Alpine Auto Brokers Inc S-1, filed Jul 5, 2023
Alpine Auto Brokers Inc. (ALTB)
As filed with the Securities and Exchange Commission on July 5, 2023
Registration No. ____________
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
(Exact name of Registrant as specified in its charter)
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| (State or other jurisdiction of | (Primary Standard Industrial | (I.R.S. Employer | ||
| incorporation or organization) | Classification Code Number) | Identification No.) |
Tel:
(Address, including zip code, and telephone number, including area code, of Registrant’s principal executive offices)
Copies to:
McMurdo Law Group, LLC
1185 Avenue of the Americas, 3rd Floor
New York, NY 10036
(917) 318-2865
Approximate date of commencement of proposed sale to the public: As soon as practicable after the registration statement becomes effective.
If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. ☒
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
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| ☐ | Smaller reporting company | |||
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If an smaller reporting company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ☐
WE HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL WE SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE SECURITIES ACT, OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.
The information in this prospectus (this “Prospectus”) is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission (the “SEC”) is effective. This Prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.
The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities in any state or other jurisdiction where offers or sales are not permitted.
SUBJECT TO COMPLETION, DATED JULY 5, 2023
Alpine Auto Brokers Inc.
120,000,000 Shares of Common Stock, $0.001 par value per share
This is a public offering of Alpine Auto Brokers Inc. (“ALTB,” or the “Company”). We are offering 120,000,000 Common Shares at $0.01 per share (the “Shares”), in a best effort, direct public offering, solely by our Chief Executive Officer, Yufeng Zhang, for the Company. There is no minimum proceeds threshold for the offering. The offering will terminate within 360 days from the date of this prospectus. The Company will retain all proceeds received from the shares sold on their account in this offering. The Company has not made any arrangements to place the proceeds in an escrow or trust account. Any proceeds received in this offering may be immediately used by the Company in its sole discretion. There are no minimum purchase requirements for each investor. All proceeds retained by the Company may not be sufficient to continue operations.
Our Shares are not currently traded on any national securities exchange, but are quoted on any over-the-counter market, under the symbol “ALTB.”
On February 20, 2023, the Company entered into a Definitive Share Exchange Agreement with National Holdings Investment Ltd., a British Virgin Islands corporation (“NHIL”), whereunder the Company acquired 100% ownership interest in NHIL for the issuance of 10,000,000 shares of the Company’s common stock. NHIL through its China based subsidiary, Yinao (Dongguan) Technology Co., Ltd., is mainly engaged in the planning and design service consulting business of new energy charging piles. The transaction closed effective February 24, 2023 and has been treated as a business combination, resulting in NHIL becoming a wholly-owned subsidiary of the Company. As such, the Company recognized the assets and liabilities of NHIL acquired in the reorganization, at their historical carrying amounts.
Investing in our Shares involves a high degree of risk. See “Risk Factors” for a detailed discussion of certain risks that you should consider in connection with an investment in our Shares.
ALTB is a holding company and we operate our business through Yinao (Dongguan) Technology Co., Ltd. (“YDTC”)
YDTC is formed and operating the Peoples Republic of China (“Material PRC Company”) has been duly established and is validly existing as a limited liability company under the laws of the Peoples Republic of China (“PRC Laws”),and has received all authorizations required by the Peoples Republic of China (the “Governmental Authorizations”) for its establishment to the extent such Governmental Authorizations are required under applicable PRC Laws, and its business license is in full force and effect. The Material PRC Company has the capacity and authority to own assets, to conduct business, and to sue and be sued in its own name under PRC Laws. The articles of association, business license and other constitutional documents (if any) of the Material PRC Company complies with the requirements of applicable PRC Laws and are in full force and effect. The Material PRC Company has not taken any corporate action, nor has any legal proceedings commenced against it, for its liquidation, winding up, dissolution, or bankruptcy, for the appointment of a liquidation committee, team of receivers or similar officers in respect of its assets or for any adverse suspension, withdrawal, revocation or cancellation of its business license.
All of the equity interests of the Material PRC Company are owned by NHIL, a BVI company, and (ii) the Material PRC Company has obtained all Governmental Authorizations for the ownership interest owned by NHIL The equity interests of the Material PRC Company are owned by NHIL free and clear of any pledge or other encumbrance under PRC Laws, and there are no outstanding rights, warrants or options to acquire, or instruments convertible into or exchangeable for, any equity interest in the Material PRC Company under PRC Laws, except for such encumbrance that would not be reasonably expected to have a Material Adverse Effect. “Material Adverse Effect,” as used herein, means a material adverse effect on the assets, liabilities, properties or business of the Company.
All of our operations are conducted by our subsidiaries and through our wholly-foreign-owned entity (“WFOE”) based in China which involves unique risks to investors. Our WFOE structure is used to provide investors with exposure to foreign investment in China-based companies where Chinese law prohibits direct foreign investment in the operating companies. Investors may never hold equity interests in the Chinese operating company. The WFOE structure is not as stable as some have imagined. The senior management and the shareholders of the domestic company play a very important role in the WFOE structure. Once there are changes to such positions involving interests, potential risks of the WFOE structure will appear. Chinese regulatory authorities could disallow this structure, which would likely result in a material change in our operations and/or a material change in the value of the securities we are registering for sale, including that it could cause the value of such securities to significantly decline or become worthless.
The legal and operational risks associated with being based in or having the majority of the Company’s operations in China could result in a material change in the value of the securities we are registering for sale or could 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 the Risk Factor titled “We are faced with risks and uncertainties as a foreign enterprise under PRC laws” on page 14.
Recently, Beijing revamped its rules for overseas listings after ride-hailing Didi Global launched its initial public offering despite warnings from regulators. That triggered a data security investigation led by the Cyberspace Administration of China (“CAC”), which recently culminated with the firm announcing plans to delist in the US in favor of Hong Kong. This shows how recent statements and regulatory actions by China’s government, such as those related to the use of variable interest entities and data security or anti-monopoly concerns, have or may impact the company’s ability to conduct its business, accept foreign investments, or list on a U.S. or other foreign exchange.
Trading securities may be prohibited under the Holding Foreign Companies Accountable Act if the PCAOB determines that it cannot inspect or fully investigate our auditor, and that as a result an exchange may determine to delist your securities.
Investing in our Common Stock involves a high degree of risk. See “Risk Factors” on page 10 for a detailed discussion of certain risks that you should consider in connection with an investment in our Common Stock.
The Company will settle amounts owed under the WFOE structure by transferring dividends, or distributions between the holding company and its subsidiaries, or to investors, which have not yet occurred. We rely primarily on dividends paid by the WFOE for our cash needs, including the funds necessary to pay dividends and other cash distributions, if any, to our shareholders, to service any debt we may incur and to pay our operating expenses. We have made no such distributions to date and we have no current cash management policies in place. We will look to implement one in the near future.
There are no legal, arbitral or governmental proceedings, regulatory investigations or other governmental decisions, rulings, orders, or actions before any Governmental Agencies in progress or pending in the PRC to which the Company or any Material PRC Company is a party or to which any assets of any Material PRC Company is a subject which, if determined adversely against any of the Company and the Material PRC Company, would be reasonably expected to have a material adverse effect.
All dividends declared and payable upon the equity interests in the WFOE may be converted into foreign currency and freely transferred out of the PRC free of any deductions in the PRC, provided that (i) the declaration and payment of such dividends complies with applicable PRC Laws and the constitutional documents of the WFOE, and (ii) the remittance of such dividends out of the PRC complies with the procedures required by the relevant PRC Laws relating to foreign exchange administration.
We face uncertainties with respect to indirect transfers of equity interests in PRC resident enterprises by their non-PRC holding companies. Despite the above, based on our current structure, these risks remain immaterial, regardless of the recent statements and regulatory actions by China’s government.
Adverse changes in economic and political policies of the PRC government could have a material and adverse effect on overall economic growth in China, which could materially and adversely affect our business. General macroeconomic conditions may materially and adversely affect our business, prospects, results of operations and financial position. The PRC government’s control over foreign currency conversion may adversely affect our business and results of operations and our ability to remit dividends. 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 subsidiary in China, which could materially and adversely affect our liquidity and our ability to fund and expand business.
Assuming no offer, issuance or sale of the Common Shares has been or will be made directly or indirectly within the PRC, a prior approval from the CSRC is not required for the Offering. However, there are substantial uncertainties regarding the interpretation and application of the M&A Rules, other PRC Laws and future PRC laws and regulations, and there can be no assurance that any Governmental Agency will not take a view that is contrary to or otherwise different from our opinions stated herein. Subject to any applicable administrative procedures required by PRC Laws, and provided that all required Governmental Authorizations have been duly obtained, the due application of the net proceeds to be received by the Company from the issue Common Shares as disclosed in the Prospectus under the caption “Use of Proceeds” does not and immediately after the Offering will not contravene any applicable PRC Laws, the articles of association or the business licenses of the Material PRC Company, except for such contravention or default which would not be reasonably expected to have a Material Adverse Effect.
There is no tax or duty payable by or on behalf of the Material PRC Company under applicable PRC Laws in connection with the creation, allotment and issuance Common Shares, provided that each person taking the aforementioned actions is not subject to PRC tax by reason of citizenship, permanent establishment, residence or otherwise subject to PRC tax imposed on or measured by net income or net profits.
Assuming no offer, issuance or sale of the Common Shares has been or will be made directly or indirectly within the PRC, it is not necessary that such documents be filed or recorded now with any Governmental Agency in the PRC.
There are no reporting obligations to any Governmental Agency under PRC Laws on those holders of Common Shares who are not deemed to be PRC residents as defined under applicable PRC Laws, to the extent that no reporting obligation is triggered by the purchase or holding of Common Shares under the PRC anti-monopoly laws, rules and regulations.
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 deem relevant, and subject to the restrictions contained in any future financing instruments.
On December 16, 2021, Public Company Accounting Oversight Board (PCAOB) issued a report on its determinations that PCAOB is unable to inspect or investigate completely PCAOB-registered public accounting firms headquartered in mainland China and in Hong Kong, a Special Administrative Region of the People’s Republic of China (PRC), because of positions taken by PRC authorities in those jurisdictions. The PCAOB made these determinations pursuant to PCAOB Rule 6100, which provides a framework for how the PCAOB fulfils its responsibilities under the Holding Foreign Companies Accountable Act (HFCAA). The report further listed in its Appendix A and Appendix B, Registered Public Accounting Firms Subject to the Mainland China Determination and Registered Public Accounting Firms Subject to the Hong Kong Determination, respectively. The audit report included in this registration statement for the year ended December 31, 2022, was issued by Shandong Haoxin Certified Accountants Co., Ltd. (“HAOXIN”), an audit firm headquartered in PRC, a jurisdiction that the PCAOB has determined that the PCAOB may be unable to conduct inspections or investigate auditors, despite a recent treaty allowing the PCAOB to review the audit papers of firms in the PRC. Our auditors HAOXIN is among those listed by the PCAOB Mainland China Determination, a determination announced by the PCAOB on December 16, 2021 that the PCAOB is unable to inspect or investigate completely registered public accounting firms headquartered in PRC, because of a position taken by one or more authorities in PRC. As a result, we and investors in our common stock may be deprived of the benefits of such full PCAOB inspections, which could cause investors in our stock to lose confidence in our reported financial information and the quality of our financial statements. In addition, under the HFCAA, our securities may be prohibited from trading on the U.S. stock exchanges or in the over-the-counter trading market in the U.S. if our auditor is not inspected by the PCAOB for three consecutive years, and this ultimately could result in our common stock being delisted. Furthermore, on June 22, 2021, the U.S. Senate passed the Accelerating Holding Foreign Companies Accountable Act (“AHFCAA”), which, if enacted, would amend the HFCAA and require the SEC to prohibit an issuer’s securities from trading on any U.S. stock exchanges or in the over-the-counter trading market in the U.S. if its auditor is not subject to PCAOB inspections for two consecutive years instead of three. In the future, if we do not engage an auditor that is subject to regular inspection by the PCAOB, our common stocks may be delisted. See “Risk Factors – Risks associated with doing business in China – The audit report included in this Amendment is prepared by an auditor who is not inspected by the Public Company Accounting Oversight Board and as such, our investors are deprived of the benefits of such inspection. The Company could be delisted if it is unable to timely meet the PCAOB inspection requirements established by the Holding Foreign Companies Accountable Act.”
U.S shareholders may face difficulties in effecting service of process against the Company and officers and director, as they are both based in China. Even with proper service of process, the enforcement of judgments obtained in U.S. courts or foreign courts based on the civil liability provisions of the U.S. federal securities laws would be extremely difficult. Furthermore, there would be added costs and issues with bringing an original action in foreign courts to enforce liabilities based on the U.S. federal securities laws against the Company.
The PRC government also imposes controls on the conversion of RMB into foreign currencies and the remittance of currencies out of the PRC. Therefore, we may experience difficulties in completing the administrative procedures necessary to obtain and remit foreign currency for the payment of dividends from our profits, if any. 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 Shares. As of the date of this prospectus, we do not have any PRC subsidiaries.
Cash dividends, if any, on our Shares 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%.
Investing in our Shares involves a high degree of risk. See “Risk Factors” for a detailed discussion of certain risks that you should consider in connection with an investment in our Shares. There are specific risks related to having operations in China that the Company has been organized to avoid.
The registered capital of the Material PRC Company has been duly paid in accordance with applicable PRC Laws and their respective articles of association, to the extent that such registered capital is required to be paid prior to the date hereof.
All of our business operations are conducted in China. Accordingly, our business, financial condition, results of operations and prospects are affected significantly by economic, political and legal developments in China. Although the PRC economy has been transitioning from a planned economy to a more market-oriented economy since the late 1970s, the PRC government continues to exercise significant control over China’s economic growth through direct allocation of resources, monetary and tax policies, and a host of other government policies such as those that encourage or restrict investment in certain industries by foreign investors, control the exchange between the Renminbi and foreign currencies, and regulate the growth of the general or specific market. While the Chinese economy has experienced significant growth in the past 30 years, growth has been uneven, both geographically and among various sectors of the economy. As the PRC economy has become increasingly linked with the global economy, China is affected in various respects by downturns and recessions of major economies around the world. The various economic and policy measures enacted by the PRC government to forestall economic downturns or bolster China’s economic growth could materially affect our business. Any adverse change in the economic conditions in China, in policies of the PRC government or in laws and regulations in China could have a material adverse effect on the overall economic growth of China and market demand for our outsourcing services. Such developments could adversely affect our businesses, lead to reduction in demand for our services and adversely affect our competitive position.
The PRC legal system is based on written statutes. Prior court decisions may be cited for reference but have limited precedential value. Since the late 1970s, the PRC government has been building a comprehensive system of laws and regulations governing economic matters in general. The overall effect has been to significantly enhance the protections afforded to various forms of foreign investments in China. We conduct our business primarily through our WFOE, the WFOE is established in China. These companies are generally subject to laws and regulations applicable to foreign investment in China. However, since these laws and regulations are relatively new and the PRC legal system continues to rapidly evolve, the interpretations of many laws, regulations and rules are not always uniform and enforcement of these laws, regulations and rules involves uncertainties, which may limit legal protections available to us. In addition, some regulatory requirements issued by certain PRC government authorities may not be consistently applied by other government authorities (including local government authorities), thus making strict compliance with all regulatory requirements impractical, or in some circumstances impossible. For example, we may have to resort to administrative and court proceedings to enforce the legal protection that we enjoy either by law or contract.
Alpine Auto Brokers Inc. is a holding company and we operate our business through our WFOE, YDTC in China. We exercise effective control over the operations of Beijing Kezhao pursuant to a series of contractual arrangements, under which we are entitled to receive substantially all of its economic benefits.
An investment in our securities is highly speculative, involves a high degree of risk and should be considered only by persons who can afford the loss of their entire investments. See “Risk Factors” beginning on page 10 of this prospectus.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
Prospectus dated , 2023
TABLE OF CONTENTS
You should rely only on information contained in this prospectus. We have not authorized anyone to provide you with additional information or information different from that contained in this prospectus. Neither the delivery of this prospectus nor the sale of our securities means that the information contained in this prospectus is correct after the date of this prospectus. This prospectus is not an offer to sell or the solicitation of an offer to buy our securities in any circumstances under which the offer or solicitation is unlawful or in any state or other jurisdiction where the offer is not permitted.
For investors outside the United States: We have not taken any action that would permit this offering or possession or distribution of this prospectus in any jurisdiction where action for that purpose is required, other than in the United States. Persons outside the United States who come into possession of this prospectus must inform themselves about, and observe any restrictions relating to, the offering of the securities covered hereby and the distribution of this prospectus outside of the United States.
The information in this prospectus is accurate only as of the date on the front cover of this prospectus. Our business, financial condition, results of operations and prospects may have changed since those dates.
No person is authorized in connection with this prospectus to give any information or to make any representations about us, the securities offered hereby or any matter discussed in this prospectus, other than the information and representations contained in this prospectus. If any other information or representation is given or made, such information or representation may not be relied upon as having been authorized by us.
We have not done anything that would permit this offering or possession or distribution of this prospectus in any jurisdiction where action for that purpose is required, other than the United States. You are required to inform yourself about, and to observe any restrictions relating to, this offering and the distribution of this prospectus.
Until July 5, 2023, all dealers that effect transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus.
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Prospectus Summary
This summary highlights information that we present more fully elsewhere in this prospectus. This summary does not contain all of the information that you might wish to consider before buying Common Shares in this offering. You should read the entire prospectus carefully, including “Risk Factors” and the financial statements and accompanying notes.
Corporate Overview
Alpine Auto Brokers (the “Company”) was organized as Alpine Auto Brokers, LLC in the state of Utah in December 2010. The Company sold automobiles and provided dealer services, for a fee.
The Company was incorporated as Alpine Auto Brokers, Inc. on May 12, 2011, in the State of Nevada for the purpose of locating and purchasing used vehicles at auctions, from private individuals, from other dealers and selling these vehicles specifically to consumers in Salt Lake City, Utah. On January 1, 2014, the Company acquired 100 percent of the membership interests of Alpine Auto Brokers, LLC, a Utah Limited Liability Company formed on December 10, 2010. The Company operated through its wholly owned subsidiary Alpine Auto Brokers, LLC.
The acquisition was accounted for as a reverse recapitalization in which the operating entity’s historical financial statements become those of the “accounting acquirer” in which historical operating results are presented from inception.
The Company had been dormant since October 27, 2016.
On August 18, 2021, the Eight Judicial District Court in Clark County, Nevada Case No: A-20-816619-B appointed Custodian Ventures, managed by David Lazar as the Company’s Receiver.
On January 28, 2022, the Company, amended its articles of incorporation change its name back to Alpine Auto Brokers Inc. The change was made because the Company failed to complete its prior name change with FINRA.
On February 9, 2022, as a result of a private transactions, 10,000,000 shares of Series A Preferred Stock, $0.001 par value per share (the “Shares”) of the “Company”, were transferred from Custodian Ventures, LLC to MetaVerse Investment Group (the “Purchaser”). As a result, the Purchaser became the holder of 90% of the voting rights of the issued and outstanding share capital of the Company on a fully-diluted basis of the Company, and became the controlling shareholder. The consideration paid for the Shares was $420,000, with $20,000 being held back pending certain public filings of the Company. The source of the cash consideration for the Shares was personal funds of the Purchaser. In connection with the transaction, David Lazar released the Company from all debts owed to him and/or Custodian Ventures, LLC.
On February 9, 2022, the existing director and officer resigned immediately. Accordingly, David Lazar, serving as a director and an officer, ceased to be the Company’s Chief Executive Officer, Chief Financial Officer, President, Treasurer, Secretary and a Director. At the effective date of the transfer, Zibin Xiao consented to act as the new Chief Executive Officer, President, and member of the Board of Directors. Also on February 9, 2022, Zonghan Wu consented to act as the new CFO, Treasurer, Secretary, and Chairman of the Board of Directors of the Company.
On June 27, 2022, Zibin Xiao resigned as the Chief Executive Officer, President, and member of the Board of Directors. Also on June 27, 2022, Yufeng Zhang consented to act as the new Chief Executive Officer, President, and member of the Board of Directors.
On February 20, 2023, the Company entered into a Definitive Share Exchange Agreement with National Holdings Investment Ltd., a British Virgin Islands corporation (“NHIL”), whereunder the Company acquired 100% ownership interest in NHIL for the issuance of 10,000,000 shares of the Company’s common stock. NHIL through its China based subsidiaries, Yinao (Dongguan) Technology Co., Ltd., is mainly engaged in the planning and design service consulting business of new energy charging piles. The transaction closed effective February 24, 2023 and has been treated as a business combination, resulting in NHIL becoming a wholly-owned subsidiary of the Company. As such, the Company recognized the assets and liabilities of NHIL acquired in the reorganization, at their historical carrying amounts.
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As a result of the above transaction, the Company’s corporate structure which is set forth as follows:
Yinao (Dongguan) Technology Co., Ltd (YDTC) was organized in 2022 to engage in the business of constructing and operating charging stations for electric vehicles (“EV”). Our ambition is to build YDTC into a central participant in this growing industry.
In this, our first year of operation, we are focusing our efforts on building a group of consulting clients who are themselves distributors of charging stations. We are undertaking this top-down approach to the industry in part because we lack sufficient financial resources to compete directly with the major participant in the industry. But of equal importance is the opportunity for market impact that we will gain by positioning ourselves as leaders in the charging station industry. As those to whom we provide our services and guidance spread throughout the EV world, they will advertise our brand as their authoritative source for technological and commercial knowledge about the charging station industry, and so our brand will gain value among the relevant participants in the EV world. Our goal is that, when we have secured the financing necessary to compete in the charging station community, we will already be known and identified with quality and know-how related to charging stations.
Our main business at this time, therefore, is to provide consulting services relating to the planning and design of new energy charging piles to customer in Guangdong Province of the PRC. Our customers are enterprises that are either initiating their participation in this industry in general or expanding their operations to Guangdong. In either case, a customer who engages YDTC, will receive, among other things:
| ● | a survey report on the distribution of new energy charging piles that have been built and are under construction in the district of Guangzhou City in which the customer intends to distribute its stations;, |
| ● | a business plan based upon an analysis of the existing distribution of charging piles in the target market; |
| ● | a site selection plan identifying prospective locations where charging piles can be built; |
| ● | a plan of the electric equipment design plus the type of charging piles to be used; |
| ● | a plan of the construction and the construction method; as well as |
| ● | the design and sample drawings of the foundation for the piles, |
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1. Corporate History and Structure
On January 10, 2022, Yinao (Dongguan) Technology Co., Ltd (YDTC) was incorporated pursuant to the PRC law.
On June 16, 2022, we established a holding company, National Holdings Investment Ltd (NHIL), under the laws of the British Virgin Islands (BVI).
On October 04, 2022, NHIL acquired 100% ownership interest in YDTC. YDTC becomes a wholly foreign owned enterprise pursuant to the PRC law.
On February 20, 2023, the Company entered into a Definitive Share Exchange Agreement with National Holdings Investment Ltd., a British Virgin Islands corporation (“NHIL”), whereunder the Company acquired 100% ownership interest in NHIL for the issuance of 10,000,000 shares of the Company’s common stock. NHIL through its China based subsidiaries, Yinao (Dongguan) Technology Co., Ltd., is mainly engaged in the planning and design service consulting business of new energy charging piles. The transaction closed effective February 24, 2023 and has been treated as a business combination, resulting in NHIL becoming a wholly-owned subsidiary of the Company.
2. Competitive Strengths
The following are the competitive strengths of Yinao (Dongguan) Technology Co., Ltd:
Top-down approach: The company’s strategy of targeting consulting clients who are themselves distributors of charging stations is a smart move, as it allows the company to establish itself as a leader in the industry while building its financial resources to compete directly with major participants. This approach will help the company gain valuable insights into the industry while building its brand reputation.
Technological and commercial knowledge: YDTC’s focus on providing its clients with technological and commercial knowledge about the charging station industry positions the company as a credible and authoritative source of information in the EV world. This knowledge base will be useful when the company is ready to enter the market as a direct competitor.
Brand reputation: By positioning itself as a leader in the charging station industry through its consulting services, YDTC is laying the foundation for a strong brand reputation. As clients spread the word about the quality of its services, the company’s brand value will increase, making it easier to compete with major players in the industry.
Growing industry: The electric vehicle market is expected to grow rapidly in the coming years, and the need for charging stations will increase accordingly. As a company focused solely on charging stations, YDTC is well-positioned to take advantage of this growth and establish itself as a significant player in the industry.
Strategic location: Dongguan is a key manufacturing hub in China, and the company’s location there gives it access to a large pool of skilled workers, suppliers, and potential customers. This strategic location could give YDTC an edge over competitors located in less advantageous areas.
3. The Charging Station Industry in China
In recent decades, China’s rapid economic growth has enabled more and more consumers to buy their own cars. The result has been the creation of the largest automotive market in the world—but also serious urban air pollution, high greenhouse gas emissions, and growing dependence on oil imports. To counteract those troubling trends, the Chinese government has imposed policies to encourage the adoption of plug-in electric vehicles (EVs). Since buying an EV costs more than buying a conventional internal combustion engine vehicle, in 2009 the government began to provide generous subsidies for EV purchases. As a result, China became the world’s largest market for EV’s, accounting for approximately 50% of global sales. In 2020 1.1 million EVs were produced and sold in China. The central government’s “New Energy Vehicle Industry Development Plan (2021 - 2035) predicted that sales of new energy vehicles would account for 20% of car sales in China in 2025. In fact, during 2022, EV sales represented 22% of new car sales.
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As the number of EV purchases grew, paying for the subsidies became extremely costly for the government. As a result, beginning in 2020, China’s government began to phase out the subsidies and instead rely on a mandate imposed on car manufacturers. The mandate requires that a certain percent of all vehicles sold by a manufacturer each year must be battery-powered. To avoid financial penalties, every year manufacturers must earn a stipulated number of points, which are awarded for each EV produced based on a complex formula that takes into account range, energy efficiency, performance, and more. The requirements get tougher over time, with a goal of having EVs make up 40% of all car sales in China by 2030.
The mandate on vehicle manufacturers to produce EVs is supplemented by a number of Chinese government policies:
| ● | Tax exemptions. The Chinese government exempts electric vehicles from consumption and sales taxes, which can save purchasers tens of thousands of RMB (equivalent to thousands of dollars). It also waives 50% of vehicle registration fees for electric vehicles. |
| ● | Procurement. The Chinese government also uses its procurement power to promote electric vehicles. A May 2016 order required that half of new vehicles purchased by China’s central government be new energy vehicles within five years. |
| ● | New auto factory requirements. Chinese regulations strongly discourage the construction of factories for manufacturing internal combustion engine vehicles only. Subject to exceptions that are difficult to satisfy, any new vehicle factory is required to include capacity for the construction of electric vehicles. |
Since EVs will be useless without charging stations, the Chinese central government has promoted the development of EV charging infrastructure as a matter of national policy. As the central government has withdrawn subsidies for purchase of EVs, it has redirected a significant portion of those funds to support the development of EV infrastructure, primarily charging stations. In November 2020, the General Office of the State Council promulgated its “Development Plan of the New Energy Vehicle Industry (2021 - 2035), in which it mandated financial support for the construction of charging stations and proposed preferential policies with respect to allocation of space in parking lots to charging stations. China State Grid and China Southern Grid, China’s two state-owned electric utilities, both have programs to promote the development of electric vehicle charging infrastructure.
Guangdong Province has also been aggressive in support of EVs and EV infrastructure. During 2022 the number of EVs sold in Guangdong Province doubled compared to sales in 2021, and now one-eighth of the EVs manufactured in the PRC are manufactured in Guangdong Province. To support this push toward EVs, Guangdong Province now has more charging stations than any other province in China – and three times as many charging facilities as are located in the entire United States. The Province subsidizes certain purchases of EVs, and encourages insurance companies to provide preferential premiums for EVs. The government of Guangdong Province gives every indication that it will continue to support the expansion of the charging station network indefinitely, with an ultimate goal of maximizing the conversion of vehicular traffic to electric.
4. Competition
The Company is operating in the growing market of new energy charging piles, which is becoming increasingly competitive due to the growing demand for electric vehicles and the government’s push towards cleaner energy. The competition the Company is facing can be broadly categorized into the following:
1. Established players: The new energy charging pile market is already populated with a number of established players such as State Grid, Southern Power Grid, and other major energy companies. These companies have a strong brand presence, financial resources, and expertise in the energy sector. They also have established relationships with customers and are likely to be strong competitors for the Company.
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2. New entrants: The market for new energy charging piles is attracting a growing number of new entrants, ranging from start-ups to established companies diversifying into the market. These competitors are also likely to be aggressive in pursuing market share and have the potential to disrupt the market.
3. Technological changes: The charging technology for electric vehicles is constantly evolving, and competitors are investing heavily in developing new charging technologies such as wireless charging, fast charging, and ultra-fast charging. These technological changes could lead to new entrants and disrupt existing market players.
4. Regulatory environment: The regulatory environment for the new energy charging pile market is evolving rapidly, and competitors are likely to be affected by changes in regulations and policies related to the development of the new energy industry. These changes could favor some players and disadvantage others.
In summary, the Company is operating in a highly competitive market, facing competition from established players, new entrants, technological changes, and regulatory environment changes. The Company are developing a strong value proposition and endeavoring to build a competitive advantage to succeed in the market.
5. Marketing
The Company is developing a brand identity that reflects the Company’s values and mission. This includes developing a unique logo, website, and marketing materials that are visually appealing and clearly communicate the Company’s value proposition. The Company also plans to further strengthen our marketing efforts and improve our brand awareness through the following actions:
1. Leverage social media: Social media platforms such as WeChat, Weibo, and LinkedIn can be used to build awareness of our brand, share Company news and updates, and engage with potential customers. The Company can also consider partnering with influencers in the electric vehicle or sustainability space to reach a wider audience.
2. Attend industry events: The Company will attend industry events such as trade shows, conferences, and seminars to network with potential customers and partners. These events can also provide valuable insights into industry trends and customer needs.
3. Foster partnerships: The Company is seeking out partnerships with property developers, government agencies, and other companies in the new energy space. By partnering with these organizations, YDTC can expand its reach and access new customer segments.
4. Overall, by developing a brand identity, leveraging social media, attending industry events, and fostering partnerships, The Company can build awareness of its brand and generate leads in the highly competitive market.
6. PRC Laws and Regulations Affecting Our Business
There are several PRC laws and regulations that could affect the Company’s business, including:
1. Regulations on new energy vehicles: The Chinese government has implemented a number of regulations and policies aimed at promoting the development and adoption of new energy vehicles, including electric vehicles. These policies could create opportunities for the Company as demand for electric vehicle charging infrastructure increases.
2. Intellectual property laws: The Company may be subject to intellectual property laws related to patents, trademarks, and copyrights. This could impact the company’s ability to protect its intellectual property and may affect its competitive position.
It is important for YDTC to stay up-to-date with any changes or developments in these and other relevant laws and regulations in order to ensure compliance and mitigate any potential risks or challenges to its business operations.
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7. Risks Related to Our Business
YDTC will face intense competition. It will not achieve market share and customers if it fails to compete effectively.
The demand for charging stations in China is strong, and the barriers to entry into the supply market are not great. So there are many enterprises competing to meet the demand. YDTC’s competitors will include international giants such as Tesla, as well as several major Chinese suppliers of charging stations, as well as many low volume suppliers similar to YDTC. Increased competition may adversely affect its margins, market share and brand recognition, or result in significant losses. When YDTC sets prices for energy, it has to consider how competitors have set prices, since electricity is fungible. When they cut prices or offer additional benefits to compete with YDTC, YDTC may have to lower its own prices or offer additional benefits or risk losing market share, either of which could harm our financial condition and results of operations.
Some of the competitors will have longer operating histories, greater brand recognition, better supplier relationships, larger customer bases and greater financial, technical and marketing resources than YDTC has. These and other smaller companies may receive investment from or enter into strategic relationships with well-established and well-financed companies or investors, which would help enhance their competitive positions. Some of the competitors may be able to secure more favorable terms from suppliers, devote greater resources to marketing and promotional campaigns, adopt more aggressive pricing policies and devote substantially more resources to their website, mobile application and systems development. We cannot assure you that YDTC will be able to compete successfully against current or future competitors, and competitive pressures may have a material and adverse effect on its business, financial condition and results of operations.
For more information see Risk Factors below starting on page 10.
8. Growth Plan
The following is a growth plan for Yinao (Dongguan) Technology Co., Ltd:
Expand consulting services: YDTC should continue to expand its consulting services to attract more clients and establish itself as a top-tier consulting firm in the EV charging station industry. The company can do this by developing and offering new services such as feasibility studies, site selection, and project management.
Develop charging station technology: YDTC should invest in research and development to improve the technology used in its charging stations. By developing more efficient, user-friendly, and innovative charging stations, the company can differentiate itself from competitors and attract more clients. Additionally, YDTC could consider developing its own branded charging stations to sell directly to customers.
Form strategic partnerships: YDTC should form strategic partnerships with other players in the EV industry, such as EV manufacturers, energy providers, and other charging station companies. These partnerships could provide access to new markets, customers, and technology, as well as help the company to stay up-to-date with the latest industry trends.
Raise capital: To fund its expansion plans, YDTC should consider raising capital through various means, such as placement, venture capital, private equity, or debt financing. With adequate funding, YDTC can invest in research and development, expand its operations, and compete with major players in the EV charging station industry.
Overall, YDTC’s growth plan should focus on expanding its consulting services, improving its technology, forming strategic partnerships, and raising capital to achieve its goal of becoming a central participant in the growing EV charging station industry.
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The Offering
| Common Shares offered | 120,000,000 Common Shares, $0.001 par value per share. | |
| Common Shares Outstanding before this Offering | 455,500,000 shares | |
| Common Shares to be Outstanding after this Offering | 575,500,000 shares | |
| Use of Proceeds; | While there is no minimum number of shares that will be sold in this offering, if we were to sell the entire number of shares registered, we estimate that our net proceeds from this offering will be approximately $1,200,000, based on an initial public offering price of $0.01 per share, after deducting estimated offering expenses. We plan to use the net proceeds of this offering primarily for general corporate purposes, which may include hiring additional sales, marketing and management personnel, and investing in sales and marketing activities, capital expenditures, and other general and administrative matters. | |
| See Use of Proceeds. | ||
| Minimum number of shares to be sold in this offering. | None. | |
| Market for the shares | There is a limited public market for the shares. The shares trade on the OTC Markets under the symbol “ALTB.” | |
| Risk Factors | Investing in these securities involves a high degree of risk. You should be able to bear a complete loss of your investment and should carefully consider the information set forth in Risk Factors before deciding to invest in our common shares. While we face uncertainties with respect to indirect transfers of equity interests in PRC resident enterprises by their non-PRC holding companies, based on our current structure, these risks remain immaterial, regardless of the recent statements and regulatory actions by China’s government. | |
| Adverse changes in economic and political policies of the PRC government could have a material and adverse effect on overall economic growth in China, which could materially and adversely affect our business. General macroeconomic conditions may materially and adversely affect our business, prospects, results of operations and financial position. The PRC government’s control over foreign currency conversion may adversely affect our business and results of operations and our ability to remit dividends. 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 subsidiary in China, which could materially and adversely affect our liquidity and our ability to fund and expand business. | ||
| The M&A Rules and certain other PRC regulations may make it more difficult for us to pursue growth through acquisitions. Under the Enterprise Income Tax 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 and have a material adverse effect on our results of operations and the value of your investment. The M&A Rules, among other things, purport to require CSRC approval prior to the listing and trading on an overseas stock exchange of the securities of an offshore special purpose vehicle established or controlled directly or indirectly by the Material PRC Company or individuals and formed for the purpose of overseas listing through the acquisition of PRC domestic interests held by such Material PRC Company or individuals. |
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| Based on our understanding of the explicit provisions under PRC Laws, and assuming no offer, issuance or sale of the Common Shares has been or will be made directly or indirectly within the PRC, a prior approval from the CSRC is not required for the Offering. However, there are substantial uncertainties regarding the interpretation and application of the M&A Rules, other PRC Laws and future PRC laws and regulations, and there can be no assurance that any Governmental Agency will not take a view that is contrary to or otherwise different from our opinions stated herein. Subject to any applicable administrative procedures required by PRC Laws, and provided that all required Governmental Authorizations have been duly obtained, the due application of the net proceeds to be received by the Company from the issue Common Shares as disclosed in the Prospectus under the caption “Use of Proceeds” does not and immediately after the Offering will not contravene any applicable PRC Laws, the articles of association or the business licenses of the Material PRC Company, except for such contravention or default which would not be reasonably expected to have a Material Adverse Effect. | ||
| The Company or our subsidiaries are required to obtain from Chinese authorities to operate our business and to offer the securities being registered to foreign investors. The Material PRC Company has obtained all material Governmental Authorizations necessary for its business operations as described in the Prospectus, and such Governmental Authorizations are in full force and effect and all required Governmental Authorizations have been duly obtained. | ||
| The due application of the net proceeds to be received by the Company from the issue of Common Shares as disclosed in the Prospectus under the caption ‘Use of Proceeds’ does not, and immediately after the Offering, will not impact any applicable PRC Laws. | ||
| Our WFOE takes invoices settles the Foreign Exchange with the banks, which pay in Renminbi. No transfer, dividend or distribution has been made to the holding company up to now. | ||
| Earning Distributions | ||
| We rely primarily on dividends paid by WFOE for our cash needs, including the funds necessary to pay dividends and other cash distributions, if any, to our shareholders, to service any debt we may incur and to pay our operating expenses. The Company settles amounts by transferring dividends, or distributions between the holding company and its subsidiaries, or to investors, which have not yet occurred between any of the above. The payment of dividends by entities organized in the PRC is subject to limitations as described herein. If we determine to pay dividends on any of our Common Shares in the future, as a holding company, we will be dependent on receipt of funds from WFOE. | ||
| Our revenue, net income and cash flow are variable. We may experience fluctuations in our results, including our revenue and net income, from period to period, due to a number of other factors, including changes in management fees as well as changes in the amount of distributions, dividends, or interest paid in respect of investments; changes in our operating expenses; or the degree to which we encounter competition and general economic and market conditions. Such variability in the timing and amount of our accruals and management fees may lead to volatility in the trading price of our shares, and, therefore, our results and cash flow for a particular period may not be indicative of our performance in a future period. | ||
| The PRC government also imposes controls on the conversion of RMB into foreign currencies and the remittance of currencies out of the PRC. Therefore, we may experience difficulties in completing the administrative procedures necessary to obtain and remit foreign currency for the payment of dividends from our profits, if any. 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 Shares. |
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| Pursuant to the Implementation Rules for the new Chinese enterprise income tax law, effective on January 1, 2008, dividends payable by a foreign investment entity to its foreign investors are subject to a withholding tax of up to 10%. Pursuant to Article 10 of the Arrangement Between the Mainland of China and the Hong Kong Special Administration Region for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income effective December 8, 2006, dividends payable by a foreign investment entity to its Hong Kong investor who owns 25% or more of the equity of the foreign investment entity is subject to a withholding tax of up to 5%. | ||
| The payment of dividends by entities organized in the PRC is subject to limitations, procedures and formalities. Regulations in the PRC currently permit payment of dividends only out of accumulated profits as determined in accordance with accounting standards and regulations in China. WFOE is also required to set aside at least 10% of its after-tax profit based on PRC accounting standards each year to its compulsory reserves fund until the accumulative amount of such reserves reaches 50% of its registered capital. | ||
| The transfer to this reserve must be made before distribution of any dividend to shareholders. The surplus reserve fund is non-distributable other than during liquidation and can be used to fund previous years’ losses, if any, and may be utilized for business expansion or converted into share capital by issuing new shares to existing shareholders in proportion to their shareholding or by increasing the par value of the shares currently held by them, provided that the remaining reserve balance after such issue is not less than 25% of the registered capital. | ||
| Cash dividends, if any, on our Shares 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%. |
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Risk Factors
An investment in our common stock involves a high degree of risk. You should carefully consider the risks described below and the other information contained in this report before deciding to invest in our common stock.
Risks Related to our Business
If we are unable to hire, retain or motivate qualified personnel, consultants, and advisors, we may not be able to grow effectively.
At the present time, we have only three employees: our management team. Our ability to grow as a public company will be largely dependent on our ability to recruit highly skilled individuals. Future success depends on our continuing ability to identify, hire, develop, motivate and retain highly qualified personnel for all areas of our organization. Competition for such qualified employees is intense. If we do not succeed in attracting excellent personnel or in retaining or motivating them, we may be unable to grow effectively. In addition, all future success depends largely on our ability to retain key consultants and advisors. We cannot assure that any skilled individuals will agree to become an employee or consultant for the Company. Our inability to retain their services could negatively impact our business and our ability to execute our business strategy.
We may not be able to obtain additional funding to meet our requirements.
Our ability to enter into the business of constructing and distributing EV charging stations depends upon our ability to obtain financing through equity financing, debt financing (including credit facilities) or the sale or syndication of some or all of our interests in certain projects or other assets. If our access to existing credit facilities is not available, and if other funding does not become available, there could be a material adverse effect on our business.
The EV charging market is characterized by rapid technological change, which requires YDTC to continue to develop new products and product innovations. Any delays in such development could adversely affect market adoption of its products and YDTC’s financial results.
Continuing technological changes in battery and other EV technologies could adversely affect adoption of current EV charging technology and/or YDTC’s products. YDTC’s future success will depend upon its ability to develop and introduce a variety of new product offerings to address the changing needs of the EV charging market. As new products are introduced, gross margins tend to decline in the near term and improve as the product become more mature and with a more efficient manufacturing process.
As EV technologies change, YDTC may need to upgrade or adapt its charging station technology and introduce new products and services in order to serve vehicles that have the latest technology, in particular battery cell technology, which could involve substantial costs. Even if YDTC is able to keep pace with changes in technology and develop new products and services, its research and development expenses could increase, its gross margins could be adversely affected in some periods and its prior products could become obsolete more quickly than expected.
If YDTC is unable to devote adequate resources to develop products or cannot otherwise successfully develop products or services that meet customer requirements on a timely basis or that remain competitive with technological alternatives, its products and services could lose market share, its revenue will decline, it may experience higher operating losses and its business and prospects will be adversely affected.
Our success depends on our personnel. Loss of key personnel may adversely affect our business.
Our success depends to a significant extent on the performance of our management personnel. In particular, we will depend on the services of key persons. The loss of the services of key persons could have a material adverse effect on the Company’s business, operating results and financial condition.
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If we are unable to implement and maintain effective internal control over financial reporting in the future, the accuracy and timeliness of our financial reporting may be adversely affected. In addition, because of our status as a smaller reporting company, you will not be able to depend on any attestation from our independent registered public accounting firm as to our internal control over financial reporting for the foreseeable future.
When we become a reporting company, the Sarbanes-Oxley Act requires, among other things, that we assess disclosure controls and procedures and internal control over financial reporting. In particular, as a public company, we will be required to perform system and process evaluations and testing of our internal control over financial reporting to allow management to report on the effectiveness of our internal controls over financial reporting, as required by Section 404 of the Sarbanes-Oxley Act. We will be required to furnish a report by management on, among other things, the effectiveness of our internal control over financial reporting for the first fiscal year beginning after the effective date of this offering. However, our independent registered public accounting firm will not be required to attest to the effectiveness of our internal control over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act until the later of the year following our first annual report required to be filed with the SEC or the date we are no longer an “smaller reporting company” as defined in the JOBS Act. Accordingly, you will not be able to depend on any attestation concerning our internal control over financial reporting from our independent registered public accounting firm for the foreseeable future.
Our senior management lacks experience in managing a public company and complying with laws applicable to operating as a U.S. public company domiciled in the Nevada, and failure to comply with such obligations could have a material adverse effect on our business.
Prior to the completion of this offering, YDTC has been operated as a private company located in China. In connection with this offering, we acquired our company, ALTB, and NHIL, and YDTC, our subsidiary in China. In the process of taking these steps to prepare our company for this initial public offering, senior management of YDTC became the senior management of our company. None of senior management of our company has experience managing a public company or managing a Nevada company.
As a result of this offering, our company will become subject to laws, regulations and obligations that do not currently apply to it, such as the Exchange Act of 1934, and our senior management currently has no experience in complying with such laws, regulations and obligations. The senior management is only experienced in operating the business of YDTC in compliance with PRC laws. However, by virtue of this offering, our company will be required to file annual and current reports with the SEC in compliance with U.S. securities and other laws. These obligations can be burdensome and complicated, and failure to comply with such obligations could have a material adverse effect on our company.
The Public Company Accounting Oversight Board (PCAOB) issued a report on its determinations that the Board is unable to inspect or investigate completely PCAOB-registered public accounting firms headquartered in mainland China and in Hong Kong, a Special Administrative Region of the People’s Republic of China (PRC), because of positions taken by PRC authorities in those jurisdictions. The Board made these determinations pursuant to PCAOB Rule 6100, which provides a framework for how the PCAOB fulfils its responsibilities under the Holding Foreign Companies Accountable Act (HFCAA).
To protect investors and to carry out the PCAOB’s mandate, our inspectors and investigators need consistent access across all jurisdictions to the audit work performed for public companies in U.S. capital markets. Rule 6100 sets forth three factors that together reflect the access the PCAOB needs to completely execute its statutory mandate with respect to its inspections and investigations. The PCAOB’s determination report provides the PCAOB’s assessment of these factors based on positions taken by PRC authorities. As discussed in the report, PRC authorities assert that access by the Board to audit work papers and related information can be provided only under a cooperative agreement, but they persistently have taken positions that prevent the finalization of, or their full performance under, such agreements.
The PCAOB has issued its determination report to the U.S. Securities and Exchange Commission, which also has responsibilities under the HFCAA. The appendices to the report identify the PCAOB-registered firms subject to the determinations. Under Rule 6100, the Board will reassess its determinations at least annually.
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We may not be able to obtain additional funding to meet our requirements.
Our ability to maintain and expand our development and production of EV products to cover our general and administrative expenses depends upon our ability to obtain financing through equity financing, debt financing (including credit facilities) or the sale or syndication of some or all of our interests in certain projects or other assets. If our access to existing credit facilities is not available, and if other funding does not become available, there could be a material adverse effect on our business.
Our success depends on our personnel. Loss of key personnel may adversely affect our business.
Our success depends to a significant extent on the performance of our management personnel. In particular, we will depend on the services of such personnel as Yufeng Zhang, President, CEO, and Treasurer. The loss of the services of key persons could have a material adverse effect on the Company’s business, operating results and financial condition. We will also be dependent on the officers and directors of ALTB to raise capital.
Our operating results depend on product costs, public tastes and promotion success.
We expect to generate our future revenue from brand operation and management services. Our future revenues will depend upon the timing and the level of market acceptance of our services, as well as upon our fees. The revenues derived from our services depend primarily on the acceptance by the public, which cannot be predicted and does not necessarily bear a direct correlation to the services provided.
Our business could be adversely impacted if we are unable to protect our intellectual property rights.
Our ability to compete depends, in part, upon successful protection of our intellectual property. We do not have the financial resources to protect our rights to the same extent as major brand operation and management companies. We will attempt to protect proprietary and intellectual property rights to our production through available copyright and trademark laws and licensing and distribution arrangements with reputable international companies in specific territories and media for limited durations. Despite these precautions, existing copyright and trademark laws afford only limited practical protection in certain countries. As a result, it may be possible for unauthorized third parties to copy and distribute our productions or certain portions or applications of our intended productions, which could have a material adverse effect on our business, results of operations and financial condition.
Litigation may also be necessary in the future to enforce our intellectual property rights, to protect our rights, or to determine the validity and scope of the proprietary rights of others or to defend against claims of infringement or invalidity. Any such litigation could result in substantial costs and the diversion of resources and could have a material adverse effect on our business, results of operations and financial condition. We cannot assure you that infringement or invalidity claims will not materially adversely affect our business, results of operations and financial condition. Regardless of the validity or the success of the assertion of these claims, we could incur significant costs and diversion of resources in enforcing our intellectual property rights or in defending against such claims, which could have a material adverse effect on our business, results of operations and financial condition.
If we fail to maintain effective internal controls over financial reporting, we may be subject to litigation and/or costly remediation and the price of our Common Stock may be adversely affected.
Failure to establish the required internal controls or procedures over financial reporting, or any failure of those controls or procedures once established, could adversely impact our public disclosures regarding our business, financial condition or results of operations. Upon review of the required internal control over financial reporting and disclosure controls and procedures, our management and/or our auditors may identify material weaknesses and/or significant deficiencies that need to be addressed. Any actual or perceived weaknesses or conditions that need to be addressed in our internal control over financial reporting, disclosure of management’s assessment of its internal control over financial reporting or disclosure of our public accounting firm’s attestation to or report on management’s assessment of our internal control over financial reporting could adversely impact the price of our Common Stock and may lead to claims against us.
