Chineseworldnet Com Inc 20-F, filed Apr 30, 2024
Chineseworldnet Com Inc (CWNOF)
About this 20-F
Chineseworldnet Com Inc filed this 20-F on April 30, 2024, covering the fiscal year ended December 31, 2023.
Headline figures
Fiscal year ended December 31, 2023, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Net loss
- $61.99K
- compared with a net loss of $360K a year earlier
- Diluted EPS
- -$0.01
- compared with -$0.03 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CHINESEWORLDNET.COM INC.
OR
For the fiscal year ended
OR
For the transition period from to
OR
Date of event requiring this shell company report
Commission file number
(Exact name of Registrant as specified in its charter)
(Jurisdiction of incorporation or organization)
(Address of principal executive offices)
President, Chief Executive Officer, Chief Financial Officer, Secretary and Treasurer
Tel: +1 (
(Name, Telephone, Email and/or Facsimile number and Address of Company Contact Person)
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Securities registered or to be registered pursuant to Section 12(b) of the Act. | ||
Title of each class | Trading Symbols | Name of each exchange on which registered |
Markets Group | ||
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Securities registered or to be registered pursuant to Section 12(g) of the Act. | ||
Common Shares, Par Value of US$0.001 Per Share | ||
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(Title of Class) | ||
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Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act. | ||
Not Applicable | ||
(Title of Class) | ||
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Securities registered or to be registered pursuant to Section 12(g) of the Act. | ||
Common Shares, Par Value of US$0.001 Per Share | ||
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(Title of Class) |
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Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act. |
Not Applicable |
(Title of Class) |
Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report:
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
☐ Yes | ☒ |
If this report is an annual or transaction report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.
☐ Yes | ☒ |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
☒ | ☐ No |
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such fi les).
☒ | ☐ No |
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See definition of “large accelerated filer”, “accelerated filer,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
☐ Large accelerated filer |
| ☐ Accelerated filer |
| ☒ |
If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, 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. ☐
† The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:
☒ |
| ☐ International Financial Reporting Standards as issued by the International Accounting Standards Board |
| ☐ Other |
If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow.
☐ Item 17 | ☐ Item 18 |
If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
☐ No |
TABLE OF CONTENTS
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MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS | 17 | |
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PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILAITED PURCHASERS | 19 | |
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ii
INTRODUCTION AND USE OF CERTAIN TERMS
ChineseWorldNet.Com Inc. is a corporation incorporated under the Company Law (1998 revision) of the Cayman Islands on January 12, 2000. Except as the context otherwise requires, all references in this annual report (the “Report”) on Form 20-F to “we,” “us,” “our,” “CWN,” and the “Company” are to ChineseWorldNet.Com Inc. and, where applicable, our former subsidiaries, including NAI Interactive Ltd. (“NAI”), a company incorporated under the laws of British Columbia, ChineseWorldNet.com (Hong Kong) Ltd. (“CWN HK”), a company incorporated under the laws of Hong Kong, 85% owned interest in ChineseWorldNet.com (Shanghai) Ltd. (“CWN China”), a company incorporated under the laws of People’s Republic of China, and 85% owned interest in Weihai Consulting Investment Ltd. (“Weihai”), a company incorporated under the laws of People’s Republic of China.
Our financial statements are prepared in accordance with the United States generally accepted accounting principles (“US GAAP”) and are presented in United States dollars (“US dollars”). All monetary amounts contained in this Report are in US dollars unless otherwise indicated. References to “Fiscal 2023” are to our fiscal year ended December 31, 2023, and other fiscal years of the Company are referred to in a corresponding manner. References to “Common Shares” are to our Common Shares, par value of US$0.001 per share.
Our registered office and principal executive office is located at Appleby, Clifton House, 75 Fort Street, P.O. Box 190, Grand Cayman, Cayman Islands KY1-1104.
CAUTIONARY NOTICE REGARDING FORWARD-LOOKING STATEMENTS
This Report contains forward-looking statements that reflect the management’s current expectations and assumptions with respect to the general economic and business conditions, our operation and business strategies, products, services and competition, future financial position and results, and various other factors, both referenced and not referenced in this Report. All statements made in this Report other than statements of historical fact, including, among others, statements that address operating performance, events, circumstances, or developments that the management expects or anticipates will or may occur in the future, statements related to revenue and volume growth, profitability, new sales and marketing channels, adequacy of and ability to raise additional funding for operations, and statements expressing general optimism about future operating results and non-historical information, are forward-looking statements. In particular, the words “believe,” “expect,” “intend,” “anticipate,” “estimate,” “plan,” “target,” “may,” variations of such words, and similar expressions identify forward-looking statements, but are not the exclusive means of identifying such statements and their absence does not mean that statements are not forward-looking.
These forward-looking statements are subject to risks and uncertainties that could cause our actual financial position and results to differ materially from those expressed in, anticipated or implied by these forward-looking statements for many reasons, including the risks and statements described in more detail under “ Item 3. Key Information – D. Risk Factors” and “Item 5.Operating and Financial Review and Prospects” included elsewhere in this Report. We do not undertake any obligation to revise or update these forward-looking statements to reflect new information, future events or circumstances unless required by applicable legislation or regulation. These forward-looking statements contained in this Report are expressly qualified by this cautionary statement.
PART I
ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISORS
This Report on Form 20-F is being filed as an annual report under the Securities Exchange Act of 1934 (the “Exchange Act”) and, as such, there is no requirement to provide any information under this item.
ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE
This Report on Form 20-F is being filed as an annual report under the Exchange Act and, as such, there is no requirement to provide any information under this item.
ITEM 3. KEY INFORMATION
| A. | Selected Financial Data |
The following table sets forth selected financial information from our financial statements prepared in accordance with US GAAP for our three most recently completed fiscal periods consisting of the years ended December 31, 2023, 2022 and 2021. The information have been extracted from our audited financial statements and the related notes included herein and should be read in conjunction with such in “Item 5 – Operating and Financial Review and Prospects”.
| | Year Ended December 31 | |||||||
|
| 2023 |
| 2022 |
| 2021 | |||
Statements of Operations: |
| |
|
| |
|
| |
|
Net loss for the year |
| | (61,991) |
| | (359,999) |
| | (40,955) |
Income (loss) per share – basic |
| | (0.01) |
| | (0.03) |
| | 0.00 |
Income (loss) per share – diluted |
| | (0.01) |
| | (0.03) |
| | 0.00 |
Weighted average common shares outstanding – basic |
| | 10,950,000 |
| | 10,950,000 |
| | 10,950,000 |
Weighted average common shares outstanding – diluted |
| | 10,950,000 |
| | 10,950,000 |
| | 10,950,000 |
| | | | | | | | | |
Balance Sheets: |
| | |
| | |
| | |
Total assets | | $ | 122,018 | | $ | 227,020 | | $ | 526,352 |
Total current liabilities | |
| 242,109 | |
| 285,120 | |
| 224,453 |
Total stockholders’ equity | |
| (120,091) | |
| (58,100) | |
| 301,899 |
No dividends have been declared or paid in Fiscal 2023, Fiscal 2022, and Fiscal 2021.
| B. | Capitalization and Indebtedness |
This Report on Form 20-F is being filed as an annual report under the Exchange Act and, as such, there is no requirement to provide any information under this item.
| C. | Reasons for the Offer and Use of Proceeds |
This Report on Form 20-F is being filed as an annual report under the Exchange Act and, as such, there is no requirement to provide any information under this item.
