
2. Continuing Obligations
The outstanding principal amount and accrued interest under the Promissory Notes shall continue to bear interest at a rate of eight percent (8%) per annum and shall be payable upon demand by the Noteholder in accordance with the terms of the Promissory Notes, as amended herein.
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3. Amendment Clause
Any further amendment, modification, or waiver of any provision of the Promissory Notes, including without limitation any reinstatement or alteration, shall be effective only if set forth in a written agreement signed by duly authorized representatives of both the Company and the Noteholder.
4. No Other Changes
Except as expressly set forth herein, all other terms and conditions of the Promissory Notes shall remain in full force and effect.
5. Governing Law
This Agreement shall be governed by and construed in accordance with the laws of the State of Nevada, United States, without regard to its conflict of laws principles.
6. Counterparts
This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Execution and delivery of this Agreement by electronic means shall be legally binding to the same extent as delivery of an original signature.
SIGNATURES
International Endeavors Corporation | Zenith (Hong Kong) Engineering Limited | |
By: /s/ Fu Wah |
By: /s/ Pun Ah Keung | |
Name: Fu Wah | Name: Pun Ah Keung | |
Title: Director | Title: Director |
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Exhibit 10.5
SHARE EXCHANGE AGREEMENT
THIS SHARE EXCHANGE AGREEMENT (the “Agreement”) dated as of March 28, 2025, is entered into by and among International Endeavors Corporation, a Nevada corporation (“IDVV”), and ModuLink Investment Limited, a British Virgin Island corporation (“ModuLink”), and the shareholders of ModuLink listed on Annex A to this Agreement (each, a “Shareholder” and, collectively, the “Shareholders”).
RECITALS
A. The Shareholders own the number of shares of capital stock of ModuLink (the “Shares”) set forth opposite each Shareholder’s name on Annex A, which Shares collectively constitute all of the issued and outstanding shares of capital stock in ModuLink.
B. IDVV desires to purchase from the Shareholders, and the Shareholders desire to sell to IDVV, the Shares in exchange for shares of IDVV common stock, par value $0.001 (the “Common Stock”) all on the terms and subject to the conditions set forth in this Agreement (the “Exchange”).
D. As a result of the Exchange, IDVV will become the sole shareholder of ModuLink.
E. Certain capitalized terms used in this Agreement are defined on Exhibit A hereto.
AGREEMENT
In consideration of the agreements, provisions and covenants set forth below, IDVV, ModuLink and the Shareholders, hereby agree as follows:
ARTICLE I.
EXCHANGE OF SHARES
1.1 Agreement to Sell.
Upon the terms and subject to all of the conditions contained herein, each of the Shareholders hereby agrees to sell, assign, transfer and deliver to IDVV, and IDVV hereby agrees to purchase and accept from each of the Shareholders, on the Closing Date, the Shares.
1.2 Purchase Price.
As full consideration for the sale, assignment, transfer and delivery of the Shares by the Shareholders to IDVV, and upon the terms and subject to all of the conditions contained herein, IDVV shall issue to the Shareholders an aggregate of 2,356,712,066 shares of IDVV Common Stock (the “Acquisition Shares”), at a per share price of $0.0034, on a pro rata basis based upon their respective beneficial ownership interest in ModuLink, as certified by the President of ModuLink, at the Closing.
1.3 Mechanics of Exchange.
(a) At the Closing, each Shareholder shall be entitled to surrender the certificate or certificates that immediately prior to the Closing represented the ModuLink Shares of Common Stock (the “Certificates”) to the exchange agent designated by IDVV in exchange for the Acquisition Shares.
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(b) Promptly after the Closing, IDVV or its designated exchange agent shall make available to each Shareholder a letter of transmittal and instructions for use in effecting the surrender of Certificates in exchange for the Acquisition Shares. Upon surrender of a Certificate to such exchange agent together with the letter of transmittal, duly executed, the Shareholder shall be entitled to receive in exchange therefore such number of Acquisition Shares as such Shareholder has the right to receive in respect of the Certificate so surrendered pursuant to the provisions of this Article I.
1.4 No Fractional Shares.
No fraction of a share of IDVV Common Stock shall be issued in the Exchange. In lieu of fractional shares, the Shareholders upon surrender of their Certificates as set forth in Section 1.3 shall be issued that number of shares of Common Stock resulting by rounding up to the nearest whole number of shares of Common Stock that each such Shareholder shall receive as a result of the Exchange.
1.5 Closing.
The closing of the transactions contemplated by this Agreement (the “Closing”) shall take place at 9:00 a.m., Hong Kong Time, at the principal administrative offices of IDVV, or at a location mutually agreement upon by IDVV and ModuLink, on or before May 1, 2025 (the “Closing Date”); provided, however, that if all of the other conditions set forth in articles VI and VII hereof are not satisfied or waived, unless this agreement has been terminated under Section 9 hereof, or at such date, the Closing Date shall be the business day following the day on which all such conditions have been satisfied or waived, or at such other date, time and place as IDVV, ModuLink and the Shareholders shall agree.
ARTICLE II.
REPRESENTATIONS AND WARRANTIES OF MODULINK
Except as set forth in the Disclosure Schedule, consisting of information about ModuLink provided by ModuLink to IDVV in connection with this Agreement (the “ModuLink Disclosure Schedule”), each of ModuLink and the Shareholders represents and warrants jointly and severally to IDVV as follows:
2.1 Organization and Qualification.
ModuLink is duly incorporated, validly and in good standing existing under the laws of British Virgin Island, has all requisite authority and power (corporate and other), governmental licenses, authorizations, consents and approvals to carry on its business as presently conducted and as contemplated to be conducted, to own, hold and operate its properties and assets as now owned, held and operated by it, to enter into this Agreement, to carry out the provisions hereof except where the failure to be in good standing or to have such governmental licenses, authorizations, consents and approvals will not, in the aggregate, either (i) have a Material Adverse Effect on the business, assets or financial condition of ModuLink, or (ii) impair the ability of ModuLink to perform its material obligations under this Agreement. ModuLink is duly qualified, licensed or domesticated as a foreign corporation in good standing in each jurisdiction wherein the nature of its activities or its properties owned or leased requires such qualification, licensing or domestication, except where the failure to be so qualified, licensed or domesticated will not have a Material Adverse Effect. Set forth as part of the ModuLink Disclosure Schedule is a list of those jurisdictions in which each of ModuLink presently conducts its business, owns, holds and operates its properties and assets.
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2.2 Subsidiaries.
ModuLink holds 100% of ModuLink Corporation Limited, a Hong Kong limited liability company. The group structure of ModuLink and its subsidiaries, and the investment in ModuLink Australia Pty Ltd (collectively, referred to as “ModuLink”) is as follows:
Except as stated above, ModuLink does not own directly or indirectly, any equity or other ownership interest in any corporation, partnership, joint venture or other entity or enterprise. ModuLink does not have any direct or indirect interests of stock ownership or otherwise in any corporation, partnership, joint venture, firm, association or business enterprise, and is not party to any agreement to acquire such an interest.
2.3 Articles of Incorporation and Bylaws.
The copies of the charter document and corporate governance document of ModuLink (collectively, the “Organizational Documents”) that have been delivered to IDVV prior to the execution of this Agreement are true and complete and have not been amended or repealed. ModuLink is not in violation or breach of any of the provisions of the Organizational Documents, except for such violations or breaches which, in the aggregate, will not have a Material Adverse Effect on ModuLink.
2.4 Authorization and Validity of this Agreement.
This Agreement and each of the Transaction Agreements constitute the legal, valid and binding obligation of each person or entity who is a party thereto (other than IDVV), enforceable against each such person or entity in accordance with its terms, except as such enforcement is limited by general equitable principles, or by bankruptcy, insolvency and other similar laws affecting the enforcement of creditors rights generally. Each ModuLink shareholder has all requisite legal capacity to execute and deliver this Agreement and the Transaction Agreements to which he or she is a party, and to perform its, his or her obligations hereunder and thereunder. The execution and delivery by each of ModuLink and each of the Shareholders of this Agreement and the Transaction Agreements (to the extent either is a party thereto), and the consummation of the transactions contemplated herein and therein (the “Transactions”) have been authorized by all necessary corporate or other action on the part of ModuLink and each of the Shareholders. This Agreement and the Transaction Agreements have been duly executed and delivered by the parties thereto (other than IDVV).
2.5 No Violation.
Neither the execution nor delivery of this Agreement or the Transaction Agreements, nor the consummation or performance of any of the Transactions by ModuLink or the Shareholders will directly or indirectly:
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(ai) violate or conflict with any provision of the Organizational Documents of ModuLink; (aii) result in (with or without notice or lapse of time) a violation or breach of, or conflict with or constitute a default or result in the termination or in a right of termination or cancellation of, or accelerate the performance required by, or require notice under, any agreement, promissory note, lease, instrument or arrangement to which ModuLink or any of its assets are bound or result in the creation of any Liens upon ModuLink or any of its assets; (aiii) violate any order, writ, judgment, injunction, ruling, award or decree of any Governmental Body; (“Governmental Body”); (aiv) violate any statute, law or regulation of any jurisdiction as such statute, law or regulation that relates to the Shareholders or ModuLink or any of the assets of ModuLink; or (av) result in cancellation, modification, revocation or suspension of any permits, licenses, registrations, consents, approvals, authorizations or certificates issued or granted by any Governmental Body which are held by or granted to the Shareholders or ModuLink or which are necessary for the conduct of ModuLink’s business; or
(b) to the knowledge of ModuLink or any of the Shareholders, cause ModuLink to become subject to, or to become liable for the payment of, any Tax (as hereinafter defined) or cause any of the assets owned by ModuLink to be reassessed or revalued by any taxing authority or other Governmental Body.
None of ModuLink or the Shareholders is or will be required to give any notice to or obtain any approval, consent, ratification, waiver or other authorization (a “Consent”) from any person or entity (including, without limitation, any Governmental Body) in connection with (i) the execution and delivery of this Agreement or any of the Transaction Agreements, or (ii) the consummation or performance of any of the Transactions.
2.6 Capitalization and Related Matters.
(a) Capitalization. ModuLink has issued and outstanding 10,000 shares of common stock. Except as set forth in the preceding sentence, no other class of capital stock or other security of ModuLink is authorized, issued, reserved for issuance or outstanding. The Shareholders, as of the Closing Date, are the lawful, record and beneficial owners of the number of ModuLink Shares of Common Stock set forth opposite each Seller’s name on Annex A attached hereto. The Shareholders have, as of the date hereof and as of the Closing Date, valid and marketable title to their respective Shares, free and clear of all Liens (including, without limitation, any claims of spouses under applicable community property laws) and are the lawful, record and beneficial owners of all of the Shares. Except as is issued to and held by the Shareholders or ModuLink, no other class of capital stock or other security of ModuLink, as applicable, is authorized, issued, reserved for issuance or outstanding, and the Shareholders hold 100% of the issued and outstanding securities of ModuLink. At the Closing, IDVV will be vested with good and marketable title to the Shares, free and clear of all Liens (including, without limitation, any claims of spouses under applicable community property laws). No legend or other reference to any purported Lien appears upon any certificate representing the Shares. Each of the Shares has been duly authorized and validly issued and is fully paid and non-assessable. None of the outstanding capital or other securities of ModuLink was issued, redeemed or repurchased in violation of the Securities Act of 1933, as amended (the “Securities Act”), or any other securities or “blue sky” laws.
(b) No Redemption Requirements. There are no authorized or outstanding options, warrants, equity securities, calls, rights, commitments or agreements of any character by which ModuLink or any of the Shareholders is obligated to issue, deliver or sell, or cause to be issued, delivered or sold, any shares of capital stock or other securities of ModuLink There are no outstanding contractual obligations (contingent or otherwise) of ModuLink to retire, repurchase, redeem or otherwise acquire any outstanding shares of capital stock of, or other ownership interests in, ModuLink or to provide funds to or make any investment (in the form of a loan, capital contribution or otherwise) in any other entity.
2.7 Compliance with Laws and Other Instruments.
Except as would not have a Material Adverse Effect, the business and operations of ModuLink has been and are being conducted in accordance with all applicable foreign, federal, provincial and local laws, rules and regulations and all applicable orders, injunctions, decrees, writs, judgments, determinations and awards of all courts and governmental agencies and instrumentalities. There are no permits, bonuses, registrations, consents, approvals, authorizations, certificates, or any waiver of the foregoing, which are required to be issued or granted by a Governmental Body for the conduct of the Business as presently conducted or the ownership of the assets of ModuLink Except as would not have a Material Adverse Effect, ModuLink is not, and has not received notice alleging that it is, in violation of, or (with or without notice or lapse of time or both) in default under, or in breach of, any term or provision of the Organizational Documents or of any indenture, loan or credit agreement, note, deed of trust, mortgage, security agreement or other material agreement, lease, license or other instrument, commitment, obligation or arrangement to which ModuLink is a party or by which any of ModuLink’s properties, assets or rights are bound or affected. To the knowledge of ModuLink, no other party to any material contract, agreement, lease, license, commitment, instrument or other obligation to which ModuLink is a party is (with or without notice or lapse of time or both) in default thereunder or in breach of any term thereof. ModuLink is not subject to any obligation or restriction of any kind or character, nor is there, to the knowledge of ModuLink, any event or circumstance relating to ModuLink that materially and adversely affects in any way its business, properties, assets or prospects or that prohibits ModuLink from entering into this Agreement and the Transaction Agreements or would prevent or make burdensome its performance of or compliance with all or any part of this Agreement, the Transaction Agreements or the consummation of the Transactions contemplated hereby or thereby.
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2.8 Certain Proceedings.
There are no outstanding or pending proceeding that has been commenced against or involving ModuLink or any of its assets and, to the knowledge of ModuLink and the Shareholders, no matters of the foregoing nature are contemplated or threatened. None of ModuLink or the Shareholders have been charged with, and is not threatened with, or under any investigation with respect to, any allegation concerning any violation of any provision of any federal, provincial, local or foreign law, regulation, ordinance, order or administrative ruling, and is not in default with respect to any order, writ, injunction or decree of any Governmental Body.
2.9 No Brokers or Finders.
None of ModuLink, the Shareholders, or any officer, director, independent contractor, consultant, agent or employee of ModuLink has agreed to pay, or has taken any action that will result in any person or entity becoming obligated to pay or entitled to receive, any investment banking, brokerage, finder’s or similar fee or commission in connection with this Agreement or the Transactions. ModuLink and the Shareholders shall jointly and severally indemnify and hold IDVV harmless against any liability or expense arising out of, or in connection with, any such claim.
2.10 Title to and Condition of Properties.
ModuLink has good, valid and marketable title to all of its properties and assets (whether real, personal or mixed, and whether tangible or intangible) reflected as owned in its books and records, free and clear of all Liens. ModuLink owns or holds under valid leases or other rights to use all real property, plants, machinery, equipment and all assets necessary for the conduct of its business as presently conducted, except where the failure to own or hold such property, plants, machinery, equipment and assets would not have a Material Adverse Effect on ModuLink. No Person other than ModuLink owns or has any right to the use or possession of the assets used in ModuLink’s business. The material buildings, plants, machinery and equipment necessary for the conduct of the business of ModuLink as presently conducted are structurally sound, are in good operating condition and repair and are adequate for the uses to which they are being put or would be put in the Ordinary Course of Business, in each case, taken as a whole, and none of such buildings, plants, machinery or equipment is in need of maintenance or repairs, except for ordinary, routine maintenance and repairs that are not material in nature or cost.
2.11 Absence of Undisclosed Liabilities.
ModuLink has no debt, obligation or liability (whether accrued, absolute, contingent, liquidated or otherwise, whether asserted or unasserted, whether due or to become due, whether or not known to ModuLink) arising out of any transaction entered into prior to the Closing Date or any act or omission prior to the Closing Date which individually or taken together would constitute a Material Adverse Effect on ModuLink and have no debt, obligation or liability to each other or any of the Shareholders or their affiliates, except to the extent specifically set forth on or reserved against on the Balance Sheet of ModuLink
The financial statements are consistent with the books and records of ModuLink and fairly present in all material respects the financial condition, assets and liabilities of ModuLink, as applicable, taken as a whole, as of the dates and periods indicated, and were prepared in accordance with GAAP (except as otherwise indicated therein or in the notes thereto).
2.12 Changes.
ModuLink has not, since the date of its incorporation:
(a) Ordinary Course of Business. Conducted its business or entered into any transaction other than in the Ordinary Course of Business, except for this Agreement.