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Global economic conditions, such as COVID-19, may adversely affect our industry, business and results of operations.
Our overall performance depends, in part, on worldwide economic conditions which historically is cyclical in character. Key international economies continue to be impacted by a recession, characterized by falling demand for a variety of goods and services, restricted credit, going concern threats to financial institutions, major multinational companies and medium and small businesses, poor liquidity, declining asset values, reduced corporate profitability, extreme volatility in credit, equity and foreign exchange markets and bankruptcies. By way of example, the automotive aftermarket, specifically fuel saving add-ons such as light-truck tonneau covers, is typically not as affected by economic slow-down or recession as other industries or market segments. In markets where our sales occur and go into recession, these conditions affect the rate of spending and could adversely affect our customers’ ability or willingness to purchase our products, and delay prospective customers’ purchasing decisions, all of which could adversely affect our operating results. In addition, in a weakened economy, companies that have competing products may reduce prices which could also reduce our average selling prices and harm our operating results.
Any further disruptions from an uptick in new infections related to COVID-19 may materially harm out business prospects.
Further upticks in infection, and the related enforcement of governmental restrictions would materially hinder our ability to grow, as it would make it could interrupt our supply chain, as well as the financial condition of our intended customer base.
Concentration of Ownership in Certain Individuals may allow such Shareholders to Control the Company’s Business
The holders of our Preferred Stock control a majority of the voting interest of the Company. Following the offering, such shareholders will still hold a majority of the interest of the Company. Future issuances of Series A Preferred Stock could further dilute the existing holders of common stock. The conversion of the Preferred Stock is entirely optional and it can happen at any time. As a result, these shareholders will be able to exercise control over virtually all matters requiring shareholder approval, including the election of directors and approval of significant corporation transactions. Thus, these individuals who make up the present management will be able to maintain their positions and effectively operate the Company’s business, regardless of other investors’ preferences.
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Risks Relating to Our Corporate Structure
U.S. Investors face added risks from the Company’s classification as a foreign private issuer.
Subject to the requirements and public policy considerations as stipulated under applicable PRC Laws relating to the enforceability of foreign court judgments, submission to foreign jurisdiction for dispute resolution and choice of law, and also subject to the conditions described under the caption “Enforceability of Civil Liabilities” in the Registration Statement and Prospectus, (i) the irrevocable submission of the Company to the jurisdiction of any courts in the United States, the waiver by the Company of any objection to the venue of a proceeding in any such court, the waiver and agreement not to plead an inconvenient forum, the waiver of sovereign immunity
Under PRC Laws, neither the Material PRC Company, nor their respective properties, assets or revenues, are entitled to any right of immunity on the grounds of sovereignty or otherwise from any legal action, suit or proceeding, from set-off or counterclaim, from the jurisdiction of any court, from services of process, from attachment prior to or in aid of execution of any judgment, or from other legal processes or proceedings for the giving of any relief or for the enforcement of any judgment.
The Company’s principal executive offices and our officers and directors are located outside of the United States. This could make the enforcement and/or service of process of a shareholder claim or judgment difficult.
U.S shareholders may face difficulties in effecting service of process against the Company and our officers and director. Even with proper service of process, the enforcement of judgments obtained in U.S. courts or foreign courts based on the civil liability provisions of the U.S. federal securities laws would be extremely difficult. Furthermore, there would be added costs and issues with bringing an original action in foreign courts to enforce liabilities based on the U.S. federal securities laws against the Company or its officers and directors, and they still may be fruitless.
We are faced with risks and uncertainties as a foreign enterprise under PRC laws.
As a company incorporated under the laws of Nevada, we are classified as a foreign enterprise under PRC laws and regulations, and our wholly-owned PRC subsidiary, YDTC, is a foreign-invested enterprise, or a FIE.
Substantial uncertainties exist with respect to the enactment timetable, interpretation and implementation of draft PRC Foreign Investment Law and how it may impact the viability of our current corporate structure, corporate governance and business operations.
The Ministry of Commerce of the People’s Republic of China (“MOFCOM”) published a discussion draft of the proposed Foreign Investment law (“Draft Foreign Investment Law”) in January 2015 aiming to, upon enactment, replace the existing laws regulating foreign investment in China, namely, the Sino-Foreign Equity Joint Venture Enterprise Law, the Sino-Foreign Cooperative Joint Venture Enterprise Law, and the Wholly Foreign-Invested Enterprise Law, together with their implementation rules and ancillary regulations. The MOFCOM is currently soliciting comments on this draft and substantial uncertainties exist with respect to its enactment timetable, interpretation and implementation. The Draft Foreign Investment Law, if enacted as proposed, may materially impact the viability of our current corporate structure, corporate governance, and business operation.
Among other things, the Draft Foreign Investment Law expands the definition of foreign investment and introduces the principle of “actual control” in determining whether a company is considered a FIE. Once an entity is determined to be an FIE, it will be subject to the foreign investment restrictions or prohibitions set forth in a “negative list,” which is classified into the “catalogue of prohibitions” and “catalogue of restrictions,” to be separately issued by the State Council later. Foreign investors are not allowed to invest in any sector set forth in the catalogue of prohibitions. If the FIE is engaged in the industry listed in the catalogue of restrictions, it needs market entry clearance by the MOFCOM. Otherwise, prior approval from governmental authorities as mandated by the existing foreign investment legal regime would no longer be required for establishment of the FIE.
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Contractual arrangements WFOE has entered into may be subject to scrutiny by the PRC tax authorities and a finding that we owe additional taxes could substantially reduce our consolidated net income and the value of your investment.
Under PRC laws and regulations, arrangements and transactions among related parties may be subject to audit or challenge by the PRC tax authorities within ten years after the taxable year when the transactions are conducted. We could face material and adverse tax consequences if the PRC tax authorities determine that the contractual arrangements of the WFOE do not represent arm’s-length prices and consequently adjust WFOE’s income in the form of a transfer pricing adjustment. A transfer pricing adjustment could, among other things, result in a reduction, for PRC tax purposes, of expense deductions recorded by the WFOE, which could in turn increase its tax liabilities. In addition, the PRC tax authorities may impose late payment fees and other penalties on WFOE for any unpaid taxes. Our consolidated net income may be materially and adversely affected if WFOE’s tax liabilities increase or if they are subject to late payment fees or other penalties.
We rely on dividends paid by WFOE for our cash needs.
We rely primarily on dividends paid by WFOE for our cash needs, including the funds necessary to pay dividends and other cash distributions, if any, to our shareholders, to service any debt we may incur and to pay our operating expenses. The payment of dividends by entities organized in the PRC is subject to limitations as described herein. Under Nevada law, we may pay dividends from legally available realized and unrealized profits of the Company, and/or its share premium account and/or as otherwise permitted by the Companies Act, provided that we must be solvent before and after the dividend payment in the sense that we will be able to pay our debts as they become due in the ordinary course of business. If we determine to pay dividends on any of our common shares in the future, as a holding company, we will be dependent on receipt of funds from WFOE.
Pursuant to the Implementation Rules for the new Chinese enterprise income tax law, effective on January 1, 2008, dividends payable by a foreign investment entity to its foreign investors are subject to a withholding tax of up to 10%. Pursuant to Article 10 of the Arrangement Between the Mainland of China and the Hong Kong Special Administration Region for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income effective December 8, 2006, dividends payable by a foreign investment entity to its Hong Kong investor who owns 25% or more of the equity of the foreign investment entity is subject to a withholding tax of up to 5%.
The payment of dividends by entities organized in the PRC is subject to limitations, procedures and formalities. Regulations in the PRC currently permit payment of dividends only out of accumulated profits as determined in accordance with accounting standards and regulations in China. WFOE is also required to set aside at least 10% of its after-tax profit based on PRC accounting standards each year to its compulsory reserves fund until the accumulative amount of such reserves reaches 50% of its registered capital.
The transfer to this reserve must be made before distribution of any dividend to shareholders. The surplus reserve fund is non-distributable other than during liquidation and can be used to fund previous years’ losses, if any, and may be utilized for business expansion or converted into share capital by issuing new shares to existing shareholders in proportion to their shareholding or by increasing the par value of the shares currently held by them, provided that the remaining reserve balance after such issue is not less than 25% of the registered capital.
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Risks Related to Doing Business in China
Our profitability may be seriously affected by fluctuations in exchange rates between the Renminbi and the U.S. dollar.
All of our revenue is denominated in Renminbi while our financial reporting is in U.S. dollars. As a result, any significant fluctuation in exchange rates may cause us to incur currency exchange translation and harm our financial condition and results of operations.
Movements in Renminbi exchange rates are affected by, among other things, changes in political and economic conditions and China’s foreign exchange regime and policy. The Renminbi has been unpegged from the U.S. dollar since July 2005 and, although the People’s Bank of China regularly intervenes in the foreign exchange market to limit fluctuations in Renminbi exchange rates, the Renminbi may appreciate or depreciate significantly in value against the U.S. dollar in the medium to long term. Moreover, it is possible that the PRC authorities may lift restrictions on fluctuations in Renminbi exchange rates and lessen intervention in the foreign exchange market in the future.
To date, we have not entered into any hedging transactions in an effort to reduce our exposure to foreign currency exchange risk. While we may decide to enter into hedging transactions in the future, the availability and effectiveness of these hedges may be limited and we may not be able to adequately hedge our exposure or at all.
Governmental control of currency conversion may limit our ability to use our revenues effectively and the ability of our WFOE to obtain financing.
The PRC government imposes control on the convertibility of the Renminbi into foreign currencies and, in certain cases, the remittance of currency out of China. We receive all our revenues in Renminbi, which currently is not a freely convertible currency. Restrictions on currency conversion imposed by the PRC government may limit our ability to use revenues generated in Renminbi to fund our expenditures denominated in foreign currencies or our business activities outside China. Under China’s existing foreign exchange regulations, Renminbi may be freely converted into foreign currency for payments relating to current account transactions, which include among other things dividend payments and payments for the import of goods and services, by complying with certain procedural requirements. Our WFOE is able to pay dividends in foreign currencies to us without prior approval from SAFE, by complying with certain procedural requirements Our WFOE may also retain foreign currency in its current account bank accounts for use in payment of international current account transactions. However, we cannot assure you that the PRC government will not take measures in the future to restrict access to foreign currencies for current account transactions.
Conversion of Renminbi into foreign currencies, and of foreign currencies into Renminbi, for payments relating to capital account transactions, which principally includes investments and loans, generally requires the approval of SAFE and other relevant PRC governmental authorities. Restrictions on the convertibility of the Renminbi for capital account transactions could affect the ability of WFOE to make investments overseas or to obtain foreign currency through debt or equity financing, including by means of loans or capital contributions from us. We cannot assure you that the registration process will not delay or prevent our conversion of Renminbi for use outside of China.
Adverse changes in political, economic and other policies of the Chinese government could have a material adverse effect on the overall economic growth of China, which could materially and adversely affect the growth of our business and our competitive position.
All of our business operations are conducted in China. Accordingly, our business, financial condition, results of operations and prospects are affected significantly by economic, political and legal developments in China. Although the PRC economy has been transitioning from a planned economy to a more market-oriented economy since the late 1970s, the PRC government continues to exercise significant control over China’s economic growth through direct allocation of resources, monetary and tax policies, and a host of other government policies such as those that encourage or restrict investment in certain industries by foreign investors, control the exchange between the Renminbi and foreign currencies, and regulate the growth of the general or specific market. While the Chinese economy has experienced significant growth in the past 30 years, growth has been uneven, both geographically and among various sectors of the economy. As the PRC economy has become increasingly linked with the global economy, China is affected in various respects by downturns and recessions of major economies around the world. The various economic and policy measures enacted by the PRC government to forestall economic downturns or bolster China’s economic growth could materially affect our business. Any adverse change in the economic conditions in China, in policies of the PRC government or in laws and regulations in China could have a material adverse effect on the overall economic growth of China and market demand for our outsourcing services. Such developments could adversely affect our businesses, lead to reduction in demand for our services and adversely affect our competitive position.
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Uncertainties with respect to the PRC legal system could have a material adverse effect on us.
The PRC legal system is based on written statutes. Prior court decisions may be cited for reference but have limited precedential value. Since the late 1970s, the PRC government has been building a comprehensive system of laws and regulations governing economic matters in general. The overall effect has been to significantly enhance the protections afforded to various forms of foreign investments in China. We conduct our business primarily through our WFOE established in China. These companies are generally subject to laws and regulations applicable to foreign investment in China. However, since these laws and regulations are relatively new and the PRC legal system continues to rapidly evolve, the interpretations of many laws, regulations and rules are not always uniform and enforcement of these laws, regulations and rules involves uncertainties, which may limit legal protections available to us. In addition, some regulatory requirements issued by certain PRC government authorities may not be consistently applied by other government authorities (including local government authorities), thus making strict compliance with all regulatory requirements impractical, or in some circumstances impossible. For example, we may have to resort to administrative and court proceedings to enforce the legal protection that we enjoy either by law or contract. However, since PRC administrative and court authorities have discretion in interpreting and implementing statutory and contractual terms, it may be more difficult to predict the outcome of administrative and court proceedings and the level of legal protection we enjoy than in more developed legal systems. These uncertainties may impede our ability to enforce the contracts we have entered into with our business partners, clients and suppliers. In addition, such uncertainties, including any inability to enforce our contracts, together with any development or interpretation of PRC law that is adverse to us, could materially and adversely affect our business and operations. Furthermore, intellectual property rights and confidentiality protections in China may not be as effective as in the United States or other more developed countries. We cannot predict the effect of future developments in the PRC legal system, including the promulgation of new laws, changes to existing laws or the interpretation or enforcement thereof, or the pre-emption of local regulations by national laws. These uncertainties could limit the legal protections available to us and other foreign investors, including you. In addition, any litigation in China may be protracted and result in substantial costs and diversion of our resources and management attention.
Since our operations and assets are located in China, shareholders may find it difficult to enforce a U.S. judgement against the assets of our Company, our directors and executive officers.
Our operation and assets are located in China. In addition, our executive officers and directors are non-residents of the U.S., and substantially all the assets of such persons are located outside the U.S. As a result, it could be difficult for investors to effect service of process in the U.S., or to enforce a judgment obtained in the U.S. against us or any of our officers or directors.
The approval of the China Securities Regulatory Commission, or the CSRC, may be required in connection with this offering under a recently adopted PRC regulation; any requirement to obtain prior CSRC approval could delay this offering and failure to obtain such approval, if required, could have a material adverse effect on our business, results of operation and reputation and could also create uncertainties for this offering.
In 2006, the CSRC and five other PRC regulatory agencies jointly promulgated the Provisions Regarding Mergers and Acquisitions of Domestic Enterprises by Foreign Investors, or the M&A Rule, which regulates foreign investment in PRC domestic enterprises. The M&A Rule requires offshore special purpose vehicles formed for the purposes of overseas listing of equity interests in PRC companies and controlled directly or indirectly by PRC companies or individuals to obtain the approval of the CSRC prior to the listing and trading of the special purpose vehicle’s securities on an overseas stock exchange. The interpretation and application of the M&A Rule is currently unclear. If the CSRC or another PRC regulatory agency subsequently determines that prior CSRC approval was required, we may face regulatory actions or other sanctions from the CSRC or other PRC regulatory agencies. These regulatory agencies may impose fines and penalties on our operations, limit our operating privileges, delay or restrict the repatriation of the proceeds from this offering into China or the payment or distribution of dividends by our PRC subsidiary, or take other actions that could have a material adverse effect on our business, financial condition, results of operations, reputation and prospects.
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We face uncertainty regarding the PRC tax reporting obligations and consequences for certain indirect transfers of the stock of our operating company.
Under the current PRC tax regulations, indirect transfers of equity interests and other properties of PRC tax resident enterprises by non-PRC holding companies may be subject to PRC tax. In accordance with the Announcement of the State Administration of Taxation on Several Issues concerning the Enterprise Income Tax on the Indirect Transfers of Properties by Non-Resident Enterprises (“Announcement 7”) issued by the SAT on February 3, 2015, if a non-PRC tax resident enterprise indirectly transfers equities and other properties of a PRC tax resident enterprise and such indirect transfer will produce a result identical or substantially similar to direct transfer of equity interests and other properties of the PRC tax resident enterprise, the non-PRC tax resident enterprise may be subject to PRC withholding tax at a rate up to 10%. The Announcement of the State Administration of Taxation on Matters Concerning Withholding of Income Tax of Non-resident Enterprises at Source (“Announcement 37”), which was issued by SAT on October 17, 2017 and became effective on December 1, 2017, renovates the principles and procedures concerning the indirect equity transfer tax withholding for a non-PRC tax resident enterprise. Failure to comply with the tax payment obligations by a non-PRC tax resident will result in penalties, including full payment of tax owed, fines and default interest on those tax.
According to Announcement 7, where a non-resident enterprise indirectly transfers equity interests or other properties of PRC tax resident enterprises (“PRC Taxable Property”) to avoid its tax liabilities by implementing arrangements without reasonable commercial purpose, such indirect transfer shall be recharacterized and recognized as a direct transfer of PRC Taxable Property. As a result, gains derived from such indirect transfer and attributable to PRC Taxable Property may be subject to PRC withholding tax at a rate of up to 10%. In respect of an indirect offshore transfer of property of a PRC establishment or place of business of a foreign enterprise, the resulting gain is to be included with the annual enterprise filing of the PRC establishment or place of business being transferred and would consequently be subject to PRC enterprise income tax at a rate of 25%. Announcement 7 further sets forth certain “safe harbors” which would be deemed to have a reasonable commercial purpose. As a general principle, the SAT also issued the Administration of General Anti-Tax Avoidance (Trial Implementation) (“GATA”), which became effective on February 1, 2015 and empowers the PRC tax authorities to apply special tax adjustments for “tax avoidance arrangements.”
We face uncertainties as to the reporting and other implications of certain past and future transactions where PRC Taxable Property are involved, such as offshore restructuring, sale of the shares in our offshore subsidiary and investments. Our Company may be subject to withholding obligations if our Company is considered as a transferee in such transactions, under Announcement 7 and Announcement 37. For transfer of shares in our Company by investors who are non-PRC resident enterprises, our PRC subsidiary may be required to expend valuable resources to comply with Announcement 7 and Announcement 37 or to request the relevant transferors from whom we purchase taxable assets to comply with these circulars, or to establish that our company should not be taxed under these circulars, which may have an adverse effect on our financial condition and results of operations.
PRC regulations relating to the establishment of offshore special purpose companies by PRC residents may subject our PRC resident shareholders to personal liability and limit our ability to acquire PRC companies or to inject capital into WFOE, limit WFOE’s ability to distribute profits to us, or otherwise materially and adversely affect us.
Under the Circular of the State Administration of Foreign Exchange on Issues concerning Foreign Exchange Administration over the Overseas Investment and Financing and Round-trip Investment by Domestic Residents via Special Purpose Vehicles, or Circular 37, issued by SAFE, prior registration with the local SAFE branch is required for PRC residents to contribute domestic assets or interests to offshore companies, known as SPVs. Moreover, Circular 37 applies retroactively. As a result, PRC residents who have contributed domestic assets or interest to a SPV but failed to complete foreign exchange registration of overseas investments as required before July 4, 2014, shall send a letter to SAFE and its branches for explanation. SAFE and its branches shall, under the principle of legality and legitimacy, conduct supplementary registration, and impose administrative punishment on those in violation of the administrative provisions on the foreign exchange pursuant to the law.
We have requested our shareholders who are PRC residents to make the necessary applications, filings and amendments as required under Circular 37 and other related rules. We attempt to comply, and attempt to ensure that our shareholders who are subject to these rules comply with the relevant requirements. However, we cannot provide any assurances that all of our shareholders who are PRC residents will comply with our request to make or obtain any application registrations or comply with other requirements required by Circular 37 or other related rules. The failure or inability of our PRC resident shareholders to make any required registrations or comply with other requirements may subject such shareholders to fines and legal sanctions and may also limit our ability to contribute additional capital into or provide loans to (including using the proceeds from this offering) YDTC, limiting the ability of YDTC to pay dividends or otherwise distribute profits to us.
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Failure to comply with the Individual Foreign Exchange Rules relating to the overseas direct investment or our PRC resident shareholders’ engaging in the issuance or trading of securities overseas may subject them to fines or other liabilities.
Other than Circular 37, our ability to conduct foreign exchange activities in China may be subject to interpretation and enforcement of the Implementation Rules of the Administrative Measures for Individual Foreign Exchange promulgated by SAFE in January 2007 (as amended and supplemented, the “Individual Foreign Exchange Rules”). Under the Individual Foreign Exchange Rules, any PRC individual seeking to make a direct investment overseas or engage in the issuance or trading of negotiable securities or derivatives overseas must make the appropriate registrations in accordance with SAFE provisions. PRC individuals who fail to make such registrations may be subject to warnings, fines or other liabilities.
We may not be fully informed of the identities of all our beneficial owners who are PRC residents. For example, because the investment in or trading of our shares will happen in an overseas public or secondary market where shares are often held with brokers in brokerage accounts, it is unlikely that we will know the identity of all of our beneficial owners who are PRC residents. Furthermore, we have no control over any of our future beneficial owners and we cannot assure you that such PRC residents will be able to complete the necessary approval and registration procedures required by the Individual Foreign Exchange Rules.
It is uncertain how the Individual Foreign Exchange Rules will be interpreted or enforced and whether such interpretation or enforcement will affect our ability to conduct foreign exchange transactions. Because of this uncertainty, we cannot be sure whether the failure by any of our PRC resident shareholders to make the required registration will subject our subsidiaries to fines or legal sanctions on their operations, delay or restriction on repatriation of proceeds of this offering into the China, restriction on remittance of dividends or other punitive action that would have a material adverse effect on our business, results of operations and financial condition.
PRC regulation of loans and direct investment by offshore holding companies to or in PRC entities may delay or prevent us from using the proceeds of this offering to make loans or additional capital contributions to WFOE, which could materially and adversely affect our liquidity and our ability to fund and expand our business.
In using the proceeds from this public offering or any future offerings, we may make loans to the WFOE. Any loans to either are subject to PRC regulations and approvals. For example, loans by us to our WFOE in China cannot exceed statutory limits and must be registered with SAFE or its local counterpart. We may also decide to finance our WFOE through capital contributions. These capital contributions must be approved by the Ministry of Commerce in China or its local counterpart. We cannot assure you that we will be able to obtain these government registrations or approvals on a timely basis, if at all. If we fail to receive such registrations or approvals, our ability to use the proceeds of this offering and to capitalize our PRC operations may be negatively affected, which could adversely and materially affect our liquidity and our ability to fund and expand our business.
The SAFE’s Circular on Reforming the Administration Approach Regarding the Foreign Exchange Capital Settlement of Foreign-invested Enterprises (“Circular 19”) provides that the conversion from foreign currency registered capital of foreign-invested enterprises into the Renminbi capital may be at foreign-invested enterprises’ discretion, which means that the foreign currency registered capital of foreign-invested enterprises for which the rights and interests of monetary contribution has been confirmed by the local foreign exchange bureau (or the book-entry of monetary contribution has been registered) can be settled at the banks based on the actual operational needs of the enterprises.
Further, according to Circular 19, the flow and use of the RMB capital converted from foreign currency-denominated registered capital of a foreign-invested company is regulated such that RMB capital may not be used for the issuance of RMB entrusted loans, the repayment of inter-enterprise loans or the repayment of banks loans that have been transferred to a third party. Although Circular 19 allows RMB capital converted from foreign currency-denominated registered capital of a foreign-invested enterprise to be used for equity investments within China, it also reiterates the principle that RMB converted from the foreign currency-denominated capital of a foreign-invested company may not be directly or indirectly used for purposes beyond its business scope. Thus, it is unclear whether SAFE will permit such capital to be used for equity investments in China in actual practice.
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In July 2016, the SAFE promulgated the Circular on Reforming and Standardizing the Administrative Provisions on Capital Account Foreign Exchange (“Circular 16”), which applies to all domestic enterprises in China. Circular 16 reiterates some of the rules set forth in Circular 19 but changes the prohibition against using RMB capital converted from foreign currency-denominated registered capital of a foreign-invested company to issue RMB entrusted loans to a prohibition against using such capital to issue loans to non-associated enterprises.
Circular 19 and Circular 16 may significantly limit the ability of our WFOE to transfer and use Renminbi funds from its foreign currency denominated capital, which may adversely affect our business, financial condition and results of operations.
In light of the various requirements imposed by PRC regulations on loans to and direct investment in PRC entities by offshore holding companies, we cannot assure you that we will be able to complete the necessary government registrations or obtain the necessary government approvals on a timely basis, if at all, with respect to future loans by us to our PRC subsidiary or with respect to future capital contributions by us to our PRC subsidiary. If we fail to complete such registrations or obtain such approvals, our ability to use the proceeds we received from our initial public offering and to capitalize or otherwise fund our PRC operations may be negatively affected, which could materially and adversely affect our liquidity and our ability to fund and expand our business.
We must remit the offering proceeds to our WFOE in China before they may be used to benefit our business in China. This process may take a number of months and we will be unable to use the proceeds to grow our business in the meantime.
The proceeds of this offering must be sent back to China, and the process for sending such proceeds back to our WFOE in China may take several months after the closing of this offering. In order to remit the offering proceeds to China, we will take the following actions:
| ● | First, we will open a special foreign exchange account for capital account transactions. To open this account, we must submit to SAFE certain application forms, identity documents, transaction documents, form of foreign exchange registration of overseas investments by domestic residents, and foreign exchange registration certificate of the invested company. |
| ● | Second, we will remit the offering proceeds into this special foreign exchange account. |
| ● | Third, we will apply for settlement of the foreign exchange. In order to do so, we must submit to SAFE certain application forms, identity documents, payment order to a designated person, and a tax certificate. |
The timing of the process is difficult to estimate because the efficiencies of different SAFE branches can vary materially. Ordinarily, the process takes several months to complete. We may be unable to use these proceeds to grow our business until we receive such proceeds in China.
We may be classified as a “resident enterprise” for PRC enterprise income tax purposes; such classification could result in unfavorable tax consequences to us and our non-PRC shareholders.
The PRC enterprise income tax law and its implementing rules provide that enterprises established outside of China whose “de facto management bodies” are located in China are considered “resident enterprises” under PRC tax laws. The implementing rules define the term “de facto management bodies” as a management body which substantially manages, or has control over the business, personnel, finance and assets of an enterprise. Circular 82, issued by the State Administration of Taxation, provides that a foreign enterprise controlled by a PRC company or a group of PRC companies will be classified as a “resident enterprise” with its “de facto management body” located within China if all of the following requirements are satisfied: (1) the senior management and core management departments in charge of its daily operations function are mainly in China; (2) its financial and human resources decisions are subject to determination or approval by persons or bodies in China; (3) its major assets, accounting books, company seals, and minutes and files of its board and shareholders’ meetings are located or kept in China; and (4) at least half of the enterprise’s directors with voting right or senior management reside in China. To provide more guidance on the implementation of Circular 82, the State Administration of Taxation issued Bulletin 45, which clarifies certain matters relating to resident status determination, post-determination administration and competent tax authorities.
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The State Administration of Taxation since issued a bulletin to provide more guidance on the implementation of Circular 82. This bulletin further provides that, among other things, an entity that is classified as a “resident enterprise” in accordance with the circular shall file the application for classifying its status of residential enterprise with the local tax authorities where its main domestic investors are registered. From the year in which the entity is determined to be a “resident enterprise,” any dividend, profit and other equity investment gain shall be taxed in accordance with the enterprise income tax law and its implementing rules.
Currently, there are no detailed rules or precedents governing the procedures and specific criteria for determining de facto management bodies which are applicable to our company or our overseas subsidiary. If our company or any of our overseas subsidiaries is considered a PRC tax resident enterprise for PRC enterprise income tax purposes, a number of unfavorable PRC tax consequences could follow. First, our company or our overseas subsidiary will be subject to the uniform 25% enterprise income tax rate as to our global income as well as PRC enterprise income tax reporting obligations. Second, although under the Enterprise Income Tax Law and its implementing rules dividends paid to us from our PRC subsidiary would qualify as tax-exempted income, we cannot assure you that such dividends will not be subject to a 10% withholding tax, as the PRC foreign exchange control authorities, which enforce the withholding tax, have not yet issued guidance with respect to the processing of outbound remittances to entities that are treated as resident enterprises for PRC enterprise income tax purposes. Finally, dividends payable by us to our shareholders and gain on the sale of our shares may become subject to PRC withholding tax. It is possible that future guidance issued with respect to the new resident enterprise classification could result in a situation in which a withholding tax of 10% for our non-PRC enterprise shareholders or a potential withholding tax of 20% for individual investors is imposed on dividends we pay to them and with respect to gains derived by such investors from transferring our shares. In addition to the uncertainty in how the new resident enterprise classification could apply, it is also possible that the rules may change in the future, possibly with retroactive effect. If we are required under the Enterprise Income Tax law to withhold PRC income tax on our dividends payable to our foreign shareholders, or if we are required to pay PRC income tax on the transfer of our shares under the circumstances mentioned above, the value of your investment in our shares may be materially and adversely affected. It is unclear whether, if we are considered a PRC resident enterprise, holders of our shares would be able to claim the benefit of income tax treaties or agreements entered into between China and other countries or areas.
Our current employment practices may be restricted under the PRC Labor Contract Law and our labor costs may increase as a result.
The PRC Labor Contract Law and its implementing rules impose requirements concerning contracts entered into between an employer and its employees and establishes time limits for probationary periods and for how long an employee can be placed in a fixed-term labor contract. Because the Labor Contract Law and its implementing rules have not been in effect very long and because there is lack of clarity with respect to their implementation and potential penalties and fines, it is uncertain how it will impact our current employment policies and practices. We cannot assure you that our employment policies and practices do not, or will not, violate the Labor Contract Law or its implementing rules and that we will not be subject to related penalties, fines or legal fees. If we are subject to large penalties or fees related to the Labor Contract Law or its implementing rules, our business, financial condition and results of operations may be materially and adversely affected. In addition, according to the Labor Contract Law and its implementing rules, if we intend to enforce the non-compete provision with an employee in a labor contract or non-competition agreement, we have to compensate the employee on a monthly basis during the term of the restriction period after the termination or ending of the labor contract, which may cause extra expenses to us. Moreover, the Labor Contract Law and its implementation rules require certain terminations to be based upon seniority rather than merit, which significantly affects the cost of reducing workforce for employers. In the event we decide to significantly change or decrease our workforce in the PRC, the Labor Contract Law could adversely affect our ability to enact such changes in a manner that is most advantageous to our circumstances or in a timely and cost effective manner, thus our results of operations could be adversely affected.
Furthermore, the economy in China has experienced increases in inflation and labor costs in recent years. As a result, average wages in the PRC are expected to continue to increase. In addition, we are required by PRC laws and regulations to pay various statutory employee benefits, including pension, housing fund, medical insurance, on-the-job injury insurance, unemployment insurance and maternity insurance to designated government agencies for the benefit of our employees. We expect that our labor costs, including wages and employee benefits, will continue to increase. Unless we are able to control our labor costs or pass on these increased labor costs to our users by increasing the fees of our services, our financial condition and results of operations may be adversely affected.
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The United States Senate has passed the Accelerating Holding Foreign Companies Accountable Act, which, if enacted, would decrease the number of “non-inspection years” from three years to two years, and thus, would reduce the time before your securities may be prohibited from trading or delisted.
Assuming the enactment of the Accelerating Holding Foreign Companies Accountable Act, our common shares may be prohibited from trading or even delisted in two years from the completion of the offering. Furthermore, the Commission adopted rules to implement the HFCAA and, pursuant to the HFCAA, the PCAOB has issued its report notifying the Commission of its determination that it is unable to inspect or investigate completely accounting firms headquartered in mainland China or Hong Kong. Therefore, our common shares are at advanced risk of prohibition from trading or delisting in two years from the offering.
We face uncertainties with respect to indirect transfers of equity interests in PRC resident enterprises by their non-PRC holding companies.
We face uncertainties with respect to indirect transfers of equity interests in PRC resident enterprises by their non-PRC holding companies. PRC Governmental Agencies may intervene or influence the Company’s operations at any time, which could result in a material change in the Company’s operations and/or the value of the Common shares. There is a risk that such action could significantly limit or completely hinder the Company’s ability to offer or continue to offer any securities to investors and cause the value of such securities to significantly decline or be worthless.
Adverse changes in economic and political policies of the PRC government could have a material and adverse effect on overall economic growth in China, which could materially and adversely affect our business. General macroeconomic conditions may materially and adversely affect our business, prospects, results of operations and financial position. The PRC government’s control over foreign currency conversion may adversely affect our business and results of operations and our ability to remit dividends. 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 subsidiary in China, which could materially and adversely affect our liquidity and our ability to fund and expand business.
The M&A Rules and certain other PRC regulations may make it more difficult for us to pursue growth through acquisitions. Under the Enterprise Income Tax 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 and have a material adverse effect on our results of operations and the value of your investment. The M&A Rules, among other things, purport to require CSRC approval prior to the listing and trading on an overseas stock exchange of the securities of an offshore special purpose vehicle established or controlled directly or indirectly by Material PRC Companies or individuals and formed for the purpose of overseas listing through the acquisition of PRC domestic interests held by such Material PRC Companies or individuals.
Based on our understanding of the explicit provisions under PRC Laws, and assuming no offer, issuance or sale of the Common shares has been or will be made directly or indirectly within the PRC, a prior approval from the CSRC is not required for the Offering. However, there are substantial uncertainties regarding the interpretation and application of the M&A Rules, other PRC Laws and future PRC laws and regulations, and there can be no assurance that any Governmental Agency will not take a view that is contrary to or otherwise different from our opinions stated herein. Subject to any applicable administrative procedures required by PRC Laws, and provided that all required Governmental Authorizations have been duly obtained, the due application of the net proceeds to be received by the Company from the issue Common shares as disclosed in the Prospectus under the caption “Use of Proceeds” does not and immediately after the Offering will not contravene any applicable PRC Laws, the articles of association or the business licenses of the Material PRC Companies, except for such contravention or default which would not be reasonably expected to have a Material Adverse Effect.
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The audit report included in this Amendment is prepared by an auditor who may not have been not inspected by the Public Company Accounting Oversight Board and as such, our investors are deprived of the benefits of such inspection. The Company could be delisted if it is unable to timely meet the PCAOB inspection requirements established by the Holding Foreign Companies Accountable Act.
As a public company with securities quoted on the OTC Pink Sheets, we will be required to have our financial statements audited by an independent registered public accounting firm registered with the PCAOB. A requirement of being registered with the PCAOB is that if requested by the SEC or PCAOB, such accounting firm is required to make its audits and related audit work papers be subject to regular inspections to assess its compliance with the applicable professional standards. Since our auditor is located in PRC, a jurisdiction where the PCAOB has been unable to conduct inspections without the approval of the Chinese authorities due to various state secrecy laws and the revised Securities Law, the PCAOB currently has limited access to inspect the work of our auditor. The lack of access to the PCAOB inspection in PRC prevents the PCAOB from fully evaluating audits and quality control procedures of the auditors based in PRC. As a result, the investors may be deprived of the benefits of such PCAOB inspections. Despite an agreement between the U.S. and the PRC in October of 2022, the limited ability of the PCAOB to conduct inspections of auditors in PRC makes it more difficult to evaluate the effectiveness of these accounting firms’ audit procedures or quality control procedures as compared to auditors outside of PRC that are subject to the PCAOB inspections.
On December 18, 2020, the Holding Foreign Companies Accountable Act, or HFCAA, was enacted. In essence, the act requires the SEC to prohibit securities of any foreign companies from being listed on U.S. securities exchanges or traded “over-the-counter” if a company retains a foreign accounting firm that cannot be inspected by the PCAOB for three consecutive years, beginning in 2021. Our independent registered public accounting firm is located in and organized under the laws of PRC, a jurisdiction where the PCAOB is currently unable to conduct inspections without the approval of the Chinese authorities, and therefore our auditors are not currently inspected by the PCAOB.
On March 24, 2021, the SEC adopted interim final amendments, which will become effective 30 days after publication in the Federal Register, relating to the implementation of certain disclosure and documentation requirements of the HFCAA. The interim final amendments will 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 has determined it is unable to inspect or investigate completely because of a position taken by an authority in that jurisdiction. Before any registrant will be required to comply with the interim final amendments, the SEC must implement a process for identifying such registrants. As of the date of this Amendment, the SEC is seeking public comment on this identification process. Consistent with the HFCAA, the amendments will require any identified registrant to submit documentation to the SEC establishing that the registrant is not owned or controlled by a government entity in that jurisdiction, and will also require, among other things, disclosure in the registrant’s annual report regarding the audit arrangements of, and government influence on, such registrant.
On June 22, 2021, the U.S. Senate passed the Accelerating Holding Foreign Companies Accountable Act which, if enacted, would decrease the number of non-inspection years from three years to two, thus reducing the time period before our securities may be delisted or prohibited from trading.
On November 5, 2021, the SEC approved PCAOB Rule 6100, Board Determination Under the Holding Foreign Companies Accountability Act, effective immediately. The rule establishes “a framework for the PCAOB’s determinations under the HFCAA that the PCAOB is unable to inspect or investigate completely registered public accounting firms located in a foreign jurisdiction because of a position taken by an authority in that jurisdiction.”
On December 2, 2021, SEC has announced the adoption of amendments to finalize rules implementing the submission and disclosure requirements in the HFCAA. The rules apply to registrants 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 (Commission-Identified Issuers). The final amendments require Commission-Identified Issuers to submit documentation to the SEC establishing that, if true, it is not owned or controlled by a governmental entity in the public accounting firm’s foreign jurisdiction. The amendments also require that a Commission-Identified Issuer that is a “foreign issuer,” as defined in Exchange Act Rule 3b-4, provide certain additional disclosures in its annual report for itself and any of its consolidated foreign operating entities. Further, the adopting release provides notice regarding the procedures the SEC has established to identify issuers and to impose trading prohibitions on the securities of certain Commission- Identified Issuers, as required by the HFCAA. The SEC will identify Commission-Identified Issuers for fiscal years beginning after December 18, 2020. A Commission-Identified Issuer will be required to comply with the submission and disclosure requirements in the annual report for each year in which it was identified. If a registrant is identified as a Commission-Identified Issuer based on its annual report for the fiscal year ended December 31, 2021, the registrant will be required to comply with the submission or disclosure requirements in its annual report filing covering the fiscal year ended December 31, 2022.
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On December 16, 2021, PCAOB issued a report on its determinations that PCAOB is unable to inspect or investigate completely PCAOB-registered public accounting firms headquartered in mainland China and in Hong Kong, a Special Administrative Region of the People’s Republic of China (PRC), because of positions taken by PRC authorities in those jurisdictions. The PCAOB made these determinations pursuant to PCAOB Rule 6100, which provides a framework for how the PCAOB fulfils its responsibilities under the HFCAA. The report further listed in its Appendix A and Appendix B, Registered Public Accounting Firms Subject to the Mainland China Determination and Registered Public Accounting Firms Subject to the Hong Kong Determination, respectively. The audit report included in this registration statement for the year ended December 31, 2022, was issued by HAOXIN, an audit firm headquartered in PRC, a jurisdiction that the PCAOB has determined the PCAOB may be unable to conduct inspections or investigate auditors, despite a recent treaty allowing the PCAOB to review the audit papers of firms in the PRC. Our auditors HAOXIN is among those listed by the PCAOB Mainland China Determination, a determination announced by the PCAOB on December 16, 2021 that the PCAOB is unable to inspect or investigate completely registered public accounting firms headquartered in PRC, because of a position taken by one or more authorities in PRC. As a result, we and investors in our common stock may be deprived of the benefits of such full PCAOB inspections. As a result, the investors may be deprived of the benefits of such PCAOB inspections. The inability of the PCAOB to conduct inspections of auditors in PRC makes it more difficult to evaluate the effectiveness of these accounting firms’ audit procedures or quality control procedures as compared to auditors outside of PRC that are subject to the PCAOB inspections. In addition, under the HFCAA, our securities may be prohibited from trading on the U.S. stock exchanges or in the over the counter trading market in the U.S. if our auditor is not inspected by the PCAOB for three consecutive years, and this ultimately could result in our common stock being delisted. Furthermore, on June 22, 2021, the U.S. Senate passed the Accelerating Holding Foreign Companies Accountable Act (“AHFCAA”), which, if enacted, would amend the HFCAA and require the SEC to prohibit an issuer’s securities from trading on any U.S. stock exchanges or in the over the counter trading market in the U.S. if its auditor is not subject to PCAOB inspections for two consecutive years instead of three. In the future, if we do not engage an auditor that is subject to regular inspection by the PCAOB, our common stocks may be delisted.
The SEC may propose additional rules or guidance that could impact us if our auditor is not subject to PCAOB inspection. For example, on August 6, 2020, the President’s Working Group on Financial Markets, or the PWG, issued the Report on Protecting United States Investors from Significant Risks from Chinese Companies to the then President of the United States. This report recommended that the SEC implement five recommendations to address companies from jurisdictions that do not provide the PCAOB with sufficient access to fulfil its statutory mandate. Some of the concepts of these recommendations were implemented with the enactment of the HFCAA. However, some of the recommendations were more stringent than the HFCAA. For example, if a company was not subject to PCAOB inspection, the report recommended that the transition period before a company would be delisted would end on January 1, 2022.
The enactment of the HFCAA and the implications of any additional rulemaking efforts to increase U.S. regulatory access to audit information in China could cause investor uncertainty for affected SEC registrants, including us, and the market price of our stock could be materially adversely affected. Additionally, whether the PCAOB will be able to conduct inspections of our auditors in the next three years, or at all, is subject to substantial uncertainty and depends on a number of factors out of our control. If we are unable to meet the PCAOB inspection requirement in time, our stock will not be permitted for trading “over-the counter” either. Such a delisting would substantially impair your ability to sell or purchase our stock when you wish to do so, and the risk and uncertainty associated with delisting would have a negative impact on the price of our stock. Also, such a delisting would significantly affect our ability to raise capital on terms acceptable to us, or at all, which would have a material adverse impact on our business, financial condition and prospects.
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Risks Related to our Common Stock
The OTC and share value
Our Common Stock trades over the counter, which may deprive stockholders of the full value of their shares. Our stock is quoted via the Over-The-Counter (“OTC”) Pink Sheets under the ticker symbol “ALTB”. Therefore, our Common Stock is expected to have fewer market makers, lower trading volumes, and larger spreads between bid and asked prices than securities listed on an exchange such as the New York Stock Exchange or the NASDAQ Stock Market. These factors may result in higher price volatility and less market liquidity for our Common Stock.
Low market price
A low market price would severely limit the potential market for our Common Stock. Our Common Stock is expected to trade at a price substantially below $5.00 per share, subjecting trading in the stock to certain Commission rules requiring additional disclosures by broker-dealers. These rules generally apply to any non-NASDAQ equity security that has a market price share of less than $5.00 per share, subject to certain exceptions (a “penny stock”). Such rules require the delivery, prior to any penny stock transaction, of a disclosure schedule explaining the penny stock market and the risks associated therewith and impose various sales practice requirements on broker-dealers who sell penny stocks to persons other than established customers and institutional or wealthy investors. For these types of transactions, the broker-dealer must make a special suitability determination for the purchaser and have received the purchaser’s written consent to the transaction prior to the sale. The broker-dealer also must disclose the commissions payable to the broker-dealer, current bid and offer quotations for the penny stock and, if the broker-dealer is the sole market maker, the broker-dealer must disclose this fact and the broker-dealer’s presumed control over the market. Such information must be provided to the customer orally or in writing before or with the written confirmation of trade sent to the customer. Monthly statements must be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks. The additional burdens imposed upon broker-dealers by such requirements could discourage broker-dealers from effecting transactions in our Common Stock.
Lack of market and state blue sky laws
Investors may have difficulty in reselling their shares due to the lack of market or state Blue Sky laws. The holders of our shares of Common Stock and persons who desire to purchase them in any trading market that might develop in the future should be aware that there may be significant state law restrictions upon the ability of investors to resell our shares. Accordingly, even if we are successful in having the shares available for trading on the OTC, investors should consider any secondary market for our securities to be a limited one. We intend to seek coverage and publication of information regarding our Company in an accepted publication which permits a “manual exemption.” This manual exemption permits a security to be distributed in a particular state without being registered if the company issuing the security has a listing for that security in a securities manual recognized by the state. However, it is not enough for the security to be listed in a recognized manual. The listing entry must contain (1) the names of issuers, officers, and directors, (2) an issuer’s balance sheet, and (3) a profit and loss statement for either the fiscal year preceding the balance sheet or for the most recent fiscal year of operations. We may not be able to secure a listing containing all of this information. Furthermore, the manual exemption is a non-issuer exemption restricted to secondary trading transactions, making it unavailable for issuers selling newly issued securities. Most of the accepted manuals are those published in Standard and Poor’s, Moody’s Investor Service, Fitch’s Investment Service, and Best’s Insurance Reports, and many states expressly recognize these manuals. A smaller number of states declare that they “recognize securities manuals” but do not specify the recognized manuals. The following states do not have any provisions and therefore do not expressly recognize the manual exemption: Alabama, Georgia, Illinois, Kentucky, Louisiana, Montana, South Dakota, Tennessee, Vermont, and Wisconsin.
Accordingly, our shares of Common Stock should be considered totally illiquid, which inhibits investors’ ability to resell their shares.
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Penny stock regulations
We will be subject to penny stock regulations and restrictions and you may have difficulty selling shares of our Common Stock. The Commission has adopted regulations which generally define so-called “penny stocks” to be an equity security that has a market price less than $5.00 per share or an exercise price of less than $5.00 per share, subject to certain exemptions. We anticipate that our Common Stock will become a “penny stock”, and we will become subject to Rule 15g-9 under the Exchange Act, or the “Penny Stock Rule”. This rule imposes additional sales practice requirements on broker-dealers that sell such securities to persons other than established customers. For transactions covered by Rule 15g-9, a broker-dealer must make a special suitability determination for the purchaser and have received the purchaser’s written consent to the transaction prior to sale. As a result, this rule may affect the ability of broker-dealers to sell our securities and may affect the ability of purchasers to sell any of our securities in the secondary market.
For any transaction involving a penny stock, unless exempt, the rules require delivery, prior to any transaction in a penny stock, of a disclosure schedule prepared by the Commission relating to the penny stock market. Disclosure is also required to be made about sales commissions payable to both the broker-dealer and the registered representative and current quotations for the securities. Finally, monthly statements are required to be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stock.
We do not anticipate that our Common Stock will qualify for exemption from the Penny Stock Rule. In any event, even if our Common Stock were exempt from the Penny Stock Rule, we would remain subject to Section 15(b)(6) of the Exchange Act, which gives the Commission the authority to restrict any person from participating in a distribution of penny stock, if the Commission finds that such a restriction would be in the public interest.
Rule 144 Risks
Sales of our Common Stock under Rule 144 could reduce the price of our stock. There are 1,301,493,002 issued and outstanding shares of our Common Stock that Rule 144 of the Securities Act defines as restricted securities.
These shares will be subject to the resale restrictions of Rule 144, should we hereinafter cease being deemed a “shell company”. In general, persons holding restricted securities, including affiliates, must hold their shares for a period of at least twelve months, affiliates may not sell more than 1.0% of the total issued and outstanding shares in any 90-day period, and affiliates must resell the shares in an unsolicited brokerage transaction at the market price. The availability for sale of substantial amounts of Common Stock under Rule 144 could reduce prevailing market prices for our securities.
No audit or compensation committee
Because we do not have an audit or compensation committee, stockholders will have to rely on our entire Board of Directors, none of which are independent, to perform these functions. We do not have an audit or compensation committee comprised of independent directors. Indeed, we do not have any audit or compensation committee. These functions are performed by our Board of Directors as a whole. No members of our Board of Directors are independent directors. Thus, there is a potential conflict in that Board members who are also part of management will participate in discussions concerning management compensation and audit issues that may affect management decisions.
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Security laws exposure
We are subject to compliance with securities laws, which exposes us to potential liabilities, including potential rescission rights. We may offer to sell our shares of our Common Stock to investors pursuant to certain exemptions from the registration requirements of the Securities Act, as well as those of various state securities laws. The basis for relying on such exemptions is factual; that is, the applicability of such exemptions depends upon our conduct and that of those persons contacting prospective investors and making the offering. We may not seek any legal opinion to the effect that any such offering would be exempt from registration under any federal or state law. Instead, we may elect to relay upon the operative facts as the basis for such exemption, including information provided by investor themselves.