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| D. | Risk Factors |
The following discussion in this Report on Form 20-F contains forward-looking statements regarding our business, prospects and results of operations that involve risks and uncertainties. Our actual results may differ materially from the results that may be anticipated by such forward-looking statements and discussed elsewhere in this Report. Factors that could cause or contribute to such differences include, but are not limited to, those discussed below, as well as those discussed under the heading “Item 4 – Information on the Company” and “Item 5 – Operating and Financial Review and Prospects” and those discussed elsewhere in this Report. In evaluating our business, prospects and results of operations, readers should carefully consider the following factors in addition to other information presented in this Report and in our other reports filed with the Securities and Exchange Commission that attempt to advise interested parties of the risks and factors that may affect our business, prospects and results of operations. See “Cautionary Notice Regarding Forward Looking Statements” above.
Trading of our common shares may be restricted by the Securities and Exchange Commission’s penny stock regulations which may limit a shareholder’s ability to buy and sell our common shares
The Securities and Exchange Commission has adopted Rule 15g-9 which generally defines “penny stock” to be any equity security that has a market price (as defined) of less than $5.00 per share or an exercise price of less than $5.00 per share, subject to certain exceptions. Our common shares are covered by the penny stock rules, which impose additional sales practice requirements on broker-dealers who sell to persons other than established customers and “accredited investors”. The term “accredited investor” refers generally to institutions with assets in excess of $5,000,000 or individuals with a net worth in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly with their spouse. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document in a form prepared by the Securities and Exchange Commission which provides information about penny stocks and the nature and level of risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction 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 effecting 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 in a penny stock not otherwise exempt from these rules, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written agreement to the transaction. These disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for the stock that is subject to these penny stock rules. Consequently, these penny stock rules may affect the ability of broker-dealers to trade our securities. We believe that the penny stock rules discourage investor interest in and limit the marketability of our common shares.
Ineligibility for Public Broker-Dealer Quotations on the Pink Market due to Shell Status
The Company is currently a shell company, which means it has no or nominal operations and either no or nominal assets or assets consisting solely of cash and cash equivalents. As a result, the Company is subject to the risks associated with shell companies, including limited or no financial resources, limited or no business prospects, and limited or no operating history. The Company’s current status as a shell company makes it ineligible for public broker-dealer quotations on the Pink Market after March 28, 2024 unless it becomes an operating company or satisfies the information review requirement and files a Form 211 with FINRA.
Our shareholders may face difficulties in protecting their interests because we are incorporated under Cayman Islands law.
Our corporate affairs are governed by our memorandum and articles of association, by the Company Law (1998 Revision) and the common law of the Cayman Islands. The rights of shareholders to take action against our directors, actions by minority shareholders and the fiduciary responsibilities of our directors under Cayman Islands law are to a large extent governed by the common law of the Cayman Islands.
Under the common law of the Cayman Islands, the fiduciary relationship of a director is to the Company and a director, therefore, does not usually owe a fiduciary duty to individual shareholders. As a result, it may be difficult for a shareholder to take action against the directors for breach of fiduciary duty.
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The common law in the Cayman Islands is derived in part from comparatively limited judicial precedent in the Cayman Islands and from English common law, the decisions of whose courts are of persuasive authority but are not binding on a court in the Cayman Islands. Cayman Islands law in this area may conflict with jurisdictions in the United States and/or other jurisdictions. As a result, our public shareholders may face more difficulties in protecting their interests in the face of actions against the management, directors or our controlling shareholders than would shareholders of a corporation incorporated in a jurisdiction in the United States.
There is uncertainty as to our shareholders’ ability to enforce civil liabilities in the Cayman Islands.
We are a Cayman Islands company and have no assets located in the United States. All of our directors and officers are nationals and/or residents of countries other than the United States. All or a substantial portion of the assets of these persons are located outside the United States. As a result, it may be difficult to effect service of process within the United States upon these persons. In addition, there is uncertainty as to whether the courts of the Cayman Islands and other jurisdictions would recognize or enforce judgments of United States courts obtained against us or such persons predicated upon the civil liability provisions of the securities laws of the United States or any state thereof, or be competent to hear original actions brought in the Cayman Islands or other jurisdictions against us or such persons predicated upon the securities laws of the United States or any of our state.
Cybersecurity Incident and Risk Management Disclosure
As a shell company with no active operations, ChineseWorldNet.com Inc. does not maintain a robust cybersecurity risk management framework. Our current corporate structure and lack of operational activities significantly reduce the potential cybersecurity risks typically associated with active businesses. However, we remain vigilant and aware of the importance of cybersecurity and will prioritize the implementation of appropriate risk management strategies should our operational status change.
Incident Disclosure: In the event of a material cybersecurity incident, we will promptly disclose the nature, scope, and impact of the incident, as well as the actions taken to mitigate and resolve the issue. Such disclosures will be made in accordance with SEC requirements and will be designed to inform our shareholders and the public about the incident’s material aspects without compromising our cybersecurity measures or ongoing investigations.
Governance: Our Board of Directors oversees our cybersecurity risk management strategy, ensuring that it aligns with our business objectives and regulatory requirements. The Board receives regular updates on our cybersecurity posture and any significant threats or incidents that may arise.
Commitment to Best Practices: Chineseworldnet.com Inc. is dedicated to maintaining the highest standards of cybersecurity. We continually evaluate and update our practices to address the evolving landscape of cyber threats and to safeguard the interests of our stakeholders.
ITEM 4. INFORMATION ON THE COMPANY
| A. | History and Development of the Company |
ChineseWorldNet.Com Inc. was incorporated on January 12, 2000 under the Company Law (1998 revision) of the Cayman Islands. The address of our registered and principle executive office is that of our agent, Appleby, being: Clifton House, 75 Fort Street, P.O. Box 190, Grand Cayman, Cayman Islands KY1-1104, telephone number is (345) 949-4900.
In August 2009, we incorporated CWN Capital Inc. (“CWN Capital”) under the BVI Business Companies Act, with a registered address at Morgan & Morgan Building, Pasea Estate, Road Town, Tortola, British Virgin Islands, focusing on capital markets businesses. CWN Capital provided a vehicle for expanding the scope of our businesses into the capital markets. On October 1, 2010, CWN Capital completed a non-brokered private placement and issued 25,000 of its common shares at a subscription price of $0.01 per share to Silver Lake Investment Partners, Ltd., resulted in CWN diluted down to a 50% ownership in CWN Capital. On December 18, 2010, CWN Capital completed another non-brokered private placement and issued 55,000 of its common shares at a subscription price of $1.00 per share to Goldpac Investments Partners Ltd., resulted in CWN a diluted down to 23.8% ownership in CWN Capital. As a result, we deconsolidated CWN Capital on December 18, 2010 and recorded our interest in CWN Capital as an equity interest. Silver Lake Investment Partners, Ltd. and Goldpac Investments Partners Ltd. were companies controlled by two directors of our company.