(b) Adverse Changes. Suffered or experienced any change in, or affecting, its condition (financial or otherwise), properties, assets, liabilities, business, operations, results of operations or prospects which would have a Material Adverse Effect;
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(c) Loans. Made any loans or advances to any Person other than travel advances and reimbursement of expenses made to employees, officers and directors in the Ordinary Course of Business;
(d) Compensation and Bonuses. Made any payments of any bonuses or compensation other than regular salary payments, or increase in the salaries, or payment on any of its debts in the Ordinary Course of Business, to any of its shareholders, directors, officers, employees, independent contractors or consultants or entry into by it of any employment, severance, or similar contract with any director, officer, or employee, independent contractor or consultant; Adopted, or increased in the payments to or benefits under, any profit sharing, bonus, deferred compensation, savings, insurance, pension, retirement, or other employee benefit plan for or with any of its employees;
(e) Liens. Created or permitted to exist any Lien on any of its properties or assets other than Permitted Liens;
(f) Capital Stock. Issued, sold, disposed of or encumbered, or authorized the issuance, sale, disposition or encumbrance of, or granted or issued any option to acquire any shares of its capital stock or any other of its securities or any Equity Security, or altered the term of any of its outstanding securities or made any change in its outstanding shares of capital stock or its capitalization, whether by reason of reclassification, recapitalization, stock split, combination, exchange or readjustment of shares, stock dividend or otherwise; changed its authorized or issued capital stock; granted any stock option or right to purchase shares of its capital stock; issued any security convertible into any of its capital stock; granted any registration rights with respect to shares of its capital stock; purchased, redeemed, retired, or otherwise acquired any shares of its capital stock; declared or paid any dividend or other distribution or payment in respect of shares of capital stock of any other entity;
(g) Dividends. Declared, set aside, made or paid any dividend or other distribution to any of its shareholders;
(h) Material Contracts. Terminated or modified any of its Material Contract except for termination upon expiration in accordance with the terms of such agreements, a description of which is included in the ModuLink’s Disclosure Schedule;
(i) Claims. Released, waived or cancelled any claims or rights relating to or affecting ModuLink in excess of $1,000 in the aggregate or instituted or settled any Proceeding involving in excess of $10,000 in the aggregate;
(j) Discharged Liabilities. Paid, discharged, cancelled, waived or satisfied any claim, obligation or liability in excess of $1,000 in the aggregate, except for liabilities incurred prior to the date of this Agreement in the Ordinary Course of Business;
(k) Indebtedness. Created, incurred, assumed or otherwise become liable for any Indebtedness or commit to any endeavor involving a commitment in excess of $1,000 in the aggregate, other than contractual obligations incurred in the Ordinary Course of Business;
(l) Guarantees. Guaranteed or endorsed in a material amount any obligation or net worth of any Person;
(m) Acquisitions. Acquired the capital stock or other securities or any ownership interest in, or substantially all of the assets of, any other Person;
(n) Accounting. Changed its method of accounting or the accounting principles or practices utilized in the preparation of its financial statements, other than as required by GAAP;
(o) Agreements. Entered into any agreement, or otherwise obligated itself, to do any of the foregoing.
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2.13 Material Contracts.
ModuLink has delivered to IDVV, prior to the date of this Agreement, true, correct and complete copies of each of its Material Contracts.
(a) No Defaults. The Material Contracts of ModuLink are valid and binding agreements of ModuLink, as applicable, and are in full force and effect and are enforceable in accordance with their terms. Except as would not have a Material Adverse Effect, ModuLink is not in breach or default of any of its Material Contracts to which it is a party and, to the knowledge of ModuLink, no other party to any of its Material Contracts is in breach or default thereof. Except as would not have a Material Adverse Effect, no event has occurred or circumstance has existed that (with or without notice or lapse of time) would (a) contravene, conflict with or result in a violation or breach of, or become a default or event of default under, any provision of any of its Material Contracts or (b) permit ModuLink or any other Person the right to declare a default or exercise any remedy under, or to accelerate the maturity or performance of, or to cancel, terminate or modify any of its Material Contracts. ModuLink has not received any notice and has no knowledge of any pending or threatened cancellation, revocation or termination of any of its Material Contracts to which it is a party, and there are no renegotiations of, or attempts to renegotiate.
2.14 Tax Returns and Audits.
(a) Tax Returns. (a) All material Tax Returns required to be filed by or on behalf of ModuLink have been timely filed and all such Tax Returns were (at the time they were filed) and are true, correct and complete in all material respects; (b) all Taxes of ModuLink required to have been paid (whether or not reflected on any Tax Return) have been fully and timely paid, except those Taxes which are presently being contested in good faith or for which an adequate reserve for the payment of such Taxes has been established on ModuLink’s balance sheet; (c) no waivers of statutes of limitation have been given or requested with respect to ModuLink in connection with any Tax Returns covering ModuLink or with respect to any Taxes payable by it; (d) no Governmental Body in a jurisdiction where ModuLink does not file Tax Returns has made a claim, assertion or threat to ModuLink that ModuLink is or may be subject to taxation by such jurisdiction; (e) ModuLink has duly and timely collected or withheld, paid over and reported to the appropriate Governmental Body all amounts required to be so collected or withheld for all periods under all applicable laws; (f) there are no Liens with respect to Taxes on the property or assets of ModuLink other than Permitted Liens; (g) there are no Tax rulings, requests for rulings, or closing agreements relating to ModuLink for any period (or portion of a period) that would affect any period after the date hereof; and (h) any adjustment of Taxes of ModuLink made by a Governmental Body in any examination that ModuLink is required to report to the appropriate provincial, local or foreign taxing authorities has been reported, and any additional Taxes due with respect thereto have been paid. No state of fact exists or has existed which would constitute ground for the assessment of any tax liability by any Governmental Body. All Tax Returns filed by ModuLink are true, correct and complete.
(b) No Adjustments, Changes. Neither ModuLink nor any other Person on behalf of ModuLink (a) has executed or entered into a closing agreement pursuant to Section 7121 of the Code or any predecessor provision thereof or any similar provision of provincial, local or foreign law; or (b) has agreed to or is required to make any adjustments pursuant to Section 481(a) of the Code or any similar provision of provincial, local or foreign law.
(c) No Disputes. There is no pending audit, examination, investigation, dispute, proceeding or claim with respect to any Taxes of or Tax Return filed or required to be filed by ModuLink, nor is any such claim or dispute pending or contemplated. ModuLink has made available to IDVV true, correct and complete copies of all Tax Returns, examination reports and statements of deficiencies assessed or asserted against or agreed to by ModuLink since January 1, 2023, and any and all correspondence with respect to the foregoing. ModuLink does not have any outstanding closing agreement, ruling request, request for consent to change a method of accounting, subpoena or request for information to or from a Governmental Body in connection with any Tax matter.
(d) No Tax Allocation, Sharing. ModuLink is not a party to any Tax allocation or sharing agreement. ModuLink (a) has not been a member of a Tax Group filing a consolidated income Tax Return under Section 1501 of the Code (or any similar provision of provincial, local or foreign law), and (b) does not have any liability for Taxes for any Person under Treasury Regulations Section 1.1502-6 (or any similar provision of provincial, local or foreign law) as a transferee or successor, by contract or otherwise.
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2.15 Material Assets.
The financial statements of ModuLink reflect the material properties and assets (real and personal) owned or leased by them.
2.16 Insurance Coverage.
ModuLink has no insurance or general liability policies maintained by ModuLink on its properties and assets.
2.17 Litigation; Orders.
There is no Proceeding (whether federal, provincial, local or foreign) pending or, to the knowledge of ModuLink, threatened or appealable against or affecting ModuLink or any of its properties, assets, business or employees. To the knowledge of ModuLink, there is no fact that might result in or form the basis for any such Proceeding. ModuLink is not subject to any Orders and has not received any written opinion or memorandum or legal advice from their legal counsel to the effect that ModuLink is exposed, from a legal standpoint, to any liability which would be material to its business. ModuLink is not engaged in any legal action to recover monies due it or for damages sustained by any of them.
2.18 Licenses.
Except as would not have a Material Adverse Effect, ModuLink possesses from the appropriate Governmental Body all licenses, permits, authorizations, approvals, franchises and rights that are necessary for it to engage in its business as currently conducted and to permit it to own and use its properties and assets in the manner in which it currently owns and uses such properties and assets (collectively, “PERMITS”). Except as would not have a Material Adverse Effect, ModuLink has not received any written notice from any Governmental Body or other Person that there is lacking any license, permit, authorization, approval, franchise or right necessary for ModuLink to engage in its business as currently conducted and to permit ModuLink to own and use its properties and assets in the manner in which it currently owns and uses such properties and assets. Except as would not have a Material Adverse Effect, the Permits are valid and in full force and effect. Except as would not have a Material Adverse Effect, no event has occurred or circumstance exists that may (with or without notice or lapse of time): (a) constitute or result, directly or indirectly, in a violation of or a failure to comply with any Permit; or (b) result, directly or indirectly, in the revocation, withdrawal, suspension, cancellation or termination of, or any modification to, any Permit. ModuLink has not received any written notice from any Governmental Body or any other Person regarding: (a) any actual, alleged, possible or potential contravention of any Permit; or (b) any actual, proposed, possible or potential revocation, withdrawal, suspension, cancellation, termination of, or modification to, any Permit. All applications required to have been filed for the renewal of such Permits have been duly filed on a timely basis with the appropriate Persons, and all other filings required to have been made with respect to such Permits have been duly made on a timely basis with the appropriate Persons. All Permits are renewable by their terms or in the Ordinary Course of Business without the need to comply with any special qualification procedures or to pay any amounts other than routine fees or similar charges, all of which have, to the extent due, been duly paid.
2.19 Interested Party Transactions.
Except for the monthly salary reimbursement of HK$350,000 for certain design and project management services to Zenith (PMS) Limited that Tam Hin Wah, Anthony is the director and shareholder, no officer, director or shareholder of ModuLink or any Affiliate, Related Person or “associate” (as such term is defined in Rule 405 of the Commission under the Securities Act) of any such Person, either directly or indirectly, (1) has an interest in any Person which (a) furnishes or sells services or products which are furnished or sold or are proposed to be furnished or sold by ModuLink, or (b) purchases from or sells or furnishes to, or proposes to purchase from, sell to or furnish ModuLink any goods or services; (2) has a beneficial interest in any contract or agreement to which ModuLink is a party or by which it may be bound or affected; or (3) is a party to any material agreements, contracts or commitments in effect as of the date hereof with ModuLink “Related Person” means: (i) with respect to a particular individual, the individual’s immediate family which shall include the individual’s spouse, parents, children, siblings, mothers and fathers-in-law, sons and daughters-in-law, and brothers and sisters-in-law; and (ii) with respect to a specified individual or entity, any entity or individual that, directly or indirectly, controls, is controlled by, or is under common control with such specified entity or individual.
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2.20 Governmental Inquiries.
ModuLink has made available to IDVV a copy of each material written inspection report, questionnaire, inquiry, demand or request for information received by ModuLink from (and the response of ModuLink thereto), and each material written statement, report or other document filed by ModuLink with, any Governmental Body since January 1, 2023.
2.21 Bank Accounts and Safe Deposit Boxes.
The ModuLink Disclosure Schedule discloses the title and number of each bank or other deposit or financial account, and each lock box and safety deposit box used by ModuLink, the financial institution at which that account or box is maintained and the names of the persons authorized to draw against the account or otherwise have access to the account or box, as the case may be.
2.22 Intellectual Property.
Any Intellectual Property ModuLink uses in its business as presently conducted is owned by ModuLink or properly licensed.
2.23 Stock Option Plans; Employee Benefits.
(a) ModuLink does not have any employee benefit plans or arrangements covering their present and former employees or providing benefits to such persons in respect of services provided to ModuLink. ModuLink has no commitment, whether formal or informal and whether legally binding or not, to create any additional plan, arrangement or practice similar to the Approved Plans.
2.24 Employee Matters.
(a) No former or current employee of ModuLink is a party to, or is otherwise bound by, any agreement or arrangement (including, without limitation, any confidentiality, non-competition or proprietary rights agreement) that in any way adversely affected, affects, or will affect (i) the performance of his, her or its duties to ModuLink, or (ii) the ability of ModuLink to conduct its business.
(b) ModuLink has no employees, directors, officers, consultants, independent contractors, representatives or agents whose contract of employment or engagement cannot be terminated by three months’ notice. (c) ModuLink is not required or obligated to pay, and since the date if its incorporation, have not paid any moneys to or for the benefit of, any director, officer, employee, consultant, independent contractor, representative or agent of ModuLink (d) ModuLink is in compliance with all applicable laws respecting employment and employment practices, terms and conditions or employment and wages and hours, and is not engaged in any unfair labor practice. There is no labor strike, dispute, shutdown or stoppage actually pending or, to the knowledge of ModuLink or the Shareholders, threatened against or affecting ModuLink
2.25 Environmental and Safety Matters.
Except as would not have a Material Adverse Effect:
(a) ModuLink has at all times been and is in compliance with all Environmental Laws and Orders applicable to ModuLink, as applicable.
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(b) There are no Proceedings pending or, to the knowledge of ModuLink, threatened against ModuLink alleging the violation of any Environmental Law or Environmental Permit applicable to ModuLink or alleging that ModuLink is a potentially responsible party for any environmental site contamination. None of ModuLink or the Shareholders are aware of, or has ever received notice of, any past, present or future events, conditions, circumstances, activities, practices, incidents, actions or plans which may interfere with or prevent continued compliance, or which may give rise to any common law or legal liability, or otherwise form the basis of any claim, action, suit, proceeding, hearing or investigation, based on or related to the manufacture, processing, distribution, use, treatment, storage, disposal, transport, or handling, or the emission, discharge, release or threatened release into the environment, of any pollutant, contaminant, or hazardous or toxic material or waste.
(c) Neither this Agreement nor the consummation of the transactions contemplated by this Agreement shall impose any obligations to notify or obtain the consent of any Governmental Body or third Persons under any Environmental Laws applicable to ModuLink
2.26 Material Customers.
Since the date of its incorporation, none of the Material Customers (as hereinafter defined) of ModuLink has notified any of ModuLink or the Shareholders of their intent to terminate their business with ModuLink business because of any dissatisfaction on the part of any such person or entity. The Transactions have not caused any of the Material Customers of ModuLink to terminate or provide notice of their intent or threaten to terminate their business with ModuLink or to notify ModuLink or the Shareholders of their intent not to continue to do such business with ModuLink after the Closing. As used herein, “Material Customers” means those customers from whom ModuLink derives annual revenues in excess of US $5,000.
2.27 Inventories.
All inventories of ModuLink are of good, usable and merchantable quality in all material respects, and, except as set forth in the ModuLink Disclosure Schedule, do not include a material amount of obsolete or discontinued items. Except as set forth in the ModuLink Disclosure Schedule, (a) all such inventories are of such quality as to meet in all material respects the quality control standards of ModuLink, (b) all such inventories are recorded on the books at the lower of cost or market value determined in accordance with GAAP, and (c) no write-down in inventory has been made or should have been made pursuant to GAAP during the past two years.
2.28 Money Laundering Laws.
The operations of ModuLink are and have been conducted at all times in compliance with applicable financial record-keeping and reporting requirements of the money laundering statutes of all U.S. and non-U.S. jurisdictions, the rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced by any Governmental Body (collectively, the “Money Laundering Laws”) and no Proceeding involving ModuLink with respect to the Money Laundering Laws is pending or, to the knowledge of ModuLink, threatened.
2.29 Disclosure.
(a) Any information set forth in this Agreement, the ModuLink Disclosure Schedule, or the Transaction Agreements shall be true, correct and complete in all material respects.
(b) No statement, representation or warranty of ModuLink or the Shareholders in this Agreement (taken with the Schedules) or the Transaction Agreements or any exhibits or schedules thereto contain any untrue statement of a material fact or omits to state a material fact necessary to make the statements herein or therein, taken as a whole, in light of the circumstances in which they were made, not misleading.
(c) Except as set forth in the ModuLink Disclosure Schedule, the Shareholders and ModuLink have no knowledge of any fact that has specific application to ModuLink (other than general economic or industry conditions) and that adversely affects the assets or the business, prospects, financial condition, or results of operations of ModuLink.
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(d) In the event of any inconsistency between the statements in the body of this Agreement and those in the Schedules (other than an exception expressly set forth as such in the Schedules with respect to a specifically identified representation or warranty), the statements in the Schedules shall control.
(e) The books of account, minute books and stock record books of ModuLink, all of which have been made available to IDVV, are complete and accurate and have been maintained in accordance with sound business practices. Without limiting the generality of the foregoing, the minute books of ModuLink contain complete and accurate records of all meetings held, and corporate action taken, by the shareholders, the boards of directors, and committees of the boards of directors of ModuLink, as applicable, and no meeting of any such shareholders, board of directors, or committee has been held for which minutes have not been prepared and are not contained in such minute books.
2.30 Finders and Brokers.
(a) None of ModuLink or the Shareholders or any Person acting on behalf of ModuLink or the Shareholders has engaged any finder, broker, intermediary or any similar Person in connection with the Exchange.
(b) None of ModuLink the Shareholders nor any Person acting on behalf of ModuLink or the Shareholders has entered into a contract or other agreement that provides that a fee shall be paid to any Person or Entity if the Exchange is consummated.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF IDVV
IDVV hereby represents and warrants to the Shareholders as of the date hereof:
3.1 Organization; Good Standing.
IDVV is duly incorporated, validly and in good standing existing under the laws of Nevada, has all requisite authority and power (corporate and other), governmental licenses, authorizations, consents and approvals to carry on its business as presently conducted and as contemplated to be conducted, to own, hold and operate its properties and assets as now owned, held and operated by it, to enter into this Agreement, to carry out the provisions hereof except where the failure to be in good standing or to have such governmental licenses, authorizations, consents and approvals will not, in the aggregate, either (i) have a Material Adverse Effect on the business, assets or financial condition of IDVV, or (ii) impair the ability of IDVV to perform its material obligations under this Agreement. IDVV is duly qualified, licensed or domesticated as a foreign corporation in good standing in each jurisdiction wherein the nature of its activities or its properties owned or leased requires such qualification, licensing or domestication, except where the failure to be so qualified, licensed or domesticated will not have a Material Adverse Effect.