If any such offering did not qualify for such exemption, an investor would have the right to rescind its purchase of the securities if it so desired. It is possible that if an investor should seek rescission, such investor would succeed. A similar situation prevails under state law in those states where the securities may be offered without registration in reliance on the partial pre-emption from the registration or qualification provisions of such state statutes under the National Securities Markets Improvement Act of 1996. If investors were successful in seeking rescission, we would face severe financial demands that could adversely affect our business and operations. Additionally, if we did not in fact qualify for the exemptions upon which we have relied, we may become subject to significant fines and penalties imposed by the Commission and state securities agencies.
No cash dividends
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 shares of 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. There is no assurance that stockholders will be able to sell shares of our Common Stock when desired.
We cannot assure you that a market will develop for our Common Stock or what the market price of our Common Stock will be.
There is a limited trading market for our Common Stock. There is no assurance that an active market for our Common Stock will develop as a result of our operation of YDTC even if we are successful. If a market does not develop or is not sustained, it may be difficult for you to sell your shares of Common Stock at an attractive price or at all. We cannot predict the prices at which our Common Stock will trade. It is possible that, in future quarters, our operating results may be below the expectations of securities analysts or investors. As a result of these and other factors, the price of our Common Stock may decline or may never become liquid.
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Risks Related to Industry
A decline in the popularity of EVs could adversely impact our business.
Because our operations are affected by general economic conditions and consumer tastes, our future success is unpredictable. The demand for EVs tends to be highly sensitive to consumers’ disposable incomes, and thus a decline in general economic conditions could, in turn, have a material adverse effect on our business, operating results and financial condition and the price of our Common Stock.
Public tastes are unpredictable and subject to change and may be affected by changes in the country’s political and social climate. A change in public tastes could have a material adverse effect on our business, operating results and financial condition and the price of our Common Stock.
A decline in general economic conditions could adversely affect our business.
Our operations are affected by general economic conditions, which generally may affect consumers’ disposable income. The demand for EVs tends to be highly sensitive to the level of consumers’ disposable income. A decline in general economic conditions could reduce the level of discretionary income that our fans and potential fans have to spend on our live and televised entertainment and consumer products, which could adversely affect our revenues.
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Use of Proceeds
We will receive gross proceeds of up to $1,200,000 from the sale of shares we are registering to sell at $0.01 per share, in an offering conducted by our officers and directors on a best-efforts basis.
The net proceeds to us from the sale of the shares which we intend to offer to new investors, after the offering expenses detailed herein, would be a maximum of $1,150,000. We do not intend to engage any broker/dealers for the sale of the shares, and thus do not expect to pay any sales commissions.
These proceeds would be received from time to time as sales of these shares are made by us. As set forth in the following table, we will use those proceeds primarily for payment of general corporate purposes with the remainder used for administrative and legal expenses for operations. We intend to use the proceeds in the following order of priority:
| Assumed Offering #1(1)(5) |
Percent | Assumed Offering #2(2)(5) |
Percent | Assumed Offering #3(3)(5) |
Percent | Maximum Offering(4)(5) |
Percent | |||||||||||||||||||||||||
| Offering Expenses | $ | 50,000 | 16.7 | % | $ | 50,000 | 8.3 | % | $ | 50,000 | 5.6 | % | $ | 50,000 | 4.2 | % | ||||||||||||||||
| Administrative Expenses | $ | 50,000 | 16.7 | % | $ | 50,000 | 8.3 | % | $ | 50,000 | 5.6 | % | $ | 50,000 | 4.2 | % | ||||||||||||||||
| General Corporate Purposes | $ | 150,000 | 50.0 | % | $ | 420,000 | 70.0 | % | $ | 720,000 | 80.0 | % | $ | 1,020,000 | 85.0 | % | ||||||||||||||||
| Legal and Professional Fees | $ | 50,000 | 16.7 | % | $ | 80,000 | 13.3 | % | $ | 80,000 | 8.9 | % | $ | 80,000 | 6.7 | % | ||||||||||||||||
| Total | $ | 300,000 | 100 | % | $ | 600,000 | 100 | % | $ | 900,000 | 100 | % | $ | 1,200,000 | 100 | % | ||||||||||||||||
| (1) | Assumes that we only raise 25% in this offering. This offering is conducted on a best-efforts basis with no minimum; therefore, we could raise significantly less than $1,200,000. |
| (2) | Assumes that we only raise 50% in this offering. This offering is conducted on a best-efforts basis with no minimum; therefore, we could raise significantly less than $1,200,000. |
| (3) | Assumes that we only raise 75% in this offering. This offering is conducted on a best-efforts basis with no minimum; therefore, we could raise significantly less than $1,200,000. |
| (4) | Assumes that we raise the full amount of our Maximum Offering hereunder, or $1,200,000. This offering is conducted on a best-efforts basis with no minimum; therefore, we could raise significantly less than $1,200,000. |
| (5) | The Offering is being sold by our officers and directors, who will not receive any compensation for their efforts. No sales fees or commissions will be paid to such officers or directors. Shares may be sold by registered broker or dealers who are members of the NASD and who enter into a Participating Dealer Agreement with the Company. Such brokers or dealers may receive commissions up to ten percent (10%) of the price of the Shares sold. |
The above estimated amounts are only for initial working purposes since we do not know how much we will need to spend on these items. Even if we are able to sell the maximum shares, we do not know how long these funds will last, and we have no other specific plans for raising additional funds. The portion of any net proceeds not immediately required will be invested in certificates of deposit or similar short-term interest bearing instruments.
We are dependent on $400,000 of the proceeds of this offering to finance our operations and grow the Company and its subsidiaries for the next 12 months. The majority of the proceeds will go toward corporate overhead.
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Determination of Offering Price
Our offering price of $0.01 per share was arbitrarily determined based upon a discount to the current market price. Accordingly, the offering price should not be considered an indication of the actual value of our securities.
There is no assurance that our common stock will trade at market prices in excess of the offering price hereunder as prices for the common stock in any public market which may develop will be determined in the marketplace and may be influenced by many factors, including the depth and liquidity of the market for the common stock, investor perception of us and general economic and market conditions.
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Dilution
We are offering our common stock at a price per share that is significantly more than the price per share paid by our current stockholders for our common stock, as well as the current market price of our common stock. We are offering for sale up to 120,000,000 shares of common stock with $1,150,000 of the proceeds going to the Company. If you purchase Shares in this offering, you will experience immediate and substantial dilution.
Dilution represents the difference between the price per share paid by purchasers in this offering and the net tangible book value per share. Net tangible book value per share represents our net tangible assets (our total tangible assets less our total liabilities), divided by the number of shares of Common Stock outstanding at the time of the offering, 455,500,000 issued and outstanding shares of Common Stock. As of December 31, 2022, our net tangible book value per share was ($0.0007) per share.
The table below illustrates the pro forma per share dilution described above assuming 120,000,000 shares are sold.
After giving effect to the sale of the maximum of 120,000,000 Shares being offered in this offering, at $0.01 per Share, and the payment of expenses related to the offering, our pro forma net tangible book value would be $0.0015 and increase by $0.0021 per share.
The table below illustrates the pro forma per share dilution described above assuming 90,000,000 shares are sold.
After giving effect to the sale of 75% of the Shares (90,000,000) shares being offered in this offering, at $0.01 per Share, and the payment of expenses related to the offering, our pro forma net tangible book value would be $0.0010 and increase by $0.0017 per share.
The table below illustrates the pro forma per share dilution described above assuming 60,000,000 shares are sold.
After giving effect to the sale of 50% of the Shares (60,000,000 shares) being offered in this offering, at $0.01 per Share, and the payment of expenses related to the offering, our pro forma net tangible book value would be $0.0005 and increase by $0.0011 per share.
The table below illustrates the pro forma per share dilution described above assuming 30,000,000 shares are sold.
After giving effect to the sale of 25% of the Shares (30,000,000 shares) being offered in this offering, at $0.01 per Share, and the payment of expenses related to the offering, our pro forma net tangible book value would be ($0.0001) and increase by $0.0006 per share.
The table below illustrates the pro forma per share dilution described above assuming 12,000,000 shares are sold.
After giving effect to the sale of 10% of the Shares (12,000,000 shares) being offered in this offering, at $0.01 per Share, and the payment of expenses related to the offering, our pro forma net tangible book value would be ($0.0005) an increase by $0.0002 per share.
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The table below indicates the relative aggregate cash investment and stock ownership of new investors in this offering:
| Percentage of offering sold | 100% | 75% | 50% | 25% | 10% | |||||||||||||||
| Price per share | $ | 0.01 | $ | 0.01 | $ | 0.01 | $ | 0.01 | $ | 0.01 | ||||||||||
| Total shares purchased | 120,000,000 | 90,000,000 | 60,000,000 | 30,000,000 | 12,000,000 | |||||||||||||||
| Total proceeds of shares purchased | $ | 1,200,000 | $ | 900,000 | $ | 600,000 | $ | 300,000 | $ | 120,000 | ||||||||||
| less: offering costs | $ | (50,000 | ) | $ | (50,000 | ) | $ | (50,000 | ) | $ | (50,000 | ) | $ | (50,000 | ) | |||||
| Net proceeds from offering | $ | 1,150,000 | $ | 850,000 | $ | 550,000 | $ | 250,000 | $ | 70,000 | ||||||||||
| Net Tangible book value as of December 31, 2022 | $ | (63,389 | ) | $ | (63,389 | ) | $ | (63,389 | ) | $ | (63,389 | ) | $ | (63,389 | ) | |||||
| Net Tangible book value after the offering | $ | 1,086,611 | $ | 786,611 | $ | 486,611 | $ | 186,611 | $ | 6,611 | ||||||||||
| Total shares issued at time of offering | 455,500,000 | 455,500,000 | 455,500,000 | 455,500,000 | 455,500,000 | |||||||||||||||
| Total shares issued after the offering | 575,500,000 | 545,500,000 | 515,500,000 | 485,500,000 | 467,500,000 | |||||||||||||||
| Net tangible book value per share as of December 31, 2022 | $ | (0.0001 | ) | $ | (0.0001 | ) | $ | (0.0001 | ) | $ | (0.0001 | ) | $ | (0.0001 | ) | |||||
| Net tangible book value per share after the offering | $ | 0.0019 | $ | 0.0014 | $ | 0.0009 | $ | 0.0004 | $ | 0.0000 | ||||||||||
| Net tangible book value per share increase to present shareholders | $ | 0.0020 | $ | 0.0016 | $ | 0.0011 | $ | 0.0005 | $ | 0.0002 | ||||||||||
| Dilution to investors | $ | 0.0081 | $ | 0.0086 | $ | 0.0091 | $ | 0.0096 | $ | 0.0100 | ||||||||||
| Percentage of ownership to present shareholders after the offering | 79.1 | % | 83.5 | % | 88.4 | % | 93.8 | % | 97.4 | % | ||||||||||
| Purchasers of stock in the offering | ||||||||||||||||||||
| Price per Share | 0.01 | 0.01 | 0.01 | 0.01 | 0.01 | |||||||||||||||
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Management’s Discussion and Analysis of Financial Condition and Results of Operation
The following discussion and analysis should be read in conjunction with our financial statements and related notes thereto.
Forward Looking Statements
The following information specifies certain forward-looking statements of the management of our Company. Forward-looking statements are statements that estimate the happening of future events and are not based on historical fact. Forward-looking statements may be identified by the use of forward-looking terminology, such as may, shall, could, expect, estimate, anticipate, predict, probable, possible, should, continue, or similar terms, variations of those terms or the negative of those terms. The forward-looking statements specified in the following information statement have been compiled by our management on the basis of assumptions made by management and considered by management to be reasonable. Our future operating results, however, are impossible to predict and no representation, guaranty, or warranty is to be inferred from those forward-looking statements.
The assumptions used for purposes of the forward-looking statements specified in the following information represent estimates of future events and are subject to uncertainty as to possible changes in economic, legislative, industry, and other circumstances. As a result, the identification and interpretation of data and other information and their use in developing and selecting assumptions from and among reasonable alternatives require the exercise of judgment. To the extent that the assumed events do not occur, the outcome may vary substantially from anticipated or projected results, and, accordingly, no opinion is expressed on the achievability of those forward-looking statements. We cannot guaranty that any of the assumptions relating to the forward-looking statements specified in the following information are accurate, and we assume no obligation to update any such forward-looking statements. Such forward-looking statements include statements regarding our anticipated financial and operating results, our liquidity, goals, and plans.
All forward-looking statements in this Form S-1 are based on information available to us as of the date of this report, and we assume no obligation to update any forward-looking statements.
Overview
Alpine Auto Brokers (the “Company”) was organized as Alpine Auto Brokers, LLC in the state of Utah in December 2010. The Company sold automobiles and provided dealer services, for a fee.
The Company was incorporated as Alpine Auto Brokers, Inc. on May 12, 2011, in the State of Nevada for the purpose of locating and purchasing used vehicles at auctions, from private individuals, from other dealers and selling these vehicles specifically to consumers in Salt Lake City, Utah. On January 1, 2014, the Company acquired 100 percent of the membership interests of Alpine Auto Brokers, LLC, a Utah Limited Liability Company formed on December 10, 2010. The Company operated through its wholly owned subsidiary Alpine Auto Brokers, LLC.
The acquisition was accounted for as a reverse recapitalization in which the operating entity’s historical financial statements become those of the “accounting acquirer” in which historical operating results are presented from inception.
The Company has been dormant since October 27, 2016.
On August 18, 2021, the Eight Judicial District Court in Clark County, Nevada Case No: A-20-816619-B appointed Custodian Ventures, managed by David Lazar as the Company’s Receiver.
On January 28, 2022, the Company, amended its articles of incorporation change its name back to Alpine Auto Brokers Inc. The change was made because the Company failed to complete its prior name change with FINRA.
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On February 9, 2022, as a result of a private transactions, 10,000,000 shares of Series A Preferred Stock, $0.001 par value per share (the “Shares”) of the “Company”, were transferred from Custodian Ventures, LLC to MetaVerse Investment Group (the “Purchaser”). As a result, the Purchaser became the holder of 90% of the voting rights of the issued and outstanding share capital of the Company on a fully-diluted basis of the Company, and became the controlling shareholder. The consideration paid for the Shares was $420,000, with $20,000 being held back pending certain public filings of the Company. The source of the cash consideration for the Shares was personal funds of the Purchaser. In connection with the transaction, David Lazar released the Company from all debts owed to him and/or Custodian Ventures, LLC.
On February 9, 2022, the existing director and officer resigned immediately. Accordingly, David Lazar, serving as a director and an officer, ceased to be the Company’s Chief Executive Officer, Chief Financial Officer, President, Treasurer, Secretary and a Director. At the effective date of the transfer, Zibin Xiao consented to act as the new Chief Executive Officer, President, and member of the Board of Directors. Also on February 9, 2022, Zonghan Wu consented to act as the new CFO, Treasurer, Secretary, and Chairman of the Board of Directors of the Company.
On June 27, 2022, Zibin Xiao resigned as the Chief Executive Officer, President, and member of the Board of Directors. Also on June 27, 2022, Yufeng Zhang consented to act as the new Chief Executive Officer, President, and member of the Board of Directors.
On February 20, 2023, the Company entered into a Definitive Share Exchange Agreement with National Holdings Investment Ltd., a British Virgin Islands corporation (“NHIL”), whereunder the Company acquired 100% ownership interest in NHIL for the issuance of 10,000,000 shares of the Company’s common stock. NHIL through its China based subsidiaries, Yinao (Dongguan) Technology Co., Ltd., is mainly engaged in the planning and design service consulting business of new energy charging piles. The transaction closed effective February 24, 2023 and has been treated as a business combination, resulting in NHIL becoming a wholly-owned subsidiary of the Company. As such, the Company recognized the assets and liabilities of NHIL acquired in the reorganization, at their historical carrying amounts.
As a result of the above transaction, the Company’s corporate structure which is set forth as follows:
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Yinao (Dongguan) Technology Co., Ltd (YDTC) was organized in 2022 to engage in the business of constructing and operating charging stations for electric vehicles (“EV”). Our ambition is to build YDTC into a central participant in this growing industry.
In this, our first year of operation, we are focusing our efforts on building a group of consulting clients who are themselves distributors of charging stations. We are undertaking this top-down approach to the industry in part because we lack sufficient financial resources to compete directly with the major participant in the industry. But of equal importance is the opportunity for market impact that we will gain by positioning ourselves as leaders in the charging station industry. As those to whom we provide our services and guidance spread throughout the EV world, they will advertise our brand as their authoritative source for technological and commercial knowledge about the charging station industry, and so our brand will gain value among the relevant participants in the EV world. Our goal is that, when we have secured the financing necessary to compete in the charging station community, we will already be known and identified with quality and know-how related to charging stations.
Our main business at this time, therefore, is to provide consulting services relating to the planning and design of new energy charging piles to customer in Guangdong Province of the PRC. Our customers are enterprises that are either initiating their participation in this industry in general or expanding their operations to Guangdong. In either case, a customer who engages YDTC, will receive, among other things:
| ● | a survey report on the distribution of new energy charging piles that have been built and are under construction in the district of Guangzhou City in which the customer intends to distribute its stations;, |
| ● | a business plan based upon an analysis of the existing distribution of charging piles in the target market; |
| ● | a site selection plan identifying prospective locations where charging piles can be built; |
| ● | a plan of the electric equipment design plus the type of charging piles to be used; |
| ● | a plan of the construction and the construction method; as well as |
| ● | the design and sample drawings of the foundation for the piles, |
9. Corporate History and Structure
On January 10, 2022, Yinao (Dongguan) Technology Co., Ltd (YDTC) was incorporated pursuant to the PRC law.
On June 16, 2022, we established a holding company, National Holdings Investment Ltd (NHIL), under the laws of the British Virgin Islands (BVI).
On October 04, 2022, NHIL acquired 100% ownership interest in YDTC. YDTC becomes a wholly foreign owned enterprise pursuant to the PRC law.
On February 20, 2023, the Company entered into a Definitive Share Exchange Agreement with National Holdings Investment Ltd., a British Virgin Islands corporation (“NHIL”), whereunder the Company acquired 100% ownership interest in NHIL for the issuance of 10,000,000 shares of the Company’s common stock. NHIL through its China based subsidiaries, Yinao (Dongguan) Technology Co., Ltd., is mainly engaged in the planning and design service consulting business of new energy charging piles. The transaction closed effective February 24, 2023 and has been treated as a business combination, resulting in NHIL becoming a wholly-owned subsidiary of the Company.
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Competitive Strengths
The following are the competitive strengths of Yinao (Dongguan) Technology Co., Ltd:
Top-down approach: The company’s strategy of targeting consulting clients who are themselves distributors of charging stations is a smart move, as it allows the company to establish itself as a leader in the industry while building its financial resources to compete directly with major participants. This approach will help the company gain valuable insights into the industry while building its brand reputation.
Technological and commercial knowledge: YDTC’s focus on providing its clients with technological and commercial knowledge about the charging station industry positions the company as a credible and authoritative source of information in the EV world. This knowledge base will be useful when the company is ready to enter the market as a direct competitor.
Brand reputation: By positioning itself as a leader in the charging station industry through its consulting services, YDTC is laying the foundation for a strong brand reputation. As clients spread the word about the quality of its services, the company’s brand value will increase, making it easier to compete with major players in the industry.
Growing industry: The electric vehicle market is expected to grow rapidly in the coming years, and the need for charging stations will increase accordingly. As a company focused solely on charging stations, YDTC is well-positioned to take advantage of this growth and establish itself as a significant player in the industry.
Strategic location: Dongguan is a key manufacturing hub in China, and the company’s location there gives it access to a large pool of skilled workers, suppliers, and potential customers. This strategic location could give YDTC an edge over competitors located in less advantageous areas.
The Charging Station Industry in China
In recent decades, China’s rapid economic growth has enabled more and more consumers to buy their own cars. The result has been the creation of the largest automotive market in the world—but also serious urban air pollution, high greenhouse gas emissions, and growing dependence on oil imports. To counteract those troubling trends, the Chinese government has imposed policies to encourage the adoption of plug-in electric vehicles (EVs). Since buying an EV costs more than buying a conventional internal combustion engine vehicle, in 2009 the government began to provide generous subsidies for EV purchases. As a result, China became the world’s largest market for EV’s, accounting for approximately 50% of global sales. In 2020 1.1 million EVs were produced and sold in China. The central government’s “New Energy Vehicle Industry Development Plan (2021 - 2035) predicted that sales of new energy vehicles would account for 20% of car sales in China in 2025. In fact, during 2022, EV sales represented 22% of new car sales.
As the number of EV purchases grew, paying for the subsidies became extremely costly for the government. As a result, beginning in 2020, China’s government began to phase out the subsidies and instead rely on a mandate imposed on car manufacturers. The mandate requires that a certain percent of all vehicles sold by a manufacturer each year must be battery-powered. To avoid financial penalties, every year manufacturers must earn a stipulated number of points, which are awarded for each EV produced based on a complex formula that takes into account range, energy efficiency, performance, and more. The requirements get tougher over time, with a goal of having EVs make up 40% of all car sales in China by 2030.
The mandate on vehicle manufacturers to produce EVs is supplemented by a number of Chinese government policies:
| ● | Tax exemptions. The Chinese government exempts electric vehicles from consumption and sales taxes, which can save purchasers tens of thousands of RMB (equivalent to thousands of dollars). It also waives 50% of vehicle registration fees for electric vehicles. |
| ● | Procurement. The Chinese government also uses its procurement power to promote electric vehicles. A May 2016 order required that half of new vehicles purchased by China’s central government be new energy vehicles within five years. |
| ● | New auto factory requirements. Chinese regulations strongly discourage the construction of factories for manufacturing internal combustion engine vehicles only. Subject to exceptions that are difficult to satisfy, any new vehicle factory is required to include capacity for the construction of electric vehicles. |
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Since EVs will be useless without charging stations, the Chinese central government has promoted the development of EV charging infrastructure as a matter of national policy. As the central government has withdrawn subsidies for purchase of EVs, it has redirected a significant portion of those funds to support the development of EV infrastructure, primarily charging stations. In November 2020, the General Office of the State Council promulgated its “Development Plan of the New Energy Vehicle Industry (2021 - 2035), in which it mandated financial support for the construction of charging stations and proposed preferential policies with respect to allocation of space in parking lots to charging stations. China State Grid and China Southern Grid, China’s two state-owned electric utilities, both have programs to promote the development of electric vehicle charging infrastructure.
Guangdong Province has also been aggressive in support of EVs and EV infrastructure. During 2022 the number of EVs sold in Guangdong Province doubled compared to sales in 2021, and now one-eighth of the EVs manufactured in the PRC are manufactured in Guangdong Province. To support this push toward EVs, Guangdong Province now has more charging stations than any other province in China – and three times as many charging facilities as are located in the entire United States. The Province subsidizes certain purchases of EVs, and encourages insurance companies to provide preferential premiums for EVs. The government of Guangdong Province gives every indication that it will continue to support the expansion of the charging station network indefinitely, with an ultimate goal of maximizing the conversion of vehicular traffic to electric.
Competition
The Company is operating in the growing market of new energy charging piles, which is becoming increasingly competitive due to the growing demand for electric vehicles and the government’s push towards cleaner energy. The competition the Company is facing can be broadly categorized into the following:
1. Established players: The new energy charging pile market is already populated with a number of established players such as State Grid, Southern Power Grid, and other major energy companies. These companies have a strong brand presence, financial resources, and expertise in the energy sector. They also have established relationships with customers and are likely to be strong competitors for the Company.
2. New entrants: The market for new energy charging piles is attracting a growing number of new entrants, ranging from start-ups to established companies diversifying into the market. These competitors are also likely to be aggressive in pursuing market share and have the potential to disrupt the market.
3. Technological changes: The charging technology for electric vehicles is constantly evolving, and competitors are investing heavily in developing new charging technologies such as wireless charging, fast charging, and ultra-fast charging. These technological changes could lead to new entrants and disrupt existing market players.
4. Regulatory environment: The regulatory environment for the new energy charging pile market is evolving rapidly, and competitors are likely to be affected by changes in regulations and policies related to the development of the new energy industry. These changes could favor some players and disadvantage others.
In summary, the Company is operating in a highly competitive market, facing competition from established players, new entrants, technological changes, and regulatory environment changes. The Company are developing a strong value proposition and endeavoring to build a competitive advantage to succeed in the market.
Marketing
The Company is developing a brand identity that reflects the Company’s values and mission. This includes developing a unique logo, website, and marketing materials that are visually appealing and clearly communicate the Company’s value proposition. The Company also plans to further strengthen our marketing efforts and improve our brand awareness through the following actions:
1. Leverage social media: Social media platforms such as WeChat, Weibo, and LinkedIn can be used to build awareness of our brand, share Company news and updates, and engage with potential customers. The Company can also consider partnering with influencers in the electric vehicle or sustainability space to reach a wider audience.
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2. Attend industry events: The Company will attend industry events such as trade shows, conferences, and seminars to network with potential customers and partners. These events can also provide valuable insights into industry trends and customer needs.
3. Foster partnerships: The Company is seeking out partnerships with property developers, government agencies, and other companies in the new energy space. By partnering with these organizations, YDTC can expand its reach and access new customer segments.
4. Overall, by developing a brand identity, leveraging social media, attending industry events, and fostering partnerships, The Company can build awareness of its brand and generate leads in the highly competitive market.
10. PRC Laws and Regulations Affecting Our Business
There are several PRC laws and regulations that could affect the Company’s business, including:
1. Regulations on new energy vehicles: The Chinese government has implemented a number of regulations and policies aimed at promoting the development and adoption of new energy vehicles, including electric vehicles. These policies could create opportunities for the Company as demand for electric vehicle charging infrastructure increases.
2. Intellectual property laws: The Company may be subject to intellectual property laws related to patents, trademarks, and copyrights. This could impact the company’s ability to protect its intellectual property and may affect its competitive position.
It is important for YDTC to stay up-to-date with any changes or developments in these and other relevant laws and regulations in order to ensure compliance and mitigate any potential risks or challenges to its business operations.
Growth Plan
The following is a growth plan for Yinao (Dongguan) Technology Co., Ltd:
Expand consulting services: YDTC should continue to expand its consulting services to attract more clients and establish itself as a top-tier consulting firm in the EV charging station industry. The company can do this by developing and offering new services such as feasibility studies, site selection, and project management.
Develop charging station technology: YDTC should invest in research and development to improve the technology used in its charging stations. By developing more efficient, user-friendly, and innovative charging stations, the company can differentiate itself from competitors and attract more clients. Additionally, YDTC could consider developing its own branded charging stations to sell directly to customers.
Form strategic partnerships: YDTC should form strategic partnerships with other players in the EV industry, such as EV manufacturers, energy providers, and other charging station companies. These partnerships could provide access to new markets, customers, and technology, as well as help the company to stay up-to-date with the latest industry trends.
Raise capital: To fund its expansion plans, YDTC should consider raising capital through various means, such as placement, venture capital, private equity, or debt financing. With adequate funding, YDTC can invest in research and development, expand its operations, and compete with major players in the EV charging station industry.
Overall, YDTC’s growth plan should focus on expanding its consulting services, improving its technology, forming strategic partnerships, and raising capital to achieve its goal of becoming a central participant in the growing EV charging station industry.
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Results of Operations for the Quarter Ended March 31, 2023 Compared to the Quarter Ended March 31, 2022
Revenue
For the quarter ended March 31, 2023, we recorded $105,472 in revenue compared to $0 for the same period in 2022. The increase in revenue is based on the operations of the reverse merger target company.
Operating expenses
Operating expenses for the quarter ended March 31, 2023 was $32,006 compared to $0 for the quarter ended March 31, 2022. The increase in operating expenses in the quarter ended March 31, 2023 compared to the same period in 2022 is due to the expenses associated with the new subsidiary Yinao (Dongguan) Technology Co., Ltd. (YDTC)
Liquidity and Capital Resources
We had $411 in cash on hand as of March 31, 2023.
Net cash used in operating activities was ($7,155) for the quarter ended March 31, 2023, compared to ($1,353)for the quarter ended March 31, 2022. The material increases in cash used in operating activities during the quarter ended March 31, 2023 was primarily due to the operating activities of the new subsidiary Sichuan Yinao (Dongguan) Technology Co., Ltd. Yinao (Dongguan) Technology Co., Ltd. (YDTC)
Net cash provided by investing activities during the quarter ended March 31, 2023 was ($1,746) compared to $0 for the quarter ended March 31, 2022. The investing activity in 2023 related to the purchase of plant and equipment of the new subsidiary Yinao (Dongguan) Technology Co., Ltd. (YDTC)
Net cash provided by financing activities was $10,000 for the quarter ended March 31, 2023, compared to $0 for the quarter ended March 31, 2022. The material increase during the 2023 period was due to the capital contributions from an original shareholder of the new subsidiary Yinao (Dongguan) Technology Co., Ltd. (YDTC)
Financial Impact of COVID-19
The COVID-19 pandemic has affected how we are operating our business, and the duration and extent to which this will impact our future results of operations and overall financial performance remains uncertain. The COVID-19 pandemic is having widespread, rapidly evolving, and unpredictable impacts on global society, economies, financial markets, and business practices. Federal, state and foreign governments have implemented measures to contain the virus, including social distancing, travel restrictions, border closures, limitations on public gatherings, work from home, and closure of non-essential businesses. To protect the health and well-being of our employees, partners, and third-party service providers, we have implemented work-from-home requirements, made substantial modifications to employee travel policies, and cancelled or shifted marketing and other corporate events to virtual-only formats for the near future. While we continue to monitor the situation and may adjust our current policies as more information and public health guidance become available, such precautionary measures could negatively affect our customer success efforts, sales and marketing efforts, delay and lengthen our sales cycles, or create operational or other challenges, any of which could harm our business and results of operations.
In addition, the COVID-19 pandemic has disrupted the operations of our current enterprise customers, as well as many potential enterprise customers, and may continue to disrupt their operations, for an indefinite period of time, including as a result of travel restrictions and/or business shutdowns, uncertainty in the financial markets, or other harm to their businesses and financial results, resulting in delayed purchasing decisions, extended payment terms, and postponed or cancelled projects, all of which could negatively impact our business and results of operations, including our revenue and cash flows.
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Beginning in March 2020, the U.S. and global economies have reacted negatively in response to worldwide concerns due to the economic impacts of the COVID-19 pandemic. These factors also may adversely impact enterprise and government spending on technology as well as such customers’ ability to pay for our products and services on an ongoing basis. For example, some businesses in industries particularly impacted by the COVID-19 pandemic, such as travel, hospitality, retail, and oil and gas, have significantly cut or eliminated capital expenditures. A prolonged economic downturn could adversely affect technology spending, demand for our offerings, which could have a negative impact on our financial condition, results of operations and cash flows. Any resulting instability in the financial markets could also adversely affect the value of our common stock, our ability to refinance our indebtedness, and our access to capital.
The ultimate duration and extent of the impact from the COVID-19 pandemic depends on future developments that cannot be accurately forecasted at this time, such as the severity and transmission rate of the disease, the actions of governments, businesses, and individuals in response to the pandemic, the extent and effectiveness of containment actions, the impact on economic activity and the impact of these and other factors on our employees, partners, and third-party service providers. These uncertainties may increase variability in our future results of operations and adversely impact our ability to accurately forecast changes in our business performance and financial condition in future periods. If we are not able to respond to and manage the impact of such events effectively or if global economic conditions do not improve, or deteriorate further, our business, financial condition, results of operations, and cash flows could be adversely affected.
Employees
We currently have 8 employees, two of which are officers and directors of ALTB. We anticipate hiring additional employees in the next twelve months. We anticipate hiring necessary personnel based on an as needed basis only on a per contract basis to be compensated directly from revenues.
Off-Balance Sheet Arrangements
During the years ended December 31, 2022 and December 31, 2021 we did not engage in any off-balance sheet arrangements as defined in item 303(a)(4) of the Commission’s Regulation S-K.
Evaluation of Disclosure Controls and Procedures
Under the supervision and with the participation of our senior management, including our Chief Executive Officer and Chief Financial Officer, we evaluated the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded as of the Evaluation Date that our disclosure controls and procedures were not effective such that the information relating to us required to be disclosed in our Securities and Exchange Commission (“SEC”) reports (i) is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and (ii) is accumulated and communicated to our management, including our Chief Executive Officer and chief financial officer, as appropriate to allow timely decisions regarding required disclosure. The Company’s former management abandoned all operations for many years, and only recently did the Company appoint new management to make filings with the SEC on behalf of the Company. As of December 31, 2022 we have concluded that our disclosure controls and procedures were not effective.
Management’s Annual Report on Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance of achieving their control objectives. Our Company has been dormant since 2007. As a result, our management did not evaluate the effectiveness of our internal control over financial reporting as of December 31, 2022 and December 31, 2021 based on the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control-Integrated Framework (2013). without such an evaluation, our management concluded that we did not maintain effective internal control over financial reporting as of December 31, 2022 based on the COSO framework criteria, as more fully described below. This was due to deficiencies that existed in the design or operation of our internal controls over financial reporting that adversely affected our internal controls and that may be considered to be material weaknesses.
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The matters involving internal controls and procedures that our management considered to be material weaknesses under the standards of the PCAOB were: (1) lack of a functioning audit committee, (2) lack of a majority of outside directors on our Board of Directors, resulting in ineffective oversight in the establishment and monitoring of required internal controls and procedures; (3) inadequate segregation of duties consistent with control objectives; (4) lack of management of the company from 2007 until 2021; and (5) lack of disclosure controls. The aforementioned material weaknesses were identified by our Chief Executive and Financial Officer in connection with the review of our financial statements as of December 31, 2022.
Management believes that the material weaknesses set forth above did not have an effect on our financial results because the activity during this period was nominal. However, management believes that the lack of a functioning audit committee and the lack of a majority of outside Directors on our Board of Directors results in ineffective oversight in the establishment and monitoring of required internal controls and procedures, which could result in a material misstatement in our financial statements in future periods.
Changes in Internal Control Over Financial Reporting
There have been no changes in our internal control over financial reporting that occurred during the periods ended December 31, 2022 and December 31, 2021, that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.
Critical Accounting Policies and Estimates
The SEC has defined a company’s critical accounting policies as the ones that are most important to the portrayal of the Company’s financial condition and results of operations and which require the Company to make its most difficult and subjective judgments, often as a result of the need to make estimates of matters that are inherently uncertain. Based on this definition, we have identified the critical accounting policies and judgments addressed below. We also have other key accounting policies that are significant to understanding our results.
Basis of Presentation
The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) and are expressed in Canadian dollars.
Management’s Representation of Interim Financial Statements
The accompanying unaudited financial statements have been prepared by the Company without audit pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The Company uses the same accounting policies in preparing quarterly and annual financial statements. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) have been condensed or omitted as allowed by such rules and regulations, and management believes that the disclosures are adequate to make the information presented not misleading. These financial statements include all of the adjustments, which in the opinion of management are necessary to a fair presentation of financial position and results of operations. All such adjustments are of a normal and recurring nature. Interim results are not necessarily indicative of results for a full year. These financial statements should be read in conjunction with the audited financial statements and notes thereto on December 31, 2020.
Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The most significant estimates relate to revenue recognition, valuation of accounts receivable and inventories, income taxes, and contingencies. The Company bases its estimates on historical experience, known or expected trends, and various other assumptions that are believed to be reasonable given the quality of information available as of the date of these financial statements. The results of these assumptions provide the basis for making estimates about the carrying amounts of assets and liabilities that are not readily apparent from other sources. Actual results could differ from these estimates.
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Revenue Recognition
The Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606) outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers. The guidance provided in Accounting Standards Codification (“ASC”) Topic 606 (“ASC 606”) requires entities to use a five-step model to recognize revenue by allocating the consideration from contracts to performance obligations on a relative standalone selling price basis. Revenue is recognized when a customer obtains control of promised goods or services in an amount that reflects the consideration that the entity expects to receive in exchange for those goods or services. The standard also requires new disclosures regarding the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. ASC 606 also includes Subtopic 340-40, Other Assets and Deferred Costs – Contracts with Customers, which requires the deferral of incremental costs of obtaining a contract with a customer.
Cash and Cash Equivalents
The Company considers all highly liquid investments with a maturity of three months or less at the date of purchase to be cash equivalents. Cash and cash equivalents consist of cash on deposit with banks and money market funds, the fair value of which approximates cost. The Company maintains its cash balances with a high-credit-quality financial institution. The Company has not experienced any losses in such accounts, and management believes the Company is not exposed to any significant credit risk on its cash and cash equivalents. As of December 31, 2021, the balance of cash was $-0-.
Accounts Receivable
Accounts receivable are customer obligations due under normal trade terms which are recorded at net realizable value. The Company establishes an allowance for doubtful accounts based on management’s assessment of the collectability of trade receivables. A considerable amount of judgment is required in assessing the amount of the allowance. The Company makes judgments about the creditworthiness of each customer based on ongoing credit evaluations and monitors current economic trends that might impact the level of credit losses in the future. If the financial condition of the customers were to deteriorate, resulting in their inability to make payments, a specific allowance will be required.
Recovery of bad debt amounts previously written off is recorded as a reduction of bad debt expense in the period the payment is collected. If the Company’s actual collection experience changes, revisions to its allowance may be required. After all, attempts to collect a receivable have failed, the receivable is written off against the allowance.
As of December 31, 2022, the balance of accounts receivable was $9,184.
Income Taxes
The Company accounts for income taxes under FASB ASC 740, Accounting for Income Taxes (“ASC 740”). Under ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under ASC 740, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. ASC 740-10-05, Accounting for Uncertainty in Income Taxes prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities.
The amount recognized is measured as the largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate settlement. The Company assesses the validity of its conclusions regarding uncertain tax positions on a quarterly basis to determine if facts or circumstances have arisen that might cause it to change its judgment regarding the likelihood of a tax position’s sustainability under audit.
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Foreign Currency Translation
The reporting currency of the Company is the US dollar.
Basic and Diluted Net Income (Loss) Per Share
The Company computes net income (loss) per share in accordance with FASB ASC 260, Earnings per Share which requires presentation of both basic and diluted earnings per share (“EPS”) on the face of the income statement. Basic EPS is computed by dividing net income (loss) available to common stockholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive.
Recent Accounting Pronouncements
There are no recent accounting pronouncements that impact the Company’s operations.
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Our Business
Alpine Auto Brokers (the “Company”) was organized as Alpine Auto Brokers, LLC in the state of Utah in December 2010. The Company sold automobiles and provided dealer services, for a fee.
The Company was incorporated as Alpine Auto Brokers, Inc. on May 12, 2011, in the State of Nevada for the purpose of locating and purchasing used vehicles at auctions, from private individuals, from other dealers and selling these vehicles specifically to consumers in Salt Lake City, Utah. On January 1, 2014, the Company acquired 100 percent of the membership interests of Alpine Auto Brokers, LLC, a Utah Limited Liability Company formed on December 10, 2010. The Company operated through its wholly owned subsidiary Alpine Auto Brokers, LLC.
The acquisition was accounted for as a reverse recapitalization in which the operating entity’s historical financial statements become those of the “accounting acquirer” in which historical operating results are presented from inception.
The Company has been dormant since October 27, 2016.
On August 18, 2021, the Eight Judicial District Court in Clark County, Nevada Case No: A-20-816619-B appointed Custodian Ventures, managed by David Lazar as the Company’s Receiver.
On January 28, 2022, the Company, amended its articles of incorporation change its name back to Alpine Auto Brokers Inc. The change was made because the Company failed to complete its prior name change with FINRA.
On February 9, 2022, as a result of a private transactions, 10,000,000 shares of Series A Preferred Stock, $0.001 par value per share (the “Shares”) of the “Company”, were transferred from Custodian Ventures, LLC to MetaVerse Investment Group (the “Purchaser”). As a result, the Purchaser became the holder of 90% of the voting rights of the issued and outstanding share capital of the Company on a fully-diluted basis of the Company, and became the controlling shareholder. The consideration paid for the Shares was $420,000, with $20,000 being held back pending certain public filings of the Company. The source of the cash consideration for the Shares was personal funds of the Purchaser. In connection with the transaction, David Lazar released the Company from all debts owed to him and/or Custodian Ventures, LLC.
On February 9, 2022, the existing director and officer resigned immediately. Accordingly, David Lazar, serving as a director and an officer, ceased to be the Company’s Chief Executive Officer, Chief Financial Officer, President, Treasurer, Secretary and a Director. At the effective date of the transfer, Zibin Xiao consented to act as the new Chief Executive Officer, President, and member of the Board of Directors. Also on February 9, 2022, Zonghan Wu consented to act as the new CFO, Treasurer, Secretary, and Chairman of the Board of Directors of the Company.
On June 27, 2022, Zibin Xiao resigned as the Chief Executive Officer, President, and member of the Board of Directors. Also on June 27, 2022, Yufeng Zhang consented to act as the new Chief Executive Officer, President, and member of the Board of Directors.
On February 20, 2023, the Company entered into a Definitive Share Exchange Agreement with National Holdings Investment Ltd., a British Virgin Islands corporation (“NHIL”), whereunder the Company acquired 100% ownership interest in NHIL for the issuance of 10,000,000 shares of the Company’s common stock. NHIL through its China based subsidiaries, Yinao (Dongguan) Technology Co., Ltd., is mainly engaged in the planning and design service consulting business of new energy charging piles. The transaction closed effective February 24, 2023 and has been treated as a business combination, resulting in NHIL becoming a wholly-owned subsidiary of the Company. As such, the Company recognized the assets and liabilities of NHIL acquired in the reorganization, at their historical carrying amounts.
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As a result of the above transaction, the Company’s corporate structure which is set forth as follows:
Yinao (Dongguan) Technology Co., Ltd (YDTC) was organized in 2022 to engage in the business of constructing and operating charging stations for electric vehicles (“EV”). Our ambition is to build YDTC into a central participant in this growing industry.
In this, our first year of operation, we are focusing our efforts on building a group of consulting clients who are themselves distributors of charging stations. We are undertaking this top-down approach to the industry in part because we lack sufficient financial resources to compete directly with the major participant in the industry. But of equal importance is the opportunity for market impact that we will gain by positioning ourselves as leaders in the charging station industry. As those to whom we provide our services and guidance spread throughout the EV world, they will advertise our brand as their authoritative source for technological and commercial knowledge about the charging station industry, and so our brand will gain value among the relevant participants in the EV world. Our goal is that, when we have secured the financing necessary to compete in the charging station community, we will already be known and identified with quality and know-how related to charging stations.
Our main business at this time, therefore, is to provide consulting services relating to the planning and design of new energy charging piles to customer in Guangdong Province of the PRC. Our customers are enterprises that are either initiating their participation in this industry in general or expanding their operations to Guangdong. In either case, a customer who engages YDTC, will receive, among other things:
| ● | a survey report on the distribution of new energy charging piles that have been built and are under construction in the district of Guangzhou City in which the customer intends to distribute its stations;, |
| ● | a business plan based upon an analysis of the existing distribution of charging piles in the target market; |
| ● | a site selection plan identifying prospective locations where charging piles can be built; |
| ● | a plan of the electric equipment design plus the type of charging piles to be used; |
| ● | a plan of the construction and the construction method; as well as |
| ● | the design and sample drawings of the foundation for the piles, |
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Corporate History and Structure
On January 10, 2022, Yinao (Dongguan) Technology Co., Ltd (YDTC) was incorporated pursuant to the PRC law.
On June 16, 2022, we established a holding company, National Holdings Investment Ltd (NHIL), under the laws of the British Virgin Islands (BVI).
On October 04, 2022, NHIL acquired 100% ownership interest in YDTC. YDTC becomes a wholly foreign owned enterprise pursuant to the PRC law.
On February 20, 2023, the Company entered into a Definitive Share Exchange Agreement with National Holdings Investment Ltd., a British Virgin Islands corporation (“NHIL”), whereunder the Company acquired 100% ownership interest in NHIL for the issuance of 10,000,000 shares of the Company’s common stock. NHIL through its China based subsidiaries, Yinao (Dongguan) Technology Co., Ltd., is mainly engaged in the planning and design service consulting business of new energy charging piles. The transaction closed effective February 24, 2023 and has been treated as a business combination, resulting in NHIL becoming a wholly-owned subsidiary of the Company.
Competitive Strengths
The following are the competitive strengths of Yinao (Dongguan) Technology Co., Ltd:
Top-down approach: The company’s strategy of targeting consulting clients who are themselves distributors of charging stations is a smart move, as it allows the company to establish itself as a leader in the industry while building its financial resources to compete directly with major participants. This approach will help the company gain valuable insights into the industry while building its brand reputation.
Technological and commercial knowledge: YDTC’s focus on providing its clients with technological and commercial knowledge about the charging station industry positions the company as a credible and authoritative source of information in the EV world. This knowledge base will be useful when the company is ready to enter the market as a direct competitor.
Brand reputation: By positioning itself as a leader in the charging station industry through its consulting services, YDTC is laying the foundation for a strong brand reputation. As clients spread the word about the quality of its services, the company’s brand value will increase, making it easier to compete with major players in the industry.
Growing industry: The electric vehicle market is expected to grow rapidly in the coming years, and the need for charging stations will increase accordingly. As a company focused solely on charging stations, YDTC is well-positioned to take advantage of this growth and establish itself as a significant player in the industry.
Strategic location: Dongguan is a key manufacturing hub in China, and the company’s location there gives it access to a large pool of skilled workers, suppliers, and potential customers. This strategic location could give YDTC an edge over competitors located in less advantageous areas.
The Charging Station Industry in China
In recent decades, China’s rapid economic growth has enabled more and more consumers to buy their own cars. The result has been the creation of the largest automotive market in the world—but also serious urban air pollution, high greenhouse gas emissions, and growing dependence on oil imports. To counteract those troubling trends, the Chinese government has imposed policies to encourage the adoption of plug-in electric vehicles (EVs). Since buying an EV costs more than buying a conventional internal combustion engine vehicle, in 2009 the government began to provide generous subsidies for EV purchases. As a result, China became the world’s largest market for EV’s, accounting for approximately 50% of global sales. In 2020 1.1 million EVs were produced and sold in China. The central government’s “New Energy Vehicle Industry Development Plan (2021 - 2035) predicted that sales of new energy vehicles would account for 20% of car sales in China in 2025. In fact, during 2022, EV sales represented 22% of new car sales.
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As the number of EV purchases grew, paying for the subsidies became extremely costly for the government. As a result, beginning in 2020, China’s government began to phase out the subsidies and instead rely on a mandate imposed on car manufacturers. The mandate requires that a certain percent of all vehicles sold by a manufacturer each year must be battery-powered. To avoid financial penalties, every year manufacturers must earn a stipulated number of points, which are awarded for each EV produced based on a complex formula that takes into account range, energy efficiency, performance, and more. The requirements get tougher over time, with a goal of having EVs make up 40% of all car sales in China by 2030.
The mandate on vehicle manufacturers to produce EVs is supplemented by a number of Chinese government policies:
| ● | Tax exemptions. The Chinese government exempts electric vehicles from consumption and sales taxes, which can save purchasers tens of thousands of RMB (equivalent to thousands of dollars). It also waives 50% of vehicle registration fees for electric vehicles. |
| ● | Procurement. The Chinese government also uses its procurement power to promote electric vehicles. A May 2016 order required that half of new vehicles purchased by China’s central government be new energy vehicles within five years. |
| ● | New auto factory requirements. Chinese regulations strongly discourage the construction of factories for manufacturing internal combustion engine vehicles only. Subject to exceptions that are difficult to satisfy, any new vehicle factory is required to include capacity for the construction of electric vehicles. |
Since EVs will be useless without charging stations, the Chinese central government has promoted the development of EV charging infrastructure as a matter of national policy. As the central government has withdrawn subsidies for purchase of EVs, it has redirected a significant portion of those funds to support the development of EV infrastructure, primarily charging stations. In November 2020, the General Office of the State Council promulgated its “Development Plan of the New Energy Vehicle Industry (2021 - 2035), in which it mandated financial support for the construction of charging stations and proposed preferential policies with respect to allocation of space in parking lots to charging stations. China State Grid and China Southern Grid, China’s two state-owned electric utilities, both have programs to promote the development of electric vehicle charging infrastructure.