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On September 8, 2009, CWN China funded and incorporated Weihai as a local entity for the purpose of carrying out certain business operations in the Greater China. Weihai has the same address as CWN China. Through CWN China, we had a 85% controlling interest in Weihai.
On February 1, 2008, CWN HK and Shanghai Compass Venture Capital Investment Company Limited (“Shanghai Compass”) signed an Agreement to Establish CWN China Co., Ltd., a Chinese-Foreign Joint Venture Limited Liability Company. In April 2008, the two parties incorporated CWN China with CWN HK having a 70% controlling interest in CWN China. In March 2011, we completed substantially all of the regulatory procedures and processes with Shanghai Compass, the other shareholder of CWN China and invested further 5,000,000 Renminbi to CWN China. CWN HK is required to contribute the additional registered capital of 5,000,000 Renminbi by paying cash within two years from August 19, 2011. During the year ended December 31, 2011, CWN HK paid cash of $400,000 which result of our financial interest increased from 70% to 80%. During the year ended December 31, 2012, CWN HK further paid cash of $200,000 which resulted in our financial interest increasing from 80% to 83.67%. During the fiscal year 2013, CWN HK further invested an amount of $187,200 to CWN China and the Company’s effective ownership of equity interest increased from 83.67% to 85% in CWN China. During Fiscal 2021, Fiscal 2022 and Fiscal 2023, we made no purchases of property and equipment. There are currently no major capital projects or divestitures in progress.
SALE OF SUBSIDIARIES
On April 28, 2014, the Company completed the sale of all shares that the Company owned in the capital of its subsidiaries to Ningbo International Limited (the “Purchaser”) in exchange for a cash payment of CDN$263,969 and a non-interest bearing promissory note in the principal amount of CDN$831,031 with a maturity date of one year with the option to extend upon mutual agreement (the “Transaction”), pursuant to a share purchase agreement dated March 19, 2014 (the “Share Purchase Agreement”). The Transaction amounted to the sale of substantially all of the assets of the Company.
Pursuant to the Share Purchase Agreement, the Company sold its right, title and interest in and to all shares that the Company owned in the capital of its subsidiaries as follows:
| 1. | 100 shares in the capital of NAI Interactive Ltd. (“NAI”), which shares represent all of the issued and outstanding shares in the capital of NAI; |
| 2. | 990 shares in the capital of ChineseWorldNet.com (Hong Kong) Ltd. (“CWN HK”) and 10 shares in the capital of CWN HK owned by Chi Cheong Liu, a director and major shareholder of the Company, on the Company’s behalf, which shares, together, represent all of the issued and outstanding shares in the capital of CWN HK; and |
| 3. | 25,000 shares in the capital of CWN Capital Inc. (“CWN Capital”), which shares represent 23.8% of the issued and outstanding shares in the capital of CWN Capital. |
The shareholders of the Company approved the Share Purchase Agreement at the extraordinary general meeting of the shareholders of the Company held on April 18, 2014.
CHANGE OF DIRECTORS AND OFFICERS
No change of directors and officers during the years ended December 31, 2023, 2022 and 2021.
| B. | Business Overview |
Prior to April 28, 2014, we had four principal businesses operated by NAI, CWN HK and CWN China: (1) the financial web portal (“Portal”) business, conducted under the ChineseWorldNet.com brand via the “www.chineseworldnet.com” website; (2) the investor relations and public relations (“IR/PR”) business, conducted under the NAI500 brand via a number of media channels including the “www.nai500.com” and “en.nai500.com” websites, as well as certain other promotional services; (3) the North America and Greater China cross-border business partnering conferences (“Conference”) business, conducted via the brand of Global Chinese Financial Forum and its “www.gcff.ca” website; and (4) the financial content and information distribution business.
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As of April 28, 2014, we had no principal businesses. The Company is currently seeking opportunities to acquire or invest in other business opportunities.
CORPORATE STRATEGY AND STRATEGIC BUSINESS PLAN
As at December 31, 2023, ChineseWorldNet.com Inc. does not have any operating businesses. The Company is now looking for opportunities to acquire or invest in other business opportunities.
In March of 2023, the Company signed a letter of intent with an Asia-based high-tech investment group for the potential acquisition of a project. At the time of this report, the letter of intent has been terminated.
| C. | Organizational Structure |
ChineseWorldNet.Com Inc. (“CWN”) was incorporated under the Company Law (1998 revision) of the Cayman Islands on January 12, 2000. Our registered and principal executive office is located at Appleby, Clifton House, 75 Fort Street, P.O. Box 190, Grand Cayman, Cayman Islands KY1-1104.
As a result of the sale of its subsidiaries to Ningbo International Limited on April 28, 2014, CWN has no subsidiaries.
| D. | Property, Plants and Equipment |
We do not own any real property.
ITEM 4A. UNRESOLVED STAFF COMMENTS
Not applicable.
ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS
This discussion and analysis is of our operating results and our financial position for the fiscal years ended December 31, 2023 and 2022 should be read in conjunction with the financial statements and the related notes thereto provided at “Item 18 – Financial Statements”.
| A. | Results of Operations |
The Company is inactive since April 28, 2014. Prior to the sale of our subsidiaries on April 28, 2014, we generated revenue from our Portal, IR/PR and Conference businesses. Our annual and quarterly operating results were primarily affected by the level of our sales and costs of operations over these three businesses.
YEARS ENDED DECEMBER 31, 2023, 2022 and 2021
For the year ended December 31, 2023 (“Fiscal 2023”), we recorded a net loss of $61,991 attributable to common stockholders ($0.01 loss) per common share, compared to a net loss of $359,999 for the year ended December 31, 2022 (“Fiscal 2022”) attributable to common stockholders ($0.03 loss per common share). The decrease of net loss of $298,008 was mainly due to loss on note receivable of $nil (2022: $291,727) and foreign exchange gain of $1,881 (2022: loss of $6,819).
For the year ended December 31, 2022 (“Fiscal 2022”), we recorded a net loss of $359,999 attributable to common stockholders ($0.03 loss) per common share, compared to a net loss of $40,955 for the year ended December 31, 2021 (“Fiscal 2021”) attributable to common stockholders ($0.00 loss per common share). The increase of net loss of $319,044 was mainly due to loss on note receivable of $291,727 (2021: $nil), foreign exchange loss of $6,819 (2021: gain of $1,004) and interest income of $nil (2021: $19,646).
Revenues
There were no revenues recorded in Fiscal 2023 and Fiscal 2022.
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Expenses
For Fiscal 2023, we recorded operating expenses $63,872 compared to operating expenses of $61,453 for Fiscal 2022.