3.2 IDVV Common Stock and Series B Preferred Stock.
IDVV is authorized to issue: (i) Four Billion Million (4,000,000,000) shares of common stock, par value $0.001, of which 1,613,221,854 are issued and outstanding as of March 17, 2025; and (ii) Ten Million (10,000,000) shares of Preferred Stock, par value $0.001, Five Hundred Thousand of which has been designated Series A Preferred Stock, par value $0.001, and of which 200,000 are issued and outstanding. The Acquisition Shares, when issued in connection with this Agreement and the other Transactional Agreements, will be duly authorized, validly issued, fully paid and nonassessable. IDVV will take all reasonable efforts subsequent to the Closing to effect and amendment to its Articles of Incorporation, as amended, to effect an increase in its authorized shares of Common Stock to issue and deliver to the Shareholders any portion of the Acquisition Shares not delivered at Closing to the Shareholders, if necessary.
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3.3 Authority; Binding Nature of Agreements.
(a) The execution, delivery and performance of this Agreement, the Transactional Agreements, and all other agreements and instruments contemplated to be executed and delivered by IDVV in connection herewith have been duly authorized by all necessary corporate action on the part of IDVV and its board of directors.
(b) This Agreement, the Transactional Agreements, and all other agreements and instruments contemplated to be executed and delivered by IDVV constitute the legal, valid and binding obligation of IDVV, enforceable against IDVV in accordance with their terms, except to the extent that enforceability may be limited by applicable bankruptcy, Exchange, insolvency, moratorium or other laws affecting the enforcement of creditors’ rights generally and by general principles of equity regardless of whether such enforceability is considered in a proceeding in law or equity.
(c) There is no pending Proceeding, and, to IDVV’s knowledge, no Person has threatened to commence any Proceeding that challenges, or that may have the effect of preventing, delaying, making illegal or otherwise interfering with, the Exchange or IDVV’s ability to comply with or perform its obligations and covenants under the Transactional Agreements, and, to the knowledge of IDVV, no event has occurred, and no claim, dispute or other condition or circumstance exists, that might directly or indirectly give rise to or serve as a basis for the commencement of any such Proceeding.
3.4 Non-contravention; Consents.
The execution and delivery of this Agreement and the other Transactional Agreements, and the consummation of the Exchange, by IDVV will not, directly or indirectly (with or without notice or lapse of time):
(a) contravene, conflict with or result in a material violation of (i) IDVV’s Certificate of Incorporation or Bylaws, or (ii) any resolution adopted by IDVV Board or any committee thereof or the stockholders of IDVV;
(b) to the knowledge of IDVV, contravene, conflict with or result in a material violation of, or give any Governmental Body the right to challenge the Exchange or to exercise any remedy or obtain any relief under, any legal requirement or any Order to which IDVV or any material assets owned or used by it are subject;
(c) to the knowledge of IDVV, cause any material assets owned or used by IDVV to be reassessed or revalued by any taxing authority or other Governmental Body;
(d) to the knowledge of IDVV, contravene, conflict with or result in a material violation of any of the terms or requirements of, or give any Governmental Body the right to revoke, withdraw, suspend, cancel, terminate or modify, any Governmental Authorization that is held by IDVV or that otherwise relates to IDVV’s business or to any of the material assets owned or used by IDVV, where such contraventions, conflict, violation, revocation, withdrawal, suspension, cancellation, termination or modification would have a Material Adverse Effect on IDVV;
(e) contravene, conflict with or result in a material violation or material breach of, or material default under, any Contract to which IDVV is a party;
(f) give any Person the right to any payment by IDVV or give rise to any acceleration or change in the award, grant, vesting or determination of options, warrants, rights, severance payments or other contingent obligations of any nature whatsoever of IDVV in favor of any Person, in any such case as a result of the Exchange; or
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(g) result in the imposition or creation of any material Lien upon or with respect to any material asset owned or used by IDVV.
Except for Consents, filings or notices required under the state and federal securities laws or any other laws or regulations or as otherwise contemplated in this Agreement and the other Transactional Agreements, IDVV will not be required to make any filing with or give any notice to, or obtain any Consent from, any Person in connection with the execution and delivery of this Agreement and the other Transactional Agreements or the consummation or performance of the Exchange.
3.5 Finders and Brokers.
(a) Neither IDVV nor any Person acting on behalf of IDVV has engaged any finder, broker, intermediary or any similar Person in connection with the Exchange.
(b) IDVV has not entered into a contract or other agreement that provides that a fee shall be paid to any Person or Entity if the Exchange is consummated.
3.6 Compliance with Applicable Law.
Results of operations or financial condition of IDVV, to IDVV’s knowledge IDVV holds all Governmental Authorizations necessary for the lawful conduct of its business under and pursuant to, and the business of IDVV is not being conducted in violation of, any Governmental Authorization applicable to IDVV.
3.8 Complete Copies of Requested Reports.
IDVV has delivered or made available true and complete copies of each document that has been reasonably requested by ModuLink or the Shareholders.
3.9 Full Disclosure.
(a) Neither this Agreement (including all Schedules and exhibits hereto) nor any of the Transactional Agreements contemplated to be executed and delivered by IDVV in connection with this Agreement contains any untrue statement of material fact; and none of such documents omits to state any material fact necessary to make any of the representations, warranties or other statements or information contained therein not misleading.
(b) All of the information set forth in the prospectus and all other information regarding IDVV and the business, condition, assets, liabilities, operations, financial performance, net income and prospects of either that has been furnished to ModuLink or the Shareholders by or on behalf of IDVV or any of the IDVV’s Representatives, is accurate and complete in all material respects.
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ARTICLE IV.
COVENANTS OF MODULINK
4.1 Access and Investigation.
ModuLink shall ensure that, at all times during the Pre-Closing Period:
(a) ModuLink and their Representatives provide IDVV and its Representatives access, at reasonable times and with twenty-four (24) hours’ notice from IDVV to ModuLink, to all of the premises and assets of ModuLink, to all existing books, records, Tax Returns, work papers and other documents and information relating to ModuLink, and to responsible officers and employees of ModuLink, and ModuLink and its Representatives provide IDVV and its Representatives with copies of such existing books, records, Tax Returns, work papers and other documents and information relating to ModuLink as IDVV may request in good faith;
(b) Each of ModuLink and its Representatives confer regularly with IDVV upon its request, concerning operational matters and otherwise report regularly (not less than semi-monthly and as IDVV may otherwise request) to IDVV and discuss with IDVV and its Representatives concerning the status of the business, condition, assets, liabilities, operations, and financial performance of ModuLink, and promptly notify IDVV of any material change in the business, condition, assets, liabilities, operations, and financial performance of ModuLink, or any event reasonably likely to lead to any such change.
4.2 Operation of the Business.
ModuLink shall ensure that, during the Pre-Closing Period:
(a) It conducts its operations in the Ordinary Course of Business and in the same manner as such operations have been conducted prior to the date of this Agreement;
(b) It uses its commercially reasonable efforts to preserve intact its current business organization, keep available and not terminate the services of its current officers and employees and maintain its relations and goodwill with all suppliers, customers, landlords, creditors, licensors, licensees, employees and other Persons having business relationships with ModuLink;
(c) It does not declare, accrue, set aside or pay any dividend or make any other distribution in respect of any shares of its capital stock, and does not repurchase, redeem or otherwise reacquire any shares of its capital stock or other securities, except with respect to the repurchase of shares of ModuLink Common Stock upon termination of employees at the original purchase price pursuant to agreements existing at the date hereof;
(d) It does not sell or otherwise issue (or grant any warrants, options or other rights to purchase) any shares of capital stock or any other securities, except the issuance of ModuLink Common Stock pursuant to option grants to employees made under the Option Plan in the Ordinary Course of Business;
(e) It does not amend its charter document, corporate governance document or other Organizational Documents, and does not affect or become a party to any recapitalization, reclassification of shares, stock split, reverse stock split or similar transaction;
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(f) It does not form any subsidiary or acquire any equity interest or other interest in any other Entity;
(g) It does not establish or adopt any Employee Benefit Plan, and does not pay any bonus or make any profit sharing or similar payment to, or increase the amount of the wages, salary, commissions, fringe benefits or other compensation or remuneration payable to, any of its directors, officers or employees;
(h) It does not change any of its methods of accounting or accounting practices in any respect;
(i) It does not make any Tax election;
(j) It does not commence or take any action or fail to take any action which would result in the commencement of any Proceeding;
(k) It does not (i) acquire, dispose of, transfer, lease, license, mortgage, pledge or encumber any fixed or other assets, other than in the Ordinary Course of Business; (ii) incur, assume or prepay any indebtedness, Indebtedness or obligation or any other liabilities or issue any debt securities, other than in the Ordinary Course of Business; (iii) assume, guarantee, endorse for the obligations of any other person, other than in the Ordinary Course of Business; (iv) make any loans, advances or capital contributions to, or investments in, any other Person, other than in the Ordinary Course of Business; or (v) fail to maintain insurance consistent with past practices for its business and property;
(l) It pays all debts and Taxes, files all of its Tax Returns (as provided herein) and pays or performs all other obligations, when due;
(m) It does not enter into or amend any agreements pursuant to which any other Person is granted distribution, marketing or other rights of any type or scope with respect to any of its services, products or technology;
(n) It does not hire any new officer-level employee;
(o) It does not revalue any of its assets, including, without limitation, writing down the value of inventory or writing off notes or accounts receivable, except as required under GAAP and in the Ordinary Course of Business;
(p) Except as otherwise contemplated hereunder, it does not enter into any transaction or take any other action outside the Ordinary Course of Business; and
(q) It does not enter into any transaction or take any other action that likely would cause or constitute a Breach of any representation or warranty made by it in this Agreement.
4.3 Filings and Consents; Cooperation.
ModuLink shall ensure that:
(a) Each filing or notice required to be made or given (pursuant to any applicable Law, Order or contract, or otherwise) by ModuLink or the Shareholders in connection with the execution and delivery of any of the Transactional Agreements, or in connection with the consummation or performance of the Exchange, is made or given as soon as possible after the date of this Agreement;
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(b) Each Consent required to be obtained (pursuant to any applicable Law, Order or contract, or otherwise) by ModuLink or the Shareholders in connection with the execution and delivery of any of the Transactional Agreements, or in connection with the consummation or performance of the Exchange, is obtained as soon as possible after the date of this Agreement and remains in full force and effect through the Closing Date;
(c) It promptly delivers to IDVV a copy of each filing made, each notice given and each Consent obtained by ModuLink during the Pre-Closing Period; and
(d) During the Pre-Closing Period, it and its Representatives cooperate with IDVV and IDVV’s Representatives, and prepare and make available such documents and take such other actions as IDVV may request in good faith, in connection with any filing, notice or Consent that IDVV is required or elects to make, give or obtain.
4.4 Notification; Updates to Disclosure Schedules.
(a) During the Pre-Closing Period, ModuLink shall promptly notify IDVV in writing of:
(i) the discovery by it of any event, condition, fact or circumstance that occurred or existed on or prior to the date of this Agreement which is contrary to any representation or warranty made by it in this Agreement or in any of the other Transactional Agreements, or that would upon the giving of notice or lapse of time, result in any of its representations and warranties set forth in this agreement to become untrue or otherwise cause any of the conditions of Closing set forth in Article VI or Article VII not to be satisfied;
(ii) any event, condition, fact or circumstance that occurs, arises or exists after the date of this Agreement (except as a result of actions taken pursuant to the express written consent of IDVV) and that is contrary to any representation or warranty made by it in this Agreement, or that would upon the giving of notice or lapse of time, result in any of its representations and warranties set forth in this agreement to become untrue or otherwise cause any of the conditions of Closing set forth in Article VI or Article VII not to be satisfied;
(b) If any event, condition, fact or circumstances that is required to be disclosed pursuant to Section 4.4(a) requires any material change in the ModuLink Disclosure Schedule, or if any such event, condition, fact or circumstance would require such a change assuming the ModuLink Disclosure Schedule were dated as of the date of the occurrence, existence or discovery of such event, condition, fact or circumstances, then ModuLink, as applicable, shall promptly deliver to IDVV an update to the ModuLink Disclosure Schedule specifying such change (a “Disclosure Schedule Update”).
(c) It will promptly update any relevant and material information provided to IDVV after the date hereof pursuant to the terms of this Agreement.
4.5 Commercially Reasonable Efforts.
During the Pre-Closing Period, ModuLink shall use its commercially reasonable efforts to cause the conditions set forth in Article VI and Article VII to be satisfied on a timely basis and so that the Closing can take place on or before May 1, 2025, in accordance with Section 1.5, and shall not take any action or omit to take any action, the taking or omission of which would or could reasonably be expected to result in any of the representations and warranties of ModuLink set forth in this Agreement becoming untrue, or in any of the conditions of Closing set forth in Article VI or Article VII not being satisfied.
4.6 Confidentiality; Publicity.
ModuLink shall ensure that:
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(a) It and its Representatives keep strictly confidential the existence and terms of this Agreement prior to the issuance or dissemination of any mutually agreed upon press release or other disclosure of the Exchange; and
(b) neither it nor any of its Representatives issues or disseminates any press release or other publicity or otherwise makes any disclosure of any nature (to any of its suppliers, customers, landlords, creditors or employees or to any other Person) regarding any of the Exchange; except in each case to the extent that it is required by law to make any such disclosure regarding such transactions or as separately agreed by the parties; provided, however, that if it is required by law to make any such disclosure, ModuLink advises IDVV, at least five business days before making such disclosure, of the nature and content of the intended disclosure.
ARTICLE V.
COVENANTS OF IDVV
5.1 Notification.
During the Pre-Closing Period, IDVV shall promptly notify ModuLink in writing of:
(a) the discovery by IDVV of any event, condition, fact or circumstance that occurred or existed on or prior to the date of this Agreement which is contrary to any representation or warranty made by IDVV in this Agreement; and,
(b) any event, condition, fact or circumstance that occurs, arises or exists after the date of this Agreement (except as a result of actions taken pursuant to the written consent of ModuLink) and that is contrary to any representation or warranty made by IDVV in this Agreement;
5.2 Filings and Consents; Cooperation.
IDVV shall ensure that:
(a) Each filing or notice required to be made or given (pursuant to any applicable Law, Order or contract, or otherwise) by IDVV in connection with the execution and delivery of any of the Transactional Agreements, or in connection with the consummation or performance of the Exchange, is made or given as soon as possible after the date of this Agreement;
(b) Each Consent required to be obtained (pursuant to any applicable Law, Order or contract, or otherwise) by IDVV in connection with the execution and delivery of any of the Transactional Agreements, or in connection with the consummation or performance of the Exchange, is obtained as soon as possible after the date of this Agreement and remains in full force and effect through the Closing Date;
(c) IDVV promptly delivers to ModuLink and a copy of each filing made, each notice given and each Consent obtained by IDVV during the Pre-Closing Period; and
(d) During the Pre-Closing Period, IDVV and its Representatives cooperate with ModuLink and their Representatives, and prepare and make available such documents and take such other actions as ModuLink may request in good faith, in connection with any filing, notice or Consent that ModuLink is required or elects to make, give or obtain.
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5.3 Commercially Reasonable Efforts.
During the Pre-Closing Period, IDVV shall use its commercially reasonable efforts to cause the conditions set forth in Article VI and Article VII to be satisfied on a timely basis and so that the Closing can take place on or before May 1, 2025, or as soon thereafter as is reasonably practical, in accordance with Section 1.5, and shall not take any action or omit to take any action, the taking or omission of which would or could reasonably be expected to result in any of the representations and warranties or IDVV set forth in this Agreement becoming untrue or in any of the conditions of closing set forth in Article VI or Article VII not being satisfied.
5.4 Disclosure of Confidential Information.
(a) Each of IDVV and the Shareholders acknowledges and agrees that it may receive Confidential Information in connection with this Transaction including without limitation, the ModuLink Disclosure Schedule and any information disclosed during the due diligence process, the public disclosure of which will harm the disclosing party’s business. The Receiving Party may use Confidential Information only in connection with the Transaction. The results of the due diligence review may not be used for any other purpose other than in connection with the Transaction. Except as expressly provided in this Agreement, the Receiving Party shall not disclose Confidential Information to anyone without the Disclosing Party’s prior written consent. The Receiving Party shall take all reasonable measures to avoid disclosure, dissemination or unauthorized use of Confidential Information, including, at a minimum, those measures it takes to protect its own confidential information of a similar nature. The Receiving Party shall not export any Confidential Information in any manner contrary to the export regulations of the governmental jurisdiction to which it is subject.
(b) The Receiving Party may disclose Confidential Information as required to comply with binding orders of governmental entities that have jurisdiction over it, provided that the Receiving Party (i) gives the Disclosing Party reasonable notice (to the extent permitted by law) to allow the Disclosing Party to seek a protective order or other appropriate remedy, (ii) discloses only such information as is required by the governmental entity, and (iii) uses commercially reasonable efforts to obtain confidential treatment for any Confidential Information so disclosed.
(c) All Confidential Information shall remain the exclusive property of the Disclosing Party. The Disclosing Party’s disclosure of Confidential Information shall not constitute an express or implied grant to the Receiving Party of any rights to or under the Disclosing Party’s patents, copyrights, trade secrets, trademarks or other intellectual property rights.