Guangdong Province has also been aggressive in support of EVs and EV infrastructure. During 2022 the number of EVs sold in Guangdong Province doubled compared to sales in 2021, and now one-eighth of the EVs manufactured in the PRC are manufactured in Guangdong Province. To support this push toward EVs, Guangdong Province now has more charging stations than any other province in China – and three times as many charging facilities as are located in the entire United States. The Province subsidizes certain purchases of EVs, and encourages insurance companies to provide preferential premiums for EVs. The government of Guangdong Province gives every indication that it will continue to support the expansion of the charging station network indefinitely, with an ultimate goal of maximizing the conversion of vehicular traffic to electric.
11. Competition
The Company is operating in the growing market of new energy charging piles, which is becoming increasingly competitive due to the growing demand for electric vehicles and the government’s push towards cleaner energy. The competition the Company is facing can be broadly categorized into the following:
1. Established players: The new energy charging pile market is already populated with a number of established players such as State Grid, Southern Power Grid, and other major energy companies. These companies have a strong brand presence, financial resources, and expertise in the energy sector. They also have established relationships with customers and are likely to be strong competitors for the Company.
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2. New entrants: The market for new energy charging piles is attracting a growing number of new entrants, ranging from start-ups to established companies diversifying into the market. These competitors are also likely to be aggressive in pursuing market share and have the potential to disrupt the market.
3. Technological changes: The charging technology for electric vehicles is constantly evolving, and competitors are investing heavily in developing new charging technologies such as wireless charging, fast charging, and ultra-fast charging. These technological changes could lead to new entrants and disrupt existing market players.
4. Regulatory environment: The regulatory environment for the new energy charging pile market is evolving rapidly, and competitors are likely to be affected by changes in regulations and policies related to the development of the new energy industry. These changes could favor some players and disadvantage others.
In summary, the Company is operating in a highly competitive market, facing competition from established players, new entrants, technological changes, and regulatory environment changes. The Company are developing a strong value proposition and endeavoring to build a competitive advantage to succeed in the market.
Marketing
The Company is developing a brand identity that reflects the Company’s values and mission. This includes developing a unique logo, website, and marketing materials that are visually appealing and clearly communicate the Company’s value proposition. The Company also plans to further strengthen our marketing efforts and improve our brand awareness through the following actions:
1. Leverage social media: Social media platforms such as WeChat, Weibo, and LinkedIn can be used to build awareness of our brand, share Company news and updates, and engage with potential customers. The Company can also consider partnering with influencers in the electric vehicle or sustainability space to reach a wider audience.
2. Attend industry events: The Company will attend industry events such as trade shows, conferences, and seminars to network with potential customers and partners. These events can also provide valuable insights into industry trends and customer needs.
3. Foster partnerships: The Company is seeking out partnerships with property developers, government agencies, and other companies in the new energy space. By partnering with these organizations, YDTC can expand its reach and access new customer segments.
4. Overall, by developing a brand identity, leveraging social media, attending industry events, and fostering partnerships, The Company can build awareness of its brand and generate leads in the highly competitive market.
PRC Laws and Regulations Affecting Our Business
There are several PRC laws and regulations that could affect the Company’s business, including:
1. Regulations on new energy vehicles: The Chinese government has implemented a number of regulations and policies aimed at promoting the development and adoption of new energy vehicles, including electric vehicles. These policies could create opportunities for the Company as demand for electric vehicle charging infrastructure increases.
2. Intellectual property laws: The Company may be subject to intellectual property laws related to patents, trademarks, and copyrights. This could impact the company’s ability to protect its intellectual property and may affect its competitive position.
It is important for YDTC to stay up-to-date with any changes or developments in these and other relevant laws and regulations in order to ensure compliance and mitigate any potential risks or challenges to its business operations.
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Growth Plan
The following is a growth plan for Yinao (Dongguan) Technology Co., Ltd:
Expand consulting services: YDTC should continue to expand its consulting services to attract more clients and establish itself as a top-tier consulting firm in the EV charging station industry. The company can do this by developing and offering new services such as feasibility studies, site selection, and project management.
Develop charging station technology: YDTC should invest in research and development to improve the technology used in its charging stations. By developing more efficient, user-friendly, and innovative charging stations, the company can differentiate itself from competitors and attract more clients. Additionally, YDTC could consider developing its own branded charging stations to sell directly to customers.
Form strategic partnerships: YDTC should form strategic partnerships with other players in the EV industry, such as EV manufacturers, energy providers, and other charging station companies. These partnerships could provide access to new markets, customers, and technology, as well as help the company to stay up-to-date with the latest industry trends.
Raise capital: To fund its expansion plans, YDTC should consider raising capital through various means, such as placement, venture capital, private equity, or debt financing. With adequate funding, YDTC can invest in research and development, expand its operations, and compete with major players in the EV charging station industry.
Overall, YDTC’s growth plan should focus on expanding its consulting services, improving its technology, forming strategic partnerships, and raising capital to achieve its goal of becoming a central participant in the growing EV charging station industry.
Employees
We currently have an aggregate of 8 employees, two of whom are the officers and directors of ALTB. We anticipate hiring additional employees in the next twelve months. We anticipate hiring necessary personnel based on an as needed basis only on a per contract basis to be compensated directly from revenues.
Intellectual Property
None
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Management
Directors and Executive Officers
On February 9, 2022, Zonghan Wu consented to act as the CFO, Treasurer, Secretary, and Chairman of the Board of Directors of the Company. On June 27, 2022, Yufeng Zhang consented to act as the Chief Executive Officer, President, and member of the Board of Directors.
| Name | Age | Position(s) | ||
| Yufeng Zhang | 37 | Chief Executive Officer, President, and Director | ||
| Zonghan Wu | 44 | CFO, Treasurer, Secretary, and Chairman of the Board of Directors |
Yufeng Zhang Mr. Zhang received his bachelor’s degree in 2021 from Heilongjiang Oriental College. From September 2015 to June 2019, Mr. Zhang served as the Operations Manager at Heilongjiang Wisdom Light Culture Communication Co., Ltd. From July 2019 to October 2020 Mr. Zhang served as a Director of Laishan Network Technology (Xi’an) Co., Ltd; and from October 2020 to the present he has served as a Director of Guoao (Shenzhen) New Energy Co., Ltd.
Zonghan Wu Mr. Wu worked for Opus International Consultants as a Business Analyst in New Zealand from 2004 to 2007. He worked for Nestle as a Commercial Analyst from 2008 to 2011. Currently he is Managing Director of Shanghai JAZ Management Consulting Co. Ltd in Shanghai. Mr. Wu is currently Chairman and Company Secretary for the following public companies listed in the U.S.: SSHT S&T Group Ltd. (OTC Pink: SSHT) and Alpine Auto Brokers Inc. (OTC Pink: ALTB). Mr. Wu is also a Director and Company Secretary for the following public companies listed in the U.S.: Alliance Recovery Corp. (OTC Pink: ARVY), ACC Aviation Holdings Ltd. OTC Pink: CAVG), Interact Holdings Group, Inc. (OTC Pink: IHGP), Linike Medical Group Ltd. (OTC Pink: LNMG), Providence Resources, Inc. (OTC Pink: PVRS), Alpine Auto Brokers Inc. (OTC Pink: SIPN), ZKGC New Energy Ltd. (OTC Pink: ZKGCF), and Victor Mining Industry Group, Inc. (OTC Pink: VMTG). Mr. Wu was awarded a Bachelor of Commerce degree from the University of Auckland in New Zealand in 2004.
Term of Office
Our directors hold their position until the next annual meeting of shareholders and until his successor is elected and qualified by our shareholders, or until earlier death, retirement, resignation or removal.
Family Relationships
There are no family relationships between the Company and any of our current and proposed directors or executive officers.
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PROPERTIES
Our mailing address is 46 Reeves Road, Pakuranga 2010, New Zealand. The Company’s wholly-owned subsidiary’s, YDTC’, address is Room 2136, Building 2, No. 119 Dongbao Road, Dongcheng Street, Dongguan City, Guangdong Province
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LEGAL PROCEEDINGS INVOLVING DIRECTORS AND EXECUTIVE OFFICERS
During the past ten years no current or incoming director, executive officer, promoter or control person of the Company has been involved in the following:
(1) A petition under the Federal bankruptcy laws or any state insolvency law which was filed by or against, or a receiver, fiscal agent or similar officer was appointed by a court for the business or property of such person, or any partnership in which he was a general partner at or within two years before the time of such filing, or any corporation or business association of which he was an executive officer at or within two years before the time of such filing;
(2) Such person was convicted in a criminal proceeding or is a named subject of a pending criminal proceeding (excluding traffic violations and other minor offenses);
(3) Such person was the subject of any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining him from, or otherwise limiting, the following activities:
i. Acting as a futures commission merchant, introducing broker, commodity trading advisor, commodity pool operator, floor broker, leverage transaction merchant, any other person regulated by the Commodity Futures Trading Commission, or an associated person of any of the foregoing, or as an investment adviser, underwriter, broker or dealer in securities, or as an affiliated person, director or employee of any investment company, bank, savings and loan association or insurance company, or engaging in or continuing any conduct or practice in connection with such activity;
ii. Engaging in any type of business practice; or
iii. Engaging in any activity in connection with the purchase or sale of any security or commodity or in connection with any violation of Federal or State securities laws or Federal commodities laws;
(4) Such person was the subject of any order, judgment or decree, not subsequently reversed, suspended or vacated, of any Federal or State authority barring, suspending or otherwise limiting for more than 60 days the right of such person to engage in any activity described in paragraph (f)(3)(i) of this section, or to be associated with persons engaged in any such activity;
(5) Such person was found by a court of competent jurisdiction in a civil action or by the Commission to have violated any Federal or State securities law, and the judgment in such civil action or finding by the Commission has not been subsequently reversed, suspended, or vacated;
(6) Such person was found by a court of competent jurisdiction in a civil action or by the Commodity Futures Trading Commission to have violated any Federal commodities law, and the judgment in such civil action or finding by the Commodity Futures Trading Commission has not been subsequently reversed, suspended or vacated;
(7) Such person was the subject of, or a party to, any Federal or State judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated, relating to an alleged violation of:
i. Any Federal or State securities or commodities law or regulation; Or
ii. 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
iii. Any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; Or
(8) Such person was 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 (15 U.S.C. 78c(a)(26))), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act (7 U.S.C. 1(a)(29))), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.
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EXECUTIVE COMPENSATION
The table below sets forth the positions and compensations for the officers and directors of the Company, and for the officers and directors, for the years ended December 31, 2022 and 2021.
There are no employment agreements between the Company and its officers and directors. And since the change of control on September 8, 2022, the directors and officers have received no compensation. This policy, however, will be revised as the Company secure additional fundings.
| Position | Name of Officers or Directors | Year | Salary before tax | Bonus | All other compensation | Total | ||||||
|
Director, President, CEO |
Yufeng Zhang |
2022 | n/a | n/a | n/a | n/a | ||||||
| 2021 | n/a | n/a | n/a | n/a | ||||||||
|
Director, Secretary, CFO |
Zonghan Wu |
2022 | n/a | n/a | n/a | n/a | ||||||
| 2021 | n/a | n/a | n/a | n/a |
We do not have an audit or compensation committee comprised of independent directors as our Company qualifies for an exemption from these requirements. Indeed, we do not have any audit or compensation committee. These functions are performed by our Board of Directors as a whole.
All directors serve 1 yr. terms.
Related Party Transactions
None
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information with respect to the beneficial ownership of our voting securities following the completion of the Reverse Merger, and the increase of the described in Items 1.01 of this report by (i) any person or group owning more than 5% of any class of voting securities, (ii) each director, (iii) our chief executive officer and (iv) all executive officers and directors of ALTB as a group as of December 31, 2022.
| Name | Number of Shares of Common Stock |
Percentage | ||||||
| Yufeng Zhang | ||||||||
| Room 2136, Building 2, No. 119 Dongbao Road, Dongcheng Street, Dongguan City, Guangdong Province | 0 | 0 | % | |||||
| Zonghan Wu | ||||||||
| 46 Reeves Road, Pakuranga 2010, Aukland, New Zealand | 400,950,000 | 88 | % | |||||
| All executives officers, directors, and beneficial ownership thereof as a group 2 people) | 400,950,000 | 88 | % | |||||
There are no other officer or director 5 % shareholders.
Unless otherwise indicated in the footnotes to this table and subject to community property laws where applicable, each of the stockholders named in this table has sole or shared voting and investment power with respect to the shares indicated as beneficially owned. Except as set forth above, applicable percentages are based upon 455,500,000 shares of common stock outstanding.
The holders of our common stock are entitled to one vote for each share held of record on all matters to be voted on by stockholders.
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Certain Relationships And Related Transactions
Except as described herein, none of the following parties (each a “Related Party”) has had any material interest, direct or indirect, in any transaction with us or in any presently proposed transaction that has or will materially affect us:
| ● | any of our directors or officers; |
| ● | any person proposed as a nominee for election as a director; |
| ● | any person who beneficially owns, directly or indirectly, shares carrying more than 10% of the voting rights attached to our outstanding shares of common stock; or |
| ● | any member of the immediate family (including spouse, parents, children, siblings and in- laws) of any of the above persons. |
None
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Description of Share Capital
We have authorized 990,000,000 shares of common stock with par value $0.001 per share. As of May 1, 2023, the Company has issued and outstanding 455,500,000 shares of common stock. We have authorized 10,000,000 shares of Series A Preferred Stock. As of December 31, 2022, the Company has issued and outstanding 0 shares of Preferred Stock. We do not have different authorized classes of stock other than afore-mentioned.
Common Stock
The holders of our common stock are entitled to one vote for each share held of record on all matters to be voted on by stockholders. There is no cumulative voting with respect to the election of directors, with the result that the holders of more than 50% of the shares voting for the election of directors can elect all of the directors then up for election. The holders of our common stock are entitled to receive dividends when, as and if declared by the Board of Directors out of funds legally available therefor. In the event of liquidation, dissolution or winding up of our company, the holders of common stock are entitled to share ratably in all assets remaining which are available for distribution to them after payment of liabilities and after provision has been made for each class of stock, if any, having preference over the common stock. Holders of shares of our common stock, as such, have no conversion, pre-emptive or other subscription rights, and there are no redemption provisions applicable to the common stock.
Preferred Stock
The holders of our Series A preferred stock are entitled to vote at 90% of the total number of issued and outstanding shares on all matters to be voted on by stockholders. The Series A preferred stock also convert into 90% of the total number of issued and outstanding shares. The holders of our preferred stock are entitled to receive dividends when, as and if declared by the Board of Directors out of funds legally available therefore. In the event of liquidation, dissolution or winding up of our company, the holders of preferred stock are entitled to share ratably in all assets remaining which are available for distribution to them after payment of liabilities and after provision has been made for each class of stock, if any, having preference over the Series A preferred stock. We do not have different authorized classes of stock other than aforementioned.
Controlling Shareholder(s)’ Ability
The controlling shareholder(s)’ shall and will have ability to control matters requiring shareholder approval, including election of directors, amendment of organizational documents, and approval of major corporate transactions, such as a change in control, merger, consolidation, or sale of assets.
Indemnification of Directors and Officers
Section 78.138 of the NRS provides that a director or officer will not be individually liable unless it is proven that (i) the director’s or officer’s acts or omissions constituted a breach of his or her fiduciary duties, and (ii) such breach involved intentional misconduct, fraud or a knowing violation of the law.
Section 78.7502 of NRS permits a company to indemnify its directors and officers against expenses, judgments, fines and amounts paid in settlement actually and reasonably incurred in connection with a threatened, pending or completed action, suit or proceeding if the officer or director (i) is not liable pursuant to NRS 78.138 or (ii) acted in good faith and in a manner the officer or director reasonably believed to be in or not opposed to the best interests of the corporation and, if a criminal action or proceeding, had no reasonable cause to believe the conduct of the officer or director was unlawful.
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Section 78.751 of NRS permits a Nevada company to indemnify its officers and directors against expenses incurred by them in defending a civil or criminal action, suit or proceeding as they are incurred and in advance of final disposition thereof, upon receipt 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 such officer or director is not entitled to be indemnified by the company. Section 78.751 of NRS further permits the company to grant its directors and officers additional rights of indemnification under its articles of incorporation or bylaws or otherwise.
Section 78.752 of NRS provides that a Nevada company may purchase and maintain insurance or make other financial arrangements on behalf of any person who is or was a director, officer, employee or agent of the company, or is or was serving at the request of the company as a director, officer, employee or agent of another company, partnership, joint venture, trust or other enterprise, for any liability asserted against him and liability and expenses incurred by him in his capacity as a director, officer, employee or agent, or arising out of his status as such, whether or not the company has the authority to indemnify him against such liability and expenses. Our Bylaws provide that we may indemnify and advance litigation expenses to our directors, officers, employees and agents to the extent permitted by law, our Articles of Incorporation or our Bylaws, and shall indemnify and advance litigation expenses to our directors, officers, employees and agents to the extent required by law, our Articles of Incorporation or Bylaws. Our obligations of indemnification, if any, shall be conditioned on receiving prompt notice of the claim and the opportunity to settle and defend the claim. We may, to the extent permitted by law, purchase and maintain insurance on behalf of an individual who is or was our director, officer, employee or agent.
Indemnification against Public Policy
Insofar as indemnification by us for liabilities arising under the Securities Act may be permitted to our directors, officers or persons controlling the company pursuant to provisions of our Articles of Incorporation and Bylaws, or otherwise, we have been advised that in the opinion of the Securities and Exchange Commission, such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable. In the event that a claim for indemnification by such director, officer or controlling person of us in the successful defence of any action, suit or proceeding is asserted by such director, officer or controlling person in connection with the securities being offered, we will, unless in the opinion of our counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by us is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.
The effect of indemnification may be to limit the rights of the Company and the shareholders (through shareholders’ derivative suits on behalf of the Company) to recover monetary damages and expenses against a director for breach of fiduciary duty.
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Shares Eligible for Future Sale
Future sales of substantial amounts of shares of our Common Shares in the public market after this offering, or the possibility of these sales occurring, could cause the prevailing market price for our Common Shares to fall or impair our ability to raise equity capital in the future. Following this offering, the Common Shares that were not offered and sold in our initial public offering are “restricted securities,” as that term is defined in Rule 144 under the Securities Act. These restricted securities are eligible for public sale only if they are registered under the Securities Act or if they qualify for an exemption from registration under Rule 144 or Rule 701 under the Securities Act, which are summarized below.
These restricted securities may be available for sale in the public market under Rule 144 one year following the filing of this registration statement on Form S-1.
Rule 144
Sales of our Common Stock under Rule 144 could reduce the price of our stock. There are 445,500,000 issued and outstanding shares of our Common Stock that Rule 144 of the Securities Act defines as restricted securities.
These shares will be subject to the resale restrictions of Rule 144. In general, persons holding restricted securities, including affiliates, must hold their shares for a period of at least year, affiliates may not sell more than 1.0% of the total issued and outstanding shares in any 90-day period, and affiliates must resell the shares in an unsolicited brokerage transaction at the market price. The availability for sale of substantial amounts of Common Stock under Rule 144 could reduce prevailing market prices for our securities.
WE URGE POTENTIAL PURCHASERS OF OUR SHARES TO CONSULT THEIR OWN TAX ADVISORS
CONCERNING THE U.S. FEDERAL, STATE, LOCAL AND NON-U.S. TAX CONSEQUENCES OF PURCHASING,
OWNING AND DISPOSING OF OUR SHARES.
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Plan of Distribution
The Company is also offering up to a total of 120,000,000 shares of common stock in a best-efforts, direct public offering, solely by our Chief Executive Officer, Yufeng Zhang, without any involvement of underwriters. The offering price is $0.01 per share. The offering will terminate 365 days from the date of this prospectus or when all of the Shares are sold, whichever comes first. We also have the right to terminate this offering at any time prior to the expiration of the offering period. Yufeng Zhang will use our best efforts to sell as many shares as possible up to the maximum offering amount of 120,000,000 shares. This is no minimum offering amount. We may accept or reject any subscription amount from any investor in our sole discretion or we may accept only part of a subscription amount. Expenses related to the offering are estimated to be $50,000.
We will sell the shares in this offering exclusively through our officers and directors. They will receive no commission from the sale of any shares by the Company. They will not register as a broker/dealer under the 1934 Act in reliance upon Rule 3a4-1 under the 1934 Act. They may rely upon Rule 3a4-1 because (i) they are not subject to any statutory disqualifications, as defined in Section 3(a)(39) of the 1934 Act, (ii) they will not be compensated in connection with the sale of the Company’s securities by the payment of commissions or other remuneration based either directly or indirectly on transactions in the securities, (iii) they are not associated persons of a broker or dealer, (iv) they will primarily perform, at the end of the offering, substantial duties for or on behalf of the Company, otherwise than in connection with transactions in securities, (v) they were not a broker or dealer, or an associated person thereof, within the preceding 12 months, (vi) they do not participate in selling an offering of securities for any issuer more than once every 12 months, except in reliance on (iv) and (v) above. The Company will register as the issuer-agent in those states requiring such registration.
We anticipate that our common stock will continue to be subject to the penny stock rules under the Securities Exchange Act of 1934, as amended. These rules regulate broker/dealer practices for transactions in “penny stocks.” Penny stocks are generally equity securities with a price of less than $5.00. The penny stock rules require broker/dealers to deliver a standardized risk disclosure document that provides information about penny stocks and the nature and level of risks in the penny stock market. The broker/dealer must also provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker/dealer and its salesperson and monthly account statements showing the market value of each penny stock held in the customer’s account. The bid and offer quotations and the broker/dealer and salesperson compensation information must be given to the customer orally or in writing prior to completing the transaction and must be given to the customer in writing before or with the customer’s confirmation. In addition, the penny stock rules require that prior to a transaction, the broker and/or dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written agreement to the transaction. The transaction costs associated with penny stocks are high, reducing the number of broker-dealers who may be willing to engage in the trading of our shares. These additional penny stock disclosure requirements are burdensome and may reduce all of the trading activity in the market for our common stock. As long as the common stock is subject to the penny stock rules, holders of our common stock may find it more difficult to sell their shares.
Our officers and directors may purchase shares in this offering; however any such purchases will be held for investment purposes only and they will be subject to Regulation M and will act accordingly, including through filing the notice and information relating to distributions subject to Regulation M under Rule 5190, Rule 6275(f) and the trade reporting rules. They shall file all notices related to these rules with FINRA’s Market Regulation Department electronically through the FINRA Firm Gateway.
In certain states the Shares may not be sold unless the Shares have been registered or qualified for sale in such state or an exemption from registration or qualification is available and is complied with.
59
Procedures for Subscribing
If you decide to subscribe for any Shares in this offering, please make:
Direct Deposit:
Yinao (Dongguan) Technology Co., Ltd.
Address: Room 2136, Building 2, No. 119 Dongbao Road, Dongcheng Street, Dongguan City, Guangdong Province
Bank: Dongguan Rural Commercial Bank Nancheng Branch
Bank Address: No. 44, Nancheng Road Section, Guantai Avenue, Dongguan City, Guangdong, China
Account Number#: 110010190010095616
SWIFT Code: 313602088017
All checks for subscriptions must be made payable to “Yinao (Dongguan) Technology Co., Ltd.”.
Right to Reject Subscriptions
We have the right to accept or reject subscriptions in whole or in part, for any reason or for no reason. All monies from rejected subscriptions will be returned immediately by us to the subscriber, without interest or deductions. Subscriptions for shares will be accepted or rejected within five business days after we receive them. Furthermore, once a subscription agreement is accepted, it will be executed without reconfirmation to or from the subscriber. Once ALTB accepts a subscription, the subscriber cannot withdraw it unless otherwise dictated by state law.
60
Legal Matters
The validity of the issuance of the shares of common stock will be passed upon for the company by McMurdo Law Group, LLC. Counsel has additionally consented to his opinion being included as an exhibit to this filing. Additionally, counsel has consented to being named in the prospectus.
The legal counsel that passed their opinion on the legality of these securities is:
McMurdo Law Group, LLC
Matthew McMurdo, Esq.
1185 Avenue of the Americas, 3rd Floor New York, NY 10036
Experts
The audited financial statements of NHIL as of December 31, 2022 and 2021 are appended to this report beginning on page F-1. The audited financial statements of YDTC as of December 31, 2022 and 2021 were audited by HAOXIN.
Where You Can Find Additional Information
We have filed with the SEC a registration statement on Form S-1 under the Securities Act with respect to the Common Shares offered hereby. This prospectus, which constitutes a part of the registration statement, does not contain all of the information set forth in the registration statement or the exhibits filed therewith. For further information about us and the Common Shares offered hereby, reference is made to the registration statement and the exhibits filed therewith. Statements contained in this prospectus regarding the contents of any contract or any other document that is filed as an exhibit to the registration statement are not necessarily complete, and in each instance we refer you to the copy of such contract or other document filed as an exhibit to the registration statement. We currently do not file periodic reports with the SEC. We will file periodic reports (including an annual report on Form 10-K, which we will be required to file within 90 days from the end of each fiscal year, and Form 10-Q, which we will be required to file within 45 days of the end of each fiscal quarter), and other information with the SEC pursuant to the Exchange Act once this registration statement on Form S-1 becomes effective. A copy of the registration statement and the exhibits filed therewith may be inspected without charge at the public reference room maintained by the SEC, located at 100 F Street, NE, Washington, DC 20549, and copies of all or any part of the registration statement may be obtained from that office. Please call the SEC at 1-800-SEC-0330 for further information about the public reference room. The SEC also maintains a website that contains reports, proxy and information statements and other information regarding registrants that file electronically with the SEC. The address of the website is http://www.sec.gov.
61
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
F-1
Report Of Independent Registered Public Accounting Firm
To the Shareholders and the Board of Directors of
Alpine Auto Brokers Inc.
Results of Review of Interim Financial Information
We have reviewed the consolidated balance sheets of Alpine Auto Brokers Inc. (the Company) as of March 31, 2023, and the related consolidated statements of operations, consolidated statements of comprehensive loss, consolidated statements of changes in stockholders’ deficit and consolidated statements of cash flows for the Three Months ended March 31, 2023, and the related notes Three Months (collectively referred to as the interim financial statements). Based on our reviews, we are not aware of any material modifications that should be made to the accompanying interim financial statements for them to be in conformity with accounting principles generally accepted in the United States of America.
Basis for Review Results
These interim financial statements are the responsibility of the Company’s management. We conducted our review in accordance with the standards of the PCAOB. A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with standards of the PCAOB, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. 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.
/s/ Shandong Haoxin Certified Public Accountants Co., Ltd.
Weifang, People’s Republic of China
June 6, 2023
F-2
ALPINE AUTO BROKERS INC.
CONSOLIDATED BALANCE SHEETS
| Note | March 31, 2023 |
December 31, 2022 |
December 31, 2021 |
|||||||||||
| (unaudited) | ||||||||||||||
| ASSETS | ||||||||||||||
| Current assets: | ||||||||||||||
| Cash and cash equivalents | 3 | |||||||||||||
| Accounts Receivable | ||||||||||||||
| Prepaid expenses and other current assets | 4 | |||||||||||||
| Total current assets | ||||||||||||||
| Property and equipment, net | 5 | |||||||||||||
| Goodwill | 7 | |||||||||||||
| TOTAL ASSETS | ||||||||||||||
| LIABILITIES AND SHAREHOLDERS’ DEFICIT | ||||||||||||||
| Current liabilities | ||||||||||||||
| Amounts due to a related party | 9 | |||||||||||||
| Accrued expenses and other current liabilities | 8 | |||||||||||||
| Total current liabilities | ||||||||||||||
| TOTAL LIABILITIES | ||||||||||||||
| Shareholders’ deficit: | ||||||||||||||
| Common Stock - $ par value, shares authorized; , and shares issued and outstanding March 31, 2023 and December 31, 2022 and 2021 | 11 | |||||||||||||
| Preferred Stock | 11 | |||||||||||||
| Additional paid-in capital | ||||||||||||||
| Accumulated deficit | ( |
) | ( |
) | ( |
) | ||||||||
| Accumulated other comprehensive loss (income) | ( |
) | ||||||||||||
| Total shareholders’ deficit | ( |
) | ( |
) | ( |
) | ||||||||
| TOTAL LIABILITIES AND SHAREHOLDERS’ DEFICIT | ||||||||||||||
F-3
ALPINE AUTO BROKERS INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
| Three Months Ended March 31, |
Year Ended December 31, |
|||||||||||||||||||
| Note | 2023 | 2022 | 2022 | 2021 | ||||||||||||||||
| (unaudited) | ||||||||||||||||||||
| Net revenues | 10 | |||||||||||||||||||
| Cost of revenues | ( |
) | ||||||||||||||||||
| Gross profit | ||||||||||||||||||||
| Operating expenses: | ||||||||||||||||||||
| General and administrative expenses | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||
| Total operating expenses | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||
| (loss) income from operations | ( |
) | ( |
) | ( |
) | ||||||||||||||
| Interest income (expense), net | ||||||||||||||||||||
| Bank charge | ( |
) | ||||||||||||||||||
| (loss) income before income taxes | ( |
) | ( |
) | ( |
) | ||||||||||||||
| Net (loss) income | ( |
) | ( |
) | ( |
) | ||||||||||||||
| Net (loss) income attributable to ordinary shareholders | ( |
) | ( |
) | ( |
) | ||||||||||||||
| Net loss per ordinary share: | ||||||||||||||||||||
| Basic and diluted | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||
| Weighted average shares used in calculating net loss per ordinary share: | ||||||||||||||||||||
| Basic and diluted | ||||||||||||||||||||
F-4
ALPINE AUTO BROKERS INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
| Three Months Ended March 31, |
Year Ended December 31, |
|||||||||||||||
| 2023 | 2022 | 2022 | 2021 | |||||||||||||
| (unaudited) | ||||||||||||||||
| Net (loss) Income | ( |
) | ( |
) | ( |
) | ||||||||||
| Other comprehensive (loss) income | ||||||||||||||||
| Foreign currency translation adjustments, net of tax of nil | ( |
) | ||||||||||||||
| Comprehensive (loss) income attributable to ALPINE AUTO BROKERS INC. | ( |
) | ( |
) | ( |
) | ||||||||||
| Total comprehensive (loss) income attributable to ordinary shares of ALPINE AUTO BROKERS INC. | ( |
) | ( |
) | ( |
) | ||||||||||
F-5
ALPINE AUTO BROKERS INC.
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (DEFICIT)
| Preferred Stock | Ordinary shares | Additional paid-in capital |
Accumulated deficit |
Accumulated other comprehensive (Income) Loss | Total shareholders’ equity (deficit) |
|||||||||||||||||||||||||||
| Shares | US$ | Shares | US$ | US$ | US$ | US$ | US$ | |||||||||||||||||||||||||
| Balance at December 31, 2020 | ( |
) | ( |
) | ||||||||||||||||||||||||||||
| Net loss | - | - | ( |
) | ( |
) | ||||||||||||||||||||||||||
| Issuance of preferred stock to related party | ||||||||||||||||||||||||||||||||
| Balance at December 31, 2021 | ( |
) | ( |
) | ||||||||||||||||||||||||||||
| Net loss | - | - | ( |
) | ( |
) | ||||||||||||||||||||||||||
| Conversion of 10,000,000 shares of Series A Preferred Stock into 400,950,000 shares of common stock with a cost basis of $0.001 per share | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||
| Balance at March 31, 2022(unaudited) | ( |
) | ( |
) | ||||||||||||||||||||||||||||
| Net loss | - | - | ( |
) | ( |
) | ||||||||||||||||||||||||||
| Balance at December 31, 2022 | ( |
) | ( |
) | ||||||||||||||||||||||||||||
| Common stock | ||||||||||||||||||||||||||||||||
| Net income | - | - | ||||||||||||||||||||||||||||||
| Foreign currency translation adjustments | - | - | ( |
) | ( |
) | ||||||||||||||||||||||||||
| Balance at March 31, 2023(unaudited) | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||
F-6
ALPINE AUTO BROKERS INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
| Three Months Ended March 31, |
Year Ended December 31, |
|||||||||||||||
| 2023 | 2022 | 2022 | 2021 | |||||||||||||
| (unaudited) | ||||||||||||||||
| Cash flows from operating activities: | ||||||||||||||||
| Net (loss) income | ( |
) | ( |
) | ( |
) | ||||||||||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||||||||||
| Depreciation and amortization | ||||||||||||||||
| Accounts receivable | ( |
) | ||||||||||||||
| Prepaid expenses and other current assets | ( |
) | ||||||||||||||
| Accounts payable | ||||||||||||||||
| Accrued expenses and other payables | ( |
) | ||||||||||||||
| Taxes payable | ||||||||||||||||
| Stock-based compensation | ||||||||||||||||
| Net cash used in operating activities | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||
| Cash flows from investing activities: | ||||||||||||||||
| Cash received from/(paid for) business combinations, net of cash acquired | ||||||||||||||||
| Net cash used in investing activities | ||||||||||||||||
| Cash flows from financing activities: | ||||||||||||||||
| Notes payable related parties-net | ||||||||||||||||
| Net cash (used in) provided by financing activities | ||||||||||||||||
| Effect of exchange rate changes on cash, cash equivalents | ( |
) | ||||||||||||||
| Net increase in cash, cash equivalents | ||||||||||||||||
| Cash, cash equivalents at beginning of the quarter | ||||||||||||||||
| Cash, cash equivalents at end of the quarter | ||||||||||||||||
| Non-cash investing and financing activities: | ||||||||||||||||
| Common stock issued to acquire NHIL | ||||||||||||||||
F-7
ALPINE AUTO BROKERS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS
Alpine Auto Brokers (the “Company”) was organized as Alpine Auto Brokers, LLC in the state of Utah in December 2010. The Company sold automobiles and provided dealer services, for a fee.
The Company was incorporated as Alpine Auto Brokers, Inc. on May 12, 2011, in the State of Nevada for the purpose of locating and purchasing used vehicles at auctions, from private individuals, from other dealers and selling these vehicles specifically to consumers in Salt Lake City, Utah. On January 1, 2014, the Company acquired 100 percent of the membership interests of Alpine Auto Brokers, LLC, a Utah Limited Liability Company formed on December 10, 2010. The Company operated through its wholly owned subsidiary Alpine Auto Brokers, LLC.
The acquisition was accounted for as a reverse recapitalization in which the operating entity’s historical financial statements become those of the “accounting acquirer” in which historical operating results are presented from inception.
The Company has been dormant since October 27, 2016.
On August 18, 2021, the Eight Judicial District Court in Clark County, Nevada Case No: A-20-816619-B appointed Custodian Ventures, managed by David Lazar as the Company’s Receiver.
On January 28, 2022, the Company, amended its articles of incorporation and changed its name back to Alpine Auto Brokers Inc. The change was made because the Company failed to complete its prior name change with FINRA.
On February 9, 2022, as a result of a private transactions, shares of Series A Preferred Stock, $ par value per share (the “Shares”) of the “Company”, were transferred from Custodian Ventures, LLC to MetaVerse Investment Group (the “Purchaser”). As a result, the Purchaser became the holder of 90% of the voting rights of the issued and outstanding share capital of the Company on a fully-diluted basis of the Company, and became the controlling shareholder. The consideration paid for the Shares was $
On February 9, 2022, the existing director and officer resigned immediately. Accordingly, David Lazar, serving as a director and an officer, ceased to be the Company’s Chief Executive Officer, Chief Financial Officer, President, Treasurer, Secretary and a Director. At the effective date of the transfer, Zibin Xiao consented to act as the new Chief Executive Officer, President, and member of the Board of Directors. Also on February 9, 2022, Zonghan Wu consented to act as the new CFO, Treasurer, Secretary, and Chairman of the Board of Directors of the Company.
On June 27, 2022, Zibin Xiao resigned as the Chief Executive Officer, President, and member of the Board of Directors. Also on June 27, 2022, Yufeng Zhang consented to act as the new Chief Executive Officer, President, and member of the Board of Directors.
On February 20, 2023, the company signed an agreement with National Holdings Investment Ltd (“NHIL”), a British Virgin Islands company, to issue ordinary shares of the company to acquire
F-8
ALPINE AUTO BROKERS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) Basis of Presentation
The accompanying financial statements have been prepared in accordance with the Financial Accounting Standards Board (“FASB”) “FASB Accounting Standard Codification™” (the “Codification”) which is the source of authoritative accounting principles recognized by the FASB to be applied by nongovernmental entities in the preparation of financial statements in conformity with generally accepted accounting principles (“GAAP”) in the United States.
The Company had negative working capital of $
The Company will focus on improving operation efficiency and cost reduction, developing core cash-generating business, and enhancing marketing function. Actions include developing more customers, as well as creating synergy using the Company’s resources.
The Company believes that available cash and cash equivalents, the cash provided by operating activities, together with actions as developing more customers and creating synergy of the Company’s resources, should enable the Company to meet presently anticipated cash needs for at least 12 months after the date that the financial statements are issued and the Company has prepared the consolidated financial statements on a going concern basis. If the Company encounters unforeseen circumstances that place constraints on its capital resources, management will be required to take various measures to conserve liquidity, which could include, but not necessarily be limited to, obtaining financial support from related parties, and controlling overhead expenses. Management cannot provide any assurance that the Company’s efforts will be successful. The consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the outcome of these uncertainties.
(b) Principles of consolidation
The consolidated financial statements include the financial statements of all the subsidiaries. All inter-company transactions and balances have been eliminated upon consolidation.
(c) Use of Estimates
The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, determination of the inputs to calculate the fair market value of preferred stock issuances, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of expenses during the reporting period. Management makes these estimates using the best information available at the time the estimates are made; however actual results could differ from those estimates. Significant items subject to such estimates and assumptions include valuation of inventory, and recoverability of carrying amount and the estimated useful lives of long-lived assets.
F-9
ALPINE AUTO BROKERS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(d) Foreign Currency Translation
The functional currency of the Company is the United States Dollar (“US$”). The functional currency of its owned subsidiaries in the PRC is Renminbi (“RMB”).
Foreign currency transactions have been translated into the functional currency at the exchange rates prevailing on the date of transactions. Foreign currency denominated monetary assets and liabilities are re-measured into the functional currency at exchange rates prevailing on the balance sheet date. Exchange gains and losses are recorded in the statements of operations.
The Group has chosen the US$ as its reporting currency. Assets and liabilities have been translated using exchange rates prevailing on the balance sheet date. Equity accounts are translated at historical exchange rates. Income statement items have been translated using the average exchange rate for the year. Translation adjustments have been reported as cumulative translation adjustments and are shown as a component of other comprehensive (loss) income in the consolidated statements of comprehensive loss and consolidated statements of changes in shareholders’ equity (deficit).
(e) Cash and cash equivalents
Cash and cash equivalents consist of cash on hand, cash in bank with no restrictions, as well as highly liquid investments which are unrestricted as to withdrawal or use, and which have remaining maturities of three months or less when initially purchased.
(f) Acquisition
The Company accounts for business combinations in accordance with Accounting Standards Codification (“ASC”) 805, Business Combinations. The results of businesses acquired in a business combination are included in the Company’s consolidated financial statements from the date of the acquisition. Purchase accounting results in assets and liabilities of an acquired business generally being recorded at their estimated fair values on the acquisition date. Any excess consideration over the fair value of assets acquired and liabilities assumed is recognized as goodwill. Transaction costs associated with business combinations are expensed as incurred and are included in general and administrative related costs in the consolidated statements of operations. The Company performs valuations of assets acquired and liabilities assumed and allocates the purchase price to its respective assets and liabilities. Determining the fair value of assets acquired and liabilities assumed requires management to use significant judgment and estimates.
(g) Accounts Receivable, net
Accounts receivable, net represents those receivables derived from the ordinary course of business and is recorded net of allowance for doubtful accounts. The Group maintains an allowance for doubtful accounts that reflect its best estimate of probable losses inherent in the accounts receivables. In determining collectability of the accounts receivables, the Group considers many factors, such as: creditworthiness of customers, aging of the receivables, payment history of customers, financial condition of the customers and market trends, and specific facts and circumstances.
The allowance for doubtful accounts is reduced by subsequent collections of the specific allowances or by any write-off of customer accounts that are deemed uncollectible.
F-10
ALPINE AUTO BROKERS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(h) Property and Equipment, net
Property and equipment is recorded at cost less accumulated depreciation and impairment. Depreciation expense of long-lived assets is recorded as either cost of revenue or operating expenses, as appropriate. Depreciation is computed using the straight-line method over the following estimated useful lives by major asset category:
| Schedule of estimated useful live | ||
| Category | Estimated useful lives | |
| Electronic equipment |
(i) Goodwill and Other Long-Lived Assets
Goodwill represents the excess of the cost of an acquired business over the fair value of the identifiable tangible and intangible assets acquired and liabilities assumed in a business combination.
In accordance with guidance within FASB ASC 350 “Intangibles — Goodwill and Other”, goodwill and identifiable intangible assets with indefinite lives are not subject to amortization but must be evaluated for impairment.
We evaluate long-lived assets, including finite-lived intangible assets, for impairment by comparison of the carrying amounts to future net undiscounted cash flows expected to be generated by such assets when events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. Should an impairment exist, the impairment loss would be measured based on the excess carrying value of the asset over the asset’s fair value or estimates of future discounted cash flows.
For goodwill and indefinite-lived intangible assets, in-process research and development, we review for impairment annually and upon the occurrence of certain events as required by ASC Topic 350, “Intangibles — Goodwill and Other”. Goodwill and indefinite-lived intangible assets are tested at least annually for impairment and more frequently if events or changes in circumstances indicate that the asset might be impaired. We review goodwill for impairment by first assessing qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test. If we are able to determine that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, we would conclude that goodwill is not impaired. If the carrying amount of a reporting unit is zero or negative, the second step of the impairment test is performed to measure the amount of impairment loss, if any, when it is more likely than not that a goodwill impairment exists.
(j) Revenue Recognition
The Group recognizes revenue in accordance with ASC 606. The core principle of ASC 606 is to recognize revenue when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. ASC 606 defines a five-step process to achieve this core principle, which includes: (1) identifying contracts with customers, (2) identifying performance obligations within those contracts, (3) determining the transaction price, (4) allocating the transaction price to the performance obligation in the contract, which may include an estimate of variable consideration, and (5) recognizing revenue when or as each performance obligation is satisfied. Documents and terms and the completion of any customer acceptance requirements, when applicable, are used to verify services rendered. The Company has no returns or sales discounts and allowances because services rendered and accepted by customers are normally not returnable.
F-11
ALPINE AUTO BROKERS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(k) Income taxes
The Company accounts for income taxes under FASB ASC 740, “Accounting for Income Taxes”. Under FASB ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under FASB ASC 740, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. FASB ASC 740-10-05, “Accounting for Uncertainty in Income Taxes” prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities.
The amount recognized is measured as the largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate settlement. The Company assesses the validity of its conclusions regarding uncertain tax positions quarterly to determine if facts or circumstances have arisen that might cause it to change its judgment regarding the likelihood of a tax position’s sustainability under audit.
(l) Comprehensive Loss
Comprehensive Loss includes all changes in equity except those resulting from investments by owners and distributions to owners. For the years presented, the Group’s total comprehensive loss includes net loss and foreign currency translation adjustments.
Net loss per common share is computed by dividing net loss by the weighted average common shares outstanding during the period as defined by Financial Accounting Standards, ASC Topic 260, “Earnings per Share.” Basic earnings per common share (“EPS”) calculations are determined by dividing net income by the weighted average number of shares of common stock outstanding during the year. Diluted earnings per common share calculations are determined by dividing net income by the weighted average number of common shares and dilutive common share equivalents outstanding.
(n) Fair Value of Financial Instruments
FASB ASC 820, Fair Value Measurements and Disclosures, defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. FASB ASC 820 also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. FASB ASC 820 describes three levels of inputs that may be used to measure fair value:
Fair value of financial instruments
Level 1 – Quoted prices in active markets for identical assets or liabilities.
Level 2 – Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
Level 3 – Unobservable inputs that are supported by little or no market activity and that are financial instruments whose values are determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant judgment or estimation.
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 of input that is significant to the fair value measurement of the instrument
F-12
ALPINE AUTO BROKERS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(o) Major Suppliers and Customers
The following customers accounted for 10% or more of revenue:
| Schedule of major suppliers and customers | ||||||||||||||||||||||||||||||||
| Three Months Ended March 31, | Year Ended December 31, | |||||||||||||||||||||||||||||||
| 2023 | 2022 | 2022 | 2021 | |||||||||||||||||||||||||||||
| US$ | % | US$ | % | US$ | % | US$ | % | |||||||||||||||||||||||||
| (unaudited) | ||||||||||||||||||||||||||||||||
| National Holding Group (Shenzhen) Co., Ltd | % | |||||||||||||||||||||||||||||||
| Guoao (Hainan) New Energy Co., Ltd | % | |||||||||||||||||||||||||||||||
The following vendors accounted for 10% or more of Prepaid expenses:
| As of March 31, | As of December 31, | |||||||||||||||||||||||||||||||
| 2023 | 2022 | 2022 | 2021 | |||||||||||||||||||||||||||||
| US$ | % | US$ | % | US$ | % | US$ | % | |||||||||||||||||||||||||
| (unaudited) | ||||||||||||||||||||||||||||||||
| Pusibo Enterprise Management Consulting (Shenzhen) Co., Ltd | % | |||||||||||||||||||||||||||||||
(p) Foreign Currency Risk
The RMB is not a freely convertible currency. The State Administration for Foreign Exchange in the PRC, under the authority of the People’s Bank of China, controls the conversion of RMB into other currencies. The value of the RMB is subject to changes in central government policies, international economic and political developments affecting supply and demand in the China Foreign Exchange Trading System market. As of March 31, 2023, December 31, 2022, and December 31, 2021, the Group’s cash and cash equivalents were $
(q) Recent Accounting Pronouncements
There are no recent accounting pronouncements that impact the Company’s operations.
NOTE 3 – CASH AND CASH EQUIVALENTS
The following is a summary of cash and cash equivalents:
| Schedule of cash and cash equivalents | ||||||||||||
|
As of March 31, |
As of December 31, | |||||||||||
| 2023 | 2022 | 2021 | ||||||||||
| (unaudited) | ||||||||||||
| Cash and cash equivalents | ||||||||||||
| Total | ||||||||||||
F-13
ALPINE AUTO BROKERS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 4 – PRAPAID EXPENSES AND OTHER CURRENT ASSETS
The following is a summary of prepaid expenses and other current assets:
| Schedule of prepaid expenses and other current assets | ||||||||||||
| As of March 31, |
As of December 31, |
|||||||||||
| 2023 | 2022 | 2021 | ||||||||||
| (unaudited) | ||||||||||||
| Prepaid Expenses | ||||||||||||
| Prepaid expenses and other current assets | ||||||||||||
NOTE 5 – PROPERTY AND EQUIPMENT, NET
The following is a summary of property and equipment:
| Schedule of property and equipment | ||||||||||||
| As of March 31, |
As of December 31, |
|||||||||||
| 2023 | 2022 |
2021 |
||||||||||
| (unaudited) | ||||||||||||
| Electronic equipment | ||||||||||||
| Less: accumulated depreciation | ||||||||||||
| Total Property and Equipment, net | ||||||||||||
NOTE 6 – ACQUISITIONS
According to the agreement, on February 20, 2023, the Company acquired
The acquisition is recorded based on its estimated fair value on the acquisition date, and the following table summarizes the purchase consideration and fair value of the assets purchased and liabilities assumed as of the acquisition date:
| Schedule of fair value of the assets purchased and liabilities | ||||
| Amount | ||||
| (unaudited) | ||||
| Cash and cash equivalent | ||||
| Accounts receivable | ||||
| Prepaid expenses and other current assets | ||||
| Property and equipment, net | ||||
| other payables | ||||
| Accrued expenses and other current liabilities | ||||
| Total net assets | ( |
) | ||
| Attributed to the Company | ( |
) | ||
| Consideration: | ||||
| Accumulated 10,000,000 common stock | ||||
| Goodwill | ||||
F-14
ALPINE AUTO BROKERS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 7 – GOODWILL
The changes in the carrying amount of goodwill are as follow:
| Schedule of goodwill | ||||||||||||
| As of March 31, |
As of December 31, |
|||||||||||
| 2023 | 2022 | 2021 | ||||||||||
| (unaudited) | ||||||||||||
| Beginning balance | ||||||||||||
| Addition | ||||||||||||
| Impairment | ||||||||||||
| Closing balance | ||||||||||||
No impairment was recognized for the years ended March 31, 2023.