Professional fees
Professional fees were $21,285 in Fiscal 2023, compared to $19,292 in Fiscal 2022.
Directors’ Remuneration
Directors’ remuneration expenses were $36,000 in Fiscal 2023, compared to $36,000 in Fiscal 2022.
Office and Miscellaneous
Office and miscellaneous expenses were $6,587 in Fiscal 2023, compared to $6,161 in Fiscal 2022.
Other Income (Loss)
We recorded other gain of $1,881 in Fiscal 2023, compared to other loss of $298,546 in Fiscal 2022. The increase of other income of $300,427 was primarily due to foreign exchange gain of $1,881 (2022: loss of $6,819) and loss on note receivable of $nil (2022: loss of $291,727).
CURRENCY
We maintain our accounting records in US dollars.
Foreign currency fluctuations may have an impact on our financial condition. However, we do not engage in any foreign currency hedge transactions.
INFLATION
We do not believe that inflation will have a material adverse effect on our financial condition.
| B. | Liquidity and Capital Resources |
As of December 31, 2023, we had cash held in trust of $113,602 (2022: $218,802). We had a working capital deficiency of $120,091 at December 31, 2023, compared to working capital deficiency of $58,100 at December 31, 2022.
| C. | Research and Development, Patents and Licenses |
We have not engaged in research and development activities for the last three fiscal years, and have no patents and licenses.
| D. | Trend Information |
As a result of the sale of our subsidiaries on April 28, 2014, we do not currently know of any trends that would be material to our operations.
| E. | Off-Balance Sheet Arrangements |
We do not have any off-balance sheet arrangements.
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ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
| A. | Directors and Senior Management |
The following table sets forth all directors and executive officers of CWN. Each director’s term of office expires at the next annual general meeting of shareholders.
Name |
| Age |
| Office Held Since |
| Offices and Positions Held in CWN |
|
Chi Cheong Liu (1) | | 64 | | January 12, 2000 | | Director, President, Chief Executive Officer, Chief Financial Officer, Secretary and Treasurer | |
Chi Kong Liu (1) | | 63 | | January 12, 2000 | | Director | |
Fong Szeto | | 76 | | April 28, 2014 | | Director | |
| (1) | Chi Cheong Liu and Chi Kong Liu are related parties. |
The business background and principal occupations of each of CWNs director and executive officer for the preceding five years are as follows:
Chi Cheong Liu
Mr. Liu has been a director and treasurer of CWN since January 2000. Mr. Liu has been President of Chigo Engineering Company, a security engineering firm, for the last 19 years. Mr. Liu is a venture capitalist specializing in biotechnology and technology investments.
Chi Kong Liu
Mr. Liu has been a director of CWN since January 2000. Mr. Liu is President and owner of S & B Trading Company Limited, a diamond and jewelry wholesaler. Mr. Liu is a venture capitalist specializing in biotechnology and technology investments.
Fong Szeto
Mr. Szeto has been a director of CWN since April 28, 2014. Mr. Szeto is an experienced international businessman with expertise in the People’s Republic of China and Hong Kong SAR.
| B. | Compensation |
The following table provides information regarding direct and indirect remuneration to the directors and executive officers of the Company during Fiscal 2023.
| | Annual Compensation in Fiscal 2023 | ||||
| | | | | Other Annual | |
| | Salary | | Bonus | | Compensation |
Name and Respective Office and Position Held |
| ($) |
| ($) |
| ($) |
Chi Cheong Liu (1) |
| |
| |
| |
Director, President and Chief Executive Officer, Chief Financial Officer, Secretary and Treasurer | | Nil | | Nil | | 12,000 |
Chi Kong Liu (2) |
| |
| |
| |
Director | | Nil | | Nil | | 12,000 |
Fong Szeto (3) |
| |
| |
| |
Director | | Nil | | Nil | | 12,000 |
| (1) | Mr. Liu is a shareholder and does not receive salary. Mr. Liu incurred director fee of $12,000 in 2023 and $12,000 in 2022. |
| (2) | Mr. Liu is a shareholder and does not receive salary. Mr. Liu incurred director fee of $12,000 in 2023 and $12,000 in 2022. |
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| (3) | Mr. Szeto is a shareholder and does not receive salary. Mr. Szeto incurred director fee of $12,000 in 2023 and $12,000 in 2022. |
PENSION PLANS
We do not provide pension, retirement or similar benefits for directors, senior management or employees.
| C. | Board Practices |
Directors hold office for a term of one year or until the next annual general meeting of shareholders at which directors are elected. Two of the current directors have served our company since January 12, 2000 and a third was appointed on April 28, 2014. Our officers are appointed by the board and serve at the board’s discretion.
We have not entered into service contracts with any of our directors.
We do not have an audit committee or remuneration committee, but our entire board of directors acts in such capacities.
| D. | Employees |
As of December 31, 2023 and 2022, there were no employees of the Company.
| E. | Share Ownership of Directors and Senior Management |
The following table sets forth certain information regarding the ownership of our Common Shares by each of the persons who were directors and members of senior management during Fiscal 2023. The percentage owned is based on 10,950,000 shares outstanding as at May 1, 2024.
Name and Respective Office and Position Held |
| Share Ownership |
| % Share Ownership |
|
Chi Cheong Liu (1) |
| 1,730,000 |
| 15.80 | % |
Chi Kong Liu |
| 580,000 |
| 5.30 | % |
Fong Szeto |
| 30,000 |
| 0.27 | % |
Total |
| 2,340,000 |
| 21.37 | % |
| (1) | Goldpac Investment Partners Ltd., for which Mr. Liu is principal, owned 1,166,667 Common Shares of our company. Goldpac Investments Ltd., for which Mr. Liu is principal, owned 200,000 Common Shares of our company. Total direct and indirect share ownership was 3,096,667 Common Shares or 28.28% of the total Common Shares of our company. |
Stock Options
Our board of directors (the “Board”) adopted the 2007 Stock Option Plan (the “2007 Plan”) on October 11, 2007, under which we issued incentive stocks options with the right to purchase up to 550,000 Common Shares to our directors, officers, and employees. All of these options granted on October 11, 2007 have an exercise price of $1.08 per share and a vesting period of 1 to 5 years, and a term of 5 years expiring on October 11, 2012. We had not grant options to individual consultants or advisors.
The Board further adopted the 2010 Stock Option Plan (the “2010 Plan”) on June 10, 2010, under which we issued incentive stocks options with the right to purchase up to 1,090,000 Common Shares to our directors, officers, and employees. All of these options granted on June 10, 2010 have an exercise price of $0.60 per share and a vesting period of 1 to 5 years, and a term of 5 years expiring on June 10, 2015. We had not grant options to individual consultants or advisors.
As at December 31, 2023 and 2022, we had no options issued or outstanding.