(d) The Receiving Party shall notify the Disclosing Party immediately upon discovery of any unauthorized use or disclosure of Confidential Information or any other breach of this Agreement by the Receiving Party. The Receiving Party shall cooperate with the Disclosing Party in every reasonable way to help the Disclosing Party regain possession of such Confidential Information and prevent its further unauthorized use.
(e) The Receiving Party shall return or destroy all tangible materials embodying Confidential Information (in any form and including, without limitation, all summaries, copies and excerpts of Confidential Information) promptly following the Disclosing Party’s written request; provided, however, that, subject to the provisions of this Agreement, the Receiving Party may retain one copy of such materials in the confidential, restricted access files of its legal department for use only in the event a dispute arises between the parties related to the Transaction and only in connection with that dispute. At the Disclosing Party’s option, the Receiving Party shall provide written certification of its compliance with this Section.
5.5 Indemnification.
(a) Each of ModuLink and the Shareholders, jointly and severally, each shall defend, indemnify and hold harmless IDVV, and its respective employees, officers, directors, stockholders, controlling persons, affiliates, agents, successors and assigns (collectively, the “IDVV Indemnified Persons”), and shall reimburse the IDVV Indemnified Person, for, from and against any loss, liability, claim, damage, expense (including costs of investigation and defense and reasonable attorneys’ fees) or diminution of value, whether or not involving a third-party claim (collectively, “Damages”), directly or indirectly, relating to, resulting from or arising out of:
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(i) any untrue representations, misrepresentations or breach of warranty by or of ModuLink or the Shareholders contained in or pursuant to this Agreement, and the ModuLink Disclosure Schedule; (ii) any breach or nonfulfillment of any covenant, agreement or other obligation by or of ModuLink or the Shareholders (only to the extent made or occurring prior to or at the Closing) contained in or pursuant to this Agreement, the Transaction Agreements executed by ModuLink or any of the Shareholders in their individual capacity, the ModuLink Disclosure Schedule, or any of the other agreements, documents, schedules or exhibits to be entered into by ModuLink or any of the Shareholders in their individual capacity pursuant to or in connection with this Agreement;
(iii) all of Pre-Closing liabilities of ModuLink or the Shareholders; and
(iv) any liability, claim, action or proceeding of any kind whatsoever, whether instituted or commenced prior to or after the Closing Date, which directly or indirectly relates to, arises or results from, or occurs in connection with facts or circumstances relating to the conduct of business of ModuLink or the assets of ModuLink, or events or circumstances existing on or prior to the Closing Date.
(b) IDVV shall defend, indemnify and hold harmless ModuLink and its respective affiliates, agents, successors and assigns (collectively, the “ModuLink Indemnified Persons”), and shall reimburse the ModuLink Indemnified Persons, for, from and against any Damages, directly or indirectly, relating to, resulting from or arising out of:
(i) any untrue representation, misrepresentation or breach of warranty by or of IDVV contained in or pursuant to this Agreement;
(ii) any breach or nonfulfillment of any covenant, agreement or other obligations by or of IDVV contained in or pursuant to this Agreement, the Transaction Agreements or any other agreements, documents, schedules or exhibits to be entered into or delivered to pursuant to or in connection with this Agreement.
Notwithstanding anything to the contrary herein, IDVV’s indemnity obligations under this section shall not exceed $800,000 in the aggregate.
(c) Promptly after receipt by an indemnified Party under Section 5.6 of this Agreement of notice of a claim against it (“Claim”), such indemnified Party shall, if a claim is to be made against an indemnifying Party under such Section, give notice to the indemnifying Party of such Claim, but the failure to so notify the indemnifying Party will not relieve the indemnifying Party of any liability that it may have to any indemnified Party, except to the extent that the indemnifying Party demonstrates that the defense of such action is prejudiced by the indemnified Party’s failure to give such notice.
(d) A claim for indemnification for any matter not involving a third-party claim may be asserted by notice to the Party from whom indemnification is sought.
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ARTICLE VI.
CLOSING CONDITIONS OF IDVV
IDVV’s obligations to affect the Closing and consummate the Exchange are subject to the satisfaction of each of the following conditions:
6.1 Accuracy of Representations and Warranties.
The representations and warranties of ModuLink and the Shareholders in this Agreement shall have been true and correct as of the date of this Agreement and shall be true and correct on and as of the Closing. ModuLink and the Shareholders shall have performed all obligations in this Agreement required to be performed or observed by them on or prior to the Closing.
6.2 Additional Conditions to Closing.
(a) All necessary approvals under federal and state securities laws and other authorizations relating to the issuance of the Acquisition Shares and the transfer of the Shares shall have been received.
(b) No preliminary or permanent injunction or other order by any federal, state or foreign court of competent jurisdiction which prohibits the consummation of the Exchange shall have been issued and remain in effect. No statute, rule, regulation, executive order, stay, decree, or judgment shall have been enacted, entered, issued, promulgated or enforced by any court or governmental authority which prohibits or restricts the consummation of the Exchange. All authorizations, consents, orders or approvals of, or declarations or filings with, and all expirations of waiting periods imposed by, any Governmental Body which are necessary for the consummation of the Exchange, other than those the failure to obtain which would not materially adversely affect the consummation of the Exchange or in the aggregate have a material adverse effect on IDVV and its subsidiaries, taken as a whole, shall have been filed, occurred or been obtained (all such permits, approvals, filings and consents and the lapse of all such waiting periods being referred to as the “Requisite Regulatory Approvals”) and all such Requisite Regulatory Approvals shall be in full force and effect.
(c) There shall not be any action taken, or any statute, rule, regulation or order enacted, entered, enforced or deemed applicable to the Exchange, by any Governmental Body which, in connection with the grant of a Requisite Regulatory Approval, imposes any material condition or material restriction upon IDVV or its subsidiaries or ModuLink, including, without limitation, requirements relating to the disposition of assets, which in any such case would so materially adversely impact the economic or business benefits of the Exchange as to render inadvisable the consummation of the Exchange.
6.3 Performance of Agreements.
ModuLink or the Shareholders, as the case may be, shall have executed and delivered each of the agreements, instruments and documents required to be executed and delivered, and performed all actions required to be performed by ModuLink or any of the Shareholders, as the case may be, pursuant to this Agreement, except as IDVV has otherwise consented in writing.
6.4 Consents.
Each of the Consents identified or required to have been identified in the ModuLink Disclosure Schedule shall have been obtained and shall be in full force and effect, other than those Consents, which have been expressly waived by IDVV.
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6.5 No Material Adverse Change and Satisfactory Due Diligence.
There shall not have been any material adverse change in the business, condition, assets, liabilities, operations or financial performance of ModuLink since the date of this Agreement as determined by IDVV in its discretion. IDVV shall be satisfied in all respects with the results of its due diligence review of ModuLink
6.6 ModuLink Closing Certificate.
In addition to the documents required to be received under this Agreement, IDVV shall also have received the following documents:
(a) copies of resolutions of ModuLink, certified by a Secretary, Assistant Secretary or other appropriate officer of ModuLink, authorizing the execution, delivery and performance of this Agreement and other Transactional Agreements;
(b) good standing certificate of ModuLink; and
(c) such other documents as IDVV may request in good faith for the purpose of (i) evidencing the accuracy of any representation or warranty made by ModuLink, (ii) evidencing the compliance by ModuLink, or the performance by ModuLink of, any covenant or obligation set forth in this Agreement or any of the other Transactional Agreements, (iii) evidencing the satisfaction of any condition set forth in Article VII or this Article VI, or (iv) otherwise facilitating the consummation or performance of the Exchange.
6.7 Transactional Agreements.
Each Person (other than IDVV) shall have executed and delivered prior to or on the Closing Date all Transactional Agreements to which it is to be a party.
6.8 Delivery of Stock Certificates, Minute Book and Corporate Seal.
The Directors shall have delivered to IDVV the stock books, stock ledgers, minute books and corporate seals of ModuLink
ARTICLE VII.
CLOSING CONDITIONS OF THE SHAREHOLDERS
The Shareholders’ obligations to affect the Closing and consummate the Exchange are subject to the satisfaction of each of the following conditions:
7.1 Accuracy of Representations and Warranties.
The representations and warranties of IDVV in this Agreement shall have been true and correct as of the date of this Agreement and shall be true and correct on and as of the Closing and IDVV shall have performed all obligations in this Agreement required to be performed or observed by them on or prior to the Closing.
7.2 Additional Conditions to Closing.
(a) All necessary approvals under federal and state securities laws and other authorizations relating to the issuance and transfer of the Acquisition Shares by IDVV and the transfer of the Shares by ModuLink shall have been received.
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(b) No preliminary or permanent injunction or other order by any federal, state or foreign court of competent jurisdiction which prohibits the consummation of the Exchange shall have been issued and remain in effect. No statute, rule, regulation, executive order, stay, decree, or judgment shall have been enacted, entered, issued, promulgated or enforced by any court or governmental authority which prohibits or restricts the consummation of the Exchange. All Requisite Regulatory Approvals shall have been filed, occurred or been obtained and all such Requisite Regulatory Approvals shall be in full force and effect.
(c) There shall not be any action taken, or any statute, rule, regulation or order enacted, entered, enforced or deemed applicable to the Exchange, by any federal or state Governmental Body which, in connection with the grant of a Requisite Regulatory Approval, imposes any condition or restriction upon the Surviving Corporation or its subsidiaries (or, in the case of any disposition of assets required in connection with such Requisite Regulatory Approval, upon IDVV, its subsidiaries, ModuLink or any of their subsidiaries), including, without limitation, requirements relating to the disposition of assets, which in any such case would so materially adversely impact the economic or business benefits of the Exchange as to render inadvisable the consummation of the Exchange.
7.3 IDVV Closing Certificates.
The Shareholders shall have received the following documents:
(a) copies of resolutions of IDVV, certified by a Secretary, Assistant Secretary or other appropriate officer of IDVV, authorizing the execution, delivery and performance of the Transactional Agreements and the Exchange; and
(b) such other documents as ModuLink may request in good faith for the purpose of (i) evidencing the accuracy of any representation or warranty made by IDVV, (ii) evidencing the compliance by IDVV with, or the performance by IDVV of, any covenant or obligation set forth in this Agreement or any of the other Transactional Agreements, (iii) evidencing the satisfaction of any condition set forth in Article VI or this Article VII, or (iv) otherwise facilitating the consummation or performance of the Exchange.
7.4 No Material Adverse Change.
There shall not have been any material adverse change in IDVV’s business, condition, assets, liabilities, operations or financial performance since the date of this Agreement.
7.5 Performance of Agreements.
IDVV shall have executed and delivered each of the agreements, instruments and documents required to be executed and delivered, and performed all actions required by IDVV pursuant to this Agreement, except as ModuLink and the Shareholders have otherwise consented in writing.
7.6 Consents.
Each of the Consents identified or required to have been identified in Section 3.4 shall have been obtained and shall be in full force and effect, other than those Consents the absence of which shall not have a material adverse effect on IDVV.
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ARTICLE VIII.
FURTHER ASSURANCES
Each of the parties hereto agrees that it will, from time to time after the date of the Agreement, execute and deliver such other certificates, documents and instruments and take such other action as may be reasonably requested by the other party to carry out the actions and transactions contemplated by this Agreement, including the closing conditions described in Articles VI and VII. ModuLink and the Shareholders shall reasonably cooperate with IDVV in its obtaining of the books and records of ModuLink, or in preparing any solicitation materials to be sent to the shareholders of IDVV in connection with the approval of the Exchange and the transactions contemplated by the Transactional Agreements.
ARTICLE IX.
TERMINATION
9.1 Termination.
This Agreement may be terminated and the Exchange abandoned at any time prior to the Closing Date:
(a) by mutual written consent of IDVV, ModuLink and the Shareholders;
(b) by IDVV if (i) there is a material Breach of any covenant or obligation of ModuLink or the Shareholders; provided however, that if such Breach or Breaches are capable of being cured prior to the Closing Date, such Breach or Breaches shall not have been cured within 10 days of delivery of the written notice of such Breach, or (ii) IDVV reasonably determines that the timely satisfaction of any condition set forth in Article VI has become impossible or impractical (other than as a result of any failure on the part of IDVV to comply with or perform its covenants and obligations under this Agreement or any of the other Transactional Agreements);
(b) by ModuLink if (i) there is a material Breach of any covenant or obligation of IDVV; provided, however, that if such Breach or Breaches are capable of being cured prior to the Closing Date, such Breach or Breaches shall not have been cured within 10 days of delivery of the written notice of such Breach, or (ii) ModuLink reasonably determines that the timely satisfaction of any condition set forth in Article VII has become impossible or impractical (other than as a result of any failure on the part of ModuLink or any Shareholder to comply with or perform any covenant or obligation set forth in this Agreement or any of the other Transactional Agreements);
(d) by IDVV if the Closing has not taken place on or before May 1, 2025, (except if as a result of any failure on the part of IDVV to comply with or perform its covenants and obligations under this Agreement or in any other Transactional Agreement);
(e) by ModuLink if the Closing has not taken place on or before May 1, 2025 (except if as a result of the failure on the part of ModuLink or the Shareholders to comply with or perform any covenant or obligation set forth in this Agreement or in any other Transactional Agreement);
(f) by any of IDVV, on the one hand or ModuLink, on the other hand, if any court of competent jurisdiction in the United States or other United States governmental body shall have issued an order, decree or ruling or taken any other action restraining, enjoining or otherwise prohibiting the Exchange and such order, decree, ruling or any other action shall have become final and non-appealable; provided, however, that the party seeking to terminate this Agreement pursuant to this clause (f) shall have used all commercially reasonable efforts to remove such order, decree or ruling; or
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(g) The parties hereby agree and acknowledge that a breach of the provisions of Articles 4.1, 4.2, 4.3, 4.4 and 4.6 are, without limitation, material Breaches of this Agreement.
9.2 Termination Procedures.
If IDVV wishes to terminate this Agreement pursuant to Section 9.1, IDVV shall deliver to the Shareholders and ModuLink a written notice stating that IDVV is terminating this Agreement and setting forth a brief description of the basis on which IDVV is terminating this Agreement. If ModuLink wishes to terminate this Agreement pursuant to Section 9.1, ModuLink shall deliver to IDVV a written notice stating that ModuLink is terminating this Agreement and setting forth a brief description of the basis on which ModuLink is terminating this Agreement.
9.3 Effect of Termination.
In the event of termination of this Agreement as provided above, this Agreement shall forthwith have no further effect. Except for a termination resulting from a Breach by a party to this Agreement, there shall be no liability or obligation on the part of any party hereto. In the event of a breach, the remedies of the non-breaching party shall be to seek damages from the breaching party or to obtain an order for specific performance, in addition to or in lieu of other remedies provided herein. Upon request after termination, each party will redeliver or, at the option of the party receiving such request, destroy all reports, work papers and other material of any other party relating to the Exchange, whether obtained before or after the execution hereof, to the party furnishing same; provided, however, that ModuLink and the Shareholders shall, in all events, remain bound by and continue to be subject to Section 4.6 and all parties shall in all events remain bound by and continue to be subject to Section 5.4 and 5.5.
Notwithstanding the above, both IDVV, on the one hand, and ModuLink and the Shareholders, on the other hand, shall be entitled to announce the termination of this Agreement by means of a mutually acceptable press release.
ARTICLE X.
MISCELLANEOUS
10.1 Survival of Representations and Warranties.
All representations and warranties of ModuLink and the Shareholders in this Agreement and the ModuLink Disclosure Schedule shall survive shall survive indefinitely. The right to indemnification, reimbursement or other remedy based on such representations and warranties will not be affected by any investigation conducted by the parties.
10.2 Expenses.
Except as otherwise set forth herein, each of the parties to the Exchange shall bear its own expenses incurred in connection with the negotiation and consummation of the transactions contemplated by this Agreement.
10.3 Entire Agreement.
This Agreement and the other Transactional Agreements contain the entire agreement of the parties hereto, and supersede any prior written or oral agreements between them concerning the subject matter contained herein, or therein. There are no representations, agreements, arrangements or understandings, oral or written, between the parties to this Agreement, relating to the subject matter contained in this Agreement and the other Transaction Agreements, which are not fully expressed herein or therein. The schedules and each exhibit attached to this Agreement or delivered pursuant to this Agreement are incorporated herein by this reference and constitute a part of this Agreement.
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10.4 Counterparts.
This Agreement may be executed in any number of counterparts, each of which shall be deemed an original but all of which shall constitute one and the same instrument.
10.5 Descriptive Headings.
The Article and Section headings in this Agreement are for convenience only and shall not affect the meanings or construction of any provision of this Agreement.
10.6 Notices.
Any notices required or permitted to be given under this Agreement shall be in writing and shall be deemed sufficiently given on the earlier to occur of the date of personal delivery, the date of receipt or three (3) days after posting by overnight courier or registered or certified mail, postage prepaid, addressed as follows:
If to IDVV:
Unit 2, Level 6, Westin Centre, 26 Hung To Road, Kwun Tong, Hong Kong
If to ModuLink:
Unit 2, Level 6, Westin Centre, 26 Hung To Road, Kwun Tong, Hong Kong
If to the Shareholders:
c/o ModuLink Corporation Limited
Unit 2, Level 6, Westin Centre, 26 Hung To Road, Kwun Tong, Hong Kong; or
To such address or addresses as a party shall have previously designated by notice to the sender given in accordance with this section.