NOTE 8 – OTHER CURRENT LIABILITIES
The following is a summary of other current liabilities:
| Schedule of other current liabilities | ||||||||||||
| As of March 31, |
As of December 31, |
|||||||||||
| 2023 | 2022 | 2021 | ||||||||||
| (unaudited) | ||||||||||||
| Other payable | ||||||||||||
| Taxes payable | ||||||||||||
| Salary and welfare payables | ||||||||||||
| Accrued expenses and other current liabilities | ||||||||||||
| Total Other current liabilities | ||||||||||||
NOTE 9 – RELATED PARTIES
Balances with Related Parties:
| Schedule of related party transactions | ||||||||||||
| As of March 31, |
As of December 31, |
|||||||||||
| 2023 | 2022 | 2021 | ||||||||||
| (unaudited) | ||||||||||||
| Due to related companies Mr. Zonghan Wu | ||||||||||||
| Total | ||||||||||||
F-15
ALPINE AUTO BROKERS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 10 – REVENUE
The following is a summary of revenue:
| Schedule of revenue recognition | ||||||||||||||||
| Three Months Ended March 31, |
Year Ended December 31, |
|||||||||||||||
| 2023 | 2022 | 2022 | 2021 | |||||||||||||
| (unaudited) | ||||||||||||||||
| Technical service | ||||||||||||||||
| Total | ||||||||||||||||
NOTE 11 – EQUITY
Common stock
As stated in NOTE 6 –ACQUISITIONS, on February 20, 2023, as a result of acquisition of National Holdings Investment Ltd, 10,000,000 shares of a common stock were transferred from Alpine Auto Brokers, LLC to Jiayue Yang.
The Company has authorized shares of $ par value, common stock. As of March 31, 2023, December 31, 2022 and December 31, 2021 there were and and shares of Common Stock issued and outstanding.
Preferred stock
The Company has shares of $ par value of Series A Preferred Stock. As of March 31, 2023, December 31, 2022 and December 31, 2021, there were zero and zero and shares of Series A Preferred Stock issued and outstanding, respectively.
As described in NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS on February 9, 2022, as a result of a private transactions, shares of Series A Preferred Stock were transferred from Custodian Ventures, LLC to MetaVerse Investment Group (the “Purchaser”). These preferred shares were convertible into 90% of the common stock of the Company. On February 18, 2022, the Purchaser converted shares of the Series A Preferred Stock to shares of common stock
The of Series A Preferred Stock have the following attributes:
Dividend Provisions
Subject to the rights of any existing series of Preferred Stock or to the rights of any series of Preferred Stock which may from time to time hereafter come into existence, the holders of shares of Series A Preferred Stock shall be entitled to receive dividends, out of any assets legally available therefor, upon any payment of any dividend (payable other than in Common Stock or other securities and rights convertible into or entitling the holder thereof to receive, directly or indirectly, additional shares of Common Stock of the Corporation) on the Common Stock of the Corporation, as and if declared by the Board of Directors, as if the Series A Preferred Stock had been converted into Common Stock.
F-16
ALPINE AUTO BROKERS INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Liquidation Preference
In the event of any liquidation, dissolution, or winding up of the Corporation, either voluntary or involuntary, the holders of the Series A Preferred Stock shall be entitled to receive, prior and in preference to any distribution of any of the assets of the Corporation to the holders of Common Stock, or any other series or class of common stock of the Corporation, whether now in existence or hereafter created by amendment to the articles of incorporation of the Corporation or by a certificate of designation, by reason of their ownership thereof, and senior, prior, and in preference to any other series or class of preferred stock of the Corporation, whether now in existence or hereafter created by amendment to the articles of incorporation of the Corporation or by a certificate of designation, an amount per share equal to the price per share actually paid to the Corporation upon the initial issuance of the Series A Preferred Stock (each, the “the Original Issue Price”) for each share of Series A Preferred Stock then held by them, plus declared but unpaid dividends. Unless the Corporation can establish a different Original Issue Price in connection with a particular sale of Series A Preferred Stock, the Original issue price shall be $0.001 per share for the Series A Preferred Stock. If, upon the occurrence of any liquidation, dissolution or winding up of the Corporation, the assets and funds thus distributed among the holders of the Series A Preferred Stock shall be insufficient to permit the payment to such holders of the full aforesaid preferential amounts, then, the entire assets and funds of the corporation legally available for distribution shall be distributed first to the Series A Preferred Stock, and then ratably among the holders of the each other series of Preferred Stock in proportion to the preferential amount each such holder is otherwise entitled to receive.
Redemption
The Series A Preferred Stock shares are non-redeemable other than upon the mutual agreement of the Corporation and the holder of shares to be redeemed, and even in such case only to the extent permitted by this Certificate of Designation, the Corporation’s Articles of Incorporation and applicable law.
Right to Convert
The holder of issued and outstanding shares of Series A Preferred Stock shall be entitled to convert the Series A Preferred Stock, at the option of the holder(s) thereof, at any time after the date of issuance of such shares, at the office of the Corporation or any transfer agent for such stock, into such number of fully paid and nonassessable shares of Common Stock that are equal to ninety percent (90%), post conversion, of the total number of issued and outstanding shares of Common Stock of the Corporation, as if all i) Series A Preferred Stock, ii) other issued and outstanding classes or series of common or preferred stock of the Corporation convertible into Common Stock of the Corporation, and iii) outstanding warrants, notes, indentures and/or other instruments, obligations or securities convertible into Common Stock of the Corporation are converted (the “Conversion Shares”), with the shares of Series A Preferred Stock so converted to be converted into the number of common shares equal to the Conversion Shares multiplied by the quotient of the number of the shares of Series A Preferred Stock converted by a holder divided by the number of all Series A Preferred Stock issued and outstanding.
On November 16, 2021, the Company issued these Series A shares to Custodian Ventures to settle a judgement due of $
NOTE 12 – COMMITMENTS AND CONTINGENCIES
The Company did
NOTE 13 – SUBSEQUENT EVENTS
In accordance with SFAS 165 (ASC 855-10) management has performed an evaluation of subsequent events through the date that the financial statements were available to be issued and has determined that it does not have any material subsequent events to disclose in these financial statements.
F-17
ALPINE AUTO BROKERS INC.
December 31, 2022
| Page | |
| Consolidated Financial Statements | |
| Report of Independent Registered Public Accounting Firm | F-17 |
| Balance Sheets | F-20 |
| Statements of Operations and Comprehensive Loss | F-21 |
| Statements of Changes in Stockholders’ Equity | F-22 |
| Statements of Cash Flows | F-23 |
| Notes to Financial Statements | F-24 |
F-18
Report of Independent Registered Public Accounting Firm
To the shareholders and the board of directors of Alpine Auto Brokers Inc.
Opinion on the Financial Statements
We have audited the accompanying balance sheets of Alpine Auto Brokers Inc. as of December 31, 2022 and 2021, the related statements of operations, stockholders’ equity (deficit), and cash flows for the years then ended, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States.
Substantial Doubt about the Company’s Ability to Continue as a Going Concern
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3 to the financial statements, the Company has suffered recurring losses from operations and has a significant accumulated deficit. In addition, the Company continues to experience negative cash flows from operations. These factors raise substantial doubt about the Company's ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 3. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audit. 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 audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.
Critical Audit Matter
Critical audit matters are matters arising from the current-period audit of the financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.
We determined that there are no critical audit matters.
/S/ BF Borgers CPA PC (PCAOB ID 5041)
We served as the Company's auditor from 2021 to 2023
Lakewood, CO
February 13, 2023
F-19
Alpine
Auto Brokers Inc.
Balance Sheets
| December 31, | December 31, | |||||||
| 2022 | 2021 | |||||||
| Assets | ||||||||
| Current assets | $ | $ | ||||||
| Total assets | $ | $ | ||||||
Liabilities and Stockholders’ Deficit | ||||||||
| Current Liabilities | ||||||||
| Accrued expenses and other liabilities | $ | $ | ||||||
| Notes payable related parties | ||||||||
| Total current liabilities | ||||||||
| Total liabilities | ||||||||
| Stockholders’ Deficit | ||||||||
| Preferred stock, $ par value, shares authorized, shares issued and outstanding | ||||||||
| Common Stock - $ par value, shares authorized; and shares issued and outstanding December 31, 2022 and December 31, 2021 | ||||||||
| Additional paid in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total stockholders’ deficit | ( | ) | ( | ) | ||||
| Total liabilities and stockholders’ deficit | $ | $ | ||||||
The accompanying notes are an integral part of these financial statements
F-20
Alpine
Auto Brokers Inc.
Statements of Operations
| Year ended | Year ended | |||||||
| December 31, | December 31, | |||||||
| 2022 | 2021 | |||||||
| Revenue | $ | $ | ||||||
| Operating expenses | ||||||||
| Administrative expenses | ( | ) | ( | ) | ||||
| Total operating expenses | ( | ) | ( | ) | ||||
| Loss from Operations | ( | ) | ( | ) | ||||
| Net Loss | $ | ( | ) | $ | ( | ) | ||
| Earnings per share | ||||||||
| Basic and diluted | $ | ( | ) | $ | ( | ) | ||
| Weighted average number of ordinary shares | ||||||||
| Basic and diluted | ||||||||
The accompanying notes are an integral part of these financial statements
F-21
Alpine
Auto Brokers Inc.
Statements of Changes in Shareholders’ Deficit
| Preferred Stock | Common Stock | Additional paid in | Accumulated | |||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | capital | Deficit | Total | ||||||||||||||||||||||
| Balance, December 31, 2020 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||
| Net loss | - | ( | ) | ( | ) | |||||||||||||||||||||||
| Issuance of preferred stock to related party | ||||||||||||||||||||||||||||
| Balance, December 31, 2021 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||
| Preferred Stock | Common Stock | Additional paid in | Accumulated | |||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | capital | Deficit | Total | ||||||||||||||||||||||
| Balance, December 31, 2021 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||
| Net loss | ( | ) | ( | ) | ||||||||||||||||||||||||
| Conversion of 10,000,000 shares of Series A Preferred Stock into 400,950,000 shares of common stock with a cost basis of $0.001 per share | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||
| Balance, December 31, 2022 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||
The accompanying notes are an integral part of these financial statements
F-22
Alpine
Auto Brokers Inc.
Statements of Cash Flows
| Year ended | Year ended | |||||||
| December 31, | December 31, | |||||||
| 2022 | 2021 | |||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Stock-based compensation | ||||||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| Cash Flows From Financing Activities | ||||||||
| Notes payable related parties-net | ||||||||
| Net cash (used in) provided by financing activities | ||||||||
| Net (decrease) increase in cash and cash equivalents | ||||||||
| Cash and cash equivalents, beginning of year | ||||||||
| Cash and cash equivalents, end of year | $ | $ | ||||||
| Supplemental disclosure of cash flow information | $ | - | $ | - | ||||
| Cash paid for income tax expense | $ | $ | ||||||
| Cash paid for interest expense | ||||||||
The accompanying notes are an integral part of these financial statements
F-23
ALPINE AUTO BROKERS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS
Alpine Auto Brokers (the “Company”) was organized as Alpine Auto Brokers, LLC in the state of Utah in December 2010. The Company sold automobiles and provided dealer services, for a fee.
The Company was incorporated as Alpine Auto Brokers, Inc. on May 12, 2011, in the State of Nevada for the purpose of locating and purchasing used vehicles at auctions, from private individuals, from other dealers and selling these vehicles specifically to consumers in Salt Lake City, Utah. On January 1, 2014, the Company acquired 100 percent of the membership interests of Alpine Auto Brokers, LLC, a Utah Limited Liability Company formed on December 10, 2010. The Company operated through its wholly owned subsidiary Alpine Auto Brokers, LLC.
The acquisition was accounted for as a reverse recapitalization in which the operating entity’s historical financial statements become those of the “accounting acquirer” in which historical operating results are presented from inception.
The Company has been dormant since October 27, 2016.
On August 18, 2021, the Eight Judicial District Court in Clark County, Nevada Case No: A-20-816619-B appointed Custodian Ventures, managed by David Lazar as the Company’s Receiver.
On January 28, 2022, the Company, amended its articles of incorporation change its name back to Alpine Auto Brokers Inc. The change was made because the Company failed to complete its prior name change with FINRA.
On
February 9, 2022, as a result of a private transactions, shares of Series A Preferred Stock, $ par value per share
(the “Shares”) of the “Company”, were transferred from Custodian Ventures, LLC to MetaVerse Investment Group
(the “Purchaser”). As a result, the Purchaser became the holder of 90% of the voting rights of the issued and outstanding
share capital of the Company on a fully-diluted basis of the Company, and became the controlling shareholder. The consideration paid
for the Shares was $
On February 9, 2022, the existing director and officer resigned immediately. Accordingly, David Lazar, serving as a director and an officer, ceased to be the Company’s Chief Executive Officer, Chief Financial Officer, President, Treasurer, Secretary and a Director. At the effective date of the transfer, Zibin Xiao consented to act as the new Chief Executive Officer, President, and member of the Board of Directors. Also on February 9, 2022, Zonghan Wu consented to act as the new CFO, Treasurer, Secretary, and Chairman of the Board of Directors of the Company.
On June 27, 2022, Zibin Xiao resigned as the Chief Executive Officer, President, and member of the Board of Directors. Also on June 27, 2022, Yufeng Zhang consented to act as the new Chief Executive Officer, President, and member of the Board of Directors.
The Company’s year-end is December 31,
F-24
ALPINE AUTO BROKERS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying financial statements have been prepared in accordance with the Financial Accounting Standards Board (“FASB”) “FASB Accounting Standard Codification™” (the “Codification”) which is the source of authoritative accounting principles recognized by the FASB to be applied by nongovernmental entities in the preparation of financial statements in conformity with generally accepted accounting principles (“GAAP”) in the United States.
Principles of consolidation
The consolidated financial statements include the financial statements of all the subsidiaries. All inter-company transactions and balances have been eliminated upon consolidation.
Use of estimates
The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, determination of the inputs to calculate the fair market value of preferred stock issuances, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of expenses during the reporting period. Management makes these estimates using the best information available at the time the estimates are made; however actual results could differ from those estimates. Significant items subject to such estimates and assumptions include valuation of inventory, and recoverability of carrying amount and the estimated useful lives of long-lived assets.
Cash and cash equivalents
Cash and cash equivalents consist of cash on hand, cash in bank with no restrictions, as well as highly liquid investments which are unrestricted as to withdrawal or use, and which have remaining maturities of three months or less when initially purchased. As of December 31, 2022 and December 31, 2021the Company had no cash on hand.
Income taxes
The Company accounts for income taxes under FASB ASC 740, “Accounting for Income Taxes”. Under FASB ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under FASB ASC 740, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. FASB ASC 740-10-05, “Accounting for Uncertainty in Income Taxes” prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities.
The amount recognized is measured as the largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate settlement. The Company assesses the validity of its conclusions regarding uncertain tax positions quarterly to determine if facts or circumstances have arisen that might cause it to change its judgment regarding the likelihood of a tax position’s sustainability under audit.
F-25
ALPINE AUTO BROKERS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Net loss per common share is computed by dividing net loss by the weighted average common shares outstanding during the period as defined by Financial Accounting Standards, ASC Topic 260, “Earnings per Share.” Basic earnings per common share (“EPS”) calculations are determined by dividing net income by the weighted average number of shares of common stock outstanding during the year. Diluted earnings per common share calculations are determined by dividing net income by the weighted average number of common shares and dilutive common share equivalents outstanding.
Recent Accounting Pronouncements
There are no recent accounting pronouncements that impact the Company’s operations.
NOTE 3 – GOING CONCERN
As
of December 31, 2022, the Company had $-
The Company will focus on improving operation efficiency and cost reduction, developing core cash-generating business, and enhancing marketing function. Actions include developing more customers, as well as creating synergy using the Company’s resources.
The Company believes that available cash and cash equivalents, the cash provided by operating activities, together with actions as developing more customers and create synergy of the Company’s resources, should enable the Company to meet presently anticipated cash needs for at least the next 12 months after the date that the financial statements are issued and the Company has prepared the consolidated financial statements on a going concern basis. If the Company encounters unforeseen circumstances that place constraints on its capital resources, management will be required to take various measures to conserve liquidity, which could include, but not necessarily be limited to, obtaining financial support from related parties, and controlling overhead expenses. Management cannot provide any assurance that the Company’s efforts will be successful. The consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the outcome of these uncertainties.
F-26
ALPINE AUTO BROKERS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 4 – EQUITY
Common stock
The Company has authorized shares of $ par value, common stock. As of December 31, 2022 and December 31, 2021 there were and shares of Common Stock issued and outstanding.
Preferred stock
The Company has shares of $ par value of Series A Preferred Stock. As of December 31, 2022, and December 31, 2021, there were zero and shares of Series A Preferred Stock issued and outstanding, respectively.
As described in NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS on February 9, 2022, as a result of a private transactions, shares of Series A Preferred Stock were transferred from Custodian Ventures, LLC to MetaVerse Investment Group (the “Purchaser”). These preferred shares were convertible into 90% of the common stock of the Company. On February 18, 2022, the Purchaser converted shares of the Series A Preferred Stock to shares of common stock
The of Series A Preferred Stock have the following attributes:
Dividend Provisions
Subject to the rights of any existing series of Preferred Stock or to the rights of any series of Preferred Stock which may from time to time hereafter come into existence, the holders of shares of Series A Preferred Stock shall be entitled to receive dividends, out of any assets legally available therefor, upon any payment of any dividend (payable other than in Common Stock or other securities and rights convertible into or entitling the holder thereof to receive, directly or indirectly, additional shares of Common Stock of the Corporation) on the Common Stock of the Corporation, as and if declared by the Board of Directors, as if the Series A Preferred Stock had been converted into Common Stock.
Liquidation Preference
In
the event of any liquidation, dissolution, or winding up of the Corporation, either voluntary or involuntary, the holders of the Series
A Preferred Stock shall be entitled to receive, prior and in preference to any distribution of any of the assets of the Corporation to
the holders of Common Stock, or any other series or class of common stock of the Corporation, whether now in existence or hereafter created
by amendment to the articles of incorporation of the Corporation or by a certificate of designation, by reason of their ownership thereof,
and senior, prior, and in preference to any other series or class of preferred stock of the Corporation, whether now in existence or
hereafter created by amendment to the articles of incorporation of the Corporation or by a certificate of designation, an amount per
share equal to the price per share actually paid to the Corporation upon the initial issuance of the Series A Preferred Stock (each,
the “the Original Issue Price”) for each share of Series A Preferred Stock then held by them, plus declared but unpaid dividends.
Unless the Corporation can establish a different Original Issue Price in connection with a particular sale of Series A Preferred Stock,
the Original issue price shall be $
F-27
ALPINE AUTO BROKERS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 4 – EQUITY (continued)
Redemption
The Series A Preferred Stock shares are non-redeemable other than upon the mutual agreement of the Corporation and the holder of shares to be redeemed, and even in such case only to the extent permitted by this Certificate of Designation, the Corporation’s Articles of Incorporation and applicable law.
Right to Convert
The holder of issued and outstanding shares of Series A Preferred Stock shall be entitled to convert the Series A Preferred Stock, at the option of the holder(s) thereof, at any time after the date of issuance of such shares, at the office of the Corporation or any transfer agent for such stock, into such number of fully paid and nonassessable shares of Common Stock that are equal to ninety percent (90%), post conversion, of the total number of issued and outstanding shares of Common Stock of the Corporation, as if all i) Series A Preferred Stock, ii) other issued and outstanding classes or series of common or preferred stock of the Corporation convertible into Common Stock of the Corporation, and iii) outstanding warrants, notes, indentures and/or other instruments, obligations or securities convertible into Common Stock of the Corporation are converted (the “Conversion Shares”), with the shares of Series A Preferred Stock so converted to be converted into the number of common shares equal to the Conversion Shares multiplied by the quotient of the number of the shares of Series A Preferred Stock converted by a holder divided by the number of all Series A Preferred Stock issued and outstanding.
On
November 16, 2021, the Company issued these Series A shares to Custodian Ventures to settle a judgement due of $
NOTE 5 – RELATED PARTY NOTES PAYABLE, AND ACCRUED EXPENSES AND OTHER LIABILITIES
As
of December 31, 2022, and December 31, 2021, the amount due to related parties was $
NOTE 6 – COMMITMENTS AND CONTINGENCIES
The
Company did
NOTE 7 – SUBSEQUENT EVENTS
In accordance with SFAS 165 (ASC 855-10) management has performed an evaluation of subsequent events through the date that the financial statements were available to be issued and has determined that it does not have any material subsequent events to disclose in these financial
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES
There were no unregistered sales of common stock of the Company during the year ended December 31, 2022.
ITEM 16. EXHIBITS
| Exhibit No. | Description | |
| 3.1 | Articles of Incorporation of the Company, as amended | |
| 3.2 | Amended and Restated Bylaws of the Company | |
| 3.3 | Articles of Incorporation of National Holdings Investment Ltd. | |
| 3.4 |
Articles of Incorporation of Yinao (Dongguan) Technology Co., Ltd. | |
| 4.1 | Share Exchange Agreement | |
| 5.1 | Opinion of McMurdo Law Group, LLC, legal counsel* | |
| 23.1 | Consent of Shandong Haoxin Certified Accountants Co., Ltd. | |
| 23.2 | Consent of BF Borgers CPA PC | |
| 23.3 | Consent of McMurdo Law Group, LLC (included in Exhibit 5.1) | |
| 99.1 | Subscription Agreement | |
| 107 | Filing fee schedule |
| * | To be filed by amendment. |
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ITEM 17. UNDERTAKINGS
UNDERTAKINGS
The Registrant undertakes:
1. Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to the director, officer and controlling person of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.
The Registrant is registering securities under Rule 415 of the Securities Act and hereby undertakes:
1. To file, during any period in which it offers or sells securities, a post-effective amendment to this registration statement to:
| (i) | Include any prospectus required by Section 10(a)(3) of the Securities Act; |
| (ii) | Reflect in the prospectus any facts or events which, individually or together, represent a fundamental change in the information in the registration statement; and notwithstanding the forgoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospects filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in the volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement. |
| (iii) | Include any additional or changed material information on the plan of distribution. |
2. That, for the purposes of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
3. To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
4. The undersigned Registrant hereby undertakes that:
A. For determining liability of the undersigned issuer under the Securities Act to any purchaser in the initial distribution of the securities, the undersigned issuer undertakes that in a primary offering of securities of the undersigned issuer pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned issuer will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:
| i. | Any preliminary prospectus or prospectus of the undersigned issuer relating to the offering required to be filed pursuant to Rule 424; |
| ii. | Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned issuer or used or referred to by the undersigned issuer; |
| iii. | The portion of any other free writing prospectus relating to the offering containing material information about the undersigned issuer or its securities provided by or on behalf of the undersigned issuer; and |
| iv. | Any other communication that is an offer in the offering made by the undersigned issuer to the purchaser. |
II-2
B. That for the purpose of determining liability under the Securities Act to any purchaser:
Each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use.
“Insofar as indemnification for liabilities arising under the Securities Act of 1933 (the “Act”) may be permitted to the director, officer and controlling person of the issuer pursuant to the foregoing provisions, or otherwise, the issuer has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable.”
In the event that a claim for indemnification against such liabilities (other than the payment by the issuer of expenses incurred or paid by a director, officer or controlling person of the issuer in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the issuer will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.
II-3
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the Registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereto duly authorized in Dongguan City, Guangdong Province, China on July 5, 2023.
| ALPINE AUTO BROKERS INC. | ||
| By: | /s/ Yufeng Zhang | |
| Yufeng Zhang, CEO and Director | ||
In accordance with the requirements of the Securities Act of 1933, this registration statement was signed by the following persons in the capacities and on the dates stated.
Dated: July 5, 2023
| By: | /s/ Yufeng Zhang | |
| Yufeng Zhang, CEO and Director | ||
| By: | /s/ Zonghan Wu | |
| Zonghan Wu, CFO and Director |
II-4
Exhibit 3.1
Filed in the Office of Secretary of State State Of Nevada Business Number E0273872011-9 Filing Number 20211892480 Filed On 11/12/2021 8:29:00 AM Number of Pages BARBARA K. CEGAVSKE 11 Secretary of State 202 North Carson Street Carson City, Nevada 89701-4201 (775) 684-5708 Website: www.nvaoa.gov Profit Corporation: Certificate of Amendment (PURSUANT TO 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 8o.o3o) TYPE OR PRINT • USE DARK INK ONLY - DO NOT HIGHLIGHT 1. Entity information: Name of entity as on file with the Nevada Secretary of State: lsalincan International Inc. Entity or Nevada Business Identification Number (NVID): I E0273872011-9 2. Restated or lEl Certificate to Accompany Restated Articles or Amended and Restated Articles I I Amended and 0 Restated Articles - No amendments; articles are restated only and are signed by an Restated Articles: officer of the corporation who has been authorized to execute the certificate by (Select one) resolution of the board of directors adopted on: 1 I (If amending and The certificate correctly sets forth the text of the articles or certificate as amended restating onll:, complete to the date of the certificate. section 1 ,2 3, 5 and 6) 18] Amended and Restated Articles • Restated or Amended and Restated Articles must be included with this filing type. 3. Type of 0 Certificate of Amendment to Articles of Incorporation (Pursuant to NRS 78.380- Before Amendment Filing Issuance of Stock) Being Completed: The undersigned declare that they constitute at least two-thirds of the (Select only one box) following: (If amending, complete (Check only one box) 0 incorporators 0 board of directors section 1, 3, 5 and 6.) The undersigned affirmatively declare that to the date of this certificate, no stock of the corporation has been issued ~ Certificate of Amendment to Articles of Incorporation (Pursuant to NRS 78.385 and 78.390- After Issuance of Stock) The vote by which the stockholders holding shares in the corporation entitling them to exercise at least a majority of the voting power, or such greater proportion of the voting power as may be required in the case of a vote by classes or series, or as may be required by the provisions of the articles of incorporation• have voted in favor of the amendment is: 1 Court order( attached) I 0 Officer’s Statement (foreign qualified entities only) - Name in home state, if using a modified name in Nevada: I I Jurisdiction of formation: 1 J Changes to takes the following effect: 0 The entity name has been amended. 0 Dissolution 0 The purpose of the entity has been amended. O Merger 0 The authorized shares have been amended. 0 Conversion 0 g ther: (SPE;,Cify cha._l!g_~s) --····- ·-· -· .. - - ! ‘ I ‘ i • Officer’s Statement must be submitted with either a certified copy of or a certificate evidencing the filing of any document, amendatory or otherwise, relating to the original articles in the place of the corporations creation. This form must be accompanied by appropriate fees. Page 1 of 2 Revised: 1/1/2019
BARBARA K. CEGAVSKE Secretary of State 202 North Carson Street Carson City, Nevada 89701-4201 (775) 684-5708 Website: www.nvsos.gov Profit Corporation: Certificate of Amendment (PuRsuANT To NRs 78.380 & 78.385/78.390) Certificate to Accompany Restated Articles or Amended and Restated Articles (PuRsuANT To NRs 78.403) 4. Effective Date and Time: (Optional) 5. Information Being Changed: (Domestic corporations only) · 6. Signature: (Required) Officer’s Statement PuRsuANno NRs 8o.o3o Date: Time: (must not be later than 90 days after the certificate is filed) Changes to takes the following effect: 0 The entity name has been amended. 0 The registered agent has been changed. (attach Certificate of Acceptance from new registered agent) 0 The purpose of the entity has been amended. [B) The authorized shares have been amended. 0 The directors, managers or general partners have been amended. 0 IRS tax language has been added. [B) Articles have been added. [B) Articles have been deleted. 0 Other. The articles have been amended as follows: (provide article numbers, if available) See attached. (attach additional page(s) if necessary) !President Signature of Officer or Authorized Signer Title 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 limitations 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 Revised: 1/1/2019
AMENDED AND RESTATED ARTICLES OF INCORPORATION OF BALIN CAN INTERNATIONAL INC. ARTICLE I NAME The name of the corporation shall be BALINCAN INTERNATIONAL INC. (hereinafter, the "Corporation"). ARTICLE II REGISTERED OFFICE The office of the Corporation shall be established by resolution of the Board of Directors. The registered agent of the Corporation shall be Nevada Agency and Transfer Company. The Corporation may, from time to time, in the manner provided by law, change the resident agent and the registered office within the State of Nevada. The Corporation may also maintain an office or offices for the conduct of its business, either within or without the State of Nevada. ARTICLE III CAPITAL STOCK Section I. Authorized Shares. The aggregate number of shares which the Corporation shall have authority to issue is one billion (I ,000,000,000) shares, consisting of two classes to be designated, respectively, "Common Stock" and "Preferred Stock," with all of such shares having a par value of$0.001 per share. The total number of shares of Common Stock that the Corporation shall have authority to issue is nine hundred ninety million (990,000,000) shares. The total number of shares of Preferred Stock that the Corporation shall have authority to issue is ten million (10,000,000) shares. The Preferred Stock may be issued in one or more series, each series to be appropriately designated by a distinguishing letter or title, prior to the issuance of any shares thereof. The voting powers, designations, preferences, limitations, restrictions, and relative, participating, optional and other rights, and the qualifications, limitations, or restrictions thereof, of the Preferred Stock shall hereinafter be prescribed by resolution of the board of directors pursuant to Section 3 of this Article Ill. Section 2. Common Stock. (a) Dividend Rate. Subject to the rights of holders of any Preferred Stock having preference as to dividends and except as otherwise provided by these Articles of Incorporation, as amended from time to time (hereinafter, the "Articles") or the Nevada Revised Statues (hereinafter, the "NRS"), the holders of Common Stock shall be entitled to receive dividends when, as and if declared by the board of directors out of assets legally available therefor. (b) Voting Rights. Except as otherwise provided by the NRS, the holders of the issued and outstanding shares of Common Stock shall be entitled to one vote for each share of Common Stock. No holder of shares of Common Stock shall have the right to cumulate votes. (c) Liquidation Rights. In the event of liquidation, dissolution, or winding up of the affairs of the Corporation, whether voluntary or involuntary, subject to the prior rights of holders of Preferred Stock to share ratably in the Corporation's assets, the Common Stock and any shares of
Preferred Stock which are not entitled to any preference in liquidation shall share equally and ratably in the Corporation's assets available for distribution after giving effect to any liquidation preference of any shares of Preferred Stock. A merger, conversion, exchange or consolidation of the Corporation with or into any other person or sale or transfer of all or any part of the assets of the Corporation (which shall not in fact result in the liquidation of the Corporation and the distribution of assets to stockholders) shall not be deemed to be a voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Corporation. (d) No Conversion, Redemption, or Preemptive Rights. The holders of Common Stock shall not have any conversion, redemption, or preemptive rights. (e) Consideration for Shares. The Common Stock authorized by this Article shall be issued for such consideration as shall be fixed, from time to time, by the board of directors. Section 3. Preferred Stock. (a) Designation. The board of directors is hereby vested with the authority from time to time to provide by resolution for the issuance of shares of Preferred Stock in one or more series not exceeding the aggregate number of shares of Preferred Stock authorized by these Articles, and to prescribe with respect to each such series the voting powers, if any, designations, preferences, and relative, participating, optional, or other special rights, and the qualifications, limitations, or restrictions relating thereto, including, without limiting the generality of the foregoing: the voting rights relating to the shares of Preferred Stock of any series (which voting rights, if any, may be full or limited, may vary over time, and may be applicable generally or only upon any stated fact or event); the rate of dividends (which may be cumulative or noncumulative), the condition or time for payment of dividends and the preference or relation of such dividends to dividends payable on any other class or series of capital stock; the rights of holders of Preferred Stock of any series in the event of liquidation, dissolution, or winding up of the affairs of the Corporation; the rights, if any, of holders of Preferred Stock of any series to convert or exchange such shares of Preferred Stock of such series for shares of any other class or series of capital stock or for any other securities, property, or assets of the Corporation or any subsidiary (including the determination of the price or prices or the rate or rates applicable to such rights to convert or exchange and the adjustment thereof, the time or times during which the right to convert or exchange shall be applicable, and the time or times during which a particular price or rate shall be applicable); whether the shares of any series of Preferred Stock shall be subject to redemption by the Corporation and if subject to redemption, the times, prices, rates, adjustments and other terms and conditions of such redemption. The powers, designations, preferences, limitations, restrictions and relative rights may be made dependent upon any fact or event which may be ascertained outside the Articles or the resolution if the manner in which the fact or event may operate on such series is stated in the Articles or resolution. As used in this section "fact or event" includes, without limitation, the existence of a fact or occurrence of an event, including, without limitation, a determination or action by a person, government, governmental agency or political subdivision of a government. Unless the board of directors provides to the contrary in the resolution which fixes the characteristics of a series of Preferred Stock, the board of directors is further authorized to increase or decrease (but not below the number of such shares of such series then outstanding) the number of shares of any series subsequent to the issuance of shares of that series. Unless the board of directors provides to the contrary in the resolution which fixes the characteristics of a series of Preferred Stock, neither the consent by series, or otherwise, of the holders of any outstanding Preferred Stock nor the consent of the holders of any outstanding Common Stock shall be required for the issuance of any new series of Preferred Stock regardless of whether the rights and preferences of the new series of Preferred Stock are senior or superior, in any way, to the outstanding series of Preferred Stock or the Common Stock. 2
(b) Certificate. Before the Corporation shall issue any shares of Preferred Stock of any series, a certificate of designation setting forth a copy of the resolution or resolutions of the board of directors, and establishing the voting powers, designations, preferences, the relative, participating, optional, or other rights, if any, and the qualifications, limitations, and restrictions, if any, relating to the shares of Preferred Stock of such series, and the number of shares of Preferred Stock of such series authorized by the board of directors to be issued shall be made and signed by an officer of the corporation and filed in the manner prescribed by the NRS. Section 4. Non-Assessment of Stock. The capital stock of the Corporation, after the amount of the subscription price has been fully paid, shall not be assessable for any purpose, and no stock issued as fully paid shall ever be assessable or assessed, and the Articles shall not be amended in this particular. No stockholder of the Corporation is individually liable for the debts or liabilities of the Corporation. ARTICLE IV DIRECTORS AND OFFICERS Section l. Number of Directors. The members of the governing board of the Corporation are styled as directors. The board of directors of the Corporation shall be elected in such manner as shall be provided in the bylaws of the Corporation. The board of directors shall consist of at least one (I) individual and not more than thirteen (13) individuals. The number of directors may be changed from time to time in such manner as shall be provided in the bylaws of the Corporation. Section 2. Directors and Officers. The name and post office box or street address of the director(s) constituting the board of directors is: Name Address David Lazar 50 W Liberty St, Suite 880, Reno, NV, 89501 The officers shall be elected by resolution of the board of directors. Section 3. Limitation of Liability. The liability of directors and officers of the Corporation shall be eliminated or limited to the fullest extent permitted by the NRS. If the NRS is amended to further eliminate or limit or authorize corporate action to further eliminate or limit the liability of directors or officers, the liability of directors and officers of the Corporation shall be eliminated or limited to the fullest extent permitted by the NRS, as so amended from time to time. Section 4. Payment of Expenses. In addition to any other rights of indemnification permitted by the laws of the State of Nevada or as may be provided for by the Corporation in its bylaws or by agreement, the expenses of officers and directors incurred in defending any threatened, pending, or completed action, suit or proceeding (including without limitation, an action, suit or proceeding by or in the right of the Corporation), whether civil, criminal, administrative or investigative, involving alleged acts or omissions of such officer or director in his or her capacity as an officer or director of the Corporation or member, manager, or managing member of a predecessor limited liability company or affiliate of such limited liability company or while serving in any capacity at the request of the Corporation as a director, officer, employee, agent, member, manager, managing member, partner, or fiduciary of, or in any other capacity for, another corporation or any partnership, joint venture, trust, or other enterprise, shall be paid by the Corporation or through insurance purchased and maintained by the Corporation or through other financial arrangements made by the Corporation, 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 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. To the extent that an officer or director is successful on the merits in defense of any such action, suit or proceeding, or in the defense of any claim, issue or matter therein, the Corporation shall indemnifY him or her against expenses, including attorneys' fees, actually and reasonably incurred by him or 3 I
her in connection with the defense. Notwithstanding anything to the contrary contained herein or in the bylaws, no director or officer may be indemnified for expenses incurred in defending any threatened, pending, or completed action, suit or proceeding (including without limitation, an action, suit or proceeding by or in the right of the Corporation), whether civil, criminal, administrative or investigative, that such director or officer incurred in his or her capacity as a stockholder. Section 5. Repeal and Conflicts. Any repeal or modification of Sections 3 or 4 above approved by the stockholders of the Corporation shall be prospective only and shall not adversely affect any limitation on the liability of a director or officer of the Corporation existing as of the time of such repeal or modification. In the event of any conflict between Sections 3 or 4 above and any other Article of the Articles, the terms and provisions of Sections 3 or 4 above shall control. ARTICLE V COMBINATIONS WITH INTERESTED STOCKHOLDERS At such time, if any, as the Corporation becomes a "resident domestic corporation", as that term is defined in NRS 78.427, the Corporation shall not be subject to, or governed by, any of the provisions in NRS 78.411 to 78.444, inclusive, as may be amended from time to time, or any successor statute. ARTICLE VI BYLAWS The board of directors is expressly granted the exclusive power to make, amend, alter, or repeal the bylaws of the Corporation pursuant to NRS 78.120. ARTICLE VII FORUM SELECTION FOR INTERNAL ACTIONS Any internal action concerning or to which the Corporation is a party or stated beneficiary must be brought, heard and finally adjudicated in the state or federal courts sited in Clark County, Nevada, to the exclusion of all other jurisdictions or venues. An internal action for purposes of this Article VII means any action, suit or proceeding which is (a) brought in the name or right of the Corporation or on its behalf, including, without limitation, any action subject to NRS 41.520; (b) for, or based upon, any breach of any fiduciary duty owed by any director, officer, employee or agent of the Corporation in such capacity; or (c) arising pursuant to, or to interpret, apply, enforce or determine the validity of, any provision of NRS Title 7, these articles, the bylaws of the Corporation, or any agreement entered into pursuant to NRS 78.365. IN WITNESS WHEREOF, the Corporation has caused these articles of incorporation to be executed in its name by its President on November _1 Q_, 2021. David Lazar, President This Certificate of Amendment for Amended and Restated Articles of Incorporation is filed pursuant to the order dated August 17, 2021, of the Eighth Judicial District Court of Nevada, in and for Clark County, case number A-20-816619-B, a copy of which is attached hereto as Exhibit A. 4 I
' EXHIBIT A Injunction and Order Appointing Receiver, August 17, 2021 Eighth Judicial District Court of Nevada, in and for Clark County, Case Number A-20-816619-B 5
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ORDR PETER L. GiASEY, ESQ. Nevada Bar No. 007650 CHASEY LA WOPPICBS ELECTRONICALLY SERVED 8/17/2021 6:06 PM 3295 N. Fort Apache Road, Suite 110 Las Vegas, Nevada 89129 Tel: (702) 233-0393 Fax: (702) 233-2107 email: peter@chaseylaw.com Attorneys for Plaintiff/Judgment Creditor CUSTODIAN VENTURES, ll..C EIGHTH JUDICIAL DISTRICT COURT CLARK COUN'IY, NEVADA Electronically Filed ��!6:06PM, CLERK OF THE COURT CUSTODIAN VENTURES, LLC, a Wyoming Limited Liability Company, as assignee of VSTOCK TRANSFER, LLC, a California Limited Liability Company ) CASENO.: ) DEPT NO.: A-20-816619-B XIII Plaintiff, vs. BALINCAN INTERNATIONAL, INC. a/k/a ALPINE AUTO BROKERS, INC., a revoked Nevada Corp oration, DOES 1 to 10, and ROE CORPORATIONS 1 to -10, inclusive, Defendants. ) ) ) ) ) ) ) ) ) ) ) ) ) INJUNCTION AND ORDER APPOINTING RECEIVER Plaintiff/Judgment Creditor Custodian Ventures, U..C's Motion to Appoint Receiver having come on for hearing before this Court, this Court having reviewed the papers and pleadings on file, good cause appearing, this Court makes the following findings and issues the foUowing orders. IT IS HEREBY FOUND that Def endant/Judgment Debtor Balincan InternationaL, Inc. a/k/a Alpine Auto Brokers, Inc. (hereinafter "ALTB") has had its corporate charter revoked by the Nevada Secretary of State, IT IS FURTHER FOUND that Defendant/Judgment Debtor ALTB has ceased to exist in some manner as set forth in NRS 78.600, - 1 - Case Number: A-20-816619-B
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 IT IS FURTHER FOUND that Defendant/Judgment Debtor ALTB has failed to pay filing fees due to the Nevada Secretary of State, IT IS FURTHER FOUND that Defendant/Judgment Debtor ALTB has failed to make periodic public disclosures and reports as required by Rule 15c2-11 promulgated by the Securities and Exchange Commission pursuant to the Securities Act of 1934, IT IS FURTHER FOUND that, in ALTB's last public disclosure, ALTB reported total liabilities of$14,704, and IT IS FURTHER FOUND that Plaintiff/Judgment Creditor Custodian Ventures, LLC holds a judgment against ALTB for more than 10% of the corporation's total liabilities. Therefore, IT IS HEREBY ORDERED, ADJUDGED, and DECREED that Plaintiff/Judgment Creditor Custodian Ventures, LLC's Motion to Appoint Receiver is GRANTED in its entirety, IT IS FURTHER ORDERED, ADJUDGED, and DECREED that the former officers and directors of ALTB Ip Tsz Ting is hereby enjoined from hereinafter exercising any authority or privilege relating to the administration or operation of ALTB, IT IS FURTHER ORDERED, ADJUDGED, and DECREED that Custodian Ventures, LLC is appointed as Receiver of and for ALTB, IT IS FURTHER ORDERED, ADJUDGED, and DECREED that, pursuant to NRS 78.600 and NRS 78.630, Receiver Custodian Ventures, LLC is granted the authority to rehabilitate ALTB, including but not limited to the reinstatement or revival of ALTB's corporate charter with the Nevada Secretary of State, to prepare and file all documents as reasonable or necessary to comply with Rule 15c2- 11 of the Securities Act of 1934, to collect the debts and property due and belonging to AL TB, to compromise and settle with any debtor of ALTB, to prosecute and defend lawsuits in the name of ALTB, - 2 - lr
1 2 3 4 5 6 7 8 9 10 11 12 13 ] 4 15 16 17 18 19 20 21 22 23 24 25 26 27 28 to .do all other acts as might be done by ALTB, to do all other acts as may be reasonable or necessary to continue the business of ALTB, and to appoint agents for the exercise of these duties. IT IS SO ORDERED. Dated !hie Respectfully Submitted by: CHASEY LA \Yl OFFICES PETER L. CHASEY, ESQ. Nevada Bar No. 007650 3295 N. Fort Apache Road, Suite 110 Las Vegas, Nevada 89129 Tel: (702) 233-0393 Fax: (702) 233-2107 email: peter@chaseyla\v.com Att orneys for Plaintiff/Judgment Creditor CUSTODIAN VENTURES, LLC - 3 - DISTRICT COURT Dated this 17th day of August, 2021 HON. MARK DENTON 4BA 04C DAD9 738F Mark R. Denton District Court Judge ABG ' I
2 3 4 5 6 7 8 9 10 11 12 13 CSERV Custodian Ventures, LLC, Plaintiff( s) VS. Alpine Auto Brokers, Inc., Defendant(s) DISTRJCT COURT CLARK COUNTY, NEVADA CASE NO: A-20-816619-B DEPT. NO. Department 13 AUTOMATED CERTIFICATE OF SERVICE This automated certificate of service was generated by the Eighth Judicial District Co urt. TI1e foregoing Order was served via the court's electronic eFile system to all 14 recipients registered for e-Service on the above entitled case as listed below: 15 Service Date: 8/17/2021 16 Peter Chasey peter@chasey law .com 17 18 19 20 21 22 23 24 25 26 27 28 ! I
Exhibit 3.2
AMENDED
AND RESTATED
BYLAWS OF
Alpine Auto Brokers Inc.
(a Nevada corporation)
ARTICLE I
Meetings of Stockholders and Other Stockholder Matters
SECTION 1. Annual Meeting. An annual meeting of the stockholders of Alpine Auto Brokers Inc., a Nevada corporation (hereinafter, the “Corporation”) shall be held for the election of directors and for the transaction of such other proper business at such time, date and place, either within or without the State of Nevada, as shall be designated by resolution of the Board of Directors from time to time.
SECTION 2. Special Meetings. Special meetings of stockholders for any purpose or purposes may be called by the Board of Directors, or by a committee of the Board of Directors that has been designated by the Board of Directors and whose powers and authority, as expressly provided in a resolution of the Board of Directors, include the power to call such meetings, and shall be held at such time, date and place, either within or without the State of Nevada, as shall be designated by resolution of the Board of Directors or such committee. Special meetings of stockholders may not be called by any other person or persons.
SECTION 3. Notice of Meetings. Written notice of each meeting of the stockholders, which shall state the time, date and place of the meeting and in the case of a special meeting, the purpose or purposes for which it is called, shall, unless otherwise provided by applicable law, the Articles of Incorporation or these bylaws, be given not less than ten (10) nor more than sixty (60) days before the date of such meeting to each stockholder entitled to vote at such meeting, and, if mailed, it shall be deposited in the United States mail, postage prepaid, directed to the stockholder at such stockholder’s address as it appears on the records of the Corporation. Whenever notice is required to be given, a written waiver thereof signed by the person entitled thereto, whether before or after the time stated therein, shall be deemed equivalent to notice. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when the person attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened.
SECTION 4. Adjournments. Any meeting of the stockholders may adjourn from time to time to reconvene at the same or some other place, and notice need not be given of any such adjourned meeting if the time and place thereof are announced at the meeting at which the adjournment is taken. At any such adjourned meeting at which a quorum may be present, the Corporation may transact any business which might have been transacted at the original meeting. If the adjournment is for more than thirty days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting.
SECTION 5. Quorum. Except as otherwise provided by Nevada law, the Articles of Incorporation or these bylaws, at any meeting of the stockholders the holders of a majority of the shares of stock, issued and outstanding and entitled to vote, shall be present in person or represented by proxy in order to constitute a quorum for the transaction of any business. In the absence of a quorum, the holders of a majority of the shares present in person or represented by proxy and entitled to vote may adjourn the meeting from time to time in the manner described in Section 4 of this Article I.
SECTION 6. Organization. At each meeting of the stockholders, the Chairman of the Board, or in his absence or inability to act, the President or, in his absence or inability to act, a Vice President or, in the absence or inability to act of such persons, any person designated by the Board of Directors, or in the absence of such designation, any person chosen by a majority of those stockholders present in person or represented by proxy, shall act as chairman of the meeting. The Secretary or, in his absence or inability to act, any person appointed by the chairman of the meeting shall act as secretary of the meeting and keep the minutes thereof.
SECTION 7. Notice of Business. At any annual meeting of the stockholders of the Corporation, only such business shall be conducted as shall have been brought before the meeting. To be properly brought before an annual meeting, such business must be (i) specified in the notice of meeting (or any supplement thereto) given by or at the direction of the Board of Directors; (ii) otherwise properly brought before the meeting by or at the direction of the Board of Directors; or (iii) otherwise properly brought before the meeting by any stockholder of the Corporation who is a stockholder of record at the time of giving of the notice provided for in this Section 7, who shall be entitled to vote at such meeting and who complies with the notice procedures set forth in this Section 7. For business to be properly brought before an annual meeting of the stockholders by a stockholder, the stockholder shall have given timely notice thereof in writing to the Secretary of the Corporation. To be timely, a stockholder’s notice shall be delivered to or mailed and received by the Secretary at the principal executive office of the Corporation not less than 60 days nor more than 90 days prior to the annual meeting; provided, however, that in the event that less than 70 days’ notice or prior public disclosure of the date of the annual meeting is given or made to stockholders, notice by the stockholder to be timely must be so received not later than the close of business on the tenth day following the day on which such notice of the date of the meeting was mailed or such public disclosure was made, whichever first occurs. Such stockholder’s notice to the Secretary of the Corporation shall set forth as to each matter the stockholder proposes to bring before the annual meeting (a) a brief description of the business desired to be brought before the annual meeting, the reasons for conducting such business at the annual meeting and, in the event that such business includes a proposal to amend any document, including these bylaws, the language of the proposed amendment, (b) the name and address, as they appear on the Corporation’s books, of the stockholder proposing such business, (c) the class and number of shares of capital stock of the Corporation which are beneficially owned by such stockholder and (d) any material interest of such stockholder in such business. Notwithstanding anything in these bylaws to the contrary, no business shall be conducted at any annual meeting of the stockholders except in accordance with the procedures set forth in this Section 7. The chairman of the annual meeting of the stockholders shall, if the facts warrant, determine and declare to the meeting that business was not properly brought before the meeting in accordance with the provisions of this Section 7, and if he should so determine, he shall so declare to the meeting and any such business not properly brought before the meeting shall not be transacted. Notwithstanding the foregoing provisions of this Section 7, a stockholder shall also comply with all applicable requirements of the Securities and Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder with respect to matters set forth in this Section 7.