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ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
| A. | Major Shareholders |
To the knowledge of our directors and senior officers, the following table sets forth the persons or companies who beneficially own, directly or indirectly, or exercise control or direction over shares carrying 5% or more of the voting rights attached to the total outstanding Common Shares as at May 1, 2024. The percentage owned is based on 10,950,000 shares outstanding as at May 1, 2024.
| | Number of | | Percentage of Shares | |
Name of Shareholder |
| Common Shares |
| Beneficially Owned |
|
Chi Cheong Liu (1) | | 3,096,667 | | 28.28 | % |
CEDE & Co |
| 1,827,000 |
| 16.68 | % |
Vcanland China Holdings Ltd. |
| 1,500,000 |
| 13.70 | % |
Datacom Venture Limited |
| 600,000 |
| 5.48 | % |
Chi Kong Liu |
| 580,000 |
| 5.30 | % |
Monica Law |
| 570,000 |
| 5.21 | % |
Total |
| 8,173,667 |
| 74.65 | % |
| (1) | Mr. Liu owns 1,730,000 Common Shares. Goldpac Investment Partners Ltd., for which Mr. Liu is principal, owns 1,166,667 Common Shares. Goldpac Investments Ltd., for which Mr. Liu is a principal, owns 200,000 Common Shares. |
Unless otherwise indicated by footnote, we believe that the beneficial owners of the Common Shares listed above, based on information furnished by such owners, have sole investment and voting power with respect to such Common Shares, subject to community property laws where applicable. Beneficial ownership is determined in accordance with the rules of the United States Securities and Exchange Commission and generally includes voting or investment power with respect to securities. As far as it is known to us, except as disclosed herein, we are not directly or indirectly owned or controlled by another corporation, by any foreign government or any other person or entity. The shareholders, who own five percent or more of our Common Shares, do not have voting rights which are different than our other shareholders who own our Common Shares.
| B. | Related Party Transactions |
In January 2023, $220,650 cash held in trust by a financial institution has been transferred to a director, $107,048 of which was used as repayment of due to the directors. The remaining balance was held by the director and pay the operating costs on behalf of the Company. At December 31, 2023, $113,602 was held by the director on behalf of the Company. At December 31, 2022, $218,802 was held by the financial institution in trust.
As at December 31, 2023, the Company has non-interest bearing loan from the stockholders and directors in the amount of $218,629 [2022 - $268,140].
As at December 31, 2023, the Company accrued director fees in the amount of $216,000 [2022 - $180,000], which has been included in the balances above.
All related party transactions were entered into in the normal course of business and are recorded at the exchange amount established and agreed to between the related parties.
| C. | Interests of Experts and Counsel |
This Report on Form 20-F is being filed as an annual report under the Exchange Act and, as such, there is no requirement to provide any information under this item.
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ITEM 8. FINANCIAL INFORMATION
| A. | Financial Statements |
This Report on Form 20-F includes our audited financial statements for the years ended December 31, 2023 and 2022, including our balance sheets as of December 31, 2023 and 2022, and the statements of shareholders’ equity, operations and cash flows for the three-year period ended December 31, 2023, and the related notes to those statements and the auditor’s reports thereon. Reference is made to these documents commencing at Page 25 of this Report.
| B. | Significant Changes |
As of April 28, 2014, we have sold all subsidiaries and business units. The core business activities and operations remain discontinued as at December 31, 2023.
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ITEM 9. THE OFFER AND LISTING
| A. | Offer and Listing Details |
Our common shares are currently quoted on the OTC Pink under the symbol “CWNOF”. For the periods indicated, the following table sets forth the high and low market prices of our common shares, as reported by the OTC Bulletin Board. These prices represent inter-dealer quotations without retail markup, markdown, or commission and may not necessarily represent actual transactions.
Periods |
| High |
| Low | ||
Fiscal 2023 | | $ | 0.08 | | $ | 0.008 |
Fiscal 2022 | | $ | 0.20 | | $ | 0.08 |
Fiscal 2021 | | $ | 0.17 | | $ | 0.002 |
Fiscal 2020 | | $ | 0.002 | | $ | 0.002 |
Fiscal 2019 | | $ | 0.03 | | $ | 0.02 |
Fiscal 2018 | | $ | 0.03 | | $ | 0.03 |
Fiscal 2017 | | $ | 0.04 | | $ | 0.03 |
Fiscal 2016 | | $ | 0.13 | | $ | 0.01 |
Fiscal 2015 | | $ | 0.08 | | $ | 0.02 |
Fiscal 2014 | | $ | 0.07 | | $ | 0.05 |
Fiscal 2013 | | $ | 0.55 | | $ | 0.05 |
Fiscal 2012 | | $ | 1.34 | | $ | 0.12 |
| | | | | | |
Fiscal 2024 | | | | | | |
1Q-2024(1) | | $ | 0.011 | | $ | 0.011 |
| | | | | | |
Fiscal 2023 | | | | | | |
1Q-2023 | | $ | 0.08 | | $ | 0.05 |
2Q-2023(1) | | $ | 0.05 | | $ | 0.05 |
3Q-2023 | | $ | 0.05 | | $ | 0.008 |
4Q-2023 | | $ | 0.011 | | $ | 0.008 |
| | | | | | |
Fiscal 2022 | | | | | | |
1Q-2022 | | $ | 0.20 | | $ | 0.17 |
2Q-2022 | | $ | 0.15 | | $ | 0.15 |
3Q-2022 | | $ | 0.15 | | $ | 0.08 |
4Q-2022 | | $ | 0.08 | | $ | 0.08 |
| | | | | | |
Fiscal 2021 | | | | | | |
1Q-2021 | | $ | 0.020 | | $ | 0.002 |
2Q-2021 | | $ | 0.12 | | $ | 0.02 |
3Q-2021 | | $ | 0.12 | | $ | 0.063 |
4Q-2021 | | $ | 3.00 | | $ | 0.058 |
| | | | | | |
Most Recent 6 months from October 2023 through March 2024 | |
| | |
| |
March 2024(1) | | $ | 0.011 | | $ | 0.011 |
February 2024 (1) | | $ | 0.011 | | $ | 0.011 |
January 2024(1) | | $ | 0.011 | | $ | 0.011 |
December 2023(1) | | $ | 0.011 | | $ | 0.011 |
November 2023 (1) | | $ | 0.011 | | $ | 0.011 |
October 2023 | | $ | 0.011 | | $ | 0.008 |
| (1) | There were no trades of our common shares during this period. |
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| B. | Plan of Distribution |
This Report on Form 20-F is being filed as an annual report under the Exchange Act and, as such, there is no requirement to provide any information under this item.
| C. | Markets |
Our common shares are quoted on the OTC Pink operated by the Financial Industry Regulatory Authority under the symbol “CWNOF”
| D. | Selling Shareholders |
This Report on Form 20-F is being filed as an annual report under the Exchange Act and, as such, there is no requirement to provide any information under this item.
| E. | Dilution |
This Report on Form 20-F is being filed as an annual report under the Exchange Act and, as such, there is no requirement to provide any information under this item.
| F. | Expenses of the Issue |
This Report on Form 20-F is being filed as an annual report under the Exchange Act and, as such, there is no requirement to provide any information under this item.