10.7 Choice of Law.
This Agreement shall be construed in accordance with and governed by the laws of the State of Nevada without regard to choice of law principles. Each of the parties hereto consents to the jurisdiction of the courts of Hong Kong Special Administrative Region.
10.8 Binding Effect; Benefits.
This Agreement shall inure to the benefit of and be binding upon the parties and their respective successors and permitted assigns. Nothing in this Agreement, express or implied, is intended to confer on any Person other than the parties or their respective successors and permitted assigns, the Shareholders and other Persons expressly referred to herein, any rights, remedies, obligations or liabilities under or by reason of this Agreement.
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10.9 Assignability.
Neither this Agreement nor any of the parties’ rights hereunder shall be assignable by any party without the prior written consent of the other parties and any attempted assignment without such consent shall be void.
10.10 Waiver and Amendment.
Any term or provision of this Agreement may be waived at any time by the party, which is entitled to the benefits thereof. The waiver by any party of a breach of any provision of this Agreement shall not operate or be construed as a waiver of any subsequent breach. The parties may, by mutual agreement in writing, amend this Agreement in any respect. ModuLink and the Shareholders hereby acknowledge their intent that this Agreement includes as a party any holder of capital stock in ModuLink at the time of Closing. IDVV, ModuLink and the Shareholders therefore agree that this Agreement may be amended, without the further consent of any party to this Agreement, (i) to add as a new Shareholder any existing shareholder of ModuLink and (ii) to modify Annex A to reflect the addition of such shareholder.
10.11 Attorney’ Fees.
In the event of any action or proceeding to enforce the terms and conditions of this Agreement, the prevailing party shall be entitled to an award of reasonable attorneys’ and experts’ fees and costs, in addition to such other relief as may be granted.
10.12 Severability.
If any provision of this Agreement is held invalid or unenforceable by any court of competent jurisdiction, the other provisions of this Agreement will remain in full force and effect. Any provision of this Agreement held invalid or unenforceable only in part or degree will remain in full force and effect to the extent not held invalid or unenforceable.
10.13 Construction.
In executing this Agreement, the parties severally acknowledge and represent that each: (a) has fully and carefully read and considered this Agreement; (b) has or has had the opportunity to consult independent legal counsel regarding the legal effect and meaning of this document and all terms and conditions hereof; (c) has been afforded the opportunity to negotiate as to any and all terms hereof; and (d) is executing this Agreement voluntarily, free from any influence, coercion or duress of any kind. The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no rule of strict construction will be applied against any party.
[signature page follows]
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IN WITNESS WHEREOF, this Agreement has been executed by the parties hereto as of the day and year first above written.
IDVV:
INTERNATIONAL ENDEAVORS CORPORATION
By: /s/ FU, Wah
Name: FU, Wah
Title: Chief Executive Officer
MODULINK INVESTMENT LIMITED
By: /s/ AU-YEUNG, Sai Kit
Name: AU-YEUNG, Sai Kit
Title: Director
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MODULINK SHAREHOLDER:
/s/ TAM, Hin Wah Anthony
TAM, Hin Wah Anthony
Number of shares of ModuLink to be selling: 3,000
Number of Common Stock of IDVV to be receiving: 707,013,618
MODULINK SHAREHOLDER:
/s/ AU-YEUNG, Sai Kit
AU-YEUNG, Sai Kit
Number of shares of ModuLink to be selling: 1,500
Number of Common Stock of IDVV to be receiving: 353,506,809
MODULINK SHAREHOLDER:
/s/ FU, Wah
FU, Wah
Number of shares of ModuLink to be selling: 1,500
Number of Common Stock of IDVV to be receiving: 353,506,809
MODULINK SHAREHOLDER:
/s/ YEUNG, Hoi Sang
YEUNG, Hoi Sang
Number of shares of ModuLink to be selling: 700
Number of Common Stock of IDVV to be receiving: 164,969,845
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MODULINK SHAREHOLDER:
/s/ MOK, Yi Kwo
MOK, Yi Kwo
Number of shares of ModuLink to be selling: 600
Number of Common Stock of IDVV to be receiving: 141,402,724
MODULINK SHAREHOLDER:
/s/ MA, Ho Wai Ethan
MA, Ho Wai Ethan
Number of shares of ModuLink to be selling: 500
Number of Common Stock of IDVV to be receiving: 117,835,603
MODULINK SHAREHOLDER:
/s/ CHONG, Chun Yin
CHONG, Chun Yin
Number of shares of ModuLink to be selling: 500
Number of Common Stock of IDVV to be receiving: 117,835,603
MODULINK SHAREHOLDER:
/s/ POON, Ka Bo Louis Lois
POON, Ka Bo Louis Lois
Number of shares of ModuLink to be selling: 250
Number of Common Stock of IDVV to be receiving: 58,917,802
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MODULINK SHAREHOLDER:
/s/ LO, Ngai Man
LO, Ngai Man
Number of shares of ModuLink to be selling: 250
Number of Common Stock of IDVV to be receiving: 58,917,802
MODULINK SHAREHOLDER:
/s/ LAU, Lai Wah
LAU, Lai Wah
Number of shares of ModuLink to be selling: 300
Number of Common Stock of IDVV to be receiving: 70,701,362
MODULINK SHAREHOLDER:
/s/ LEE, Hui Meng
LEE, Hui Meng
Number of shares of ModuLink to be selling: 100
Number of Common Stock of IDVV to be receiving: 23,567,121
MODULINK SHAREHOLDER:
/s/ LEE, Kwok Chung
LEE, Kwok Chung
Number of shares of ModuLink to be selling: 200
Number of Common Stock of IDVV to be receiving: 47,134,242
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MODULINK SHAREHOLDER:
/s/ TSANG, Chiu Wah
TSANG, Chiu Wah
Number of shares of ModuLink to be selling: 200
Number of Common Stock of IDVV to be receiving: 47,134,242
MODULINK SHAREHOLDER:
/s/ LI, Ho Tak Herbert
LI, Ho Tak Herbert
Number of shares of ModuLink to be selling: 100
Number of Common Stock of IDVV to be receiving: 23,567,121
MODULINK SHAREHOLDER:
/s/ LAU, Shun Wai
LAU, Shun Wai
Number of shares of ModuLink to be selling: 100
Number of Common Stock of IDVV to be receiving: 23,567,121
MODULINK SHAREHOLDER:
/s/ CHEUNG, Tsz Kin Jimmy
CHEUNG, Tsz Kin Jimmy
Number of shares of ModuLink to be selling: 100
Number of Common Stock of IDVV to be receiving: 23,567,121
MODULINK SHAREHOLDER:
/s/ KWONG, Wan Keung
KWONG, Wan Keung
Number of shares of ModuLink to be selling: 100
Number of Common Stock of IDVV to be receiving: 23,567,121
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EXHIBIT A
CERTAIN DEFINITIONS
For purposes of the Agreement (including this Exhibit A):
Agreement. “Agreement” shall mean the Share Exchange Agreement to which this Exhibit A is attached (including all Disclosure Schedules and all Exhibits), as it may be amended from time to time.
Approved Plans. “Approved Plans” shall mean a stock option or similar plan for the benefit of employees or others, which has been approved by the shareholders of ModuLink
ModuLink Shares of Common Stock. “ModuLink Shares of Common Stock” shall mean the shares of common stock of ModuLink
Breach. There shall be deemed to be a “Breach” of a representation, warranty, covenant, obligation or other provision if there is or has been any inaccuracy in or breach of, or any failure to comply with or perform, such representation, warranty, covenant, obligation or other provision.
Certificates. “Certificates” shall have the meaning specified in Section 1.3 of the Agreement.
Closing. “Closing” shall have the meaning specified in Section 1.5 of the Agreement.
Closing Date. “Closing Date” shall have the meaning specified in Section 1.5 of the Agreement.
Code. “Code” shall mean the Internal Revenue Code of 1986 or any successor law, and regulations issued by the IRS pursuant to the Internal Revenue Code or any successor law.
Confidential Information. “Confidential Information” shall mean all nonpublic information disclosed by one party or its agents (the “Disclosing Party”) to the other party or its agents (the “Receiving Party”) that is designated as confidential or that, given the nature of the information or the circumstances surrounding its disclosure, reasonably should be considered as confidential. Confidential Information includes, without limitation (i) nonpublic information relating to the Disclosing Party’s technology, customers, vendors, suppliers, business plans, intellectual property, promotional and marketing activities, finances, agreements, transactions, financial information and other business affairs, and (ii) third-party information that the Disclosing Party is obligated to keep confidential.
Confidential Information does not include any information that (i) is or becomes publicly available without breach of this Agreement, (ii) can be shown by documentation to have been known to the Receiving Party at the time of its receipt from the Disclosing Party, (iii) is received from a third party who, to the knowledge of the Receiving Party, did not acquire or disclose such information by a wrongful or tortious act, or (iv) can be shown by documentation to have been independently developed by the Receiving Party without reference to any Confidential Information.
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Consent. “Consent” shall mean any approval, consent, ratification, permission, waiver or authorization (including any Governmental Authorization).
Disclosure Schedule Update. “Disclosure Schedule Update” shall have the meaning specified in Section 4.4 of the Agreement.
Entity. “Entity” shall mean any corporation (including any nonprofit corporation), general partnership, limited partnership, limited liability partnership, joint venture, estate, trust, cooperative, foundation, society, political party, union, company (including any limited liability company or joint stock company), firm or other enterprise, association, organization or entity.
Environmental Laws. “Environmental Laws” shall mean any Law or other requirement relating to the protection of the environment, health, or safety from the release or disposal of hazardous materials.
Environmental Permit. “Environmental Permit” means all licenses, permits, authorizations, approvals, franchises and rights required under any applicable Environmental Law or Order.
Equity Securities. “Equity Security” shall mean any stock or similar security, including, without limitation, securities containing equity features and securities containing profit participation features, or any security convertible into or exchangeable for, with or without consideration, any stock or similar security, or any security carrying any warrant, right or option to subscribe to or purchase any shares of capital stock, or any such warrant or right.
Exchange Act. “Exchange Act” means the United States Securities Exchange Act of 1934, as amended.
GAAP. “GAAP” shall mean United States Generally Accepted Accounting Principles, applied on a consistent basis.
Governmental Authorization. “Governmental Authorization” shall mean any:
(F) | permit, license, certificate, franchise, concession, approval, consent, ratification, permission, clearance, confirmation, endorsement, waiver, certification, designation, rating, registration, qualification or authorization that is issued, granted, given or otherwise made available by or under the authority of any Governmental Body or pursuant to any Law; or |
(b) right under any contract with any Governmental Body.
Governmental Body. “Governmental Body” shall mean any:
(F) | nation, principality, state, commonwealth, province, territory, county, municipality, district or other jurisdiction of any nature; |
(b) federal, state, local, municipal, foreign or other government;
(c) governmental or quasi-governmental authority of any nature (including any governmental division, subdivision, department, agency, bureau, branch, office, commission, council, board, instrumentality, officer, official, representative, organization, unit, body or Entity and any court or other tribunal); or
(d) individual, Entity or body exercising, or entitled to exercise, any executive, legislative, judicial, administrative, regulatory, police, military or taxing authority or power of any nature, including any court, arbitrator, administrative agency or commissioner, or other governmental authority or instrumentality.
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IDVV. “IDVV” shall have the meaning specified in the first paragraph of the Agreement.
IDVV Common Stock. “IDVV Common Stock” shall mean the shares of common stock of IDVV.
Indebtedness. “Indebtedness” shall mean any obligation, contingent or otherwise. Any obligation secured by a Lien on, or payable out of the proceeds of, or production from, property of the relevant party will be deemed to be Indebtedness.
Intellectual Property. “Intellectual Property” means all industrial and intellectual property, including, without limitation, all U.S. and non-U.S. patents, patent applications, patent rights, trademarks, trademark applications, common law trademarks, Internet domain names, trade names, service marks, service mark applications, common law service marks, and the goodwill associated therewith, copyrights, in both published and unpublished works, whether registered or unregistered, copyright applications, franchises, licenses, know-how, trade secrets, technical data, designs, customer lists, confidential and proprietary information, processes and formulae, all computer software programs or applications, layouts, inventions, development tools and all documentation and media constituting, describing or relating to the above, including manuals, memoranda, and records, whether such intellectual property has been created, applied for or obtained anywhere throughout the world.
Knowledge. A corporation shall be deemed to have “knowledge” of a particular fact or matter only if a director or officer of such corporation has, had or should have had knowledge of such fact or matter.
Laws. “Laws” means, with respect to any Person, any U.S. or non-U.S. federal, national, state, provincial, local, municipal, international, multinational or other law (including common law), constitution, statute, code, ordinance, rule, regulation or treaty applicable to such Person.
Lien. “Lien” shall mean any mortgage, pledge, security interest, encumbrance, lien or charge, right of first refusal, encumbrance or other adverse claim or interest of any kind, including, without limitation, any conditional sale or other title retention agreement, any lease in the nature thereof and the filing of or agreement to give any financing statement under the Uniform Commercial Code of any jurisdiction and including any lien or charge arising by Law.
Material Adverse Effect. “Material Adverse Effect” means any change, effect or circumstance which, individually or in the aggregate, would reasonably be expected to (a) have a material adverse effect on the business, assets, financial condition or results of operations of the affected party, in each case taken as a whole or (b) materially impair the ability of the affected party to perform its obligations under this Agreement and the Transaction Agreements, excluding any change, effect or circumstance resulting from (i) the announcement, pendency or consummation of the transactions contemplated by this Agreement, (ii) changes in the United States securities markets generally, or (iii) changes in general economic, currency exchange rate, political or regulatory conditions in industries in which the affected party operates.
Material Contract. “Material Contract” means any and all agreements, contracts, arrangements, understandings, leases, commitments or otherwise, providing for potential payments by or to the company in excess of $1,000, and the amendments, supplements and modifications thereto.
ModuLink Disclosure Schedule. “ModuLink Disclosure Schedule” shall have the meaning specified in introduction to Article II of the Agreement.
Order. “Order” shall mean any award, decision, injunction, judgment, order, ruling, subpoena, or verdict entered, issued, made, or rendered by any Governmental Body.
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Ordinary Course of Business. “Ordinary Course of Business” shall mean an action taken by ModuLink if (i) such action is taken in normal operation, consistent with past practices, (ii) such action is not required to be authorized by the Shareholders, Board of Directors or any committee of the Board of the Directors or other governing body of ModuLink and (iii) does not require any separate or special authorization or consent of any nature by any Governmental Body or third party.
Permitted Liens. “Permitted Liens” shall mean (a) Liens for Taxes not yet payable or in respect of which the validity thereof is being contested in good faith by appropriate proceedings and for the payment of which the relevant party has made adequate reserves; (b) Liens in respect of pledges or deposits under workmen’s compensation laws or similar legislation, carriers, warehousemen, mechanics, laborers and materialmen and similar Liens, if the obligations secured by such Liens are not then delinquent or are being contested in good faith by appropriate proceedings conducted and for the payment of which the relevant party has made adequate reserves; and (c) statutory Liens incidental to the conduct of the business of the relevant party which were not incurred in connection with the borrowing of money or the obtaining of advances or credits and that do not in the aggregate materially detract from the value of its property or materially impair the use thereof in the operation of its business.
Person. “Person” shall mean any individual, Entity or Governmental Body.
Pre-Closing Period. “Pre-Closing Period” shall mean the period commencing as of the date of the Agreement and ending on the Closing Date.
Proceeding. “Proceeding” shall mean any action, suit, litigation, arbitration, proceeding (including any civil, criminal, administrative, investigative or appellate proceeding and any informal proceeding), prosecution, contest, hearing, inquiry, inquest, audit, examination or investigation, commenced, brought, conducted or heard by or before, or otherwise has involved, any Governmental Body or any arbitrator or arbitration panel.
Representatives. “Representatives” of a specified party shall mean officers, directors, employees, attorneys, accountants, advisors and representatives of such party, including, without limitation, all subsidiaries of such specified party, and all such Persons with respect to such subsidiaries. The Related Persons of ModuLink shall be deemed to be “Representatives” of ModuLink, as applicable.
SEC. “SEC” shall mean the United States Securities and Exchange Commission.
Securities Act. “Securities Act” shall mean the United States Securities Act of 1933, as amended.
Taxes. “Taxes” shall mean all foreign, federal, state or local taxes, charges, fees, levies, imposts, duties and other assessments, as applicable, including, but not limited to, any income, alternative minimum or add-on, estimated, gross income, gross receipts, sales, use, transfer, transactions, intangibles, ad valorem, value-added, franchise, registration, title, license, capital, paid-up capital, profits, withholding, payroll, employment, unemployment, excise, severance, stamp, occupation, premium, real property, recording, personal property, federal highway use, commercial rent, environmental (including, but not limited to, taxes under Section 59A of the Code) or windfall profit tax, custom, duty or other tax, governmental fee or other like assessment or charge of any kind whatsoever, together with any interest, penalties or additions to tax with respect to any of the foregoing; and “Tax” means any of the foregoing Taxes.
Tax Group. “Tax Group” shall mean any federal, state, local or foreign consolidated, affiliated, combined, unitary or other similar group of which ModuLink is now or was formerly a member.
Tax Return. “Tax Return” shall mean any return, declaration, report, claim for refund or credit, information return, statement or other similar document filed with any Governmental Body with respect to Taxes, including any schedule or attachment thereto, and including any amendment thereof.