SECTION 8. Order of Business; Conduct of Meetings. The order of business at all meetings of the stockholders shall be as determined by the chairman of the meeting.
SECTION 9. Voting; Proxies. Unless otherwise provided by Nevada law or in the Articles of Incorporation, each stockholder entitled to vote at any meeting of stockholders shall be entitled to one vote for each share of capital stock which has voting power upon the matter in question held by such stockholder either (i) on the date fixed pursuant to the provisions of Section 10 of Article I of these bylaws as the record date for the determination of the stockholders to be entitled to notice of or to vote at such meeting; or (ii) if no record date is fixed, then at the close of business on the day next preceding the day on which notice is given. Each stockholder entitled to vote at any meeting of the stockholders may authorize another person or persons to act for him by proxy. Any such proxy shall be delivered to the secretary of such meeting at or prior to the time designated in the order of business for so delivering such proxies. At all meetings of the stockholders for the election of directors, a plurality of the votes cast shall be sufficient to elect. On all other matters, except as otherwise required by Nevada law or the Articles of Incorporation, a majority of the votes cast at a meeting of the stockholders shall be necessary to authorize any corporate action to be taken by vote of the stockholders. Unless required by Nevada law, or determined by the chairman of the meeting to be advisable, the vote on any question other than the election of directors need not be by written ballot. On a vote by written ballot, each written ballot shall be signed by the stockholder voting, or by his proxy if there be such proxy, and shall state the number of shares voted.
SECTION 10. Fixing of Record Date for Stockholder Meetings. In order that the Corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors, and which record date shall not be more than 60 nor less than 10 days before the date of such meeting. If no record date is fixed by the Board of Directors, the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be the close of business on the day next preceding the day on which notice is given, or if notice is waived, at the close of business on the day next preceding the day on which the meeting is held. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for the adjourned meeting.
SECTION 11. Fixing a Record Date for Other Purposes. In order that the Corporation may determine the stockholders entitled to receive payment of any dividend or other distribution or allotment of any rights or the stockholders entitled to exercise any rights in respect of any change, conversion or exchange of stock, or for the purposes of any other lawful action, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted, and which record date shall not be more than 60 days prior to such action. If no record date is fixed, the record date for determining stockholders for any such purpose shall be at the close of business on the day on which the Board of Directors adopts the resolution relating thereto.
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SECTION 12. List of Stockholders Entitled to Vote. The officer of the Corporation who has charge of the stock ledger of the Corporation shall prepare and make, at least 10 days before every meeting of the stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or, if not so specified, at the place where the meeting is to be held. The list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder of the Corporation who is present.
SECTION 13. Inspectors. The Board of Directors may, in advance of any meeting of stockholders, appoint one or more inspectors to act at such meeting or any adjournment thereof. If the inspectors shall not be so appointed or if any of them shall fail to appear or act, the chairman of the meeting shall appoint inspectors. Each inspector, before entering upon the discharge of his or her duties, shall take and sign an oath faithfully to execute the duties of inspector at such meeting with strict impartiality and according to the best of his or her ability. The inspectors shall determine the number of shares outstanding and the voting power of each, the number of shares represented at the meeting, the existence of a quorum, the validity and effect of proxies, and shall receive votes, ballots or consents, hear and determine all challenges and questions arising in connection with the right to vote, count and tabulate all votes, ballots or consents, determine the result, and do such acts as are proper to conduct the election or vote with fairness to all stockholders. On request of the chairman of the meeting or any stockholder entitled to vote thereat, the inspectors shall make a report in writing of any challenge, question or matter determined by them and shall execute a certificate of any fact found by them. No director or candidate for the office of director shall act as an inspector of an election of directors. Inspectors need not be stockholders.
SECTION 14. Stock Ledger. The stock ledger of the Corporation shall be the only evidence as to who are the stockholders entitled to examine the stock ledger, the list required by Section 12 of this Article I, the books of the Corporation, or to vote in person or by proxy at any meeting of the stockholders.
ARTICLE II
Board of Directors
SECTION 1. General Powers. The business and affairs of the Corporation shall be managed by or under the direction of a Board of Directors. The Board of Directors may exercise all such authority and powers of the Corporation and do all such lawful acts and things as are not, by Nevada law or the Articles of Incorporation, directed or required to be exercised or done by the stockholders.
SECTION 2. Number, Qualification. Except as otherwise fixed by or pursuant to provisions of the Articles of Incorporation relating to the rights of the holders of any class or series of stock having a preference over common stock as to dividends or upon liquidation to elect additional directors under specified circumstances, the number of directors of the Corporation shall be fixed from time to time by affirmative vote of a majority of the directors then in office.
SECTION 3. Elections and Terms. The Board of Directors, other than those who may be elected by the holders of any classes or series of stock having a preference over the common stock as to dividends or upon liquidation, shall be elected for a term ending at the next following Annual Meeting of Stockholders and until their successors have been duly elected and qualified.
SECTION 4. Newly Created Directorships and Vacancies. Except as otherwise fixed by or pursuant to provisions of the Articles of Incorporation relating to the rights of the holders of any class or series of stock having a preference over common stock as to dividends or upon liquidation to elect additional directors under specified circumstances, newly created directorships resulting from any increase in the number of directors and any vacancies on the Board of Directors resulting from death, resignation, disqualification, removal or other cause shall be filled by the affirmative vote of a majority of the remaining directors then in office, even though less than a quorum of the Board of Directors. Except as otherwise provided under Nevada law, newly created directorships and vacancies resulting from any cause may not be filled by any other person or persons. Any director elected in accordance with the preceding sentence shall hold office for the remainder of the full term and until such director’s successor shall have been duly elected and qualified. No decrease in the number of directors constituting the Board of Directors shall shorten the term of any director then in office.
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SECTION 5. Removal and Resignation. Except as otherwise fixed by or pursuant to provisions of the Articles of Incorporation relating to the rights of the holders of any class or series of stock having a preference over common stock as to dividends or upon liquidation to elect additional directors under specified circumstances, any director may be removed from office only for cause and only by the affirmative vote of the holders of two-thirds of the outstanding shares of stock entitled to vote generally in the election of directors. Any director may resign at any time upon written notice to the Corporation. Any such resignation shall take effect at the time specified therein or, if the time when it shall become effective shall not be specified therein, immediately upon its receipt; and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective.
SECTION 6. Nomination of Directors. Only persons who are nominated in accordance with the following procedures shall be eligible for election by the stockholders as directors of the Corporation. Nominations of persons for election as directors of the Corporation may be made at an annual meeting of stockholders (i) by or at the direction of the Board of Directors; (ii) by any nominating committee or persons appointed by the Board of Directors; or (iii) by any stockholder of the Corporation entitled to vote for the election of directors at the meeting who complies with the notice procedures set forth in this Section 6. Such nominations, other than those made by or at the direction of the Board of Directors, shall be made pursuant to timely notice in writing to the Secretary of the Corporation. To be timely, a stockholder’s notice shall be delivered to or mailed and received at the principal executive office of the Corporation not less than 60 days nor more than 90 days prior to the annual meeting; provided, however, that in the event that less than 70 days’ notice or prior public disclosure of the date of the annual meeting is given or made to stockholders, notice by the stockholder to be timely must be so received not later than the close of business on the tenth day following the day on which such notice of the date of the meeting was mailed or such public disclosure was made, whichever first occurs. Such stockholder’s notice to the Secretary of the Corporation shall set forth (a) as to each person whom the stockholder proposes to nominate for election or reelection as a director, (i) the name, age, business address and residence address of the person, (ii) the principal occupation or employment of the person, (iii) the class and number of shares of capital stock of the Corporation which are beneficially owned by the person and (iv) any other information relating to the person that is required to be disclosed in solicitations for proxies for election of directors pursuant to Regulation 14A under the Securities Exchange Act of 1934, as now or hereafter amended; and (b) as to the stockholder giving the notice, (i) the name and record address of such stockholder and (ii) the class and number of shares of capital stock of the Corporation which are beneficially owned by such stockholder. The Corporation may require any proposed nominee to furnish such other information as may reasonably be required by the Corporation to determine the eligibility of such proposed nominee to serve as a director of the Corporation. No person shall be eligible for election by the stockholders as a director of the Corporation unless nominated in accordance with the procedures set forth herein. The chairman of the annual meeting of the stockholders shall, if the facts warrant, determine and declare to the meeting that nomination was not made in accordance with the foregoing procedure, and if he should so determine, he shall so declare to the meeting and the defective nomination shall be disregarded.
SECTION 7. Regular Meetings. Regular meetings of the Board of Directors may be held at such places within or without the State of Nevada and at such times as the Board of Directors may from time to time determine. Notice of regular meetings of the Board of Directors need not be given except as otherwise required by Nevada law or these bylaws.
SECTION 8. Special Meetings. Special meetings of the Board of Directors may be held at any time or place within or without the State of Nevada whenever called by the Chairman of the Board of Directors, the President or by a majority of the entire Board of Directors.
SECTION 9. Notice of Meetings. Notice of each special meeting of the Board of Directors (and of each regular meeting for which notice shall be required) shall be given by the Secretary as hereinafter provided in this Section 9, in which notice shall be stated the time and place of the meeting. Except as otherwise required by Nevada law or these bylaws, such notice need not state the purpose(s) of such meeting. Notice of each such meeting shall be mailed, postage prepaid, to each director, addressed to such director at such director’s residence or usual place of business, by registered mail, return receipt requested delivered at least two (2) days before the day on which such meeting is to be held, or shall be sent addressed to such director at such place by electronic mail, telegraph, telex, cable or wireless, or be delivered to such director personally, by facsimile or by telephone, at least 24 hours before the time at which such meeting is to be held. A written waiver of notice, signed by the director entitled to notice, whether before or after the time stated therein, shall be deemed equivalent to notice. Notice of any such meeting need not be given to any director who shall, either before or after the meeting, submit a signed waiver of notice or who shall attend such meeting without protesting, prior to or at its commencement, the lack of notice to him.
SECTION 10. Quorum and Manner of Acting. Except as hereinafter provided, a majority of the whole Board of Directors shall be present in person or by means of a conference telephone or similar communications equipment which allows all persons participating in the meeting to hear each other at the same time at any meeting of the Board of Directors in order to constitute a quorum for the transaction of business at such meeting; and, except as otherwise required by Nevada law, the Articles of Incorporation or these bylaws, the act 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. In the absence of a quorum at any meeting of the Board of Directors, a majority of the directors present thereat may adjourn such meeting to another time and place. Notice of the time and place of any such adjourned meeting shall be given to the directors who were not present at the time of the adjournment and, unless such time and place were announced at the meeting at which the adjournment was taken, to the other directors. At any adjourned meeting at which a quorum is present, any business may be transacted which might have been transacted at the meeting as originally called. The directors shall act only as a Board and the individual directors shall have no power as such.
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SECTION 11. Action Without a Meeting. Any action required or permitted to be taken at any meeting of the Board of Directors may be taken without a meeting if all members of the Board consent thereto in writing, and the writing or writings are filed with the minutes of the proceedings of the Board of Directors.
SECTION 12. Telephonic Participation. Members of the Board of Directors may participate in a meeting of the Board by means of a conference telephone or similar communications equipment allowing all persons participating in the meeting to hear each other at the same time. Participation in such a meeting shall constitute presence in person at such meeting.
SECTION 13. Organization. At each meeting of the Board, the Chairman of the Board or, in his absence or inability to act, the Chief Executive Officer or, in his absence or inability to act, another director chosen by a majority of the directors present shall act as chairman of the meeting and preside thereat. The Secretary or, in his absence or inability to act, any person appointed by the chairman shall act as secretary of the meeting and keep the minutes thereof.
SECTION 14. Compensation. The Board of Directors shall have authority to fix the compensation, including fees and reimbursement of expenses, of directors for services to the Corporation in any capacity.
ARTICLE III
Committees
SECTION 1. Committees. The Board of Directors may, by resolution passed by a majority of the whole Board of Directors, designate one or more committees, each committee to consist of two or more of the directors of the Corporation. The Board of Directors may fill vacancies in, change the membership of, or dissolve any such committee. The Board of Directors may designate one or more directors as alternate members of any committee who may replace any absent or disqualified member at any meeting of the committee. In the absence or disqualification of a member of the committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not he or they constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in place of such absent or disqualified member. Any such committee, to the extent provided by Nevada law and to the extent provided in the resolution of the Board of Directors, shall have and may exercise the powers of the Board of Directors in the management of the business and affairs of the Corporation, and may authorize the seal of the Corporation to be affixed to all papers which may require it. Each committee shall keep written minutes of its proceedings and shall report such minutes to the Board of Directors when required. All such proceedings shall be subject to revision or alteration by the Board of Directors; provided, however, that third parties shall not be prejudiced by such revision or alteration.
SECTION 2. Committee Rules. Unless the Board of Directors otherwise provides, each committee designated by the Board of Directors may make, alter and repeal rules for the conduct of its business. In the absence of such rules, each committee shall conduct its business in the same manner as the Board of Directors conducts its business pursuant to Article II of these bylaws.
SECTION 3. Standing Committees. Notwithstanding anything contained in this Article III to the contrary, the Board of Directors shall maintain two (2) standing committees consisting of (i) a Corporate Governance Committee; and (2) an Audit Committee. The Corporate Governance Committee shall consist of at least three (3) members of the Board of Directors who are “non- employee directors” within the meaning of Rule 16b-3 promulgated under the Securities Exchange Act of 1934, as amended, and who are “outside directors” within the meaning of Section 162(m) of the Internal Revenue Code of 1986, as amended. The Corporate Governance Committee shall have the power and authority to recommend general compensation polices to the full Board of Directors, oversee the Corporation’s compensation plans, establish the compensation levels for the Corporation’s Chief Executive Officer and other Executive Officers and advise the full Board of Directors on general compensation policies for the Company’s Executive Officers. The Audit Committee shall consist of at least three (3) members of the Board of Directors, none of which shall also serve as an Executive Officer of the Corporation. The Audit Committee shall have the power and authority to review and report to the full Board of Directors with respect to the selection, retention, termination and terms of engagement of the Corporation’s independent public accountants and maintain communications among the Board of Directors, the independent public accountants and the Corporation’s internal accounting staff with respect to accounting and audit procedures. The Audit Committee shall also have the power and authority to review the Corporation’s processes, internal accounting and control procedures and policies and related matters with the Corporation’s management.
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ARTICLE IV
Officers
SECTION 1. Number. The officers of the Corporation shall be elected by the Board of Directors and shall consist of a Chairman of the Board, a Chief Executive Officer, a President, one or more Vice Presidents, a Secretary, a Treasurer, and such other officers and assistant officers as may be deemed necessary or desirable by the Board of Directors. Any number of offices may be held by the same person. In its discretion, the Board of Directors may choose not to fill any office for any period that it may deem advisable unless otherwise required by Nevada law.
SECTION 2. Election and Term of Office. The officers of the Corporation shall be elected annually by the Board of Directors at its first meeting held after each annual meeting of stockholders or as soon thereafter as conveniently may be. The Chief Executive Officer shall appoint persons to other officers as he or she deems desirable and such appointments, if any, shall serve at the pleasure of the Board of Directors. Each officer shall hold office until a successor is duly elected and qualified or until his or her earlier death, resignation or removal as hereinafter provided.
SECTION 3. Resignations. Any officer may resign at any time upon written notice to the Corporation. Any such resignation shall take effect at the time specified therein or, if the time when it shall become effective shall not be specified therein, immediately upon its receipt; and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective.
SECTION 4. Removal. Any officer or agent of the Corporation may be removed, either with or without cause, at any time, by the Board of Directors at any meeting of the Board of Directors or, except in the case of an officer or agent elected or appointed by the Board of Directors, by the Chief Executive Officer, but any such removal shall be without prejudice to the contract rights, if any, of the person so removed.
SECTION 5. Vacancies. Any vacancy occurring in any office of the Corporation by death, resignation, removal or otherwise, may be filled for the unexpired portion of the term of the office which shall be vacant by the Board of Directors at any special or regular meeting.
SECTION 6. Powers and Duties of Executive Officers. The officers of the Corporation shall have such powers and duties in the management of the Corporation as may be prescribed in a resolution by the Board of Directors and, to the extent not so provided, as generally pertain to their respective offices, subject to the control of the Board of Directors. The Board of Directors may require any officer, agent or employee to give security for the faithful performance of his or her duties.
SECTION 7. The Chairman of the Board. The Chairman of the Board shall be an officer of the Corporation for the purpose of executing agreements and other instruments on behalf of the Corporation but shall not be an employee of the Corporation. He shall, if present, preside at each meeting of the stockholders and of the Board of Directors and shall be an ex-officio member of all committees of the Board of Directors. Such person shall perform all duties incident to the office of Chairman of the Board and such other duties as may from time to time be assigned to such person by the Board of Directors.
SECTION 8. The Chief Executive Officer. The Chief Executive Officer shall have the general and active supervision and direction over the business operations and affairs of the Corporation and over the other officers, agents and employees and shall see that their duties are properly performed. At the request of the Chairman of the Board, or in the case of his absence or inability to act, the Chief Executive Officer shall perform the duties of the Chairman of the Board and when so acting shall have all the powers of, and be subject to all the restrictions upon the Chairman of the Board. Such person shall perform all duties incident to the office of Chief Executive Officer and such other duties as may from time to time be assigned to such person by the Board of Directors.
SECTION 9. The President. The President shall be the Chief Operating Officer of the Corporation and shall have general and active supervision and direction over the business operations and affairs of the Corporation and over its several officers, agents and employees, subject, however, to the direction of the Chief Executive Officer and the control of the Board of Directors. In general, the President shall have such other powers and shall perform such other duties as usually pertain to the office of President or as from time to time may be assigned to him by the Board of Directors or the Chief Executive Officer.
SECTION 10. Vice Presidents. Each Vice President shall have such powers and perform such duties as from time to time may be assigned to him by the Board of Directors or the Chief Executive Officer.
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SECTION 11. The Treasurer. The Treasurer shall (a) have charge and custody of, and be responsible for, all the funds and securities of the Corporation; (b) keep full and accurate accounts of receipts and disbursements in books belonging to the Corporation; (c) cause all monies and other valuables to be deposited to the credit of the Corporation in such depositories as may be designated by the Board; (d) receive, and give receipts for, monies due and payable to the Corporation from any source whatsoever; (e) disburse the funds of the Corporation and supervise the investment of its funds as ordered or authorized by the Board, taking proper vouchers therefor; and (f) in general, have all the powers and perform all the duties incident to the office of Treasurer and such other duties as from time to time may be assigned to him by the Board of Directors or the Chief Executive Officer.
SECTION 12. The Secretary. The Secretary shall (a) record the proceedings of the meetings of the stockholders and directors in a minute book to be kept for that purpose; (b) see that all notices are duly given in accordance with the provisions of these bylaws and as required by law; (c) be custodian of the records and the seal of the Corporation and affix and attest the seal to all stock certificates of the Corporation (unless the seal of the Corporation on such certificates shall be a facsimile, as hereinafter provided) and affix and attest the seal to all other documents to be executed on behalf of the Corporation under its seal; (d) see that the books, reports, statements, certificates and other documents and records required by law to be kept and filed are properly kept and filed; and (e) in general, have all the powers and perform all the duties incident to the office of Secretary and such other duties as from time to time may be assigned to him by the Board of Directors or the Chief Executive Officer.
SECTION 13. Officers’ Bonds or Other Security. The Board of Directors may secure the fidelity of any or all of its officers or agents by bond or otherwise, in such amount and with such surety or sureties as the Board of Directors may require.
SECTION 14. Compensation. The compensation of the officers of the Corporation for their services as such officers shall be fixed from time to time by the Board of Directors; provided, however, that the Board of Directors may delegate to the Chief Executive Officer or the President the power to fix the compensation of officers and agents appointed by the Chairman of the Board or the President, as the case may be. An officer of the Corporation shall not be prevented from receiving compensation by reason of the fact that such person is also a director of the Corporation.
ARTICLE V
Shares of Stock
SECTION 1. Stock Certificates. Every holder of stock in the Corporation shall be entitled to have a certificate signed by or in the name of the Corporation by the Chairman of the Board or the President or a Vice President, and by the Treasurer or an Assistant Treasurer, or the Secretary or an Assistant Secretary, certifying the number of shares owned by such holder in the Corporation. Any of or all the signatures on the certificate may be a facsimile. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon such certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, it may nevertheless be issued by the Corporation with the same effect as if he were such officer, transfer agent or registrar at the date of issue.
SECTION 2. Books of Account and Record of Stockholders. The books and records of the Corporation may be kept at such places, within or without the State of Nevada, as the Board of Directors may from time to time determine. The stock record books and the blank stock certificate books shall be kept by the Secretary or by any other officer or agent designated by the Board of Directors.
SECTION 3. Transfer of Shares. Transfers of shares of stock of the Corporation shall be made on the stock records of the Corporation only upon authorization by the registered holder thereof, or by his attorney hereunto authorized by power of attorney duly executed and filed with the Secretary or with a transfer agent or transfer clerk, and on surrender of the certificate or certificates for such shares properly endorsed or accompanied by a duly executed stock transfer power and the payment of all taxes thereon. Except as otherwise provided by Nevada law, the Corporation shall be entitled to recognize the exclusive right of a person in whose name any share or shares stand on the record of stockholders as the owner of such share or shares for all purposes, including, without limitation, the rights to receive dividends or other distributions, and to vote as such owner, and the Corporation may hold any such stockholder of record liable for calls and assessments and the Corporation shall not be bound to recognize any equitable or legal claim to or interest in any such share or shares on the part of any other person whether or not it shall have express or other notice thereof. Whenever any transfers of shares shall be made for collateral security and not absolutely, and both the transferor and transferee request the Corporation to do so, such fact shall be stated in the entry of the transfer.
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SECTION 4. Regulations. The Board of Directors may make such additional rules and regulations, not inconsistent with these bylaws, as it may deem expedient concerning the issue, transfer and registration of certificates for shares of stock of the Corporation. It may appoint, or authorize any officer or officers to appoint, one or more transfer agents or one or more transfer clerks and one or more registrars and may require all certificates for shares of stock to bear the signature or signatures of any of them.
SECTION 5. Lost, Stolen or Destroyed Stock Certificates. The holder of any certificate representing shares of stock of the Corporation shall immediately notify the Corporation of any loss, destruction or mutilation of such certificate, and the Corporation may issue a new certificate of stock in the place of any certificate theretofore issued by it, alleged to have been lost, stolen or destroyed, and the Board of Directors may, in its discretion, require the owner of the lost, stolen or destroyed certificate, or his legal representative, to give the Corporation a bond sufficient, as the Board in its absolute discretion shall determine, to indemnify the Corporation against any claim that may be made against it on account of the alleged loss, theft or destruction of any such certificate or the issuance of such new certificate. Anything herein to the contrary notwithstanding, the Board of Directors, in its absolute discretion, may refuse to issue any such new certificate, except pursuant to judicial proceedings under the laws of the State of Nevada.
ARTICLE VI
Contracts, Checks, Drafts, Bank Accounts, Etc.
SECTION 1. Execution of Contracts. Except as otherwise required by statute, the Articles of Incorporation or these bylaws, any contract or other instrument may be executed and delivered in the name and on behalf of the Corporation by such officer or officers (including any assistant officer) of the Corporation as the Board of Directors may from time to time direct. Such authority may be general or confined to specific instances as the Board of Directors may determine. Unless authorized by the Board of Directors or expressly permitted by these bylaws, no officer or agent or employee shall have any power or authority to bind the Corporation by any contract or engagement or to pledge its credit or to render it pecuniary liable for any purpose or to any amount.
SECTION 2. Loans. Unless the Board of Directors shall otherwise determine, the President or any Vice-President may effect loans and advances at any time for the Corporation from any bank, trust company or other institution, or from any firm, corporation or individual, and for such loans and advances may make, execute and deliver promissory notes, bonds or other certificates or evidences of indebtedness of the Corporation, but no officer or officers shall mortgage, pledge, hypothecate or transfer any securities or other property of the Corporation other than in connection with the purchase of chattels for use in the Corporation’s operations, except when authorized by the Board of Directors.
SECTION 3. Checks, Drafts, Bank Accounts, etc. All checks, drafts, bills of exchange or other orders for the payment of money out of the funds of the Corporation, and all notes or other evidence of indebtedness of the Corporation, shall be signed in the name and on behalf of the Corporation by such persons and in such manner as shall from time to time be authorized by the Board of Directors.
SECTION 4. Deposits. All funds of the Corporation not otherwise employed shall be deposited from time to time to the credit of the Corporation in such banks, trust companies or other depositaries as the Board of Directors may from time to time designate or as may be designated by any officer or officers of the Corporation to whom such power of designation may from time to time be delegated by the Board of Directors. For the purpose of deposit and for the purpose of collection for the account of the Corporation, checks, drafts and other orders for the payment of money which are payable to the order of the Corporation may be endorsed, assigned and delivered by any officer or agent of the Corporation.
SECTION 5. General and Special Bank Accounts. The Board of Directors may from time to time authorize the opening and keeping of general and special bank accounts with such banks, trust companies or other depositaries as the Board of Directors may designate or as may be designated by any officer or officers of the Corporation to whom such power of designation may from time to time be delegated by the Board of Directors. The Board of Directors may make such special rules and regulations with respect to such bank accounts, not inconsistent with the provisions of these bylaws, as it may deem expedient.
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ARTICLE VII
Indemnification
SECTION 1. Right To Indemnification. The Corporation shall indemnify and hold harmless to the fullest extent permitted by applicable law as it presently exists or may hereafter be amended, any person who was or is a party or is threatened to be made a party or is otherwise involved in any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, or by or in the right of the Corporation to procure a judgment in its favor (a “Proceeding”), by reason of the fact that such person 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, enterprise or nonprofit entity, including serving with respect to employee benefit plans, against all liability and loss suffered and expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the Corporation; provided, however, with respect to a Proceeding involving the right of the Corporation to procure judgment in its favor, such indemnification shall only cover expenses (including attorney fees) and shall only be made if such person acted in good faith and in a manner such person reasonably believed to be in the best interests of the Corporation and shall not be made with respect to any Proceeding as to which such person has been adjudged to be liable to the Corporation unless and only to the extent that the Court of Chancery of the State of Nevada or the court in which such Proceeding was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery of the State of Nevada or such other court shall deem proper. The Corporation shall be required to indemnify a person in connection with a Proceeding (or part thereof) initiated by such person only if the Proceeding (or part thereof) was authorized by the Board of Directors of the Corporation.
SECTION 2. Prepayment of Expenses. Expenses incurred in defending any Proceeding may be paid by the Corporation in advance of the final disposition of such action, suit or proceeding as authorized by the Board of Directors in the specific case upon receipt of an undertaking by or on behalf of the director or officer to repay such amount if it should be ultimately determined that such person is not entitled to be indemnified by the Corporation as authorized in this Article VII or otherwise.
SECTION 3. Claims. If a claim for indemnification or payment of expenses under this Article VII is not paid in full within 60 days after a written claim therefor has been received by the Corporation, the claimant may file suit to recover the unpaid amount of such claim and, if successful in whole or in part, shall be entitled to be paid the expense of prosecuting such claim. In any such action the Corporation shall have the burden of proving that the claimant was not entitled to the requested indemnification or payment of expenses under applicable Nevada law.
SECTION 4. Non-Exclusivity of Rights. The indemnification provided by this Article VII shall not be deemed exclusive of any other rights to which those seeking indemnification may be entitled under these bylaws or any agreement or vote of stockholders or disinterested directors or otherwise, both as to action in such person’s official capacity and as to action in another capacity while holding such office, and shall continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such a person.
SECTION 5. Other Indemnification. The Corporation’s obligation, if any, to indemnify any person who was or is serving at its request as a director, officer, employee or agent of another corporation, partnership, joint venture, trust, enterprise or non-profit entity be reduced by any amount such person may collect as indemnification from such other corporation, partnership, joint venture, trust, enterprise or non-profit enterprise.
SECTION 6. Insurance. The Corporation may purchase and maintain insurance on behalf of any person who 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 against any liability asserted against such person and incurred by such person in any such capacity, or arising out of such person’s status as such, whether or not the Corporation would have the power to indemnify such person against such liability under the provisions of Nevada law, the Articles of Incorporation or of this Article VII.
SECTION 7. Amendment or Repeal. Any repeal or modification of the foregoing provisions of this Article VII shall not adversely affect any right or protection hereunder of any person respect of any act or omission occurring prior to the time of such repeal or modification.
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General Provisions
SECTION 1. Registered Office. The registered office and registered agent of the Corporation will be as specified in the Articles of Incorporation of the Corporation.
SECTION 2. Other Offices. The Corporation may also have such offices, both within or without the State of Nevada, as the Board of Directors may from time to time determine or the business of the Corporation may require.
SECTION 3. Fiscal Year. The fiscal year of the Corporation shall be so determined by the Board of Directors.
SECTION 4. Seal. The seal of the Corporation shall be circular in form, shall bear the name of the Corporation and shall include the words and numbers “Corporate Seal”, “Nevada” and the year of incorporation.
SECTION 5. Voting Securities Owned By Corporation. Voting securities in any other corporation held by the Corporation shall be voted by the Chief Executive Officer, unless the Board of Directors specifically confers authority to vote with respect thereto, which authority may be general or confined to specific instances, upon some other person or officer. Any person authorized to vote securities shall have the power to appoint proxies, with general power of substitution.
SECTION 6. Inspection of Books and Records. Any stockholder of record, in person or by attorney or other agent, shall, upon written demand under oath stating the purpose thereof, have the right during the usual hours for business to inspect for any proper purpose the Corporation’s stock ledger, a list of its stockholders, and its other books and records, and to make copies or extracts therefrom. A proper purpose shall mean any purpose reasonably related to such person’s interest as a stockholder. In every instance where an attorney or other agent shall be the person who seeks the right to inspection, the demand under oath shall be accompanied by a power of attorney or such other writing which authorizes the attorney or other agent to so act on behalf of the stockholder. The demand under oath shall be directed to the Corporation at its registered office in the State of Nevada or at its principal place of business.
SECTION 7. Section Headings. Section headings in these bylaws are for convenience of reference only and shall not be given any substantive effect in limiting or otherwise construing any provision herein.
SECTION 8. Inconsistent Provisions. In the event that any provision of these bylaws is or becomes inconsistent with any provision of the Articles of Incorporation, the general corporation law of the State of Nevada or any other applicable law, the provision of these bylaws shall not be given any effect to the extent of such inconsistency but shall otherwise be given full force and effect.
ARTICLE IX
Amendments
These bylaws, may be adopted, amended or repealed, and new bylaws made, by the Board of Directors of the Corporation, but the stockholders of the Corporation may make additional bylaws and may alter and repeal any bylaws, whether adopted by them or otherwise, by affirmative vote of the holders of two-thirds of the outstanding shares of stock entitled to vote upon the election of directors.
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I, the undersigned, being the Director of Alpine Auto Brokers Inc., DO HEREBY CERTIFY the foregoing to be the bylaws of the Corporation, as adopted by consent to action in lieu of a special meeting of the Board of Directors of the Corporation, dated June 8, 2023.
| /s/ Yufeng Zhang | |
| Yufeng Zhang, Director |
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Exhibit 3.3
BVI BC No.: 2101111
TERRITORY
OF THE BRITISH VIRGIN ISLANDS
THE BVI BUSINESS COMPANIES ACT, 2004
(the “Act”)
A COMPANY LIMITED BY SHARES
MEMORANDUM AND ARTICLES
OF ASSOCIATION
OF
National
Holdings Investment Ltd
国民控股投资有限公司
Incorporated the 16th day of June, 2022
12. OVERSEAS MANAGEMENT COMPANY TRUST (B.V.I.) LTD.
OMC
Chambers
Wickhams Cay 1
Road Town, Tortola
British Virgin Islands
TERRITORY
OF THE BRITISH VIRGIN ISLANDS
THE BVI BUSINESS COMPANIES ACT 2004 (the “Act”)
MEMORANDUM OF ASSOCIATION
OF
National Holdings Investment Ltd
国民控股投资有限公司
1. A COMPANY LIMITED BY SHARES
| 1. | NAME |
The name of the Company is National Holdings Investment Ltd
The Company has a foreign character name in addition to its name. The foreign character name of the Company is 国民控股投资有限公司.
| 2. | TYPE OF COMPANY |
The Company is a company limited by shares.
| 3. | REGISTERED OFFICE |
The first Registered Office of the Company is located at OMC Chambers, Wickhams Cay 1, Road Town, Tortola, British Virgin Islands.
| 4. | REGISTERED AGENT |
The first Registered Agent of the Company is OVERSEAS MANAGEMENT COMPANY TRUST (B.V.I.) LTD.
| 5. | CAPACITY AND POWERS |
Subject to Clause 6 below, the objects for which the Company is established are unrestricted and the Company shall have full power and authority to carry out any object not prohibited by the BVI Business Companies Act, 2004 or as the same may be revised from time to time or any other law of the British Virgin Islands.
| 6. | LIMITATIONS ON THE COMPANY’S BUSINESS |
For the purposes of section 9(4) of the Act, the business and activities of the company are limited to those business and activities which are not prohibited from engaging in under any law for the time being in force in the British Virgin Islands.
| 7. | NUMBER AND CLASSES OF SHARES |
The Company is authorized to issue a maximum of 100,000,000 ordinary shares of a single class with a par value of USD 0.0001 each.
| 8. | CURRENCY |
The shares in the Company shall be issued in the currency of the United States of America.
| 9. | FRACTIONAL SHARES |
The Company may issue fractional shares. A fractional share shall have the corresponding fractional liabilities, limitations, preferences, privileges, qualifications, restrictions, rights and other attributes of a whole share of the same class and series.
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| 10. | DESIGNATIONS, POWERS AND PREFERENCES OF SHARES |
Each share in the Company confers upon the shareholder:
| (a) | the right to one vote at a meeting of the shareholders of the Company or on any resolution of shareholders; |
| (b) | the right to an equal share in any dividend paid by the Company; and |
| (c) | the right to an equal share in the distribution of the surplus assets of the Company on its liquidation. |
The directors may at their discretion by resolution of directors redeem, purchase or otherwise acquire all or any of the shares in the Company subject to Regulation 3 of the Articles.
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| 11. | VARIATION OF RIGHTS |
The rights attached to shares as specified in Clause 10 above may only, whether or not the Company is being wound up, be varied with the consent in writing of or by a resolution passed at a meeting by the holders of more than 50 per cent of the issued shares of that class.
| 12. | RIGHTS NOT VARIED BY THE ISSUE OF SHARES PARI PASSU |
The rights conferred upon the holders of the shares of any class issued with preferred or other rights shall not, unless otherwise expressly provided by the terms of issue of the shares of that class, be deemed to be varied by the creation or issue of further shares ranking pari passu therewith.
| 13. | REGISTERED SHARES |
| 13.1. | The Company shall issue registered shares only. |
| 13.2. | The Company is not authorised to issue bearer shares, convert registered shares to bearer shares or exchange registered shares for bearer shares. |
| 14. | AMENDMENT OF MEMORANDUM AND ARTICLES |
Subject to Clause 11, the Company may amend its Memorandum or Articles by a resolution of shareholders or by a resolution of directors, save that no amendment may be made by a resolution of directors:
| (a) | to restrict the rights or powers of the shareholders to amend the Memorandum or Articles; |
| (b) | to change the percentage of shareholders required to pass a resolution of shareholders to amend the Memorandum or Articles; |
| (c) | in circumstances where the Memorandum or Articles cannot be amended by the shareholders; or |
| (d) | to Clauses 10, 11, 12 or this Clause 14. |
| 15. | DEFINITIONS |
Words used in this Memorandum and not defined herein shall have the meanings set out in the Articles.
| We, OVERSEAS MANAGEMENT COMPANY TRUST (B.V.I.) LTD., of OMC Chambers, Wickhams Cay 1, Road Town, Tortola, British Virgin Islands, for the purpose of incorporating a BVI Business Company under the laws of the British Virgin Islands hereby sign this Memorandum of Association the 16th day of June, 2022: |
Incorporator
| /s/ Sandra Vasquez | |
Sandra Vasquez |
|
| Authorised Signatory | |
| OVERSEAS MANAGEMENT COMPANY TRUST (B.V.I.) LTD. |
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TERRITORY
OF THE BRITISH VIRGIN ISLANDS
THE BVI BUSINESS COMPANIES ACT 2004 (the “Act”)
ARTICLES OF ASSOCIATION
OF
National Holdings Investment Ltd
国民控股投资有限公司
1. A COMPANY LIMITED BY SHARES
| 1. | INTERPRETATION |
References in these Articles of Association (“Articles”) to the Act shall mean the BVI Business Companies Act, 2004 (No. 16 of 2004) and any modification, extension, re-enactment or renewal thereof, any amendments thereto and the BVI Business Companies Regulations, 2012 and any other regulations made thereunder. The following Articles shall constitute the Articles of the Company. In these Articles, words and expressions defined in the Act shall have the same meanings and, unless otherwise required by the context, whenever the singular or plural number, or the masculine, feminine or neuter gender is used in these Articles, it shall equally, where the context admits, include the others.
“Person” means an individual, a corporation, a trust, the estate of a deceased individual, a partnership, an unincorporated association or any legal entity capable of having a legal existence.
| 2. | SHARES |
| 2.1. | Every shareholder is entitled to a certificate signed by a director of the Company or under the seal specifying the number of shares held by him and the signature of the director and the seal may be facsimiles. |
| 2.2. | Any shareholder receiving a certificate shall indemnify and hold the Company and its directors and officers harmless from any loss or liability which it or they may incur by reason of any wrongful or fraudulent use or representation made by any person by virtue of the possession thereof. If a share certificate is worn out or lost it may be renewed on production of the worn out certificate or on satisfactory proof of its loss together with such indemnity as may be required by a resolution of directors. |
| 2.3. | If several persons are registered as joint holders of any shares, any one of such persons may give an effectual receipt for any distribution. |
| 2.4. | Shares and other securities may be issued at such times, to such persons, for such consideration and on such terms as the directors may by resolution of directors determine. |
| 2.5. | Without prejudice to the generality of the foregoing, the pre-emption rights set out in Section 46 of the Act shall not apply to the Company. |
| 2.6. | The Company may issue convertible shares, bonus shares, partly paid shares and nil paid shares. |
| 2.7. | A share may be issued for consideration in any form, including money, a promissory note, or other written obligation to contribute money or property, real property, personal property (including goodwill and know-how), services rendered or a contract for future services. |
| 2.8. | Shares may be issued for such amount of consideration as the directors may from time to time by resolution of directors determine, except that in the case of shares issued with a par value, the consideration paid or payable shall not be less than the par value. |
| 2.9. | Before issuing shares for a consideration other than money, which is in whole or in part, other than money, the directors shall pass a resolution stating: |
| (a) | the amount to be credited for the issue of the shares; and |
| (b) | that, in their opinion, the present cash value of the non-money consideration and money consideration, if any, is not less than the amount to be credited for the issue of the shares. |
| 2.10. | The Company shall keep a register of members containing: |
| (a) | the names and addresses of the persons who hold shares; |
| (b) | the number of each class and series of shares held by each shareholder; |
| (c) | the date on which the name of each shareholder was entered in the register of members; and |
| (d) | the date on which any person ceased to be a shareholder. |
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| 2.11. | The register of members may be in such form as the directors may approve, but if it is in magnetic, electronic or other data storage form, the Company must be able to produce legible evidence of its contents. Until the directors otherwise determine, the magnetic, electronic or other data storage form shall be the original register of members. |
| 2.12. | A share is deemed to be issued when the name of the shareholder is entered in the register of members. |
| 3. | REDEMPTION OF SHARES AND TREASURY SHARES |
| 3.1. | The Company may purchase, redeem or otherwise acquire and hold its own shares save that the Company may not purchase, redeem or otherwise acquire its own shares without the consent of shareholders whose shares are to be purchased, redeemed or otherwise acquired unless the Company is permitted by the Act or any other provision in the Memorandum or Articles to purchase, redeem or otherwise acquire the shares without their consent. |
| 3.2. | The Company may acquire its own fully paid share or shares for no consideration by way of surrender of the share or shares to the Company by the person holding the share or shares. Any surrender of a share or shares shall be in writing and signed by the person holding the share or shares. |
| 3.3. | The Company may only offer to acquire shares if at the relevant time the directors determine by resolution of directors that immediately after the acquisition the value of the Company’s assets will exceed its liabilities and the Company will be able to pay its debts as they fall due. |
| 3.4. | Subject to the provisions of the Act, the Company may make an offer to purchase, redeem or otherwise acquire its own shares from one or more or all of the shareholders: |
| (a) | in accordance with Sections 60, 61 and 62 of the Act; or |
| (b) | in accordance with a right of a shareholder to have his shares redeemed or to have his shares exchanged for money or other property of the Company; or |
| (c) | in exchange for newly issued shares of equal value; or |
| (d) | pursuant to the provisions of Section 179 of the Act. |
| 3.5. | Shares may only be held as treasury shares where, when aggregated with the number of shares of the same class already held by the Company as treasury shares, the total number of treasury shares does not exceed 50% of the shares of that class previously issued by the Company, excluding those shares that have been cancelled. |
| 3.6. | All rights and obligations attaching to a treasury share are suspended and shall not be exercised by or against the Company while it holds the share as a treasury share. |
| 3.7. | Treasury shares may be disposed of by the Company on such terms and conditions (not otherwise inconsistent with the Memorandum and Articles) as the Company may by resolution of directors determine. |
| 3.8. | Where shares are held by another body corporate of which the Company holds, directly or indirectly, shares having more than 50 per cent of the votes in the election of directors of the other body corporate, all rights and obligations attaching to the shares held by the other body corporate are suspended and shall not be exercised by the other body corporate. |
| 4. | MORTGAGES AND CHARGES OF SHARES |
| 4.1. | Shareholders may mortgage or charge their shares in the Company and upon satisfactory evidence thereof the Company shall give effect to the terms of any valid mortgage or charge except in so far as it may conflict with any requirements herein contained for consent to the transfer of shares. |
| 4.2. | In the case of the mortgage or charge of registered shares there may be entered in the register of members of the Company: |
| (a) | a statement that the shares are mortgaged or charged; |
| (b) | the name of the mortgagee or chargee; and |
| (c) | the date on which the particulars specified in the preceding subparagraphs (a) and (b) are entered in the register of members. |
| 4.3. | Where particulars of a mortgage or charge are entered in the register of members, such particulars may be cancelled: |
| (a) | with the written consent of the named mortgagee or chargee or anyone authorised to act on his behalf; or |
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| (b) | upon evidence satisfactory to the directors of the discharge of the liability secured by the mortgage or charge and the issue of such indemnities as the directors shall consider necessary or desirable. |
| 4.4. | Whilst particulars of a mortgage or charge over shares are entered in the register of members pursuant to this Regulation: |
| (a) | no transfer of any share the subject of those particulars shall be effected; |
| (b) | the Company may not purchase, redeem or otherwise acquire any such share; and |
| (c) | no replacement certificate shall be issued in respect of such shares, without the written consent of the named mortgagee or chargee. |
| 4.5. | The directors may not resolve to refuse or delay the transfer of a share pursuant to the enforcement of a valid security interest created over the share. |
| 5. | FORFEITURE |
| 5.1. | Shares that are not fully paid on issue are subject to the forfeiture provisions set forth in this Regulation and for this purpose shares issued for a promissory note, or other written obligation to contribute money or property, or a contract for future services are deemed to be not fully paid. |
| 5.2. | A written notice of call specifying the date for payment to be made shall be served on the shareholder who defaults in making payment in respect of the shares. |
| 5.3. | The written notice of call referred to in Sub-Regulation 5.2 shall name a further date not earlier than the expiration of 14 days from the date of service of the notice on or before which the payment required by the notice is to be made and shall contain a statement that in the event of non-payment at or before the time named in the notice the shares, or any of them, in respect of which payment is not made will be liable to be forfeited. |
| 5.4. | Where a written notice of call has been issued pursuant to Sub-Regulation 5.3 and the requirements of the notice have not been complied with, the directors may, at any time before tender of payment, forfeit and cancel the shares to which the notice relates. |
| 5.5. | The Company is under no obligation to refund any moneys to the shareholder whose shares have been cancelled pursuant to Sub-Regulation 5.4 and that shareholder shall be discharged from any further obligation to the Company. |
| 6. | TRANSFER OF SHARES |
| 6.1. | Shares may be transferred by a written instrument of transfer signed by the transferor and containing the name and address of the transferee, which shall be sent to the Company at the office of its registered agent for registration. In the case of the transfer of a share that imposes a liability to the Company on the transferee, the instrument of transfer shall also be signed by the transferee. |
| 6.2. | The Company shall, on receipt of an instrument of transfer complying with the above Sub-Regulation 6.1, enter the name of the transferee of a share in the register of members unless the directors resolve to refuse or delay the registration of the transfer for reasons that shall be specified in a resolution of directors. |
| 6.3. | Where shares are listed on a recognised exchange, the shares may be transferred without the need for a written instrument of transfer if the transfer is carried out in accordance with the laws, rules, procedures and other requirements applicable to shares registered on the recognised exchange and subject to the Company’s memorandum and articles and the Listed Companies and Funds Regulations. For the avoidance of doubt, Sub- Regulations 6.1 and 6.2 do not apply to the transfer of shares that are listed on a recognised exchange. |
| 6.4. | The directors may not resolve to refuse or delay the transfer of a share unless the shareholder has failed to pay an amount due in respect of the share. |
| 6.5. | The transfer of a share is effective when the name of the transferee is entered on the register of members. |
| 6.6. | If the directors of the Company are satisfied that an instrument of transfer relating to shares has been signed but that the instrument has been lost or destroyed, they may resolve by resolution of directors: |
| (a) | to accept such evidence of the transfer of shares as they consider appropriate; and |
| (b) | that the transferee’s name should be entered in the register of members notwithstanding the absence of the instrument of transfer. |
| 6.7. | Subject to the Memorandum, the personal representative of a deceased shareholder may transfer a share even though the personal representative is not a shareholder at the time of the transfer. |
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| 7. | MEETINGS OF MEMBERS |
| 7.1. | Any director of the Company may convene meetings of the members at such times and in such manner and places within or outside the British Virgin Islands as the director considers necessary or desirable. |
| 7.2. | Upon the written request of shareholders entitled to exercise 30% or more of the voting rights in respect of the matter for which the meeting is requested, the directors shall convene a meeting of shareholders within 28 days of receiving the written request. In the event that the directors fail to convene a meeting of shareholders within 28 days, then: |
| (a) | any one director; |
| (b) | the company secretary; or |
| (c) | the shareholder who issued the written request, or where there is more than one, any one of those shareholders, |
may convene a meeting of shareholders, and the provisions of these Articles with regard to convening a meeting of shareholders shall apply, construing references to the directors as references to the party convening the meeting.