ITEM 10. ADDITIONAL INFORMATION
| A. | Share Capital |
This Report on Form 20-F is being filed as an annual report under the Exchange Act and, as such, there is no requirement to provide any information under this item.
| B. | Memorandum and Articles of Association |
There have been no changes to the Memorandum, Articles of Association, or Cayman Islands Law with respect to rights and powers of directors and shareholders since our 20-F Registration Statement (SEC file no. 000-33051) filed on July 3, 2002. Such discussion is hereby incorporated by reference into this Report.
| C. | Material Contracts |
There were no material contracts entered into by us during the last two years.
| D. | Exchange Controls |
CAYMAN ISLANDS
We are organized under the laws of the Cayman Islands. We do not believe there are any decrees or regulations under the laws of the Cayman Islands applicable to us restricting the import or export of capital or affecting the remittance of dividends or other payments to non-resident holders of our common stock. There are no restrictions under CWN’s Articles of Association or Memorandum of Association or under Cayman Islands law as dividends thereon. There is uncertainty as to whether the Courts of Cayman Island would (i) enforce judgments of United States Courts obtained against us or our directors and officers predicated upon the civil liability provisions of the federal securities laws of the United States or (ii) entertain original actions brought in Cayman Island Courts against us or such persons predicated upon the federal securities laws of the United States. There is no treaty in effect between the United States and Cayman Island providing for such enforcement.
- 15 -
| E. | Taxation |
CAYMAN ISLAND INCOME TAX CONSEQUENCES
CWN is organized under the laws of Cayman Islands. At present, there is no Cayman Islands profit tax, withholding tax, capital gains tax, capital transfer tax, estate duty or inheritance tax payable by our United States shareholders, except shareholders ordinarily resident in the Cayman Islands. There is currently no reciprocal tax treaty between Cayman Islands and the United States regarding withholding taxes.
| F. | Dividends and Paying Agents |
This Report on Form 20-F is being filed as an annual report under the Exchange Act and, as such, there is no requirement to provide any information under this item.
| G. | Statement by Experts |
This Report on Form 20-F is being filed as an annual report under the Exchange Act and, as such, there is no requirement to provide any information under this item.
| H. | Documents on Display |
Any documents referred to in this Report on Form 20-F may be inspected at our principal office located at Appleby, Clifton House, 75 Fort Street, P.O. Box 190, Grand Cayman, Cayman Islands KY1-1104 during normal business hours.
Our filings with the Securities and Exchange Commission, and the exhibits thereto, are available for inspection and copying at the public reference facilities maintained by the Securities and Exchange Commission in 100 F. St., NE, Washington, D.C., 20549. Copies of these filings may be obtained from these offices after the payment of prescribed fees. Please call the Securities and Exchange Commission at 1-800-SEC-0330 for further information on the public reference rooms. These filings are also available on the Securities and Exchange Commission’s website at www.sec.gov.
| I. | Subsidiary Information |
As of December 31, 2023 and 2022, we do not have any subsidiaries.
ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are a small business issuer as defined in Section 230.405 of the Securities Act of 1933 and Section 240.12b-2 of the Exchange Act and, as such, there is no requirement to provide any information under this item.
ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES
This Report on Form 20-F is being filed as an annual report under the Exchange Act and, as such, there is no requirement to provide any information under this item.
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PART II
ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES
There has not been a material default in the payment of principal, interest, a sinking or purchase fund installment, or any other material default not cured within 30 days, relating to any indebtedness of us or any of our significant subsidiaries. No payment of dividends is in arrears.
ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS
There has been no modification of the instruments defining the rights of holders of any class of our registered securities. There has been no modification or qualification of the rights evidenced by any class of our registered securities by issuing or modifying any other class of securities. There are no assets securing any class of our registered securities. There has been no change in the last financial year to the trustee of our registered securities.
ITEM 15. CONTROLS AND PROCEDURES
DISCLOSURE CONTROLS AND PROCEDURES
As required by Rule 13a-15 under the Securities Exchange Act of 1934, our management, with the participation of our principal executive officer and principal financial officer, evaluated our disclosure controls and procedures (as defined in Rule 13a-15(e) of the Securities Exchange Act of 1934) as of the end of the period covered by this annual report.
Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934 is accumulated and communicated to our principal executive officer and principal financial officer to allow timely decisions regarding required disclosure.
MANAGEMENT’S REPORT ON INTERNAL CONTROLS OVER FINANCIAL REPORTING
Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rules 13a-15(f) under the Exchange Act. Our management evaluated the effectiveness of our internal control over financial reporting as of December 31, 2013 based on criteria for effective internal control over financial reporting described in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on its evaluation, our management concluded that our internal control over financial reporting was not effective as of December 31, 2023, as per the five components of the Framework: Control Environment, Risk Assessment, Control Activities, Information and Communication and Monitoring.
During its assessment of internal control over financial reporting, management identified the following material weakness: insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of both US GAAP and SEC guidelines. The material weakness is a result of the following:
| 1. | Material weakness related to inadequate segregation of duties over certain information system access controls. The deficiency carries significant risk of management overrides and may result in material errors going unnoticed or unauthorized transactions being processed. In addition, there is no formal process and documentation related to the board of directors’ review and approval of the financial statements. |
- 17 -
| 2. | Significant deficiency as purchase requisitions and purchase orders were not prepared, only oral indication was given by management. Purchases could be initiated and executed for other uses or purchased goods or services could be misappropriated for other uses. There is no formal process in reviewing and approving purchase requests. There was also the potential risk of fraud for these purchases. |
Individually, the significant deficiency was evaluated as representing a more than remote likelihood that a misstatement that was more than inconsequential, but less than material, could occur. Taken together with the material weakness, these deficiencies represent a more than remote likelihood that a material misstatement could occur and not be prevented or detected. Therefore, in combination, these deficiencies represent a material weakness.
CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING
There were no changes to our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934, as amended) during the year ended December 31, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
ITEM 16. [RESERVE]
ITEM 16A AUDIT COMMITTEE FINANCIAL EXPERT
Our board of directors serves as our audit committee. The board has determined that it does not have an audit committee financial expert. We believe that retaining an independent director who would qualify as an “audit committee financial expert” would be overly costly and burdensome and is not warranted given that we sold all of our subsidiaries.
ITEM 16B. CODE OF ETHICS
On October 29, 2004, we adopted a Code of Ethics (the “Code of Ethics”). A copy of our Code of Ethics was filed as an exhibit to the Report on Form 20-F filed with the Securities Exchange Commission on December 3, 2004. Our Code of Ethics will be made available in print, free of charge, to any person requesting a copy in writing from our secretary at Appleby, Clifton House 75 Fort Street, PO Box 190, Grand Cayman E9 KY1-1104.
ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES
The following table sets forth the aggregate fees billed by our auditors,
| | For year ending December 31, | ||||
|
| 2023 |
| 2022 | ||
Audit Fees(1) | | $ | 10,585 | | $ | 9,137 |
Audit-Related Fees(2) | |
| — | |
| — |
Tax Fees(3) | |
| — | |
| — |
All Other Fees | |
| — | |
| — |
Total | | $ | 10,585 | | $ | 9,137 |
| (1) | Audit Fees consist of fees for the audit of our annual financial statements and review in connection with our statutory and regulatory filings. |
| (2) | Audit-Related Fees consist of fees related to assurance and related services that are reasonably related to the performance of the audit or review of our financial statements and are not reported under “Audit Fees”. |
| (3) | Tax Fees consist of fees related to tax compliance, tax advice and tax planning. |
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ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES
There are no applicable disclosures required by Exchange Act Rule 10a-3(d) regarding an exemption from the listings standards for audit committees.
ITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS
Neither our Company, nor any affiliated purchaser of our Company, has purchased any of our securities during Fiscal 2023.
ITEM 16F. CHANGES IN REGISTRANT’S CERTIFYING ACCOUNTANT
None.
ITEM 16G. CORPORATE GOVERNANCE
We are not listed on a national securities exchange and, as such, there is no requirement to provide any information under this item.
ITEM 16H. MINE SAFETY DISCLOSURE
Not applicable.
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PART III
ITEM 17. FINANCIAL STATEMENTS
Not applicable.
ITEM 18. FINANCIAL STATEMENTS
The following Financial Statements and the related Notes thereto are filed as part of this Report, commencing at Page 23 to 31 of this Report:
- 20 -
ITEM 19. EXHIBITS
Exhibit No. |
|
| Document Description |
| |
| | | | | |
1 | | (1) | | Articles of Association, Memorandum of Association and Certificate of Incorporation of CWN | |
| | | | | |
2.1 | | (2) | | | |
| | | | | |
4.1 | | (4) | | | |
| | | | | |
4.2 | | (6) | | | |
| | | | | |
4.3 | | (5) | | | |
| | | | | |
4.4 | | (6) | | | |
| | | | | |
4.5 | | (6) | | | |
| | | | | |
4.6 | | (7) | | | |
| | | | | |
4.7 | | (7) | | | |
| | | | | |
4.8 | | (8) | | | |
| | | | | |
4.9 | | (9) | | Share purchase agreement dated March 19, 2014 with Ningbo International Limited | |
| | | | | |
11 | | (3) | | | |
| | | | | |
12.1 | | * | | | |
| | | | | |
13.1 | | * | | | |
| | | | | |
101.INS | | * | | XBRL Instance Document | |
| | | | | |
101.SCH | | * | | XBRL Taxonomy Extension Schema Document | |
| | | | | |
101.CAL | | * | | XBRL Taxonomy Extension Calculation Linkbase Document | |
| | | | | |
101.DEF | | * | | XBRL Taxonomy Extension Definition Linkbase Document | |
| | | | | |
101.LAB | | * | | XBRL Taxonomy Extension Label Linkbase Document | |
| | | | | |
101.PRE | | * | | XBRL Taxonomy Extension Presentation Linkbase Document | |
| | | | | |
104 | | * | | Cover Page Interactive Data File (embedded within the Exhibit 101 Inline XBRL document set) | |
*Filed herewith
- 21 -
| (1) | Incorporated by reference to Exhibits of Registrant’s Registration Statement on Form 20-F (file no. 000-33051) filed on July 3, 2002. |
| (2) | Incorporated by reference to Exhibits of Registrant’s Annual Report on Form 20-F (file no. 000-33051) filed on December 3, 2004. |
| (3) | Incorporated by reference to Exhibits of Registrant’s Annual Report on Form 20-F (file no. 000-33051) filed on June 30, 2005. |
| (4) | Incorporated by reference to Exhibits of Registrant’s Annual Report on Form 20-F (file no. 000-33051) filed on June 30, 2008. |
| (5) | Incorporated by reference to Exhibits of Registrant’s Annual Report on Form 20-F (file no. 000-33051) filed on June 30, 2009. |
| (6) | Incorporated by reference to Exhibits of Registrant’s Annual Report on Form 20-F (file no. 000-33051) filed on May 13, 2011. |
| (7) | Incorporated by reference to Exhibits of Registrant’s Annual Report on Form 20-F (file no. 000-33051) filed on April 30, 2012. |
| (8) | Incorporated by reference to Exhibits of Registrant’s Annual Report on Form 20-F (file no. 000-33051) filed on April 30, 2013. |
| (9) | Incorporated by reference to Schedule “A” to Exhibit 99.4 of Registrant’s Form 6-K (file no. 000-33051) filed on March 24, 2014. |
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SIGNATURES
The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F, and that it has duly caused and authorized the undersigned to sign this annual report on its behalf.
Dated: Apr 29, 2024
ChineseWorldNet.com Inc., | |
a Cayman Islands Corporation | |
| |
/s/ CHI CHEONG LIU | |
CHI CHEONG LIU | |
Director, President, Chief Executive Officer, Chief Financial Officer, Secretary and Treasurer | |
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders of Chineseworldnet.com Inc.:
Opinion on the Financial Statements
We have audited the accompanying balance sheets of Chineseworldnet.com Inc. (the Company) as of December 31, 2023 and 2022, and the related statements of stockholders’ equity, operations and comprehensive loss, and cash flows for each of the years in the three-year period ended December 31, 2023 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, 2023 and 2022, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America.
Material Uncertainty Related to Going Concern
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As described in Note 1 of the financial statements, the Company has accumulated losses since its inception and requires additional funds to maintain and expand its intended business operations that raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. This matter is also described in the “Critical Audit Matters” section of our report.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter 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 especially challenging, subjective, or complex judgments. The communication of a critical audit matter does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which they relate.
Going Concern – Refer to Note 1
Critical Audit Matter Description
Accounting principles generally accepted in the United States require the Company to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the date that the financial statements are issued. If conditions or events raise substantial doubt, management should consider whether its plans that are intended to mitigate the conditions or events will alleviate the substantial doubt.
Conclusions on going concern considerations involve significant estimates and management judgment, including prospective financial information. Given the complexity and the subjective nature of such information, evaluating management’s judgments related to their going concern analysis required extensive audit effort and a high degree of auditor judgment.
Audit Response
Our audit procedures related to testing management’s assessment of the ability of the Company to continue as a going concern included the following:
We evaluated the forecasted operating expenses, as well as management’s assumptions related to sources and uses of cash for reasonableness. This testing included:
| ● | Developing an understanding of management’s plans for obtaining additional financing through discussions with management and review of board meeting minutes. |
| ● | Developing an understanding of management’s expectations for future changes in expenses through discussions with management and review of budgets. |
| ● | Comparing forecasted expenses to historical results. |
| ● | Evaluating the impact of the Company’s existing financing arrangements on their ability to continue as a going concern. |
| ● | Assessing financial statements disclosure to ensure it is appropriate. |
/s/ MNP LLP
Chartered Professional Accountants
We have served as the Company’s auditor since 2006.
April 29, 2024
1021 West Hastings St, Suite 2200, Vancouver, BC, V6E 0C3 |
|
Chineseworldnet.Com Inc.