Transaction Agreements. “Transactional Agreements” shall mean this Agreement and any agreement or document to be executed pursuant to this Agreement.
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ANNEX A
Stockholder |
Number of Shares of Common Stock of ModuLink Held |
Number of Shares of Common Stock of ModuLink To Be Exchanged |
Number of Shares of Common Stock of IDVV To Be Issued |
TAM, Hin Wah Anthony |
3,000 |
3,000 |
707,013,618 |
AU-YEUNG, Sai Kit |
1,500 |
1,500 |
353,506,809 |
FU, Wah |
1,500 |
1,500 |
353,506,809 |
YEUNG, Hoi Sang |
700 |
700 |
164,969,845 |
MOK, Yi Kwo |
600 |
600 |
141,402,724 |
MA, Ho Wai Ethan |
500 |
500 |
117,835,603 |
CHONG, Chun Yin |
500 |
500 |
117,835,603 |
POON, Ka Bo Louis Lois |
250 |
250 |
58,917,802 |
LO, Ngai Man |
250 |
250 |
58,917,802 |
LAU, Lai Wah |
300 |
300 |
70,701,362 |
LEE, Hui Meng |
100 |
100 |
23,567,121 |
LEE, Kwok Chung |
200 |
200 |
47,134,242 |
TSANG, Chiu Wah |
200 |
200 |
47,134,242 |
LI, Ho Tak Herbert |
100 |
100 |
23,567,121 |
LAU, Shun Wai |
100 |
100 |
23,567,121 |
CHEUNG, Tsz Kin Jimmy |
100 |
100 |
23,567,121 |
KWONG, Wan Keung |
100 |
100 |
23,567,121 |
Total |
10,000 |
10,000 |
2,356,712,066 |
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Exhibit 10.6
GAC Energy Technology Co., Ltd.
2024 Distributor Cooperation Agreement
1 |
本协议于 2025 年 1 月 1 日在中国-------由双方在平等互利基础上达成,按双方同意的
下列条款发展业务关系:
This agreement is made and entered into by and between the parties concerned on 1st Jan, 2025, in China on the basis of equality and mutual benefit to develop business on terms and conditions mutually agreed upon as follows:
1.协议双方 The Parties Concerned
甲方:广汽能源科技有限公司
乙方: 领丰创新科技有限公司
Party A: GAC Energy Technology Co., Ltd.
Party B: Modulink InnoTech Ltd.
2. 授权 Authorization
2.1甲方授权乙方为本协议授权区域和平台内的 代理商,乙方负责广汽能源品牌在授权范围内的品牌建立和传播、维护,并为第三条所列商品向授权范围内的顾客进行销售。
Party A hereby appoints Party B as its Distributor in the territory and platform stipulated in this agreement to be responsible for GACE brand establishment, spread and maintenance, in the meanwhile, Party B shall also make sales for the commodities stipulated in Article 3 to customers in the authorizing scope.
2.2授权范围:仅限于,香港和英国 国家和地区。如乙方有其他销售计划,需经甲方同意后方可进行销售,否则视为违约。
In, Hong Kong SAR and United Kingdom . If Party B has other sales plan, it must be agreed by Party A before selling, otherwise it will be regarded as a breach of the agreement.
3. | 经营商品 Commodity |
甲方提供的广汽能源/埃安品牌的产品,包括7kW交流桩系列产品、120kW(30kW/60kW/180kW/240kW)直流桩系列产品、便携式充电枪、放电枪等。
The GACE/Aion brand products provided by Party A, including 7 kW AC charger series, 120kW(30kW/60kW/180kW/240kW) DC charger series, Portable Charger, Discharger, etc.
4. | 双方权利义务 Rights and obligations of the Parties |
4.1 甲方权利义务
Party A's rights and obligations
4.1.1甲方有权对乙方的产品经销行为进行管控,一旦乙方行为违背合同要求,甲方有权终止合同,乙方承担全部责任。
Party A has the right to regulate Party B's product distribution behavior, once Party B's behavior is contrary to the requirements of the agreement, Party A has the right to terminate the agreement, and Party B bears full responsibility.
4.1.2经甲方同意的,乙方可在授权区域开展各项活动,甲方将不定时配合乙方开展活动。
With the consent of Party A, Party B can carry out various activities in the authorized area, and Party A will cooperate with Party B to carry out activities from time to time.
4.1.3甲方应积极协助乙方开展工作,并及时地给予指导和各方面资源扶持,包括及不限于相关产品的质保、研发、商务、售后、培训等一系列协助服务。
Party A shall actively assist Party B to carry out its work and give timely guidance and support in all aspects of resources, including warranty, research and development, business, after-sales, training and a series of assisting services.
4.1.4甲方对乙方反馈的产品销售相关问题及时给予答复并提出解决方案。
Party A shall give timely response to Party B's feedback on product sales related issues and propose solutions.
4.1.5甲方保证所提供的产品质量。如产品使用过程中造成损害,经双方认可的权威机构检验,确因甲方产品质量问题而造成的损失,甲方承担相关的赔偿责任。
Party A guarantees the quality of the products provided. If there is damage caused using the product, and by the authoritative institutions’ inspection recognized by both parties, the loss caused is from product quality problems of Party A, Party A shall bear the corresponding compensation responsibility.
4.1.6如乙方在相应的授权期间内未通过考核,则甲方有权终止本合同,考核指标详见备注。
If Party B fails to pass the assessment within the corresponding authorization period, Party A has the right to terminate this agreement, and the assessment indexes are detailed in the Notes.
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4.2乙方的权利和义务:
Party B's rights and obligations
4.2.1有独立法人资格,有独立的经营与决策能力。
Party B is an independent legal person and has independent operation and decision-making ability.
4.2.2负责尽最大努力向客户宣传、推广甲方所提供的产品,并向顾客提供优质、高效的服务。
Party B is responsible for maximizing its effort to publicize and promote the products provided by Party A to customers, and to provide customers with high-quality and efficient service.
4.2.3乙方遵守本合同之规定,年累计销售和考核指标完成率大于100%可享受甲方奖励。
Party B shall comply with the provisions of this agreement and enjoy Party A's rewards for the annual cumulative sales and assessment index completion rate of more than 100%.
4.2.4乙方必须严格遵守甲方相应制定的销售、营销定价政策和原则。
Party B must strictly abide by Party A's sales and marketing price policies and principles.
4.2.5乙方在销售及推广宣传的过程中,经甲方同意,可以使用甲方商标在授权区域内进行各种形式的销售服务活动。乙方应保护甲方产品品牌的声誉形象,不得发生有损产品品牌的行为。
Party B in the process of sales and promotion and publicity, with the consent of Party A, has the right to use Party A's trademark in the authorized area for various forms of sales and service activities. Party B shall protect the reputation and image of Party A's product brand, and shall not engage in behaviors detrimental to the product brand.
4.2.6在甲方授权产品类别内,乙方能销售甲方产品。乙方进行全平台,全网络,自媒体的相应推广,所有宣传内容和信息应事先经过甲方确认或由甲方提供相应产品推广资料,如有任何调整应事先告知甲方并根据甲方要求进行改善。
In Party A's authorized product categories, Party B can sell Party A's products. Party B carries out the corresponding promotion on all platforms, networks and self-media, and all publicity contents and information shall be confirmed by Party A in advance, and Party A shall be informed in advance of any adjustment and Party B shall improve according to Party A's requirements.
5. 采购目标(基于Exw价格) Purchase Target(Base on Exw Price)
…..(Confidential)….
6. 价格与支付 Price and Payment Terms
…..(Confidential)….
6.3 交货 Delivery
6.3.1甲乙双方所确认的订单,原则上不允许取消,并应如期出货。
All orders confirmed by both parties should not be cancelled in principle and should be shipped on time.
6.3.2甲方交货时间以每笔订单为准。如果甲方不能按时交货,从订单约定的交货日期起(不包含交货日期当天)10个工作日后乙方有权取消订单,甲方应退还乙方该笔订单所支付的订金。该笔退还订金在乙方下笔支付的货款中抵扣。
The delivery time of goods from Party A will be subject to each sales order. If Party A fails to deliver the goods on time, 10 working days since the delivery date on the order (excluding on the day of the delivery date), Party B has the right to cancel the order, and Party A shall refund the deposit paid by Party B. The refund of the deposit can be deducted from next payment made by Party B.
6.4甲方银行账户信息如下:
The Bank information of Party A is as followed:
…..(Confidential)….
6.5本协议生效后并在产品认证通过后10个工作日内: 乙方向甲方支付人民币拾万元做为前期合作的货款,甲方根据乙方的需求安排发货。
Within 10 working days after the effective date of this agreement and the products are certified, Party B shall pay Party A 100,000 Yuan (CNY)as the initial payment for products for the early cooperation, Party A shall arrange shipment of products in accordance with Party B’s needs.
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7. 质保服务 Warranty Service
7.1甲方为所供设备提供质保服务:交流桩产品整机贰年质保,直流桩产品整机壹年质保。
Party A provides warranty service for the products supplied: two-year warranty for the whole machine of AC products and one-year warranty for the whole machine of DC products.
7.2设备质保期自设备安装验收合格之日开始计算质保期。
The warranty period of the equipment shall be calculated from the date of acceptance of equipment installation.
7.3质保期内,对于设备正常使用出现的损坏,甲方提供免费维修服务;对于非正常使用、第三方原因或本合同约定的不可抗力造成的设备损坏,甲方进行积极修复,但维修费用和零部件采购费用由乙方承担。
During the warranty period, Party A shall provide free maintenance service for the damages arising from the normal use of the equipment; for the damages of the equipment caused by abnormal use, third party reasons or force majeure as agreed in the agreement, Party A shall actively make repairs, but the maintenance cost and the purchasing cost of spare parts shall be borne by Party B.
7.4质保期满后,双方可就有关设备的修理服务另行签订服务协议。
After the expiration of the warranty period, both parties may sign a separate service agreement on the repair service of the products concerned.
7.5 质保期内乙方或使用方不得撕毁、替换、破坏原厂设备条码及设备防撕标签,设备出现无原厂设备条码、条码信息不完整、防撕标签破损情况,甲方有权不承担该设备的质保服务。
During the warranty period, Party B or the user shall not tear, replace, or destroy the original equipment barcode and equipment tear-proof labels, and Party A shall have the right not to undertake the warranty service of the equipment if there is no original equipment barcode, incomplete barcode information, or broken tear-proof labels.
8. 商情共享 Market communication
…..(Confidential)….
9. 知识产权 Intellectual Property
…..(Confidential)….
…..(Confidential)….
10. 保密约定 Non-Disclosure Promise
10.1 乙方应对在本协议签订履行过程中所知悉的甲方商业秘密承担保密义务,除非有明显证据证明该等信息已属于公知信息或得到甲方书面授权。该等保密义务在本协议终止后继续有效。
Party B should take the non-disclosure obligation for Party A’s commercial secrets which Party B learns during the subscription and performance of the agreement, unless Party B has obvious evidences to prove that these information are the public information or Party B gets the approval by written form from Party A. This non-disclosure obligation is still valid after this agreement termination.
10.2 甲方商业秘密包括但不限于以下内容:
1) | 本协议内容、产品供价、供货数量、销售数量、促销方案、销售计划、各项支持政策等。 |
2) | 其它不为公众所知悉的内容。 |
Party A’s commercial secrets are including but not limited to the followings:
1) | The content of this agreement, Prices of products, Quantity of goods supply, Sales volume, Promotion programs, Distribution plans, All support policies, etc. |
2) | Others which are not the public information. |
10.3 乙方违反本保密约定的,应按10万元人民币/次向甲方支付罚金。
If Party B has the violation for Article 10(Non-Disclosure Promise), Party B should pay RMB 100,000 Yuan per time to Party A as default fine.
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11. 协议有效期 Validity of Agreement
11.1 本协议经甲乙双方签署后生效,有效期为贰年,从 2025 年 1 月 1 日至 2026年 12 月 31 日,如双方无异议,自动续约,直至一方提出终止。
This agreement shall come into force upon being signed by both parties, and shall continue one year from September 15th, 2024 to September 14th, 2026 If there is no objection from either party, the contract is automatically renewed until termination is raised by either party.
11.2 本协议约定的各项附件(如有),是本协议的组成部分,与本协议具有同等的法律效力。
All the attachments (if any) stipulated in this agreement are the components of this agreement, and they have same law validity as this agreement.
12. 违约责任 Liability of Breaching of Agreement
12.1 因乙方逾期付款、通知不及时、配合工作不到位等任何乙方原因造成产品交期无法满足或引起甲方其他违约行为的,甲方不承担违约责任。
Party A shall not be liable for any breach of agreement if the delivery date of the products cannot be met or any other breach of agreement by Party A is caused by Party B's late payment, untimely notification, lack of cooperation and other reasons.
12.2 合同签订后,未经甲方同意,乙方不得部分或全部变更、取消供货货物,否则甲方退还乙方所支付款项时有权扣除甲方因此产生的成本、损失等。
After the signing of the agreement, Party B shall not change or cancel the supply of goods partially or completely without Party A's consent, otherwise Party A shall have the right to deduct Party A's costs and losses incurred at the time of the return of the payment made by Party B.
12.3 乙方未按合同约定按时向甲方支付合同款项的,每迟延一个自然日,应当按延迟付款部分的万分之五向甲方支付违约金。
If Party B fails to pay the agreement payment to Party A on time as agreed in the agreement, Party B shall pay liquidated damages to Party A according to five ten-thousandths of the part of the delayed payment for each natural day of delay.
12.4 甲方给乙方交货,在收到乙方货款后,甲方安排相关每次货物发货时间,并及时同步给乙方确认,如有变动及时同步给乙方,若确认后发货时间延迟10个工作日以上,并且没有得到乙方同意,则乙方有权取消订单,甲方全额退回货款。
.Party A will deliver the goods to Party B. After receiving the payment from Party B, Party A will arrange the delivery time of the goods and confirm with Party B in time. Any changes shall be synchronized to B Party in a timely manner, if the shipment time is delayed by more than 10 working days after confirmation and without B Party's consent, B Party is entitled to cancel the order and A Party returns the full amount of the purchase price.
12.5 乙方仅可在甲方指定区域销售本合同指定的产品,且该产品的销售单价必须遵守甲方的市场指导价(以甲方书面出具的价格指导函为准),向下波动范围不得超过市场指导价的10%。乙方在进行市场营销时,如需要可以凭情况说明向甲方申请特价。甲方根据参与竞争各方的具体情况,确定是否批准特价申请,并以书面方式通知乙方。乙方不得在没有获得甲方书面价格批文的情况下,在甲方指定销售区域外销售上述产品,或以低于指导价90%的价格销售产品,否则甲方有权不予供货,扣除全部保证金且要求乙方支付违反本款销售的每台设备2000元的罚款。由此造成的包括但不限于对甲方商誉影响在内的一切损失由乙方承担。
Party B can only sell the products specified in this agreement in the area designated by Party A, and the unit price of the products must comply with Party A's market guide price (subject to the price guidance letter issued by Party A in writing), and the down fluctuation range shall not be more than 10% of the market guide price. Party B can apply to Party A for special price with the information statement if necessary, in marketing. Party A will determine whether to approve the special price application based on the specific circumstances of the competing parties and notify Party B in writing. Party B shall not sell the above products outside of Party A's designated sales area without Party A's written price approval, or sell the products at a price lower than 90% the guide price, or Party A shall have the right to withhold the supply of the products, deduct the entire deposit and require Party B to pay a fine of RMB 2,000 for each unit of the products sold in violation of this paragraph. Party B shall bear all losses caused by this, including but not limited to the impact on Party A's goodwill.
12.6 本合同履行期间,任一方不履行本合同约定的义务的,经通知纠正后十五个自然日内仍未纠正的,因违约方造成的守约方损失,由违约方向守约方承担赔偿责任。
During the period of performance of this agreement, if either party fails to fulfill the obligations agreed in this agreement, and if such failure is not corrected within fifteen natural days after notification of correction, the defaulting party shall be liable to the defending party for any loss caused by the Party in breach of this agreement.
5 |
12.7 违约方须承担守约方为维护本合同项下权益而产生的费用,包括但不限于律师费、诉讼费、保全费、保全手续/保险费、调查取证费、公证费、鉴定费、差旅费、执行费及其他为获得违约赔偿支出的一切费用。
The defaulting party shall bear the costs incurred by the defending party to safeguard its rights and interests under this agreement, including but not limited to attorney's fees, litigation costs, preservation costs, preservation procedures/insurance costs, investigation and collection of evidence, notary fees, appraisal fees, travel costs, execution costs and any other costs incurred in order to obtain compensation for the breach of agreement.
13. 协议的终止 Agreement Termination
13.1在以下情形下,甲方均有权解除合同、终止对乙方的经销商授权,同时取消所有未支付的市场支持费用及其他:
1) | 乙方出现本协议第四条约定的行为且符合解除合同条件的。 |
2) | 乙方违反本协议第九条、第十条之约定, 情节严重的(以甲方认定为准)。 |
3) | 乙方出现其它违约情形,或者损害甲方利益的行为,经甲方书面通知后仍不改正的。 |
Party A has the right to terminate this agreement, cease the authorization of Party B’s distribution and cancel all unpaid A&P and others:
1) | Party B has the behaviors stipulated in Article 4 and meets the requirement of agreement termination. |
2) | Party B has the violations for Article 9 and 10, and the process is very harmful (decided by Party A). |
3) | Party B has other violations, or behaviors of damaging Party A’s interest, Party B wouldn’t correct after notice by written form from Party A. |
13.2任何一方如果破产、向第三方承担巨额债务、遭受任何形式的经营危机的,另一方有权通知对方终止协议。
If either Party goes bankrupt, assumes huge debts to a third party, or suffers from any form of business crisis, the other Party has the right to notify the other Party to terminate the agreement.