| 7.3. | A member may be represented at a meeting of members by a proxy who may speak and vote on behalf of the member. |
| 7.4. | The instrument appointing a proxy shall be produced at the place designated for the meeting before the time for holding the meeting at which the person named in such instrument proposes to vote. The notice of the meeting may specify an alternative or additional place or time at which the proxy shall be presented. |
| 7.5. | The instrument appointing a proxy shall be in substantially the following form or such other form as the chairman of the meeting shall accept as properly evidencing the wishes of the member appointing the proxy. |
[ Name of Company ]
I/We being a member of the above Company HEREBY APPOINT ........................................... of ........................................... or failing him ........................................... of ........................................... to be my/our proxy to vote for me/us at the meeting of members to be held on the ........... day of ................, 20...... and at any adjournment thereof. | |
| (Any restrictions on voting to be inserted here.) | |
| Signed this ........... day of ..........................................., 20...... | |
| .................................................................. | |
| Member |
| 7.6. | The following applies where shares are jointly owned: |
| (a) | if two or more persons hold shares jointly each of them may be present in person or by proxy at a meeting of members and may speak as a member; |
| (b) | if only one of the joint owners is present in person or by proxy he may vote on behalf of all joint owners; and |
| (c) | if two or more of the joint owners are present in person or by proxy they must vote as one. |
| 7.7. | A member shall be deemed to be present at a meeting of members if he participates by telephone or other electronic means and all members participating in the meeting are able to hear each other. |
| 8. | NOTICE OF MEETINGS OF MEMBERS |
| 8.1. | The director convening a meeting shall give not less than seven days notice of a meeting of members to: |
| (a) | those members whose names on the date the notice is given appear as members in the register of members of the Company and are entitled to vote at the meeting; and |
| (b) | the other directors. |
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| 8.2. | Notwithstanding Sub-Regulation 8.1, a meeting of members held in contravention of the requirement to give notice is valid if members holding at least 90 per cent of the total voting rights on all the matters to be considered at the meeting have waived notice of the meeting and, for this purpose, the presence of a member at the meeting shall constitute waiver in relation to all the shares which that member holds. |
| 8.3. | The inadvertent failure of a director who convenes a meeting to give notice of a meeting to a member or another director, or the fact that a member or another director has not received notice, does not invalidate the meeting. |
| 8.4. | The director convening a meeting of members may fix as the record date for determining those members that are entitled to vote at the meeting the date notice is given of the meeting or such other date as may be specified in the notice, being a date not earlier than the date of the notice. |
| 9. | QUORUM FOR MEETINGS OF MEMBERS |
| 9.1. | The quorum for a meeting of members is duly constituted if, at the commencement of the meeting, there are present in person or by proxy not less than 50 per cent of the votes of the shares or class or series of shares entitled to vote on resolutions of members to be considered at the meeting. A quorum may comprise a single member or proxy and then such person may pass a resolution of members and a certificate signed by such person accompanied where such person be a proxy by a copy of the proxy instrument shall constitute a valid resolution of members. |
| 9.2. | If within two hours from the time appointed for the meeting a quorum is not present, the meeting, if convened upon the requisition of members, shall be dissolved; in any other case it shall stand adjourned to the next business day in the jurisdiction in which the meeting was to have been held at the same time and place or to such other time and place as the directors may determine, and if at the adjourned meeting there are present within one hour from the time appointed for the meeting in person or by proxy not less than one third of the votes of the shares or each class or series of shares entitled to vote on the matters to be considered by the meeting, those present shall constitute a quorum but otherwise the meeting shall be dissolved. |
| 10. | PROCEEDINGS OF MEETINGS OF MEMBERS |
| 10.1. | At any meeting of the members the chairman is responsible for deciding in such manner as he considers appropriate whether any resolution proposed has been carried or not and the result of his decision shall be announced to the meeting and recorded in the minutes of the meeting. If the chairman has any doubt as to the outcome of the vote on a proposed resolution, he shall cause a poll to be taken of all votes cast upon such resolution. If the chairman fails to take a poll then any member present in person or by proxy who disputes the announcement by the chairman of the result of any vote may immediately following such announcement demand that a poll be taken and the chairman shall cause a poll to be taken. If a poll is taken at any meeting, the result shall be announced to the meeting and recorded in the minutes of the meeting. |
| 10.2. | At every meeting of members, the chairman of the board shall preside as chairman of the meeting. If there is no chairman of the board or if the chairman of the board is not present at the meeting, the members present shall choose one of their numbers to be the chairman. If the members are unable to choose a chairman for any reason, then the person representing the greatest number of voting shares present in person or by proxy at the meeting shall preside as chairman failing which the oldest individual member or representative of a member present shall take the chair. |
| 10.3. | The chairman may, with the consent of the meeting, adjourn any meeting from time to time, and from place to place, but no business shall be transacted at any adjourned meeting other than the business left unfinished at the meeting from which the adjournment took place |
| 10.4. | Any person other than an individual which is a member of the Company may by resolution of its directors or other governing body authorise such individual as it thinks fit to act as its representative at any meeting of members or of any class of members, and the individual so authorised shall be entitled to exercise the same rights on behalf of the person which he represents as that person could exercise if it were an individual. |
| 10.5. | The chairman of any meeting at which a vote is cast by proxy or on behalf of any person other than an individual may call for a notarial certified copy of such proxy or authority which shall be produced within 7 days of being so requested or the votes cast by such proxy or on behalf of such person shall be disregarded. |
| 10.6. | Directors of the Company may attend and speak at any meeting of members and at any separate meeting of the holders of any class or series of shares. |
| 10.7. | An action that may be taken by the members at a meeting may also be taken by a resolution of members consented to in writing, without the need for any notice, but if any resolution of members is adopted otherwise than by the unanimous written consent of all members, a copy of such resolution shall forthwith be sent to all members not consenting to such resolution. The consent may be in the form of counterparts, each counterpart being signed by one or more members. If the consent is in one or more counterparts, and the counterparts bear different dates, then the resolution shall take effect on the earliest date upon which persons holding a sufficient number of votes of shares to constitute a resolution of members have consented to the resolution by signed counterparts. |
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| 10.8. | If the Company shall have only one member the provisions herein contained for meetings of the members shall not apply and in lieu of minutes of a meeting shall record in writing and sign a note or memorandum of all matters requiring a resolution of members. Such a note or memorandum shall constitute sufficient evidence of such resolution for all purposes. |
| 11. | DIRECTORS |
| 11.1. | Subject to any subsequent amendment to change the number of directors, the minimum number of directors shall be one. |
| 11.2. | No person shall be appointed as a director of the Company, an alternate director or nominated as a reserve director, unless he has consented in writing to act as a director, an alternate director or to be nominated as a reserve director. |
| 11.3. | The first directors of the Company shall be appointed by the first registered agent within six months of the incorporation date of the Company; and thereafter, the directors shall be elected by resolution of members or by resolution of directors for such term as the members or directors determine. If, before the Company has any members, the sole director or all of the directors appointed by the first registered agent, resign or die, or in the case of a director that is not an individual, ceases to exist, the first registered agent may appoint one or more further persons as directors of the Company. |
| 11.4. | Each director holds office for the term, if any, fixed by the resolution of members or resolution of directors appointing him, or until his earlier death, resignation or removal. If no term is fixed on the appointment of a director, the director serves indefinitely until his earlier death, resignation or removal. |
| 11.5. | A vacancy in the board of directors may be filled by a resolution of members or a resolution passed by the majority of the remaining directors. |
| 11.6. | A vacancy in relation to directors occurs if a director dies or otherwise ceases to hold office prior to the expiration of his term of office. |
| 11.7. | A director may be removed from office by a resolution of members or by resolution of directors. A resolution passed under this Regulation may only be passed at a meeting called for the purpose of removing the director or for purposes including the removal of the director or by a written resolution passed by at least seventy-five percent (75%) of the votes of the members or directors of the Company entitled to vote. |
| 11.8. | A director may resign his office by giving written notice of his resignation to the Company and the resignation has effect from the date the notice is received by the Company or from such later date as may be specified in the notice. A director shall resign forthwith as a director if he is, or becomes, disqualified from acting as a director under the Act. |
| 11.9. | The Company shall keep a register of directors containing: |
| (a) | the names and addresses of the persons who are directors of the Company; |
| (b) | the date on which each person whose name is entered in the register was appointed as a director of the Company; |
| (c) | the date on which each person named as a director ceased to be a director of the Company; and |
| (d) | such other information as may be prescribed by the Act. |
| 11.10. | The register of directors may be kept in any such form as the directors may approve, but if it is in magnetic, electronic or other data storage form, the Company must be able to produce legible evidence of its contents. Until the directors otherwise determine, the magnetic, electronic or other data storage shall be the original register of directors. |
| 11.11. | The directors may, by a resolution of directors, fix the emoluments of directors with respect to services to be rendered in any capacity to the Company. |
| 11.12. | A director is not required to hold a share as a qualification to office. |
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| 12. | POWERS OF DIRECTORS |
| 12.1. | The business and affairs of the Company shall be managed by, or under the direction or supervision of, the directors of the Company. The directors of the Company have all the powers necessary for managing, and for directing and supervising, the business and affairs of the Company. The directors may pay all expenses incurred preliminary to and in connection with the incorporation of the Company and may exercise all such powers of the Company as are not by the Act or by the Memorandum or the Articles required to be exercised by the members. |
| 12.2. | Each director shall exercise his powers for a proper purpose and shall not act or agree to the Company acting in a manner that contravenes the Memorandum, the Articles or the Act. Each director, in exercising his powers or performing his duties, shall act honestly and in good faith in what the director believes to be the best interests of the Company. |
| 12.3. | If the Company is the wholly owned subsidiary of a holding company, a director of the Company may, when exercising powers or performing duties as a director, act in a manner which he believes is in the best interests of the holding company even though it may not be in the best interests of the Company. |
| 12.4. | Any director which is a body corporate may appoint any individual as its duly authorised representative for the purpose of representing it at meetings of the directors, with respect to the signing of consents or otherwise. |
| 12.5. | The continuing directors may act notwithstanding any vacancy in their body. |
| 12.6. | The directors may by resolution of directors exercise all the powers of the Company to incur indebtedness, liabilities or obligations and to secure indebtedness, liabilities or obligations whether of the Company or of any third party. |
| 12.7. | All cheques, promissory notes, drafts, bills of exchange and other negotiable instruments and all receipts for moneys paid to the Company shall be signed, drawn, accepted, endorsed or otherwise executed, as the case may be, in such manner as shall from time to time be determined by resolution of directors. |
| 12.8. | For the purposes of Section 175 (Disposition of assets) of the Act, the directors may by resolution of directors determine that any sale, transfer, lease, exchange or other disposition is in the usual or regular course of the business carried on by the Company and such determination is, in the absence of fraud, conclusive. |
| 12.9. | The directors may from time to time and at any time by an instrument in writing appoint any person, firm or corporate body whether appointed directly or indirectly as its attorney either generally or in relation to a specific matter. |
| 12.10. | An act of an attorney appointed under Sub-Regulation 12.9 in accordance with the instrument under which the attorney was appointed binds the Company. |
| 12.11. | An instrument appointing an attorney under Sub-Regulation 12.9 may either be executed as a deed or signed by a person acting under the express or implied authority of the Company. |
| 13. | PROCEEDINGS OF DIRECTORS |
| 13.1. | Any one director of the Company may call a meeting of the directors by sending a written notice to each other director. |
| 13.2. | The directors of the Company or any committee thereof may meet at such times and in such manner and places within or outside the British Virgin Islands as the directors may determine to be necessary or desirable. |
| 13.3. | A director is deemed to be present at a meeting of directors if he participates by telephone or other electronic means and all directors participating in the meeting are able to hear each other. |
| 13.4. | A director shall be given not less than 3 days’ notice of meetings of directors, but a meeting of directors held without 3 days’ notice having been given to all directors shall be valid if all the directors entitled to vote at the meeting waive notice of the meeting, and for this purpose the presence of a director at a meeting shall constitute waiver by that director. The inadvertent failure to give notice of a meeting to a director, or the fact that a director has not received the notice, does not invalidate the meeting. |
| 13.5. | A director of the Company may appoint any other director or any other person, not disqualified from an appointment as a director, as his alternate to exercise the appointing director’s powers and carry out the appointing director’s responsibilities. |
| (a) | An alternate director has the same rights as the appointing director in relation to any director’s meeting and any written resolution circulated for written consent. |
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| (b) | Subject to the Act and Regulation 17, an alternate director is liable for his own acts and omission as an alternate director whilst acting in that capacity. |
| (c) | The appointment and termination of an alternate director must be in writing and written notice of the appointment and termination must be given by the appointing director to the Company as soon as reasonably practicable. |
| (d) | The appointing director may, at any time, voluntarily terminate the alternate director’s appointment which shall take effect from the time when the written notice of this termination is given to the Company. |
| (e) | The rights of an alternate director shall terminate upon the death of the appointing director or if the appointing director, otherwise ceases to hold office. |
| 13.6. | A meeting of directors is duly constituted for all purposes if at the commencement of the meeting there are present in person or by alternate not less than one-half of the total number of directors, unless there are only 2 directors in which case the quorum is 2. |
| 13.7. | If the Company has only one director the provisions herein contained for meetings of directors do not apply and such sole director has full power to represent and act for the Company in all matters as are not by the Act, the Memorandum or the Articles required to be exercised by the shareholders. In lieu of minutes of a meeting the sole director shall record in writing and sign a note or memorandum of all matters requiring a resolution of directors. Such a note or memorandum constitutes sufficient evidence of such resolution for all purposes. |
| 13.8. | At meetings of directors at which the chairman of the board is present, he shall preside as chairman of the meeting. If there is no chairman of the board or if the chairman of the board is not present, the directors present shall choose one of their numbers to be chairman of the meeting. |
| 13.9. | An action that may be taken by the directors or a committee of directors at a meeting may also be taken by a resolution of directors or a resolution of a committee of directors consented to in writing or by telex, telegram, cable or other written electronic communication, without the need for any notice by a majority of the directors or members of the committee of directors, but if any resolution is adopted otherwise than by the unanimous written consent of all directors or all members of a committee of directors, a copy of such resolution shall forthwith be sent to all directors or all members of a committee of directors not consenting to such resolution. The consent may be in the form of counterparts each counterpart being signed by one or more directors. If the consent is in one or more counterparts, and the counterparts bear different dates, then the resolution shall take effect on the date upon which sufficient number of directors to constitute a resolution of directors or a resolution of a committee of directors has consented to the resolution by signed counterparts. |
| 14. | COMMITTEES |
| 14.1. | The directors may, by resolution of directors, designate one or more committees, each consisting of one or more directors, and delegate one or more of their powers, including the power to affix the seal, to the committee. |
| 14.2. | The directors have no power to delegate to a committee of directors any of the following powers: |
| (a) | to amend the Memorandum or the Articles; |
| (b) | to change the registered office or agent; |
| (c) | to designate committees of directors; |
| (d) | to delegate powers to a committee of directors; |
| (e) | to appoint or remove directors; |
| (f) | to appoint or remove an agent; |
| (g) | to fix emoluments of directors; |
| (h) | to approve a plan of merger, consolidation or arrangement; |
| (i) | to make a declaration of solvency for the purposes of Section 198(1)(a) of the Act or to approve a liquidation plan; |
| (j) | to make a determination under Section 57(1) of the Act that the Company will, immediately after a proposed distribution, satisfy the solvency test; or |
| (k) | to authorize the Company to continue as a Company incorporated under the laws of a jurisdiction outside the British Virgin Islands. |
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| 14.3. | Sub-Regulation 14.2(c) and (d) do not prevent a committee of directors, where authorised by the resolution of directors appointing such committee or by a subsequent resolution of directors, from appointing a sub-committee and delegating powers exercisable by the committee to the sub-committee. |
| 14.4. | The meetings and proceedings of each committee of directors consisting of 2 or more directors shall be governed mutatis mutandis by the provisions of the Articles regulating the proceedings of directors so far as the same are not superseded by any provisions in the resolution of directors establishing the committee. |
| 14.5. | Where the directors delegate their powers to a committee of directors they remain responsible for the exercise of that power by the committee, unless they believed on reasonable grounds at all times before the exercise of the power that the committee would exercise the power in conformity with the duties imposed on directors of the Company under the Act. |
| 15. | OFFICERS AND AGENTS |
| 15.1. | The Company may by resolution of directors appoint officers of the Company at such times as may be considered necessary or expedient. Such officers may consist of a chairman of the board of directors, a president and one or more vice-presidents, secretaries and treasurers and such other officers as may from time to time be considered necessary or expedient. Any number of offices may be held by the same person. |
| 15.2. | The officers shall perform such duties as are prescribed at the time of their appointment subject to any modification in such duties as may be prescribed thereafter by resolution of directors. In the absence of any specific prescription of duties it shall be the responsibility of the chairman of the board to preside at meetings of directors and shareholders, the president to manage the day to day affairs of the Company, the vice-presidents to act in order of seniority in the absence of the president but otherwise to perform such duties as may be delegated to them by the president, the secretaries to maintain the register of members, minute books and records (other than financial records) of the Company and to ensure compliance with all procedural requirements imposed on the Company by applicable law, and the treasurer to be responsible for the financial affairs of the Company. |
| 15.3. | The emoluments of all officers shall be fixed by resolution of directors. |
| 15.4. | The officers of the Company shall hold office until their successors are duly appointed, but any officer elected or appointed by the directors may be removed at any time, with or without cause, by resolution of directors. Any vacancy occurring in any office of the Company may be filled by resolution of directors. |
| 15.5. | The directors may, by a resolution of directors, appoint any person, including a person who is a director, to be an agent of the Company. An agent of the Company shall have such powers and authority of the directors, including the power and authority to affix the seal, as are set forth in the Articles or in the resolution of directors appointing the agent, except that no agent has any power or authority with respect to the matters specified in Sub-Regulation |
| 14.2. | The resolution of directors appointing an agent may authorise the agent to appoint one or more substitutes or delegates to exercise some or all of the powers conferred on the agent by the Company. The directors may remove an agent appointed by the Company and may revoke or vary a power conferred on him. |
| 16. | CONFLICT OF INTERESTS |
| 16.1. | A director of the Company shall, forthwith after becoming aware of the fact that he is interested in a transaction entered into or to be entered into by the Company, disclose the interest to all other directors of the Company. |
| 16.2. | For the purposes of Sub-Regulation 16.1, a disclosure to all other directors to the effect that a director is a member, director or officer of another named entity or has a fiduciary relationship with respect to the entity or a named individual and is to be regarded as interested in any transaction which may, after the date of the entry or disclosure, be entered into with that entity or individual, is a sufficient disclosure of interest in relation to that transaction. |
| 16.3. | A director of the Company who is interested in a transaction entered into or to be entered into by the Company may: |
| (a) | vote on a matter relating to the transaction; |
| (b) | attend a meeting of directors at which a matter relating to the transaction arises and be included among the directors present at the meeting for the purposes of a quorum; and |
| (c) | sign a document on behalf of the Company, or do any other thing in his capacity as a director, that relates to the transaction, |
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and, subject to compliance with the Act shall not, by reason of his office be accountable to the Company for any benefit which he derives from such transaction and no such transaction shall be liable to be avoided on the grounds of any such interest or benefit.
| 17. | INDEMNIFICATION |
| 17.1. | Subject to the limitations hereinafter provided the Company shall indemnify against all expenses, including legal fees, and against all judgments, fines and amounts paid in settlement and reasonably incurred in connection with legal, administrative or investigative proceedings any person who: |
| (a) | is or was a party or is threatened to be made a party to any threatened, pending or completed proceedings, whether civil, criminal, administrative or investigative, by reason of the fact that the person is or was a director of the Company; or |
| (b) | is or was, at the request of the Company, serving as a director of, or in any other capacity is or was acting for, another body corporate or a partnership, joint venture, trust or other enterprise. |
| 17.2. | The indemnity in Sub-Regulation 17.1 only applies if the person acted honestly and in good faith with a view to the best interests of the Company and, in the case of criminal proceedings, the person had no reasonable cause to believe that their conduct was unlawful. |
| 17.3. | The decision of the directors as to whether the person acted honestly and in good faith and with a view to the best interests of the Company and as to whether the person had no reasonable cause to believe that his conduct was unlawful is, in the absence of fraud, sufficient for the purposes of the Articles, unless a question of law is involved. |
| 17.4. | The termination of any proceedings by any judgment, order, settlement, conviction or the entering of a nolle prosequi does not, by itself, create a presumption that the person did not act honestly and in good faith and with a view to the best interests of the Company or that the person had reasonable cause to believe that his conduct was unlawful. |
| 17.5. | The Company may purchase and maintain insurance in relation to any person who is or was a director, officer or liquidator of the Company, or who at the request of the Company is or was serving as a director, officer or liquidator of, or in any other capacity is or was acting for, another body corporate or a partnership, joint venture, trust or other enterprise, against any liability asserted against the person and incurred by the person in that capacity, whether or not the Company has or would have had the power to indemnify the person against the liability as provided in the Articles. |
| 18. | RECORDS |
| 18.1. | The Company shall keep the following documents at the office of its registered agent: |
| (a) | the Memorandum and the Articles; |
| (b) | the register of members, or a copy of the register of members; |
| (c) | the register of directors, or a copy of the register of directors; and |
| (d) | copies of all notices and other documents filed by the Company with the Registrar of Corporate Affairs in the previous ten (10) years. |
| 18.2. | If the Company maintains only a copy of the register of members or a copy of the register of directors at the office of its registered agent, it shall: |
| (a) | within 15 days of any change in either register, notify the registered agent in writing of the change; and |
| (b) | provide the registered agent with a written record of the physical address of the place or places at which the original register of members or the original register of directors is kept. |
| 18.3. | The Company shall keep the following records and underlying documentation at the office of its registered agent or at such other place or places, within or outside the British Virgin Islands, as the directors may determine: |
| (a) | minutes of meetings and resolutions of members and classes of members; and |
| (b) | minutes of meetings and resolutions of directors and committees of directors. |
| 18.4. | The records and underlying documentation shall be retained for a period of 5 years from the date of completion of the transaction to which the records and underlying documentation relate or from the date that the Company terminates the business relationship to which the records and underlying documentation relate. |
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| 18.5. | Where any original records and underlying documentation referred to in this Regulation are maintained other than at the office of the registered agent of the Company, the Company shall provide the registered agent with a written record of the physical address of the place or places at which the records and underlying documentation are kept and the name of the person who maintains and controls the Company’s records and underlying documentation. |
| 18.6. | Where the place at which the original records and underlying documentation of the Company or the name of the person who maintains and controls the Company’s records and underlying documentation changes, the Company shall provide its registered agent with the physical address of the new location of the records and underlying documentation or the name of the new person who maintains and controls the Company’s records and underlying documentation within 14 days of the change. |
| 18.7. | The records and underlying documentation of the Company referred to in this Regulation shall be in such form as are sufficient to show and explain the Company’s transactions and will, at any time, enable the financial position of the Company to be determined with reasonable accuracy. Records and underlying documentation include accounts and records, such as invoices, contracts and similar documents, in relation to all sums of money received and expended by the Company and the matters in respect of which the receipt and expenditure take place; all sales and purchases of goods by the Company; and the assets and liabilities of the Company. |
| 18.8. | The records kept by the Company under this Regulation shall be in written form or either wholly or partly as electronic records complying with the requirements of the Electronic Transactions Act (No. 5 of 2001). |
| 19. | SEAL |
The Company shall have a common seal and the directors shall provide for the safe custody of the seal and for an imprint thereof to be kept at the office of the registered agent of the Company. Except as otherwise expressly provided herein, the seal when affixed to any written instrument shall be witnessed and attested to by the signature of any one director or other person so authorised from time to time by resolution of directors. Such authorisation may be before or after the seal is affixed, may be general or specific and may refer to any number of sealings. The directors may provide for a facsimile of the seal and of the signature of any director or authorised person which may be reproduced by printing or other means on any instrument and it shall have the same force and validity as if the seal had been affixed to such instrument and the same had been attested to as hereinbefore described.
| 20. | DISTRIBUTIONS |
| 20.1. | The directors of the Company may, by resolution of directors, authorise a distribution by way of dividend at such time at such amount as they think fit if they are satisfied, on reasonable grounds, that, immediately after the distribution, the value of the Company’s assets will exceed its liabilities and the Company will be able to pay its debts as they fall due. |
| 20.2. | Dividends may be paid in money, shares, or other property. |
| 20.3. | Notice of any dividend that may have been declared shall be given to each shareholder as specified in Sub- Regulation 23.1 and all dividends unclaimed for 3 years after having been declared may be forfeited by resolution of directors for the benefit of the Company. |
| 20.4. | No dividend shall bear interest as against the Company and no dividend shall be paid on treasury shares. |
| 20.5. | The directors may, before making any distributions, set aside out of the profits of the Company such sum as they think proper as a reserve fund, and may invest the sum so set apart as a reserve fund upon such securities as they may select. |
| 20.6. | The directors may determine in their sole discretion to issue bonus shares from time to time and bonus shares may be deemed to have been fully paid for on issue. |
| 20.7. | A division of the issued and outstanding shares of a class or series of shares into a larger number of shares of the same class or series having a proportionately smaller par value does not constitute the issue of a bonus share. |
| 21. | ACCOUNTS |
| 21.1. | The Company shall keep records that are sufficient to show and explain the Company’s transactions and that will, at any time, enable the financial position of the Company to be determined with reasonable accuracy. |
| 21.2. | The Company may by resolution of shareholders call for the directors to prepare periodically and make available a profit and loss account and a balance sheet. The profit and loss account and balance sheet shall be drawn up so as to give respectively a true and fair view of the profit and loss of the Company for a financial period and a true and fair view of the assets and liabilities of the Company as at the end of a financial period. |
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| 22. | AUDIT |
| 22.1. | The Company may by resolution of shareholders call for the accounts to be examined by auditors. |
| 22.2. | The first auditors shall be appointed by resolution of directors; subsequent auditors shall be appointed by a resolution of shareholders. |
| 22.3. | The auditors may be shareholders, but no director or other officer shall be eligible to be an auditor of the Company during their continuance in office. |
| 22.4. | The remuneration of the auditors of the Company: |
| (a) | in the case of auditors appointed by the directors, may be fixed by resolution of directors; and |
| (b) | subject to the foregoing, shall be fixed by resolution of shareholders or in such manner as the Company may by resolution of shareholders determine. |
| 22.5. | The auditors shall examine each profit and loss account and balance sheet required to be laid before a meeting of the shareholders or otherwise given to shareholders and shall state in a written report whether or not: |
| (a) | in their opinion the profit and loss account and balance sheet give a true and fair view respectively of the profit and loss for the period covered by the accounts, and of the assets and liabilities of the Company at the end of that period; and |
| (b) | all the information and explanations required by the auditors have been obtained. |
| 22.6. | The report of the auditors shall be annexed to the accounts and shall be read at the meeting of shareholders at which the accounts are laid before the Company or shall be otherwise given to the shareholders. |
| 22.7. | Every auditor of the Company shall have a right of access at all times to the books of account and vouchers of the Company, and shall be entitled to require from the directors and officers of the Company such information and explanations as he thinks necessary for the performance of the duties of the auditors. |
| 22.8. | The auditors of the Company shall be entitled to receive notice of, and to attend any meetings of shareholders at which the Company’s profit and loss account and balance sheet are to be presented. |
| 23. | NOTICES |
| 23.1. | Any notice, information or written statement to be given by the Company to shareholders may be given by personal service or by mail addressed to each shareholder at the address shown in the register of members. |
| 23.2. | Any summons, notice, order, document, process, information or written statement to be served on the Company may be served by leaving it, or by sending it by registered mail addressed to the Company, at its registered office, or by leaving it with, or by sending it by registered mail to, the registered agent of the Company. |
| 23.3. | Service of any summons, notice, order, document, process, information or written statement to be served on the Company may be proved by showing that the summons, notice, order, document, process, information or written statement was delivered to the registered office or the registered agent of the Company or that it was mailed in such time as to admit to its being delivered to the registered office or the registered agent of the Company in the normal course of delivery within the period prescribed for service and was correctly addressed and the postage was prepaid. |
| 24. | VOLUNTARY WINDING UP AND DISSOLUTION |
| 24.1. | The Company may voluntarily commence to wind up and dissolve if |
| (a) | it has no liabilities; or |
| (b) | is able to pay its debts as they fall due, |
by a resolution of shareholders or if, the Company has never issued shares, by a resolution of directors.
| 24.2. | The Company may by a resolution of shareholders or by a resolution of directors appoint a voluntary liquidator. |
| 24.3. | Where a liquidator has been appointed by a resolution of directors, the shareholders of a company may by a resolution of the shareholders appoint an eligible person, subject to the Act, as an additional voluntary liquidator to act jointly with the voluntary liquidator appointed. |
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| 25. | CONTINUATION |
The Company may by resolution of shareholders or by a resolution passed unanimously by all directors of the Company continue as a company incorporated under the laws of a jurisdiction outside the British Virgin Islands in the manner provided under those laws.
| We, OVERSEAS MANAGEMENT COMPANY TRUST (B.V.I.) LTD., of OMC Chambers, Wickhams Cay 1, Road Town, Tortola, British Virgin Islands, for the purpose of incorporating a BVI Business Company under the laws of the British Virgin Islands hereby sign these Articles of Association the 16th day of June, 2022: |
Incorporator
| /s/ Sandra Vasquez | |
Sandra Vasquez |
|
| Authorised Signatory | |
| OVERSEAS MANAGEMENT COMPANY TRUST (B.V.I.) LTD. |
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Exhibit 3.4
Ying’ao (Dongguan) Technology Co., Ltd.
Articles of Association
Chapter I General Provisions
Article 1 The Articles of Association is formulated in accordance with the provisions in Company Law of the People’s Republic of China (hereinafter referred to as the Company Law) and relevant laws, administrative regulations and rules.
Article 2 In case of any inconsistency between the articles of the Articles of Association ano laws, administrative regulations and rules, the provisions of laws, administrative regulations and rules shall prevail.
Article 3 The Company is established with the investment of a legal person shareholder, and it is a one person limited liability company solely owned by a legal person.
Chapter II Name and Domicile of the Company
Article 4 Name of the Company: Ying’ao (Dongguan) Technology Co., Ltd.
Article 5 Domicile of the Company: Room 2136, Building 2, No. 119 Dongbao Road, Dongcheng Sub-district, Dongguan City, Guangdong Province.
Postal Code: 523000.
Chapter III Business Scope of the Company
Article 6 Business scope of the Company: General items: development of network and information security software; information technology consulting service; technical service, technology development, technical consultation, technology exchange, technology transfer and technology promotion; software development; technical service of Internet of Things; technology research and development of Internet of Things; computer system service: data processing service; corporate management consulting; information consulting services (excluding licensing information consulting services): socio-economic consulting services; advertising production; advertising release; advertising design and agency; network technical service; retail of computer hardware and software and auxiliary equipment; sales of security equipment; sales of smart home consumer devices; artificial intelligence industry application system integration service; development of artificial intelligence application software; services for Internet of Things application; and professional design services.(Except for the projects subject to approval pursuant to law, business activities shall be carried out independently according to law by virtue of the business license).
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If the terms of the company’s business scope are not standardized, those who have been standardized and certified by the registration authority for filing in accordance with the preceding paragraph shall prevail.
When the business scope of the Company is changed, the Company shall go through the change registration with the company registration authority pursuant to law.
Chapter IV Registered Capital of the Company Article
7 Registered capital of the Company: RMB 1 million.
Chapter V Names of Shareholders
Article 8 Name of shareholder: National Holding Investment Co., Ltd.
Domicile: Room 302, Unit 8, Building 2, Block D, Bielai Xinchuang Community, Binhe, Changtu County, Liaoning Province, China
Certificate name: Business License, Certificate No.: 2101111.
Chapter VI Method, Amount and Time of Capital Contribution of Shareholders
Article 9 The shareholders contributes RMB 1 million in cash, and the total subscribed capital contribution is RMB 1 million, which shall be fully paid before December 31, 2050.
Chapter VII Rights and Obligations of Shareholder
Article IO The shareholder shall enjoy the following rights:
(1) To enjoy the rights of asset income, decision-making on major matters and selection of the Company’s management pursuant to law:
(2) To transfer and pledge the equity held in accordance with the Company Law and the Articles of Association of the Company;
(3) To supervise the business, operation and financial management of the Company, and make suggestions or inquiries;
(4) To consult and copy the Articles of Association, minutes of meetings and financial and accounting repo1is;
(5) To enJoy the remammg assets after the liquidation of the Company has completed liquidation;
(6) Other rights prescribed by laws and administrative regulations.
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Article 11 Shareholders shall fulfill the following obligations:
(1) Where the contribution is made in monetary, the contribution in monetary shall be fully deposited into the account opened by the Company in the bank; and where the contribution is made in non-monetary property, the formalities for transferring the property right to the name of the Company shall be handled pursuant to law:
(2) To bear debts to the Company with the amount of capital contribution during liquidation of the Company;
(3) Not to withdraw its capital contribution;
(4) To observe the Articles of Association.
Chapter VIII Organization of the Company and Its Formation Method, Authority and Rules of Procedure
Article 12 The Company will not set up a board of shareholders.
Article 13 The shareholder shall exercise the following functions and powers:
(1) To decide on the business policy and investment plan of the Company;
(2) To select and replace the management of the Company, and decide on matters concerning the remuneration of the Company’s management;
(3) To examine and approve the report of the executive director;
(4) To examine and approve the reports of the supervisor;
(5) To review and approve the annual financial budget plan and final account plan of the Company;
(6) To examine and approve the profit distribution plan and loss making-up plan of the Company;
(7) To make decisions on the increase or decrease of the registered capital of the Company;
(8) To make decisions on the issuance of corporate bonds;
(9) To make decisions on the merger, dissolution, liquidation or change of company form of the Company;
(10) To amend the Aliicles of Association;
(11) To make resolutions on providing guarantee to the Company’s shareholder or actual controllers;
(12) To make resolutions on the guarantee provided by the Company to any other person other than the shareholder or actual controllers of the Company.
When the shareholder makes the preceding decisions, the decisions shall be made in writing and shall be signed by the shareholder and kept in the Company.
Article 14 The Company does not have a board of directors, but has one executive director, who shall be appointed by the shareholder.
A1iicle 15 The executive director shall be responsible to the shareholder and exercise the following functions and rights:
(1) To implement the decisions of the shareholder and re, shareholder;
(2) To decide on the business plans and investment
(3) To formulate the annual financial budget plan Company;
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(4) To formulate the profit distribution plan and loss making-up plan of the Company;
(5) To formulate plans for increasing or decreasing the registered capital of the Company and for issuing corporate bonds;
(6) To formulate plans for merger, change of company form and dissolution of the Company;
(7) To decide the establishment of the Company’s internal management organization;
(8) To decide on the appointment or dismissal of the financial head of the Company and its remuneration according to the nomination of the manager;
(9) To formulate the basic management system of the Company.
Article 16 The term of office of the executive director is three years. Upon expiration of the term of office, the executive director may be reappointed with the consent of the appointing party.
Article 17 The Company has one manager, who is concurrently held by the executive director and appointed by the shareholder.
The manager shall be responsible to the shareholder and exercise the following functions and powers:
(1) To take charge of the production and operation management of the Company, and organize the implementation of the resolutions of the shareholders;
(2) To organize and implement the annual operation plan and investment schemes of the Company;
(3) To draw up the plan for the establishment of the Company’s internal management organization;
(4) To draw up the basic management system of the Company;
(5) To formulate specific rules and regulations of the Company;
(6) To propose to appoint or dismiss the financial head of the Company.
Article 18 The Company does not have a board of supervisors, but has one supervisor, who shall be appointed by the shareholder. Each term of office shall be three years. Upon expiration of the term of office, it may be reappointed with the consent of the appointing party. The executive director and senior management shall not concurrently serve as supervisor.
Article 19 The supervisor shall exercise the following functions and powers:
(1) To examine the financial affairs of the Company;
(2) To supervise the acts of executive director and senior management in the performance of duties of the Company, and put forward proposals for removal of the executive director or senior management who violate laws, administrative regulations, the Articles of Association or the resolutions of the shareholder;
(3) To require the executive director and senior management to make con-ections when their acts harm the interests of the Company;
(4) To pu forward pr posal_s to the shareh lder;
(5) To bnng a lawsmt agamst the executive dlfet_c 01;.. - or mami,lTie]Jt 111 accordance with Article 152 of the Company Law.
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Chapter IX Legal Representative of the Company
Article 20 The legal representative of the Company shall be the executive director.
Article 21 The legal representative shall, on behalf of the Company, exercise the relevant functions and powers prescribed by laws and regulations.
Chapter X Supplementary Provisions
Article 22 The Articles of Association shall come into force as of the date of approval of registration (filing) by the company registration authority.
Article 23 Matters not specified in the Articles of Association shall be implemented m accordance with relevant provisions of the Company Law.
| Signature of Legal Representative: |
MM/DD/YYYY
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Exhibit 4.1
DEFINITIVE SHARE EXCHANGE AGREEMENT
This Definitive Share Exchange Agreement (“Agreement”), dated as of February 20, 2023, is among National Holdings Investment Ltd (“NHIL”), a BVI company, Jiayue Yang, the sole shareholder of NHIL (the “Shareholder”), Alpine Auto Brokers Inc., a Nevada corporation (“ALTB”), Zonghan Wu (“ZHW”), the Director of ALTB. Collectively, the Shareholder, NHIL, ALTB, and ZHW are the “Parties.”
The parties hereby enter into this Agreement, following which,
| 1. | ALTB will own 100,000,000 ordinary shares of NHIL, representing all of the issued and outstanding equity of NHIL; |
| 2. | the Shareholder will be issued 10,000,000 shares of ALTB, $0.001 par value per share (the “Common Stock”), representing 2.2% of ALTB’s outstanding shares of Common Stock (the “Share Exchange”), calculated post-issuance and in addition to the voting control shares currently held by the Shareholder; and |
| 3. | NHIL will hold no common shares of ALTB, as the wholly-owned subsidiary of ALTB. |
As a result of this Agreement, ALTB will be announcing this reverse merger. The first consolidated post-acquisition report will be the initial report following the Closing (as defined below).
RECITALS
WHEREAS, the Shareholder currently holds 1 ordinary shares of NHIL, representing all of the equity of NHIL and is desirous of relinquishing all of her NHIL shares so that she is issued 10,000,000 shares of ALTB Common Stock of the 455,500,000 shares of ALTB Common Stock to be outstanding; this would represent 2.2% of ALTB’s issued and outstanding shares of Common Stock; and that NHIL would be a wholly-owned subsidiary of ALTB.
WHEREAS, the Shareholder and the Board of Directors of the NHIL are desirous of NHIL becoming a wholly-owned subsidiary of ALTB.
WHEREAS, ALTB and NHIL are desirous of ALTB acquiring 100% of the outstanding shares of NHIL, and issuing 10,000,000 shares of ALTB Common Stock in the process, making NHIL a wholly-owned subsidiary of ALTB, with the shares of ALTB Common Stock being issued pro-rata to the Shareholder.
WHEREAS, ALTB and NHIL are desirous of ALTB acquiring 100% of the outstanding shares of NHIL.
WHEREAS, the Board of Directors and Shareholder of ALTB and NHIL, respectively, have each agreed to Exchange and issue shares, as necessary to cause the forgoing results, upon the terms, and subject to the conditions, set forth in this Agreement.
WHEREAS, it is intended that, for federal income tax purposes, the Share Exchange shall qualify as a reorganization under the provisions of Section 368(a)(1)(B) of the Internal Revenue Code of 1986, as amended (the “Code”), and the rules and regulations promulgated thereunder, and be tax-free pursuant to Section 351(a) of the Code.
WHEREAS, the Parties desire to make certain representations, warranties, covenants and agreements in connection with this Agreement.
NOW, THEREFORE, in consideration of the premises and mutual promises herein made, and in consideration of the representations, warranties, covenants and agreements herein contained, and intending to be legally bound hereby, the Parties agree as follows:
INCORPORATION OF RECITALS BY REFERENCE. The Recitals are hereby incorporated herein by this reference, as if fully restated herein.
ARTICLE I
DEFINITIONS
I.1 Certain Definitions. The following terms shall, when used in this Agreement, have the following meanings:
“Acquisition” means the acquisition of any businesses, assets or property other than in the ordinary course, whether by way of the purchase of assets or stock, by ALTB acquiring all of the outstanding shares of NHIL pursuant to this Share Exchange Agreement from the Shareholder and the Shareholder relinquishing and exchanging her shares of NHIL to ALTB.
“Affiliate” means, with respect to any Person: (i) any Person directly or indirectly owning, controlling or holding with power to vote ten percent (10%) or more of the outstanding voting securities of such other Person (other than passive or institutional investors); (ii) any Person ten percent (10%) or more of whose outstanding voting securities are directly or indirectly owned, controlled or held with power to vote, by such other Person; (iii) any Person directly or indirectly controlling, controlled by or under common control with such other Person; and (iv) any officer, director or partner of such other Person. “Control” for the foregoing purposes shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities or voting interests, by contract or otherwise.
“Business Day” means any day other than Saturday, Sunday or a day on which banking institutions in New York, New York, are required or authorized to be closed.
“Code” means the United States Internal Revenue Code of 1986, as amended.
“Collateral Documents” mean the Exhibits and any other documents, instruments and certificates to be executed and delivered by the Parties hereunder or there under.
“Commission” means the Securities and Exchange Commission or any Regulatory Authority that succeeds to its functions.
“Effective Time” means, the moment in time when the shares of the ALTB are exchanged for the shares of NHIL.
“Encumbrance” means any material mortgage, pledge, lien, encumbrance, charge, security interest, security agreement, conditional sale or other title retention agreement, limitation, option, assessment, restrictive agreement, restriction, adverse interest, restriction on transfer or exception to or material defect in title or other ownership interest (including restrictive covenants, leases and licenses).
“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations there under.
“Exchange Shares” means the issued and outstanding ordinary shares of NHIL (the “NHIL Shares”), exchanged by the Shareholder to ALTB, for 10,000,000 shares of Common Stock of ALTB (the “ALTB Shares”).
“GAAP” means United States generally accepted accounting principles as in effect from time to time.
“Legal Requirement” means any statute, ordinance, law, rule, regulation, code, injunction, judgment, order, decree, ruling, or other requirement enacted, adopted or applied by any Regulatory Authority, including judicial decisions applying common law or interpreting any other Legal Requirement.
“Losses” shall mean all damages, awards, judgments, assessments, fines, sanctions, penalties, charges, costs, expenses, payments, diminutions in value and other losses, however suffered or characterized, all interest thereon, all costs and expenses of investigating any claim, lawsuit or arbitration and any appeal there from, all actual attorneys’, accountants’ investment bankers’ and expert witness’ fees incurred in connection therewith, whether or not such claim, lawsuit or arbitration is ultimately defeated and, subject to Section 9.4, all amounts paid incident to any compromise or settlement of any such claim, lawsuit or arbitration.
“Liability” means any liability or obligation (whether known or unknown, whether asserted or unasserted, whether absolute or contingent, whether accrued or unaccrued, whether liquidated or unliquidated, and whether due or to become due), including any liability for Taxes.
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“Material Adverse Effect” means a material adverse effect on (i) the assets, Liabilities, properties or business of the Parties, (ii) the validity, binding effect or enforceability of this Agreement or the Collateral Documents or (iii) the ability of any Party to perform its obligations under this Agreement and the Collateral Documents; provided, however, that none of the following shall constitute a Material Adverse Effect on ALTB: (i) the filing, initiation and subsequent prosecution, by or on behalf of Shareholder of any Party, of litigation that challenges or otherwise seeks damages with respect to the Share Exchange, this Agreement and/or transactions contemplated thereby or hereby, (ii) occurrences due to a disruption of a Party’s business as a result of the announcement of the execution of this Agreement or Changes caused by the taking of action required by this Agreement, (iii) general economic conditions, or (iv) any Changes generally affecting the industries in which a Party operates.
“Permit” means any license, permit, consent, approval, registration, authorization, qualification or similar right granted by a Regulatory Authority.
“Permitted Liens” means (i) liens for Taxes not yet due and payable or being contested in good faith by appropriate proceedings; (ii) rights reserved to any Regulatory Authority to regulate the affected property; (iii) statutory liens of banks and rights of set off; (iv) as to leased assets, interests of the lessors and sub-lessors thereof and liens affecting the interests of the lessors and sub-lessors thereof; (v) inchoate material men’s, mechanics’, workmen’s, repairmen’s or other like liens arising in the ordinary course of business; (vi) liens incurred or deposits made in the ordinary course in connection with workers’ compensation and other types of social security; (vii) licenses of trademarks or other intellectual property rights granted by ALTB, in the ordinary course and not interfering in any material respect with the ordinary course of the business of ALTB; and (viii) as to real property, any encumbrance, adverse interest, constructive or other trust, claim, attachment, exception to or defect in title or other ownership interest (including, but not limited to, reservations, rights of entry, rights of first refusal, possibilities of reversion, encroachments, easement, rights of way, restrictive covenants, leases, and licenses) of any kind, which otherwise constitutes an interest in or claim against property, whether arising pursuant to any Legal Requirement, under any contract or otherwise, that do not, individually or in the aggregate, materially and adversely affect or impair the value or use thereof as it is currently being used in the ordinary course.
“Person” means any natural person, corporation, partnership, trust, unincorporated organization, association, Limited Liability Company, Regulatory Authority or other entity.
“Regulatory Authority” means: (i) the United States of America; (ii) any state, commonwealth, territory or possession of the United States of America and any political subdivision thereof (including counties, municipalities and the like); (iii) Canada and any other foreign (as to the United States of America) sovereign entity and any political subdivision thereof; or (iv) any agency, authority or instrumentality of any of the foregoing, including any court, tribunal, department, bureau, commission or board.
“Representative” means any director, officer, employee, agent, consultant, advisor or other representative of a Person, including legal counsel, accountants and financial advisors.
“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations there under.
“ALTB Business” means the business conducted by ALTB.
“ALTB Common Stock” means the common shares of ALTB.
“Subsidiary” of a specified Person means (a) any Person if securities having ordinary voting power (at the time in question and without regard to the happening of any contingency) to elect a majority of the directors, trustees, managers or other governing body of such Person are held or controlled by the specified Person or a Subsidiary of the specified Person; (b) any Person in which the specified Person and its subsidiaries collectively hold a fifty percent (50%) or greater equity interest; (c) any partnership or similar organization in which the specified Person or subsidiary of the specified Person is a general partner; or (d) any Person the management of which is directly or indirectly controlled by the specified Person and its Subsidiaries through the exercise of voting power, by contract or otherwise.
“Tax” means any U.S. or non U.S. federal, state, provincial, local or foreign income, gross receipts, license, payroll, employment, excise, severance, stamp, occupation, premium, windfall profits, environmental, customs duties, capital, franchise, profits, withholding, social security (or similar), unemployment, disability, real property, personal property, intangible property, recording, occupancy, sales, use, transfer, registration, value added minimum, estimated or other tax of any kind whatsoever, including any interest, additions to tax, penalties, fees, deficiencies, assessments, additions or other charges of any nature with respect thereto, whether disputed or not.
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“Tax Return” means any return, declaration, report, claim for refund or credit or information return or statement relating to Taxes, including any schedule or attachment thereto, and including any amendment thereof.
“Treasury Regulations” means regulations promulgated by the U.S. Treasury Department under the Code.
ARTICLE II
THE SHARE EXCHANGE
II.1 Share Exchange. In accordance with and subject to the provisions of this Agreement and the Nevada Revised Statutes (the “Code”), at the Effective Time, NHIL shall become a wholly-owned subsidiary of ALTB, and ALTB shall be its only shareholder and shall continue in its existence with one owner, ALTB, until a merger, if any. Pursuant to the Share Exchange, the Shareholder is relinquishing all of her 1 NHIL ordinary shares, constituting all issued and outstanding shares of NHIL (the “NHIL Shares”), and is acquiring 10,000,000 ALTB Shares, representing 2.2% of the outstanding Common Stock of ALTB.
II.2 Stock Transfer Books. Effective immediately after the Share Exchange, the stock transfer books of NHIL shall be closed for this transaction.
II.3 Restriction on Transfer. The Exchange Shares may not be sold, transferred, or otherwise disposed of without registration under the Act or an exemption therefrom, and that in the absence of an effective registration statement covering the Share Exchange Shares or any available exemption from registration under the Act, the Share Exchange Shares must be held indefinitely. The Parties are aware that the Share Exchange Shares may not be sold pursuant to Rule 144 promulgated under the Act unless all of the conditions of that Rule are met. Among the conditions for use of Rule 144 may be the availability of current information to the public about ALTB.
II.4 Restrictive Legend. All certificates representing the Exchange Shares shall contain an appropriate restrictive legend.
II.5 Closing. The closing of the transactions contemplated by this Agreement and the Collateral Documents (the “Closing”) shall take place via conference call at the offices of McMurdo law Group, LLC, 1185 Avenue of the Americas, 3rd Floor, NY 10036, or at such other location as the parties may agree.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF ALTB
ALTB represents and warrants to the Shareholder that the statements contained in this ARTICLE III are correct and complete as of the date of this Agreement and, except as provided in Section 7.1, will be correct and complete as of the Closing Date (as though made then and as though the Closing Date were substituted for the date of this Agreement throughout this ARTICLE III, except in the case of representations and warranties stated to be made as of the date of this Agreement or as of another date and except for Changes contemplated or permitted by this Agreement).