13.3协议终止后,甲乙双方应共同协商,并就乙方库存产品、售后服务、广告等事项签订相关协议。
When the agreement is terminated, Party A and Party B will discuss and sign another agreement/Memo on the issues of inventory, after-sales service, A&P etc.
13.4 任何一方发出终止协议通知的,可以通过快递或传真、电子邮件的形式通知另一方。
Either party shall send the notice of termination to the other party by rapid courier, fax or e-mail.
14. 不可抗力 Force Majeure
由于水灾、火灾、地震、干旱、战争或协议一方无法预见、控制、避免和克服的其他事件导致不能或暂时不能全部或部分履行本协议,该方不负责任。但是,受不可抗力事件影响的一方须尽快将发生的事件通知另一方,并在不可抗力事件发生15天内将有关机构出具的不可抗力事件的证明寄交对方。
Either party shall not be held responsible for failure or delay to perform all or any part of this agreement due to flood, fire, earthquake, draught, war or any other events which could not be predicted, controlled, avoided or overcome by the relative party. However, the party affected by the event of Force Majeure shall inform the other party of its occurrence in writing as soon as possible and thereafter sends a certificate of the event issued by the relevant authorities to the other party within 15 days after its occurrence.
15. 仲裁 Arbitration
因本协议的签订及履行所发生的一切争议应通过友好协商解决。如协商不能解决争议,则应将争议提交中国广州仲裁委员会,依据其仲裁规则进行仲裁。仲裁裁决是终局的,对双方都有约束力。
All disputes arising from the subscription and performance of this agreement shall be settled through friendly negotiation. Should no settlement be reached through negotiation, the case shall then be submitted for arbitration to Guangzhou Arbitration Commission and the rules of this Commission shall be applied. The award of the arbitration shall be final and binding upon both parties.
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16. 法律适用 Law Application
本协议的签订、履行、争议解决及其它相关的一切事宜均适用中华人民共和国法律。
This agreement subscription, performance, disputes settlement and all other related issues will be governed and interpreted by in accordance with the Peoples Republic of China law.
17. 本合同的签订地点 Agreement Signing Place
本合同的签订地点为中华人民共和国广东省广州市。
Agreement signing place is Guangzhou, Guangdong, China.
18. 其它 Others
18.1 本合同中英文表述,发生歧义时以中文为准。
This agreement is described by Chinese and English language versions. In case of discrepancy, the Chinese version shall prevail.
18.2 本协议一式叁份,甲方持贰份,乙方持壹份,具有同样法律效应,经双方盖章后生效.
This agreement is printed in three original copies, which Party A holds two copies and Party B holds one copy, with the same legal effect, and will become effective after stamp by both of Parties.
18.3 协议中所提到的书面形式,包括电子邮件、传真、信函等。
The written form mentioned in this agreement is including e-mail, fax, letter, etc.
18.4 双方的联系信息如下,如果出现变化,一方应及时通知另一方,该通知自到达另一方时生效。
The contact information of both parties are as followings, if any changes of them occur, one party should notice the other party on time, this notice will be valid when it reaches the other party.
甲方:
联系人:…..(Confidential)….
地址:…..(Confidential)….
电话:…..(Confidential)….
邮箱:…..(Confidential)….
乙方:
联系人: 传华
地址:九龙官塘鸿图道26号威登中心6楼602室
电话:+852 3188 2012
邮箱:will.fu@modulinktech.com
Party A:
Name: …..(Confidential)….
Tel: …..(Confidential)….
E-mail: …..(Confidential)….
Party B:
Contact Person: Will Fu
Address: Unit 2, 6/F, Westin Centre, 26 Hung To Road, Kwun Tong, KLN, HK
Tel: +852 3188 2012
E-mail:备注:will.fu@modulinktech.com
Note:
…..(Confidential)….(以下无正文)
(This page below is intentionally left blank)
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Exhibit 10.7
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Terms and Conditions of Works Order
1. General Information of the Subcontractor
1.1 | Name of Contract Person: Anthony Tam | |
1.2 | Position: Managing Director | |
1.3 | Tel: 6818 3348 | |
1.4 | Email Address: anthony.tam@zenithpms.com | |
1.5 | Business Registration (“BR”) No.: 73271026-000-08-21-A | |
1.6 | Expiry Date of BR: 12 August 2022 |
2. | Scope of the Works Order |
2.1 | The Subcontractor shall design, supply, fabricate and installation of the structure, the fitting out works and building services works for the Project Manager’s main site office in accordance with Particular Specification Clauses 1.49, 1.108, Appendix 1.12 and Appendix 1.16A and Appendix 1.16B, and comply with all requirements specified in this Works Order up to the satisfaction of the Contractor, the Project Manager and the Employer. | |
2.2 | For the sake of clarity, the design shall base on the attached approved seating plan shown in Annex J. | |
2.3 | Based on Items 2.1 and 2.2, the Subcontractor shall provide all necessary resources including labour, tools, materials, plant equipment and supervisor for completion of the subcontract works stated in this Works Order. | |
2.4 | For the Works Matrix in accordance with PSA 1.12, the demarcation of the Subcontractor’s responsibility is clarified in Annex D. |
3. | Period for Completion of the Works Order |
3.1) | Tentative commencement and completion date shall be 15 October 2021 and 31 March 2022 respectively. | |
3.2) | Maintenance period: 18 months after completion and handover of the office for occupation and use. |
4. | Documents Forming Part of the Works Order |
4.1 | Annex A - Particulars of Main Contract | |
4.2 | Annex B - Schedule to the Article of Agreement & additional conditions of contract | |
4.3 | Annex C - Bill of Quantities | |
4.4 | Annex D - Works Matrix | |
4.5 | Annex E - Extracted from the Main Contract | |
4.6 | Annex F - Safety Requirements | |
4.9 | Annex I - Declaration Form of Ethical Commitments and Confidentiality | |
4.10 | Annex J - Drawings | |
4.11 | Annex K - Responsibilities Matrix |
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5. | Method of Measurement |
Lump Sum fixed price contract in accordance with the mechanism stated in the Works Order.
6. | Payment Term |
To be paid within 40 days after the Subcontractor’s submission of invoice/interim payment application.
7. | The Price |
7.1 | Unless otherwise specified in this Works Order, all items, rates, sums, amounts and/or prices (“WO Prices”) contained herein shall remain firm, fixed and unchanged throughout the entire periods of the Main Contract and the Subcontractor shall not be entitled to any adjustment of the said WO Prices due to any fluctuation in the costs of labour, plant, equipment, materials and required resources employed and used in execution of this Works Order. The WO Prices shall include all costs of preliminaries, labour, plant, equipment, materials, temporary and permanent works, transport to and from the Site and/or the working areas, liabilities, obligations, establishment charges, administration, overheads, profit, and risks, and any other costs which are required and involved for commencement, execution, completion and maintenance of the works of this Works Order. In other words, the WO Prices shall include for the works being executed and shall be deemed to have covered all works which may be required and necessitated for the complete provision, execution and maintenance of the works of Works Order as it may be specifically required and/or reasonably inferred by the Main Contract in connection with this Works Order and up to the satisfaction of the Contractor. | |
7.2 | For the Works Order of daywork basis, the Subcontractor shall submit all daywork records (in the format and form agreed by the Contractor) to the Contractor for checking and verification within 3 working days from the date of carrying out the works, otherwise the Contractor may refuse to check and verify the records for payment purpose. Notwithstanding the signatures by the Contractor for those verified records, the records are subject to rectification and amendment by the Contractor if any discrepancy or inconsistency is found based on other documents. Further, for payment certification purpose, the Contractor shall verify, value and certify the overtime working payment based on the overtime records generated by face recognition, smart-card or other electric system, or the Contractor’s contemporary overtime record if the said system record is not available due to reasonable reason(s). | |
7.3 | Where the item(s) are marked as “Provisional” or “Optional” in the Bills of Quantities, Schedule of Rates, and/or pricing documents of the Subcontract, the final quantities of the Subcontract Works shall “Provisional” or “Optional” shall only be commenced by the Subcontractor upon receiving any instruction by the Contractor for confirmation. | |
7.4 | The Contractor shall at his sole discretion delete any item(s) and/or Subcontract Works marked as ” Provisional” and/or “Optional” within the Bills of Quantities, Schedule of Rates and/or pricing documents of the Subcontract in whole or in part from the Subcontract and award to any other parties for execution and completion. Accordingly, the Subcontractor shall be deemed to have allowed in the Subcontract Price all such costs and times associated with such deletion of Provisional and/or Optional items in whole or in part by the Contractor from the Subcontract. |
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8. | Retention Money: |
8.1 | 5% of all certified amount shall be held by the Contractor. Limit of retention money to be 2.5% of the total final Price to the Subcontractor. | |
8.2 | Release of retention monies |
8.1 | 50% of the retention money being withheld to be released within 40 working days after completion of the works stated in this Works Order up to the satisfaction of the Contractor. | |
8.2 | Balance of retention money being withheld to be released 40 days after the Contractor’s receipt of the final part of the retention monies under the Main Contract paid by the Employer under the Main Contract. |
9 | Liquidated Damages |
Not applicable.
10 | Insurance |
10.1 | The Employer or the Contractor shall only provide the following insurance policies: |
10.1.1 | Contractors’ All Risks Insurance, | |
10.1.2 | Third Party Liability Insurance, and | |
10.1.3 | Employees’ Compensation Insurance |
10.2 | Details of the above insurance policies are available for inspection at the Contractor’s office. | |
10.3 | The Subcontractor’s attention is drawn to those provisions (including without limitation) in relation to non-insurable risks, exclusions, excesses, deductibles, advance payment, outlaying expenses, legal costs, and other risks which are not covered under the Contractor’s existing insurance policies. Further, Employees’ Compensation Insurance shall not cover any self-employed person. All self-employed person at any tiers shall not be allowed to work on the Site and/or working areas unless they are covered by separate personal insurance policies which shall be submitted to the Contractor for prior approval. | |
10.4 | If the Subcontractor considers that the Employer or the Contractor’s procured insurance policies are not sufficient to cover all risks under this Works Order, the same shall procure, effect and maintain its own insurance policies up to its expected coverage at his own costs and expenses. | |
10.5 | Any other insurance policies necessary for the works in connection the Works Order and those self-employed persons as aforesaid shall be deemed to be allowed in the WO Prices. | |
10.6 | The Subcontractor shall provide the following insurance: |
1) | Professional Indemnity Insurance in accordance with Additional Condition of Contract Clause F5, F6, F7A and Appendix K of the main contract. | |
2) | all constructional plant, to the full replacement value covering all loss and damage to all plant, equipment and machinery used in connection with the execution of the Subcontract Works in the joint names of the Contractor and the Subcontractor. | |
3) | All plant, equipment and materials for incorporation into the Subcontract Works during transportation until deliver to the Site. |
11 | Safety & Environmental Requirements |
Whilst the Subcontractor shall comply with all requirements stipulated under the Main Contract, Ordinance and laws, the Subcontractor shall also fulfill the safety regulations and the environmental requirements specified by the Contractor.
12 | Facilities to be Provided by the Contractor |
Not applicable
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13 | General Conditions |
13.1 | Words, terms, phrases and express ions contained herein shall carry the same interpretations and definitions as assigned to them in the Main Contract unless this Works Order provides otherwise. | |
13.2 | The Subcontractor shall execute and carry out the works of this Works Order:- |
13.2.1 | in accordance with the Con tractor’s programs, direction and instructions ( which may be required to be revised at any time in order to suit the actual site situation and conditions) up to the satisfaction of the Contractor; | |
13.2.2 | in a timely manner in accordance with the requirements of this Works Order and/or the Main Contract in connection with the same; and | |
13.2.3 | at such times and in such manner as to ensure that the execution of this Works Order has completed and discharged all the Contractor’s obligations under the Main Contract in connection with the same. |
13.3 | The Contractor is empowered to issue any instruction, variation order, compensation events, change, direction, and other decision under this Works Order in order to discharge his obligations under the Main Contract. In this regard, the Subcontractor shall comply with the same without delay. |
13.4 | In the event that the Con tractor advances the previous fixed date for completion or specified degree of completion of the works of this Works Order or any part thereof or requires the Subcontractor to take steps to expedite progress of the works of this Works Order, then the Subcontractor shall take all such necessary steps to enable the Contractor to comply with his obligations under the Main Contract, and no adjustment shall be made to the WO Prices in respect thereof. |
13.5 | It shall be a condition precedent to the Subcontractor’s right to an extension of time and additional payment claim that the Subcontractor shall have given written notice and in accordance with the notice requirements stipulated in the Main Contract and/or the Works Order. For those delaying and related events specified in the Main Contract, the Subcontractor shall issue the said notice to the Contractor in good time for consideration and where the Contractor considers appropriate submit to the Project Manager and/or the Supervisor any claim for extension of time and additional payment, together with all substantiation required by the Main Contract for granting extension of time and additional payment caused by those delaying or related events. For the sake of clarity, the Subcontractor shall not have the right or entitlement of any extension of time for completion of the works of this Works Order affected by inclement weather and/or weather conditions, and any other events precluded from the Main Contract. The Subcontractor shall not be entitled to any greater relief in terms of time or money than the Contractor is successful in recovering under the Main Contract. | |
13.6 | Notwithstanding any provision of this Works Order, without prejudice to any rights and remedies of the Contractor, and for any reason which shall include the default of the Subcontractor in the late commencement of the works of this Works Order, the slip in program, poor progress of the works, poor site management, poor interface management, lack of resources, poor quality of works, defective works, poor safety records, poor environmental records and the lack of improvements of the performance despite of any written warning of the Contractor to the Subcontractor, the Contractor may at any time and at its sole discretion terminate this Works Order by giving the Subcontractor a 3 calendar days’ advance notice of “Notice of Termination”. After expiry of the said notice period, the issued Notice of Termination has been served by the Contractor to the Subcontractor who shall be deemed to have repudiated this Works Order. | |
13.7 | The Subcontractor shall throughout the progress of the works of this Works Order take full responsibility for the adequate stability and safety of all operations. | |
13.8 | As soon as practicable after completion of the Main Contract and /or the works of this Works Order, the Subcontractor shall clear away and remove from the Site and/or working areas all surplus materials and rubbish of any kind left from his works and make good of the Site and/or working areas up to the satisfaction of the Contractor. |
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13.9 | All materials supplied by the Contractor shall be properly kept and stored by the Subcontractor. | |
13.10 | In the event of any ambiguity and discrepancy amongst the documents forming part of this Works Order, the succeeding one shall override the preceding one and the provisions carry more onerous requirements in the opinion of the Contractor shall take precedence over any other provisions therein. | |
13.11 | The Subcontractor shall submit to the Contractor a written “Declaration for Ethical Commitments and Confidentiality” together with the payment application. | |
13.12 | The Subcontractor shall also submit to the Contractor a written “Declaration of Having Paid All Employee’s Wages and Salaries” together with the payment application that wage and/or salary of every person employed by the Subcontractor or by his sub-subcontractors at all tiers for the execution of this Works Order had been paid in full prior to receipt of the payment from the Contractor. | |
13.13 | This Works Order shall be governed by and construed in all respects according to the laws for the time being in force in Hong Kong Special Administrative Region. | |
13.14 | No information relating to this Works Order shall be disclosed by any person without the written consent of each and every party to the Works Order except to the extent that may be required by law or by good accounting practice. | |
13.15 | Nothing in this Works Order is intended to or shall confer any benefit for or right to enforce any of the terms of this Works Order to any third party, and any entity which is not expressly stated to be a party to this Works Order shall have no right under the Contracts (Rights of Third Parties) Ordinance (Cap. 623) (“CRTPO”) to enforce any term of this Works Order. The CRTPO is hereby expressly excluded from this Works Order. |
14 | Set Off |
14.1 | All damages (including liquidated damages or delay damages), costs, charges, expenses , debts or sums for which the Subcontractor is liable to the Contractor under any provision of this Works Order may be deducted and/or set off by the Contractor from monies due to the Subcontractor under this Works Order (including any retention money) and the Contractor shall have the power and right to recover any balance not so deducted and/or set off from monies due to the Subcontractor under any other contract between the Contractor and the Subcontractor. | |
14.2 | All damages (including liquidated damages or delay damages), costs, charges, expenses, debts or sums for which the Subcontractor is liable to the Contractor under any provision of any other contract between the Contractor and the Subcontractor may be deducted and/or set off by the Contractor from monies due to the Subcontractor under this Works Order (including any retention money). |
15 | Provisions Stated in the Main Contract |
15.1 | The Contractor and the Subcontractor shall act as stated in the Agreement and in a spirit of mutual trust and co-operation. | |
15.2 | The Subcontractor shall comply with all provisions and requirements stated in the Main Contract which are in connection with the Works Order. The following additional conditions of contract (“ACC”) are highlighted, inter alia, for understanding and compliance with:- |
(a) | ACC Clause A-1 - Definitions | |
(b) | ACC Clause A3 - Information not to be Divulged | |
(c) | ACC Clause B4 - Right of Employer to determine for Convenience | |
(d) | ACC Clause C1 - Assignment | |
(e) | ACC Clause C2 - Subcontracting | |
(f) | ACC Clause C3 - Specialist Subcontractors | |
(g) | ACC Clause C4 - ISO 9000 Certification for Subcontractor | |
(h) | ACC Clause C5 - Subcontractor Management Plan | |
(i) | ACC Clause C6 - Engagement of Subcontractors who are Registered under the Respective Trades and Groups Available in the Registered Specialist Trade Contractors Scheme | |
(j) | ACC Clause C7 - Limiting Tiers of Subcontracting | |
(k) | ACC Clause C8 - Subcontract Conditions |
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(l) | ACC Clause C9-Tender Requirements for Subcontracting | |
(m) | ACC Clause C10 - Anti-collision | |
(n) | ACC Clause D2 - Patents Rights and Royalties | |
(o) | ACC Clause D3 - Giving of Notices and Payment of fees | |
(p) | ACC Clause D10 - Site Cleanliness and Tidiness | |
(q) | ACC Clause D13 - Site Diary and Labour Returns | |
(r) | ACC Clause D15 - Ethical Commitment | |
(s) | ACC Clause C16 - Contractor’s Interim Statements | |
(t) | ACC Clause D17 - Acknowledgment of being Notified of the Ethical Requirements | |
(u) | ACC Clause D18 - Permits for Excavation Works under Land (Miscellaneous Provisions ) Ordinance Cap.28 | |
(v) | ACC Clause D19 - Hired and Hire-purchase Construction Plant | |
(w) | ACC Clause D20 - Environmental Management Plan | |
(x) | ACC Clause D21 - Use of Ultra Low Sulphur Diesel | |
(y) | ACC Clause D24 - In te llectual Property Rights relating to Site Uniform | |
(z) | ACC Clause D25 - Disposal Ground | |
(aa) | ACC Clause D26 - Works within the Railway Protection Area | |
(bb) | ACC Clause D28 - Pay for Safety Performance Merit Scheme (PFSPMS) | |
(cc) | ACC Clause D30 - Use of non-road mobile machinery approved under the Air Pollution Control (Non-road Mobile Machinery) (Emission) Regulation | |
(dd) | ACC Clause E1 - Engagement of Labour | |
(ee) | ACC Clause E2 - Employment of Skilled Workers | |
(ff) | ACC Clause E3 - Fair Wages | |
(gg) | ACC Clause E4 - Passes | |
(hh) | ACC Clause E6 - Payment of Wages of Site Workers |
15.3 | Subject to the requirements stated in Clause B4 of the additional conditions of contract, the Employer is entitled to terminate the Contract for convenience. In this case, the Contractor shall also be entitled to exercise the same power to determine the Works Order. In the event of the termination by the Employer for converuence upon terms similar to the terms of section 9 “Termination” of NEC Clauses of the Contract. In the event that the Employer and/or the Project Manager exercise the powers under the said provision of the Main Contract, the Subcontractor may seek financial relief on the same basis that the Contractor is entitled to relief under the Contract. It shall be a condition of the Subcontractor’s entitlement that it provides all information which the Contractor is required to submit to the Employer and/or the Project Mana ger in good time for the Contractor to consider and where the Contractor considers appropriate submit such information to the Employer and/or the Project Manager. In no circumstances shall the Subcontractor’s reimbursement be more than the sum, amount and/or additional payment recouped from the Employer in respect of the Works Order. | |
15.4 | Without absolving and releasing the general obligations of the Subcontractor stated in the Works Order, the following major notification provisions (which is not an exhaustive list) stated in the Contract are highlighted for understanding and strict compliance with:- |
(a) | Early warning (Clause 16); | |
(b) | Ambiguities and inconsistencies (Clause 17); | |
(c) | Illegal and impossible requirements (Clause 18); | |
(d) | Notifying compensation events (Clause 61); | |
(e) | Without the Project Manager’s reply to the Contractor’s compensation events notification (Clause 61.4), and | |
(f) | Same as Item (e) above, but for the Contractor’s submitted quotations for the compensation events (Clause 62.6). |
15.5 | For compensation events, if the Subcontractor has not notified a compensation event within 4 weeks of becoming aware of the event , he shall not be entitled to any further payment or remuneration whatsoever unless the event arises from the Contractor’s instruction which is in connection with the Project Manager or the Supervisor giving an instruction, issuing a certificate, changing an earlier decision or correction an assumption. |
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16 | Dispute |
16.1 | Any dispute arises between the Contractor and the Subcontractor in connection with this Works Order shall be referred in writing to the Contractor within 14 calendar days of the occurrence of the dispute so as to facilitate the Contractor to deal with the matter in a proper manner. Failing agreement on the dispute, it shall be referred to and determined by arbitration at the Hong Kong International Arbitration Centre and in accordance with its Domestic Arbitration Rules. | |
16.2 | Without the written consent of the Contractor, any reference to arbitration under this provision shall not be opened until after completion of the whole Main Contract works or termination of the Main Contract. | |
16.3 | Notwithstanding the above dispute resolution mechanism between the Contractor and the Subcontractor, the Subcontractor shall understand and comply with the requirements stated in ACC Clause G2(9)(a)(I), (II), (III) and (IV) in connection with Dispute Resolution Advisor System under the Main Contract. |
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Exhibit 10.8
DESIGN SERVICES MANAGEMENT AGREEMENT
This Design Services Management Agreement (the “Agreement”) is entered into as of 1 August 2024, by and between:
Zenith (HK) Engineering Limited, a company incorporated under the laws of the Hong Kong Special Administrative Region, with its registered office at Unit 8, 6/F, Westin Centre, No. 26 Hung To Road, Kwun Tong, Hong Kong (hereinafter referred to as “ZHEL”), and
Zenith Integrated Modular Limited (ZIM), a company incorporated under the laws of the Hong Kong Special Administrative Region, with its registered office at Unit 2, 6/F, Westin Centre, No. 26 Hung To Road, Kwun Tong, Hong Kong (hereinafter referred to as “ZIM”).
ZHEL and ZIM are collectively referred to as the “Parties” and individually as a “Party.”
1. PURPOSE AND SCOPE OF AGREEMENT
1.1 Purpose: The purpose of this Agreement is to define the terms and conditions under which ZIM will provide design technical manpower to support ZHEL for the project Sheung Shui Town Lo No. 263 (F0874) Kwu Tung North - Podium and Tower (the “Project”).
1.2 Scope of Services: ZIM shall provide the following services:
a. Provision of skilled technical personnel, including but not limited to designers, engineers, and other professionals as required for the Project.
b. Assistance in design development, planning, and coordination activities related to the Project.
c. Collaboration with ZHEL’s team to ensure the successful execution of the Project.
d. Any other services as mutually agreed upon by the Parties in writing.
2. OBLIGATIONS OF THE PARTIES
2.1 Obligations of ZIM:
a. Provide qualified and experienced personnel to perform the services outlined in this Agreement.
b. Ensure that all personnel adhere to the highest standards of professionalism and quality.
c. Comply with all applicable laws, regulations, and industry standards.
d. Maintain confidentiality of all information related to ZHEL and the Project.
2.2 Obligations of ZHEL:
a. Provide ZIM with all necessary information, materials, and access required to perform the services.
b. Pay ZIM for the services rendered in accordance with the terms of this Agreement.
c. Designate a representative to liaise with ZIM and provide timely feedback and approvals.
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3. TERM AND TERMINATION
3.1 Term: This Agreement shall commence on 1 August 2024 and continue until the completion of the Project, unless terminated earlier in accordance with this Agreement.
3.2 Termination:
a. Either Party may terminate this Agreement by providing 30 days written notice to the other Party.
b. In the event of termination, ZIM shall be compensated for all services rendered up to the effective date of termination.
4. COMPENSATION AND PAYMENT TERMS
4.1 Contract Sum: ZHEL shall pay ZIM a total contract sum of HK$4,000,000 for the services outlined in this Agreement.
4.2 Payment Terms:
a. ZIM shall submit invoices to ZHEL on a [monthly/quarterly] basis or as otherwise agreed.
b. ZHEL shall pay all undisputed invoices within [30 days] of receipt.
4.3 Expenses:
a. ZIM shall be reimbursed for any pre-approved out-of-pocket expenses incurred in connection with the services.
b. Such expenses shall be documented and submitted to ZHEL for approval prior to reimbursement.
5. CONFIDENTIALITY
5.1 Both Parties agree to maintain the confidentiality of all proprietary and sensitive information disclosed during the term of this Agreement.
5.2 Confidential information shall not be disclosed to any third party without the prior written consent of the disclosing Party.
6. INTELLECTUAL PROPERTY
6.1 All intellectual property developed or created by ZIM in the course of providing the services shall be the sole property of ZHEL.
6.2 ZIM hereby assigns to ZHEL all rights, title, and interest in and to any such intellectual property.
7. LIABILITY AND INDEMNIFICATION
7.1 Liability: Neither Party shall be liable for any indirect, incidental, or consequential damages arising out of this Agreement.
7.2 Indemnification: Each Party agrees to indemnify and hold harmless the other Party from and against any claims, losses, or damages arising out of its breach of this Agreement.
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8. GOVERNING LAW AND DISPUTE RESOLUTION
8.1 Governing Law: This Agreement shall be governed by and construed in accordance with the laws of the Hong Kong Special Administrative Region.
8.2 Dispute Resolution:
a. Any dispute, controversy, or claim arising out of or in connection with this Agreement, including its validity, interpretation, performance,
or termination, shall be resolved through arbitration in Hong Kong.
b. The arbitration shall be administered by the Hong Kong International Arbitration Centre (HKIAC) in accordance with the HKIAC
Administered Arbitration Rules in force at the time of the arbitration.
c. The arbitration tribunal shall consist of [one/three] arbitrator(s) appointed in accordance with the HKIAC Rules.
d. The language of the arbitration shall be English.
e. The arbitral award shall be final and binding on the Parties, and judgment upon the award may be entered in any court of competent
jurisdiction.
8.3 Interim Measures:
Nothing in this Agreement shall prevent either Party from seeking interim or conservatory measures from a court of competent jurisdiction
to protect its rights pending the resolution of the dispute through arbitration.
9. MISCELLANEOUS
9.1 Entire Agreement: This Agreement constitutes the entire agreement between the Parties and supersedes all prior agreements or understandings.
9.2 Amendments: Any amendments to this Agreement must be in writing and signed by both Parties.
9.3 Force Majeure: Neither Party shall be liable for any failure or delay in performance due to events beyond its reasonable control.
9.4 Notices: All notices under this Agreement shall be in writing and delivered to the addresses specified above.
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IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first written above.
For and on behalf of Zenith (HK) Engineering
Limited
By: /s/ Irene Pun Ah Keung
Name: Irene Pun Ah Keung
Title: Director
Date: 1 August 2024
For and on behalf of Zenith Integrated Modular
Limited (ZIM)
By: /s/ Tam Hin Wah Anthony
Name: Tam Hin Wah Anthony
Title: Director
Date: 1 August 2024
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Exhibit 10.9
DESIGN AND PROJECT SERVICES MANAGEMENT AGREEMENT
This Design and Project Services Management Agreement (the “Agreement”) is entered into as of 1st August 2024, by and between:
Zenith (PMS) Limited, a company incorporated under the laws of HKSAR, with its registered office at Unit 7, 6/F, Westin Centre, No. 26 Hung To Road, Kwun Tong (hereinafter referred to as “PMS”), and
Zenith Integrated Modular Limited, a company incorporated under the laws of HKSAR, with its registered office at Unit 2, 6/F, Westin Centre, No. 26 Hung To Road, Kwun Tong (hereinafter referred to as “IML”).
PMS and IML are collectively referred to as the “Parties” and individually as a “Party.”
1. PURPOSE AND SCOPE OF AGREEMENT
1.1 Purpose: The purpose of this Agreement is to define the terms and conditions under which PMS will provide skilled technical manpower to support IML in design and project services management.
1.2 Scope of Services: PMS shall provide the following services:
a. Provision of skilled technical personnel, including but not limited to designers, engineers, project managers, and other professionals
as required.
b. Assistance in project planning, design development, and project management activities.
c. Coordination and collaboration with IML’s team to ensure the successful execution of the agreed-upon services.
d. Any other services as mutually agreed upon by the Parties in writing.
2. OBLIGATIONS OF THE PARTIES
2.1 Obligations of PMS:
a. Provide qualified and experienced personnel to perform the services outlined in this Agreement.
b. Ensure that all personnel adhere to the highest standards of professionalism and quality.
c. Comply with all applicable laws, regulations, and industry standards.
d. Maintain confidentiality of all information related to IML and the services provided.
2.2 Obligations of IML:
a. Provide PMS with all necessary information, materials, and access required to perform the services.
b. Pay PMS for the services rendered in accordance with the terms of this Agreement.
c. Designate a representative to liaise with PMS and provide timely feedback and approvals.
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3. TERM AND TERMINATION
3.1 Term: This Agreement shall commence on 1st August 2024 and continue until the completion of the agreed-upon services, unless terminated earlier in accordance with this Agreement.
3.2 Termination:
a. Either Party may terminate this Agreement by providing 30 days written notice to the other Party.
b. In the event of termination, PMS shall be compensated for all services rendered up to the effective date of termination.
4. COMPENSATION AND PAYMENT TERMS
4.1 Fees:
a. IML shall pay PMS a fixed fee of HK$350,000 for the services outlined in this Agreement.
b. Additional services or expenses beyond the scope of this Agreement shall be subject to extra charges, which shall be mutually agreed
upon in writing by both Parties.
4.2 Payment Terms:
a. PMS shall submit invoices to IML on a monthly basis or as otherwise agreed.
b. IML shall pay all undisputed invoices within 45 days of receipt.
4.3 Expenses:
a. PMS shall be reimbursed for any pre-approved out-of-pocket expenses incurred in connection with the services.
b. Such expenses shall be documented and submitted to IML for approval prior to reimbursement.
5. CONFIDENTIALITY
5.1 Both Parties agree to maintain the confidentiality of all proprietary and sensitive information disclosed during the term of this Agreement.
5.2 Confidential information shall not be disclosed to any third party without the prior written consent of the disclosing Party.
6. INTELLECTUAL PROPERTY
6.1 All intellectual property developed or created by PMS in the course of providing the services shall be the sole property of IML.
6.2 PMS hereby assigns to IML all rights, title, and interest in and to any such intellectual property.
7. LIABILITY AND INDEMNIFICATION
7.1 Liability: Neither Party shall be liable for any indirect, incidental, or consequential damages arising out of this Agreement.
7.2 Indemnification: Each Party agrees to indemnify and hold harmless the other Party from and against any claims, losses, or damages arising out of its breach of this Agreement.
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8. GOVERNING LAW AND DISPUTE RESOLUTION
8.1 Governing Law: This Agreement shall be governed by and construed in accordance with the laws of the Hong Kong Special Administrative Region.
8.2 Dispute Resolution:
a. Any dispute, controversy, or claim arising out of or in connection with this Agreement, including its validity, interpretation, performance,
or termination, shall be resolved through arbitration in Hong Kong.
b. The arbitration shall be administered by the Hong Kong International Arbitration Centre (HKIAC) in accordance with the HKIAC
Administered Arbitration Rules in force at the time of the arbitration.
c. The arbitration tribunal shall consist of [one/three] arbitrator(s) appointed in accordance with the HKIAC Rules.
d. The language of the arbitration shall be English.
e. The arbitral award shall be final and binding on the Parties, and judgment upon the award may be entered in any court of competent
jurisdiction.
8.3 Interim Measures:
Nothing in this Agreement shall prevent either Party from seeking interim or conservatory measures from a court of competent jurisdiction
to protect its rights pending the resolution of the dispute through arbitration.
9. MISCELLANEOUS
9.1 Entire Agreement: This Agreement constitutes the entire agreement between the Parties and supersedes all prior agreements or understandings.
9.2 Amendments: Any amendments to this Agreement must be in writing and signed by both Parties.
9.3 Force Majeure: Neither Party shall be liable for any failure or delay in performance due to events beyond its reasonable control.
9.4 Notices: All notices under this Agreement shall be in writing and delivered to the addresses specified above.
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IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first written above.
For and on behalf of Zenith (PMS) Limited
/s/ Tam Hin Wah Anthony
Name: Tam Hin Wah Anthony
Title: Director
Date: 1st August 2024
For and on behalf of Zenith Integrated Modular Limited
/s/ Au-Yeung Sai Kit
Name: Au-Yeung Sai Kit
Title: Authorized Person/Company Secretary
Date: 1st August 2024
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Exhibit 21
Subsidiaries
Details of the Company’s principal subsidiaries as of December 31, 2024 and March 31, 2025 were as follows:
Name | Place of Incorporation | Principal Activities | ||
ModuLink Corporation Limited (“MCL”) | Hong Kong | Holding company and provision of intergroup management services | ||
Zenith Integrated Modular Limited (“ZIML”) | Hong Kong | Provision of construction and engineering services | ||
Zenith AY Modular Buildings Company Limited (“ZAMBCL”) | Hong Kong | Provision of project management services in overseas | ||
ModuLink InnoTech Company Limited (“MICL”) | Hong Kong | Provision of technology management services |