III.1 Organization and Qualification. ALTB is a corporation duly organized, validly existing and in good standing under the laws of its respective jurisdiction of organization. ALTB has all requisite power and authority to own, lease and use its assets as they are currently owned, leased and used and to conduct its business as it is currently conducted. ALTB is duly qualified or licensed to do business in and is in good standing in each jurisdiction in which the character of the properties owned, leased or used by it or the nature of the activities conducted by it make such qualification necessary, except any such jurisdiction where the failure to be so qualified or licensed would not have a Material Adverse Effect on ALTB or a material adverse effect on the validity, binding effect or enforceability of this Agreement or the Collateral Documents or the ability of ALTB to perform its obligations under this Agreement or any of the Collateral Documents.
III.2 Capitalization.
(a) The authorized capital stock and other ownership interests of ALTB, a Nevada corporation, consists of 1,000,000,000 common shares of Common Stock, of which 445,500,000 were issued and outstanding as of February 20, 2023. All of the outstanding ALTB Common Stock have been duly authorized and are validly issued, fully paid and non-assessable.
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(b) Other than what has been described herein or in ALTB’s filings via OTC Markets, there are no outstanding or authorized options, warrants, purchase rights, preemptive rights or other contracts or commitments that could require ALTB to issue, sell, or otherwise cause to become outstanding any of its capital stock or other ownership interests (collectively “Options”).
(c) All of the issued and outstanding shares of ALTB Common Stock have been duly authorized and are validly issued and outstanding, fully paid and non-assessable and have been issued in compliance with applicable securities laws and other applicable Legal Requirements or transfer restrictions under applicable securities laws.
III.3 Authority and Validity. ALTB has all requisite corporate power to execute and deliver, to perform its obligations under, and to consummate the transactions contemplated by, this Agreement (subject to the receipt of any necessary consents, approvals, authorizations or other matters referred to herein). The execution and delivery by ALTB of, the performance by ALTB of its obligations under, and the consummation by ALTB of the transactions contemplated by, this Agreement have been duly authorized by all requisite action of ALTB (subject to the approval of ALTB Shareholder as contemplated herein). This Agreement has been duly executed and delivered by ALTB and (assuming due execution and delivery by the Shareholder and approval by ALTB Shareholder) is the legal, valid and binding obligation of ALTB, enforceable against it in accordance with its terms, except that such enforcement may be subject to (i) bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting or relating to enforcement of creditors’ rights generally and (ii) general equitable principles. Upon the execution and delivery of the Collateral Documents by each Person (other than by the Shareholder) that is required by this Agreement to execute, or that does execute, this Agreement or any of the Collateral Documents, and assuming due execution and delivery thereof by the Shareholder, the Collateral Documents will be the legal, valid and binding obligations of ALTB, enforceable against ALTB in accordance with their respective terms, except that such enforcement may be subject to (i) bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting or relating to enforcement of creditors’ rights generally and (ii) general equitable principles.
III.4 No Breach or Violation. Subject to obtaining the consents, approvals, authorizations, and orders of and making the registrations or filings with or giving notices to Regulatory Authorities and Persons identified herein, the execution, delivery and performance by ALTB of this Agreement and the Collateral Documents to which it is a party, and the consummation of the transactions contemplated hereby and thereby in accordance with the terms and conditions hereof and thereof, do not and will not conflict with, constitute a violation or breach of, constitute a default or give rise to any right of termination or acceleration of any right or obligation of ALTB under, or result in the creation or imposition of any Encumbrance upon ALTB, ALTB assets, ALTB Business or ALTB Common Stock by reason of the terms of (i) the articles of incorporation, by laws or other charter or organizational document of ALTB or any Subsidiary of ALTB, (ii) any material contract, agreement, lease, indenture or other instrument to which ALTB is a party or by or to which ALTB, or the assets may be bound or subject and a violation of which would result in a Material Adverse Effect on ALTB, (iii) any order, judgment, injunction, award or decree of any arbitrator or Regulatory Authority or any statute, law, rule or regulation applicable to ALTB or (iv) any Permit of ALTB, which in the case of (ii), (iii) or (iv) above would have a Material Adverse Effect on ALTB or a material adverse effect on the validity, binding effect or enforceability of this Agreement or the Collateral Documents or the ability of ALTB to perform its obligations under this Agreement or any of the Collateral Documents.
III.5 Consents and Approvals. Except for requirements described in Schedule 3.5, no consent, approval, authorization or order of, registration or filing with, or notice to, any Regulatory Authority or any other Person is necessary to be obtained, made or given by ALTB in connection with the execution, delivery and performance by ALTB of this Agreement or any Collateral Document or for the consummation by ALTB of the transactions contemplated hereby or thereby, except to the extent the failure to obtain any such consent, approval, authorization or order or to make any such registration or filing would not have a Material Adverse Effect on ALTB or a material adverse effect on the validity, binding effect or enforceability of this Agreement or the Collateral Documents or the ability of ALTB to perform its obligations under this Agreement or any of the Collateral Documents.
III.6 Intellectual Property. ALTB warrants that it has good title to or the right to use all material company intellectual property rights and all material inventions, processes, designs, formulae, trade secrets and know how necessary for the operation of ALTB Business without the payment of any royalty or similar payment.
III.7 Compliance with Legal Requirements. ALTB has operated its business in compliance with all Legal Requirements applicable to ALTB except to the extent the failure to operate in compliance with all material Legal Requirements would not have a Material Adverse Effect on ALTB or Material Adverse Effect on the validity, binding effect or enforceability of this Agreement or the Collateral Documents.
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III.8 Litigation. There are no outstanding judgments or orders against or otherwise affecting or related to ALTB, ALTB Business or ALTB assets and there is no action, suit, complaint, proceeding or investigation, judicial, administrative or otherwise, that is pending or, to ALTB’s knowledge, threatened that, if adversely determined, would have a Material Adverse Effect on ALTB or a material adverse effect on the validity, binding effect or enforceability of this Agreement or the Collateral Documents, except as noted in the Company’s financial statements published on OTC Markets or documented by ALTB to the Shareholder.
III.9 Taxes. To the best of ALTB’s knowledge, ALTB has duly and timely filed in proper form all Tax Returns for all Taxes required to be filed with the appropriate Regulatory Authority, and has paid all taxes required to be paid in respect thereof except where such failure would not have a Material Adverse Effect on ALTB, except where, if not filed or paid, the exception(s) have been documented by ALTB to the Shareholder.
III.10 Books and Records. The books and records of ALTB accurately and fairly represent ALTB Business and its results of operations in all material respects.
III.11 Brokers or Finders. All negotiations relative to this Agreement and the transactions contemplated hereby have been carried out by ALTB and/or its Affiliates/Representatives in connection with the transactions contemplated by this Agreement, neither ALTB, nor any of its Affiliates/Representatives have incurred any obligation to pay any brokerage or finder’s fee or other commission in connection with the transaction contemplated by this Agreement.
III.12 Disclosure. No representation or warranty of ALTB in this Agreement or in the Collateral Documents and no statement in any certificate furnished or to be furnished by ALTB pursuant to this Agreement contained, contains or will contain on the date such agreement or certificate was or is delivered, or on the Closing Date, any untrue statement of a material fact, or omitted, omits or will omit on such date to state any material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading.
III.13 No Undisclosed Liabilities. ALTB is not subject to any material liability (including unasserted claims), absolute or contingent, which is not shown or which is in excess of amounts shown or reserved for in the balance sheet as of February 20, 2023, other than liabilities of the same nature as those set forth in ALTB’s financial statements and reasonably incurred in the ordinary course of its business after February 20, 2023.
III.14 Disclosed Liabilities. All liabilities disclosed by ALTB shall be paid from ALTB’s accounts receivable when and as is due. Any Liabilities, disclosed or undisclosed, shall be the sole obligation of ALTB.
III.15 Absence of Certain Changes. Since February 20, 2023, ALTB has not: (a) suffered any material adverse change in its financial condition, assets, liabilities or business; (b) contracted for or paid any capital expenditures; (c) incurred any indebtedness or borrowed money, issued or sold any debt or equity securities, declared any dividends or discharged or incurred any liabilities or obligations except in the ordinary course of business as heretofore conducted; (d) mortgaged, pledged or subjected to any lien, lease, security interest or other charge or encumbrance any of its properties or assets; (e) paid any material amount on any indebtedness prior to the due date, forgiven or cancelled any material amount on any indebtedness prior to the due date, forgiven or cancelled any material debts or claims or released or waived any material rights or claims; (f) suffered any damage or destruction to or loss of any assets (whether or not covered by insurance); (g) acquired or disposed of any assets or incurred any liabilities or obligations; (h) made any payments to its affiliates or associates or loaned any money to any person or entity; (i) formed or acquired or disposed of any interest in any corporation, partnership, limited liability company, joint venture or other entity; (j) entered into any employment, compensation, consulting or collective bargaining agreement or any other agreement of any kind or nature with any person. Or group, or modified or amended in any respect the terms of any such existing agreement; (k) entered into any other commitment or transaction or experience any other event that relates to or affect in any way this Agreement or to the transactions contemplated hereby, or that has affected, or may adversely affect ALTB Business, operations, assets, liabilities or financial condition; or (1) amended its Articles of Incorporation or By-laws, except as otherwise contemplated herein.
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III.16 Contracts. A true and complete list of all contracts, agreements, leases, commitments or other understandings or arrangements, written or oral, express or implied, to which ALTB is a party or by which it or any of its property is bound or affected requiring payments to or from, or incurring of liabilities by, ALTB in excess of $10,000 (the “Contracts”). ALTB has complied with and performed, in all material respects, all of its obligations required to be performed under and is not in default with respect to any of the Contracts, as of the date hereof, nor has any event occurred which has not been cured which, with or without the giving of notice, lapse of time, or both, would constitute a default in any respect there under. To the best knowledge of ALTB, no other party has failed to comply with or perform, in all material respects, any of its obligations required to be performed under or is in material default with respect to any such Contracts, as of the date hereof, nor has any event occurred which, with or without the giving of notice, lapse of time or both, would constitute a material default in any respect by such party there under. ALTB knows of and has no reason to believe that there are any facts or circumstances which would make a material default by any party to any contract or obligation likely to occur subsequent to the date hereof.
III.17 Permits and Licenses. ALTB has all certificates of occupancy, rights, permits, certificates, licenses, franchises, approvals and other authorizations as are reasonably necessary to conduct its business and to own, lease, use, operate and occupy its assets, at the places and in the manner now conducted and operated, except those the absence of which would not materially adversely affect its business. ALTB has not received any written or oral notice or claim pertaining to the failure to obtain any material permit, certificate, license, approval or other authorization required by any federal, state or local agency or other regulatory body, the failure of which to obtain would materially and adversely affect its business.
III.18 Assets Necessary to Business. ALTB owns or leases all properties and assets, real, personal, and mixed, tangible and intangible, and is a party to all licenses, permits and other agreements necessary to permit it to carry on its business as presently conducted.
III.19 Labor Agreements and Labor Relations. ALTB has no collective bargaining or union contracts or agreements. ALTB is in compliance with all applicable laws respecting employment and employment practices, terms and conditions of employment and wages and hours, and is not engaged in any unfair labor practices; there are no charges of discrimination or unfair labor practice charges” or complaints against ALTB pending or threatened before any governmental or regulatory agency or authority; and, there is no labor strike, dispute, slowdown or stoppage actually pending or threatened against or affecting ALTB.
III.20 Employment Arrangements. ALTB has no employment or consulting agreements or arrangements, written or oral, which are not terminable at the will of ALTB, or any pension, profit-sharing, option, other incentive plan, or any other type of employment benefit plan as defined in ERISA or otherwise, or any obligation to or customary arrangement with employees for bonuses, incentive compensation, vacations, severance pay, insurance or other benefits. No employee of ALTB is in violation of any employment agreement or restrictive covenant.
III.21 Filings. ALTB is not subject to filings required by the Exchange Act of 1934, as amended.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF NHIL AND THE SHAREHOLDER
NHIL and the Shareholder, where applicable, represent and warrant to ALTB that the statements contained in this ARTICLE IV are correct and complete as of the date of this Agreement and, except as provided in Section 8.1, will be correct and complete as of the Closing Date (as though made then and as though the Closing Date were substituted for the date of this Agreement throughout this ARTICLE IV, except in the case of representations and warranties stated to be made as of the date of this Agreement or as of another date and except for Changes contemplated or permitted by the Agreement).
IV.1 Organization and Qualification. NHIL has all requisite power and authority to own, lease and use NHIL’s assets as they are currently owned, leased and used and to conduct its business as it is currently conducted. NHIL is duly qualified or licensed to do business in and are each in good standing in each jurisdiction in which the character of the properties owned, leased or used by it or the nature of the activities conducted by it makes such qualification necessary, except any such jurisdiction where the failure to be so qualified or licensed and in good standing would not have a Material Adverse Effect on NHIL or a Material Adverse Effect on the validity, binding effect or enforceability of this Agreement or the Collateral Documents or the ability of NHIL or the Shareholder to perform their obligations under this Agreement or any of the Collateral Documents.
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IV.2 Capitalization.
(a) The authorized capital stock of NHIL is 1 ordinary shares. All 1 outstanding shares of NHIL are owned by the Shareholder. NHIL has no shares of preferred stock authorized. The shares of NHIL ordinary stock are duly issued and outstanding, and have been duly authorized, validly issued and outstanding and fully paid and non-assessable, which shares are Exchanged hereby, as above provided.
(b) There no outstanding or authorized options, warrants, purchase rights, preemptive rights or other contracts or commitments that could require NHIL or any of its Subsidiaries to issue, sell, or otherwise cause to become outstanding any of its capital stock or other ownership interests.
(c) All of the issued and outstanding shares of the NHIL capital stock have been duly authorized and are validly issued and outstanding, fully paid and non-assessable (with respect to Subsidiaries that are corporations) and have been issued in compliance with applicable securities laws and other applicable Legal Requirements.
IV.3 Authority and Validity. NHIL and the Shareholder have all requisite power to execute and deliver to perform its or their obligations under, and to consummate the transactions contemplated by, this Agreement and the Collateral Documents. The execution and delivery by NHIL and the Shareholder and the performance by NHIL and the Shareholder of their obligations under, and the consummation by NHIL and the Shareholder of the transactions contemplated by, this Agreement and the Collateral Documents have been duly authorized by all requisite action of NHIL and the Shareholder. This Agreement has been duly executed and delivered (assuming due execution and delivery by NHIL and the Shareholder) is the legal, valid and binding obligation of the Shareholder, enforceable in accordance with its terms except that such enforcement may be subject to (i) bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting or relating to enforcement of creditors’ rights generally and (ii) general equitable principles. Upon the execution and delivery by NHIL and the Shareholder of the Collateral Documents to which it is a party, if any, and assuming due execution and delivery thereof by the other parties thereto, the Collateral Documents will be the legal, valid and binding obligations, enforceable in accordance with their respective terms except that such enforcement may be subject to (i) bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting or relating to enforcement of creditors’ rights generally and (ii) general equitable principles.
IV.4 No Breach or Violation. Subject to obtaining the consents, approvals, authorizations, and orders of and making the registrations or filings with or giving notices to Regulatory Authorities and Persons identified herein, the execution, delivery and performance by NHIL or the Shareholder of this Agreement and the Collateral Documents to which they are a party and the consummation of the transactions contemplated hereby and thereby in accordance with the terms and conditions hereof and thereof, do not and will not conflict with, constitute a violation or breach of, constitute a default or give rise to any right of termination or acceleration of any right or obligation of the Shareholder under, or result in the creation or imposition of any Encumbrance upon the property of the Shareholder by reason of the terms of (i) the articles of incorporation, by laws or other charter or organizational document of NHIL, (ii) any contract, agreement, lease, indenture or other instrument to which any the Shareholder or NHIL are a party or by or to which the Shareholder or NHIL or their property may be bound or subject and a violation of which would result in a Material Adverse Effect on the Shareholder or NHIL taken as a whole, (iii) any order, judgment, injunction, award or decree of any arbitrator or Regulatory Authority or any statute, law, rule or regulation applicable to the Shareholder or NHIL or (iv) any Permit of NHIL or subsidiary, which in the case of (ii), (iii) or (iv) above would have a Material Adverse Effect on NHIL or a material adverse effect on the validity, binding effect or enforceability of this Agreement or the Collateral Documents or the ability of the Shareholder or NHIL to perform their obligations hereunder or there under.
IV.5 Consents and Approvals. Except for requirements under applicable United States or state securities laws, no consent, approval, authorization or order of, registration or filing with, or notice to, any Regulatory Authority or any other Person is necessary to be obtained, made or given by NHIL or the Shareholder in connection with the execution, delivery and performance by them of this Agreement or any Collateral Documents or for the consummation by them of the transactions contemplated hereby or thereby, except to the extent the failure to obtain such consent, approval, authorization or order or to make such registration or filings or to give such notice would not have a Material Adverse Effect on NHIL or the Shareholder, in the aggregate, or a material adverse effect on the validity, binding effect or enforceability of this Agreement or the Collateral Documents or the ability of NHIL or the Shareholder to perform their obligations under this Agreement or any of the Collateral Documents.
IV.6 Compliance with Legal Requirements. NHIL’s business has operated in compliance with all material Legal Requirements including, without limitation, the Securities Act applicable to NHIL, except to the extent the failure to operate in compliance with all material Legal Requirements, would not have a Material Adverse Effect on NHIL or a Material Adverse Effect on the validity, binding effect or enforceability of this Agreement or the Collateral Documents.
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IV.7 Litigation. There are no outstanding judgments or orders against or otherwise affecting or related to NHIL, or the business or assets; and there is no action, suit, complaint, proceeding or investigation, judicial, administrative or otherwise, that is pending or, to the best knowledge of either of the Shareholder, threatened that, that has not been disclosed and if adversely determined, would have a material adverse effect on the validity, binding effect or enforceability of this Agreement or the Collateral Documents.
IV.8 Ordinary Course. Since the date of its most recent balance sheet, dated February 20, 2023, there has not been any occurrence, event, incident, action, failure to act or transaction involving NHIL, which is reasonably likely, individually or in the aggregate, to have a Material Adverse Effect on NHIL.
IV.9 Assets and Liabilities. As of the date of this Agreement, neither NHIL nor any of its Subsidiaries has any assets or liability, except for the assets and liabilities disclosed in the balance sheet disclosed to ALTB through the date hereof.
IV.10 Taxes. NHIL, and any Subsidiaries, has duly and timely filed in proper form all Tax Returns for all Taxes required to be filed with the appropriate Governmental Authority, except where such failure to file would not have a Material Adverse Effect on NHIL.
IV.11 Books and Records. The books and records of NHIL and any Subsidiaries accurately and fairly represent NHIL’s business and its results of operations in all material respects. All accounts receivable and inventory of NHIL’s business are reflected properly on such books and records in all material respects.
IV.12 Financial and Other Information. To the knowledge of the Shareholder, NHIL’s financial statements do not contain (directly or by incorporation by reference) any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein (or incorporated therein by reference), in light of the circumstances under which they were or will be made, not misleading.
IV.13 Brokers or Finders. All negotiations relative to this Agreement and the transactions contemplated hereby have been carried out by NHIL and/or its Affiliates/Representatives in connection with the transactions contemplated by this Agreement, neither NHIL, nor any of its Affiliates/Representatives have incurred any obligation to pay any brokerage or finder’s fee or other commission in connection with the transaction contemplated by this Agreement.
IV.14 Disclosure. No representation or warranty of NHIL, NHIL, or the Shareholder in this Agreement or in the Collateral Documents and no statement in any certificate furnished or to be furnished by NHIL or the Shareholder pursuant to this Agreement contained, contains or will contain on the date such agreement or certificate was or is delivered, or on the Closing Date, any untrue statement of a material fact, or omitted, omits or will omit on such date to state any material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading.
IV.15 Filings. NHIL is not subject to filings required by the Securities Act of 1933, as amended, and the Exchange Act of 1934, as amended.
IV.16 Conduct of Business. Prior to the Closing Date, NHIL shall conduct its business in the normal course, and shall not sell, pledge, or assign any assets, without the prior written approval of ALTB, except in the regular course of business. Except as otherwise provided herein, NHIL shall not amend its Articles of Incorporation or By-Laws, declare dividends, redeem or sell stock or other securities, acquire or dispose of fixed assets, change employment terms, enter into any material or long-term contract, guarantee obligations of any third party, settle or discharge any material balance sheet receivable for less than its stated amount, pay more on any liability than its stated amount or enter into any other transaction other than in the regular course of business.
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ARTICLE V
COVENANTS OF ALTB
Between the date of this Agreement and the Closing Date:
V.1 Additional Information. ALTB shall provide to the Shareholder and her Representatives such financial, operating and other documents, data and information relating to ALTB, ALTB Business and ALTB’s assets and liabilities, as the Shareholder or her Representatives may reasonably request. In addition, ALTB shall take all action necessary to enable the Shareholder and their Representatives to review, inspect and review ALTB Assets, ALTB Business and Liabilities of ALTB and discuss them with ALTB’s officers, employees, independent accountants, customers, licensees, and counsel. Notwithstanding any investigation that the Shareholder may conduct of ALTB, ALTB Business, ALTB’s assets and the liabilities of ALTB, the Shareholder may fully rely on ALTB’s warranties, covenants and indemnities set forth in this Agreement.
V.2 Consents and Approvals. As soon as practicable after execution of this Agreement, ALTB shall use commercially reasonable efforts to obtain any necessary consent, approval, authorization or order of, make any registration or filing with or give any notice to, any Regulatory Authority or Person as is required to be obtained, made or given by ALTB to consummate the transactions contemplated by this Agreement and the Collateral Documents.
V.3 Non-circumvention. It is understood that in connection with the transactions contemplated hereby, ALTB will not, and it will cause its directors, officers, employees, agents and representatives not to attempt, directly or indirectly, (i) to contact any party introduced to it by the Shareholder, or (ii) deal with, or otherwise become involved in any transaction with any party which has been introduced to it by the Shareholder, without the express written permission of the introducing party. Any violation of the covenant shall be deemed an attempt to circumvent the Shareholder, and the party so violating this covenant shall be liable for damages in favor of the circumvented party.
V.4 No Solicitations. From and after the date of this Agreement until the Effective Time or termination of this Agreement pursuant to ARTICLE X, ALTB will not nor will it authorize or permit any of its officers, directors, affiliates or employees or any investment banker, attorney or other advisor or representative retained by it, directly or indirectly, (i) solicit or initiate the making, submission or announcement of any other acquisition proposal, (ii) participate in any discussions or negotiations regarding, or furnish to any person any nonpublic information with respect to any other acquisition proposal, (iii) engage in discussions with any Person with respect to any other acquisition proposal, except as to the existence of these provisions, (iv) approve, endorse or recommend any other acquisition proposal or (v) enter into any letter of intent or similar document or any contract agreement or commitment contemplating or otherwise relating to any other acquisition proposal.
V.5 Notification of Adverse Change. ALTB shall promptly notify the Shareholder of any material adverse change in the condition (financial or otherwise) of ALTB.
V.6 Notification of Certain Matters. ALTB shall promptly notify the Shareholder of any fact, event, circumstance or action known to it that is reasonably likely to cause ALTB to be unable to perform any of its covenants contained herein or any condition precedent in ARTICLE VII not to be satisfied, or that, if known on the date of this Agreement, would have been required to be disclosed to the Shareholder pursuant to this Agreement or the existence or occurrence of which would cause any of ALTB’s representations or warranties under this Agreement not to be correct and/or complete. ALTB shall give prompt written notice to the Shareholder of any adverse development causing a breach of any of the representations and warranties in ARTICLE III as of the date made.
V.7 The Company Disclosure Schedule. For purposes of determining the satisfaction of any of the conditions to the obligations of the Shareholder in ARTICLE VII, ALTB disclosures shall be deemed to include only (a) the information contained therein on the date of this Agreement and (b) information provided by written supplements delivered prior to Closing by ALTB that (i) are accepted in writing by a majority of the Shareholder, or (ii) reflect actions taken or events occurring after the date hereof prior to Closing.
V.8 State Statutes. ALTB and its Board of Directors shall, if any state takeover statute or similar law is or becomes applicable to the Share Exchange, this Agreement or any of the transactions contemplated by this Agreement, use all reasonable efforts to ensure that the Share Exchange and the other transactions contemplated by this Agreement may be consummated as promptly as practicable on the terms contemplated by this Agreement and otherwise to minimize the effect of such statute or regulation on the Share Exchange, this Agreement and the transactions contemplated hereby.
V.9 Conduct of Business. Prior to the Closing Date, ALTB shall conduct its business in the normal course, and shall not sell, pledge, or assign any assets, without the prior written approval of the Shareholder, except in the regular course of business. Except as otherwise provided herein, ALTB shall not amend its Articles of Incorporation or Bylaws, declare dividends, redeem or sell stock or other securities, acquire or dispose of fixed assets, change employment terms, enter into any material or long-term contract, guarantee obligations of any third party, settle or discharge any material balance sheet receivable for less than its stated amount, pay more on any liability than its stated amount, or enter into any other transaction other than in the regular course of business.
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V.10 Filings. Until closing, ALTB will timely file all reports and other documents relating to the operation of ALTB required to be filed, which reports and other documents do not and will not contain any misstatement of a material fact, and do not and will not omit any material fact necessary to make the statements therein not misleading.
ARTICLE VI
COVENANTS OF THE SHAREHOLDER AND NHIL
Between the date of this Agreement and the Closing Date,
VI.1 Additional Information. The Shareholder shall provide to ALTB and its Representatives such financial, operating and other documents, data and information relating to NHIL, the NHIL business and the NHIL’s assets and the liabilities of the NHIL and its Subsidiaries, as ALTB or its Representatives may reasonably request. In addition, the Shareholder shall take all action necessary to enable ALTB and its Representatives to review and inspect the NHIL assets, the NHIL business and the liabilities of NHIL and discuss them with ALTB’s officers, employees, independent accountants and counsel. Notwithstanding any investigation that ALTB may conduct of NHIL, the NHIL business, the NHIL’s assets and the liabilities of the NHIL, ALTB may fully rely on the Shareholder’s warranties, covenants and indemnities set forth in this Agreement.
VI.2 No Solicitations. From and after the date of this Agreement until the Effective Time or termination of this Agreement pursuant to ARTICLE X, the Shareholder will not nor will she authorize or permit any of NHIL’s officers, directors, affiliates or employees or any investment banker, attorney or other advisor or representative retained by it, directly or indirectly, (i) solicit or initiate the making, submission or announcement of any other acquisition proposal, (ii) participate in any discussions or negotiations regarding, or furnish to any person any non-public information with respect to any other acquisition proposal, (iii) engage in discussions with any Person with respect to any other acquisition proposal, except as to the existence of these provisions, (iv) approve, endorse or recommend any other acquisition proposal or (v) enter into any letter of intent or similar document or any contract agreement or commitment contemplating or otherwise relating to any other acquisition proposal.
VI.3 Notification of Adverse Change. The Shareholder shall promptly notify ALTB of any material adverse Change in the condition (financial or otherwise) of NHIL.
VI.4 Consents and Approvals. As soon as practicable after execution of this Agreement, NHIL and the Shareholder shall use his commercially reasonable efforts to obtain any necessary consent, approval, authorization or order of, make any registration or filing with or give notice to, any Regulatory Authority or Person as is required to be obtained, made or given by NHIL or the Shareholder to consummate the transactions contemplated by this Agreement and the Collateral Documents.
VI.5 Notification of Certain Matters. The Shareholder shall promptly notify ALTB of any fact, event, circumstance or action known to them that is reasonably likely to cause NHIL to be unable to perform any of its covenants contained herein or any condition precedent if not to be satisfied, or that, if known on the date of this Agreement, would have been required to be disclosed to ALTB pursuant to this Agreement or the existence or occurrence of which would cause the Shareholder’ representations or warranties under this Agreement not to be correct and/or complete. The Shareholder shall give prompt written notice to ALTB of any adverse development causing a breach of any of the representations and warranties in ARTICLE IV.
ARTICLE VII
CONDITIONS PRECEDENT TO OBLIGATIONS OF NHIL AND THE SHAREHOLDER
All obligations of NHIL and the Shareholder under this Agreement shall be subject to the fulfillment at or prior to Closing of each of the following conditions, it being understood that the Parties may, in their sole discretion, to the extent permitted by applicable Legal Requirements, waive any or all of such conditions in whole or in part.
VII.1 Accuracy of Representations. All representations and warranties of ALTB contained in this Agreement, the Collateral Documents and any certificate delivered by any of ALTB at or prior to Closing shall be, if specifically qualified by materiality, true in all respects and, if not so qualified, shall be true in all material respects, in each case on and as of the Closing Date with the same effect as if made on and as of the Closing Date, except for representations and warranties expressly stated to be made as of the date of this Agreement or as of another date other than the Closing Date and except for Changes contemplated or permitted by this Agreement.
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VII.2 Covenants. ALTB shall, in all material respects, have performed and complied with each of the covenants, obligations and agreements contained in this Agreement and the Collateral Documents that are to be performed or complied with by them at or prior to Closing.
VII.3 Consents and Approvals. All consents, approvals, permits, authorizations and orders required to be obtained from, and all registrations, filings and notices required to be made with or given to, any Regulatory Authority or Person as provided herein.
VII.4 Delivery of Documents. ALTB shall have delivered, or caused to be delivered, to the Shareholder the following documents:
(i) Copies of ALTB articles of incorporation and bylaws and resolutions of the board of directors of ALTB authorizing the execution of this Agreement and the Collateral Documents to which it is a party and the consummation of the transactions contemplated hereby and thereby.
(ii) Such other documents and instruments as the Shareholder may reasonably request: (A) to evidence the accuracy of ALTB’s representations and warranties under this Agreement, the Collateral Documents and any documents, instruments or certificates required to be delivered hereunder; (B) to evidence the performance by ALTB of, or the compliance by ALTB with, any covenant, obligation, condition and agreement to be performed or complied with by ALTB under this Agreement and the Collateral Documents; or (C) to otherwise facilitate the consummation or performance of any of the transactions contemplated by this Agreement and the Collateral Documents.
VII.5 No Material Adverse Change. Since the date hereof, there shall have been no material adverse change in ALTB’s Assets, the ALTB Business or the financial condition or operations of ALTB, taken as a whole.
ARTICLE VIII
CONDITIONS PRECEDENT TO OBLIGATIONS OF ALTB
All obligations of ALTB under this Agreement shall be subject to the fulfillment at or prior to Closing of the following conditions, it being understood that ALTB may, in its sole discretion, to the extent permitted by applicable Legal Requirements, waive any or all of such conditions in whole or in part.
VIII.1 Accuracy of Representations. All representations and warranties of NHIL and the Shareholder contained in this Agreement and the Collateral Documents and any other document, instrument or certificate delivered by NHIL or the Shareholder at or prior to the Closing shall be, if specifically qualified by materiality, true and correct in all respects and, if not so qualified, shall be true and correct in all material respects, in each case on and as of the Closing Date with the same effect as if made on and as of the Closing Date, except for representations and warranties expressly stated to be made as of the date of this Agreement or as of another date other than the Closing Date and except for Changes contemplated or permitted by this Agreement.
VIII.2 Covenants. NHIL and the Shareholder shall, in all material respects, have performed and complied with each obligation, agreement, covenant and condition contained in this Agreement and the Collateral Documents and required by this Agreement and the Collateral Documents to be performed or complied with by the Shareholder at or prior to Closing.
VIII.3 Consents and Approvals. All consents, approvals, authorizations and orders required to be obtained from, and all registrations, filings and notices required to be made with or given to, any Regulatory Authority or Person as provided herein.
VIII.4 Delivery of Documents. NHIL and the Shareholder shall have executed and delivered, or caused to be executed and delivered, to ALTB the following documents:
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Documents and instruments as ALTB may reasonably request: (A) to evidence the accuracy of the representations and warranties of the Shareholder and NHIL under this Agreement and/or the Collateral Documents and any documents, instruments or certificates required to be delivered hereunder; (B) to evidence the performance by the Shareholder of, or the compliance by the Shareholder with, any covenant, obligation, condition and agreement to be performed or complied with by the Shareholder under this Agreement and the Collateral Documents; or (C) to otherwise facilitate the consummation or performance of any of the transactions contemplated by this Agreement and the Collateral Documents.
VIII.5 No Material Adverse Change. There shall have been no material adverse change in the business, financial condition or operations of NHIL and its Subsidiaries taken as a whole.
VIII.6 No Litigation. No action, suit or proceeding shall be pending or threatened by or before any Regulatory Authority and no Legal Requirement shall have been enacted, promulgated or issued or deemed applicable to any of the transactions contemplated by this Agreement and the Collateral Documents that would: (i) prevent consummation of any of the transactions contemplated by this Agreement and the Collateral Documents; (ii) cause any of the transactions contemplated by this Agreement and the Collateral Documents to be rescinded following consummation; or (iii) have a Material Adverse Effect on NHIL.
ARTICLE IX
INDEMNIFICATION
IX.1 Indemnification by ALTB. ALTB shall indemnify, defend and hold harmless (i) the Shareholder, (ii) any the Shareholder’s assigns and successors in interest to ALTB Shares, and (iii) each of the Shareholder, members, partners, directors, officers, managers, employees, agents, attorneys and representatives, from and against any and all Losses which may be incurred or suffered by any such party and which may arise out of or result from any breach of any material representation, warranty, covenant or agreement of ALTB contained in this Agreement. All claims to be assorted hereunder must be made for the first anniversary of the Closing.
IX.2 Indemnification by the Shareholder. NHIL and the Shareholder shall indemnify, defend and hold harmless ALTB from and against any and all Losses which may be incurred or suffered by any such party hereto and which may arise out of or result from any breach of any material representation, warranty, covenant or agreement of the Shareholder contained in this Agreement. All claims to be assorted hereunder must be made for the first anniversary of the Closing.
IX.3 Notice to Indemnifying Party. If any party (the “Indemnified Party”) receives notice of any claim or other commencement of any action or proceeding with respect to which any other party (or parties) (the “Indemnifying Party”) is obligated to provide indemnification pursuant to Sections 9.1 or 9.2, the Indemnified Party shall promptly give the Indemnifying Party written notice thereof, which notice shall specify in reasonable detail, if known, the amount or an estimate of the amount of the liability arising here from and the basis of the claim. Such notice shall be a condition precedent to any liability of the Indemnifying Party for indemnification hereunder, but the failure of the Indemnified Party to give prompt notice of a claim shall not adversely affect the Indemnified Party’s right to indemnification hereunder unless the defense of that claim is materially prejudiced by such failure. The Indemnified Party shall not settle or compromise any claim by a third party for which it is entitled to indemnification hereunder without the prior written consent of the Indemnifying Party (which shall not be unreasonably withheld or delayed) unless suit shall have been instituted against it and the Indemnifying Party shall not have taken control of such suit after notification thereof as provided in Section 9.4.
IX.4 Defense by Indemnifying Party. In connection with any claim giving rise to indemnity hereunder resulting from or arising out of any claim or legal proceeding by a Person who is not a party to this Agreement, the Indemnifying Party at its sole cost and expense may, upon written notice to the Indemnified Party, assume the defense of any such claim or legal proceeding (i) if it acknowledges to the Indemnified Party in writing its obligations to indemnify the Indemnified Party with respect to all elements of such claim (subject to any limitations on such liability contained in this Agreement) and (ii) if it provides assurances, reasonably satisfactory to the Indemnified Party, that it will be financially able to satisfy such claims in full if the same are decided adversely. If the Indemnifying Party assumes the defense of any such claim or legal proceeding, it may use counsel of its choice to prosecute such defense, subject to the approval of such counsel by the Indemnified Party, which approval shall not be unreasonably withheld or delayed. The Indemnified Party shall be entitled to participate in (but not control) the defense of any such action, with its counsel and at its own expense; provided, however, that if the Indemnified Party, in its sole discretion, determines that there exists a conflict of interest between the Indemnifying Party (or any constituent party thereof) and the Indemnified Party, the Indemnified Party (or any constituent party thereof) shall have the right to engage separate counsel, the reasonable costs and expenses of which shall be paid by the Indemnified Party. If the Indemnifying Party assumes the defense of any such claim or legal proceeding, the Indemnifying Party shall take all steps necessary to pursue the resolution thereof in a prompt and diligent manner. The Indemnifying Party shall be entitled to consent to a settlement of, or the stipulation of any judgment arising from, any such claim or legal proceeding, with the consent of the Indemnified Party, which consent shall not be unreasonably withheld or delayed; provided, however, that no such consent shall be required from the Indemnified Party if (i) the Indemnifying Party pays or causes to be paid all Losses arising out of such settlement or judgment concurrently with the effectiveness thereof (as well as all other Losses theretofore incurred by the Indemnified Party which then remain unpaid or unreimbursed), (ii) in the case of a settlement, the settlement is conditioned upon a complete release by the claimant of the Indemnified Party and (iii) such settlement or judgment does not require the encumbrance of any asset of the Indemnified Party or impose any restriction upon its conduct of business.
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ARTICLE X
TERMINATION
X.1 Termination. This Agreement may be terminated, and the transactions contemplated hereby may be abandoned, at any time prior to it being fully executed, or thereafter:
(a) by mutual written agreement of the Shareholder and ALTB hereto duly authorized by action taken by or on behalf of the respective Boards of Directors; or
(b) by any of ALTB or the Shareholder upon notification to the non-terminating party by the terminating party:
(i) if the terminating party is not in material breach of its obligations under this Agreement and there has been a material breach of any representation, warranty, covenant or agreement on the part of the non-terminating party set forth in this Agreement such that the conditions will not be satisfied; provided, however, that if such breach is curable by the non-terminating party and such cure is reasonably likely to be completed prior to the Closing Date; or
(ii) if any court of competent jurisdiction or other competent Governmental or Regulatory Authority shall have issued an order making illegal or otherwise permanently restricting, preventing or otherwise prohibiting the Share Exchange and such order shall have become final.
(c) Effect of Termination. If this Agreement is validly terminated by either ALTB or the Shareholder pursuant to Section 10.1, this Agreement will forthwith become null and void and there will be no liability or obligation on the part of the parties hereto, except that nothing contained herein shall relieve any party hereto from liability for willful breach of its representations, warranties, covenants or agreements contained in this Agreement.
ARTICLE XI
MISCELLANEOUS
XI.1 Parties Obligated and Benefited. This Agreement shall be binding upon the Parties and their respective successors by operation of law and shall inure solely to the benefit of the Parties and their respective successors by operation of law, and no other Person shall be entitled to any of the benefits conferred by this Agreement. Without the prior written consent of the other Party, no Party may assign this Agreement or the Collateral Documents or any of its rights or interests or delegate any of its duties under this Agreement or the Collateral Documents.
XI.2 Publicity. All press release shall be joint press releases between ALTB and NHIL and each shall consult with each other prior to issuing any press releases or otherwise making public announcements with respect to the Share Exchange and the other transactions contemplated by this Agreement and prior to making any filings with any third party and/or any Regulatory Authorities (including any national securities inter dealer quotation service) with respect thereto, except as may be required by law or by obligations pursuant to any listing agreement with or rules of any national securities inter dealer quotation service.
XI.3 Notices. Any notices and other communications required or permitted hereunder shall be in writing and shall be effective upon delivery by hand or upon receipt if sent by certified or registered mail (postage prepaid and return receipt requested) or by a nationally recognized overnight courier service (appropriately marked for overnight delivery) or upon transmission if sent by telex or facsimile (with request for immediate confirmation of receipt in a manner customary for communications of such respective type and with physical delivery of the communication being made by one or the other means specified in this Section as promptly as practicable thereafter). Notices shall be addressed as follows:
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|
If to the Shareholder or NHIL: |
National Holdings Investment Ltd OMC Chambers, Wickhams Cay 1 Road Town, Tortola, British Virgin Islands | ||
| If to ALTB: |
ALPINE AUTO BROKERS INC. 1185 Avenue of the Americas 3rd Floor New York, NY 10036 |
XI.4 Addresses. Any Party may change the address to which notices are required to be sent by giving notice of such change in the manner provided in this Section.
XI.5 Attorneys’ Fees. In the event of any action or suit based upon or arising out of any alleged breach by any Party of any representation, warranty, covenant or agreement contained in this Agreement or the Collateral Documents, the prevailing Party shall be entitled to recover reasonable attorneys’ fees and other costs of such action or suit from the other Party.
XI.6 Headings. The Article and Section headings of this Agreement are for convenience only and shall not constitute a part of this Agreement or in any way affect the meaning or interpretation thereof.
XI.7 Choice of Law. This Agreement and the rights of the Parties under it shall be governed by and construed in all respects in accordance with the laws of the State of Nevada, without giving effect to any choice of law provision or rule.
XI.8 Rights Cumulative. All rights and remedies of each of the Parties under this Agreement shall be cumulative, and the exercise of one or more rights or remedies shall not preclude the exercise of any other right or remedy available under this Agreement or applicable law.
XI.9 Further Actions. The Parties shall execute and deliver to each other, from time to time at or after Closing, for no additional consideration and at no additional cost to the requesting party, such further assignments, certificates, instruments, records, or other documents, assurances or things as may be reasonably necessary to give full effect to this Agreement and to allow each party fully to enjoy and exercise the rights accorded and acquired by it under this Agreement.
XI.10 Time of the Essence. Time is of the essence under this Agreement. If the last day permitted for the giving of any notice or the performance of any act required or permitted under this Agreement falls on a day which is not a Business Day, the time for the giving of such notice or the performance of such act shall be extended to the next succeeding Business Day.
XI.11 Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
XI.12 Entire Agreement. This Agreement (including the Exhibits, disclosures made as to ALTB, the NHIL financial statements, the ALTB financial statements, and any other documents, instruments and certificates referred to herein, which are incorporated in and constitute a part of this Agreement) contains the entire agreement of the Parties.
XI.13 Survival of Representations and Covenants. Notwithstanding any right of the Shareholder to fully investigate the affairs of ALTB and notwithstanding any knowledge of facts determined or determinable by the Shareholder pursuant to such investigation or right of investigation, the Shareholder shall have the right to rely fully upon the representations, warranties, covenants and agreements of ALTB contained in this Agreement. Each representation, warranty, covenant and agreement of ALTB contained herein shall survive the execution and delivery of this Agreement and the Closing and shall thereafter terminate and expire on the first anniversary of the Closing Date unless, prior to such date, the Shareholder have delivered to ALTB a written notice of a claim with respect to such representation, warranty, covenant or agreement.
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IN WITNESS WHEREOF, the Parties hereto have duly executed this Agreement as of the day and year first above written.
| Dated: February 20, 2023 |
|
National Holdings Investment Ltd |
||
| By: | ||
| Name: | Jiayue Yang | |
| Title: | Director | |
| Jiayue Yang |
|
Alpine Auto Brokers Inc. |
||
| By: | ||
| Name: | Zonghan Wu | |
| Title: | Director | |
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Exhibit 23.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We hereby consent to the incorporation in this Registration Statement on Form S-1 of our reviewed financial statements of Alphine Auto Brokers Inc. as of March 31, 2023 which is unaudited, and to all references to our firm included in this Registration Statement.
Shandong Haoxin CPA Co., Ltd.
Certified Public Accountants
Weifang, People’s Republic of China
July 5, 2023
Exhibit 23.2
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We hereby consent to the incorporation in this Registration Statement on Form S-1 of our report dated February 13, 2023 relating to the financial statements of Alpine Auto Brokers Inc. as of December 31, 2022 and 2021 and to all references to our firm included in this Registration Statement.
Certified Public Accountants
Lakewood, CO
July 5, 2023
Exhibit 99.1
Subscription Agreement
Alpine Auto Brokers Inc.
| 1. | Investment: |
The undersigned (“Buyer”) subscribes for Shares of Common Stock of Alpine Auto Brokers Inc. (the “Company”) at $0.01 per share.
Number of Shares Purchased = __________________
Total subscription price ($0.01 x Shares purchased): = $ ___________.
| PLEASE MAKE CHECK PAYABLE TO: | _______________________ |
| 2. | Investor information: |
| Name (type or print) | ||||
| Mailing Address | ||||
| Street | City/State | Zip | ||
| SSN/EIN/Taxpayer I.D/Passport Number. | E-Mail address | ||||
| Joint Name (type or print) | |||||
| SSN/EIN/Taxpayer I.D./Passport number | E-Mail address |
| Mailing Address (if different from above): | ||||
| Street | City/State | Zip | ||
| Business Phone: | ||
| Home Phone: |
| 3. | Type of ownership: (You must check one box) |
| ☐ | Individual | ☐ | Custodian for | ||
| ☐ | Tenants in Common | ☐ | Uniform Gifts to Minors Act of the State of: __________________ | ||
| ☐ | Joint Tenants with rights of Survivorship | ☐ | Corporation (Inc., LLC, LP) – Please list all officers, directors, partners, managers, etc. | ||
| ☐ | Partnership (Limited Partnerships use “Corporation”) | ☐ | Other (please explain) | ||
| ☐ | Trust | ||||
| ☐ | Community Property |
| 4. | Further Representations, Warrants and Covenants. |
Buyer hereby represents warrants, covenants and agrees as follows:
| (a) | Buyer is at least eighteen (18) years of age with an address as set forth in this Subscription Agreement. | |
| (b) | Except as set forth in the Prospectus and the exhibits thereto, no representations or warranties, oral or otherwise, have been made to Buyer by the Company or any other person, whether or not associated with the Company or this offering. In entering into this transaction, Buyer is not relying upon any information, other than that contained in the Prospectus and the exhibits thereto and the results of any independent investigation conducted by Buyer at Buyer’s sole discretion and judgment. | |
| (c) | Buyer understands that his or her investment in the Shares is speculative and involves a high degree of risk, and is not recommended for any person who cannot afford a total loss of the investment. Buyer is able to bear the economic risks of an investment in the offering and at the present time can afford a complete loss of such investment. | |
| (d) | Buyer is under no legal disability nor is Buyer subject to any order which would prevent or interfere with Buyer’s execution, delivery and performance of this Subscription Agreement or his or her purchase of the Shares. The Shares are being purchased solely for Buyer’s own account and not for the account of others and for investment purposes only, and are not being purchased with a view to or for the transfer, assignment, resale or distribution thereof, in whole or part. Buyer has no present plans to enter into any contract, undertaking, agreement or arrangement with respect to the transfer, assignment, resale or distribution of any of the Shares. |
| (e) | Buyer has (i) adequate means of providing for his or her current financial needs and possible personal contingencies, and no present need for liquidity of the investment in the Shares, and (ii) a liquid net worth (that is, net worth exclusive of a primary residence, the furniture and furnishings thereof, and automobiles) which is sufficient to enable Buyer to hold the Shares indefinitely. | |
| (f) | If the Buyer is acting without a Purchaser Representative, Buyer has such knowledge and experience in financial and business matters that Buyer is fully capable of evaluating the risks and merits of an investment in the offering. | |
| (g) | Buyer has been furnished with the Prospectus. | |
| (h) | Buyer understands that Buyer shall be required to bear all personal expenses incurred in connection with his or her purchase of the Shares, including without limitation, any fees which may be payable to any accountants, attorneys or any other persons consulted by Buyer in connection with his or her investment in the offering. |
| 5. | Indemnification |
Buyer acknowledges an understanding of the meaning of the legal consequences of Buyer’s representations and warranties contained in this Subscription Agreement and the effect of his or her signature and execution of this Agreement, and Buyer hereby agrees to indemnify and hold the Company and each of its officers and/or directors, representatives, agents or employees, harmless from and against any and all losses, damages, expenses or liabilities due to, or arising out of, a breach of any representation, warranty or agreement of or by Buyer contained in this Subscription Agreement.
| 6. | Acceptance of Subscription. |
It is understood that this subscription is not binding upon the Company until accepted by the Company, and that the Company has the right to accept or reject this subscription, in whole or in part, in its sole and complete discretion. If this subscription is rejected in whole, the Company shall return to Buyer, without interest, the Payment tendered by Buyer, in which case the Company and Buyer shall have no further obligation to each other hereunder. In the event of a partial rejection of this subscription, Buyer’s Payment will be returned to Buyer, without interest, whereupon Buyer agrees to deliver a new payment in the amount of the purchase price for the number of Shares to be purchased hereunder following a partial rejection of this subscription.
| 7. | Governing Law. |
This Subscription Agreement shall be governed and construed in all respects in accordance with the laws of the State of Nevada without giving effect to any conflict of laws or choice of law rules.
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IN WITNESS WHEREOF, this Subscription Agreement has been executed and delivered by the Buyer and by the Company on the respective dates set forth below.
| Signature of Buyer | |
| Printed Name | |
| Date |
Deliver completed subscription agreements and wires as follows:
[WIRE INSTRUCTIONS]
To be filled out by the Company
Investor Subscription accepted as of this __ day of __________, 2023.
| By: | ||
| Name: | ||
| Its: |
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