BALANCE SHEETS
As at December 31
(Expressed in U.S. Dollars)
| | 2023 | | 2022 |
|
| $ |
| $ |
ASSETS | |
| | |
Current assets | |
| |
|
Cash held in trust [note 5] | | | | |
Prepaid expenses and deposits |
| | | |
Total current assets |
| | | |
|
|
| |
|
Total assets |
| | | |
|
|
| |
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
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Current liabilities |
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Accounts payable and accrued liabilities | | | | |
| | | | |
Total current liabilities |
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Stockholders’ equity [note 4] |
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Common stock |
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Authorized |
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Additional paid-in capital |
| | | |
Deficit |
| ( | | ( |
Total stockholders’ equity |
| ( | | ( |
Total liabilities and stockholders’ equity |
| | | |
Nature of operation [note 1] |
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|
Going concern [note 1] | | | | |
Subsequent events [note 7] |
|
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|
The accompanying notes are an integral part of these financial statements
- 26 -
Chineseworldnet.Com Inc.
STATEMENTS OF STOCKHOLDERS’ EQUITY
Years ended December 31
(Expressed in U.S. Dollars)
| | | | | | Additional | | | |
|
| | Common stock | | paid-in | | | |
| ||
| | Shares | | Amount | | capital | | (Deficit) | | Total |
|
| # |
| $ |
| $ |
| $ |
| $ |
Balance, January 1, 2021 | | | | |
| |
| ( |
| |
| | | | |
| |
| |
| |
Net loss for the year | | |
|
| ( |
| ( | |||
| | | | |
| |
| |
| |
Balance, December 31, 2021 | | | | |
| |
| ( |
| |
| | | | |
| |
| |
| |
Net loss for the year | | |
|
| ( |
| ( | |||
| | | | |
| |
| |
| |
Balance, December 31, 2022 | | | | | | | | ( | | ( |
| | | | | | | | | | |
Net loss for the year | | | | | ( | | ( | |||
Balance, December 31, 2023 | | | | | | | | ( | | ( |
The accompanying notes are an integral part of these financial statements
- 27 -
Chineseworldnet.Com Inc.
STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
Years ended December 31
(Expressed in U.S. Dollars)
|
| 2023 | | 2022 | | 2021 |
|
| $ |
| $ |
| $ |
Expenses | |
|
|
|
|
|
Professional fees | | |
| |
| |
Directors’ remuneration [note 5] | | |
| |
| |
Office and miscellaneous | | |
| |
| |
| | |
| |
| |
Other income (loss) | | |
| |
| |
Foreign exchange (loss) gain | | |
| ( |
| |
Accretion income [note 3] | | — |
| — |
| |
Loss on note receivable [note 3] | | — |
| ( |
| — |
| | |
| ( |
| |
Net loss and comprehensive loss for the year | | ( |
| ( |
| ( |
| | |
| |
| |
Basic and diluted net income (loss) per common share | | ( |
| ( |
| |
Weighted average number of common shares outstanding | | |
| |
| |
- basic and diluted | | |
| |
| |
The accompanying notes are an integral part of these financial statements
- 28 -
Chineseworldnet.Com Inc.
STATEMENTS OF CASH FLOWS
Years ended December 31
(Expressed in U.S. Dollars)
| | 2023 | | 2022 | | 2021 |
|
| $ |
| $ |
| $ |
OPERATING ACTIVITIES | |
|
|
|
|
|
Net loss for the year | | ( |
| ( |
| ( |
| | |
| |
| |
Adjustment to reconcile net income (loss) to net cash provided (used) by operating activities: | | |
| |
| |
Foreign exchange (gain) or loss | | ( |
| |
| ( |
Loss on note receivable | | |
| |
| |
Imputed interest income | | — |
| — |
| ( |
| | |
| |
|
|
Changes in non-cash working capital items: | | |
| |
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|
Prepaid expenses and deposits | | ( |
| |
| ( |
Accounts payable and accrued liabilities | | |
|
| | |
Due to related parties, non-interest bearing [note 5] | | |
| |
| |
Net cash provided (used) by operating activities | | |
| |
| |
| | | | | | |
FINANCING ACTIVITIES | | | | | | |
Cash transfer to trust account | | — | | — | | ( |
| | — | | — | | ( |
| | |
| |
|
|
Increase (Decrease) in cash and cash equivalents | | — |
| — |
| ( |
Cash and cash equivalents, beginning of year | | — |
| — |
| |
Cash and cash equivalents, end of year | | — |
| — |
| — |
The accompanying notes are an integral part of these financial statements
- 29 -
1. NATURE OF OPERATIONS AND GOING CONCERN
The Company was incorporated under the laws of Cayman Islands on January 12, 2000. On January 15, 2000 the Company acquired
After disposal of all subsidiaries and long-term investment on April 28, 2014, the core business activities and operations were discontinued. The Company is currently inactive with limited operations and is in the process of seeking new business opportunities.
These financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America applicable to a going concern, which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. The Company has accumulated losses since its inception and requires additional funds to maintain and expand its intended business operations. As at December 31, 2023, the Company has a working capital deficiency of $
Management’s plans in this regard are to raise debt or equity financing as required which the Company has been able to finance the operations through a series of equity and debt financings and additional funds is still required to fund the Company’s anticipated business expansion. There can be no assurance that a viable business opportunity that can be adequately financed will be identified and available to the Company. Additional equity and/or debt financing is subject to the global financial markets and prevailing economic conditions, which have recently been volatile and distressed. These factors will likely make it more challenging to obtain financing for the Company going forward. These matters and conditions indicate the existence of a material uncertainty that causes substantial doubt about the Company’s ability to continue as going concern.
2. SIGNIFICANT ACCOUNTING POLICIES
Basis of presentation
These financial statements have been prepared in conformity with generally accepted accounting principles in the United States of America (“US GAAP”) and are expressed in United States dollars, unless otherwise noted. All adjustments considered necessary for a fair presentation of financial position, results of operations and cash flows as at December 31, 2023 have been included.
Use of estimates
The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Estimates and underlying assumptions are reviewed at each period end. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected. Significant areas requiring the use of management estimates relate to allowance of note receivable.
- 30 -
2. SIGNIFICANT ACCOUNTING POLICIES (cont’d.)
Cash and cash equivalents
Cash equivalents usually consist of highly liquid investments which are readily convertible into cash with maturity of three months or less when purchased. The Company had
Foreign currency translations
The Company’s functional currency is the U.S. dollar. Transactions in other currencies are recorded in U.S. dollars at the rates of exchange prevailing when the transactions occur. Monetary assets and liabilities denominated in other currencies are translated into U.S. dollars at rates of exchange in effect at the balance sheet dates. Exchange gains and losses are recorded in the Statements of Operations and Comprehensive Loss.
Income taxes
Income taxes are accounted for under the liability method of accounting for income taxes. Under the liability method, deferred tax liabilities and assets are recognized for the estimated future tax consequences attributable to differences between the amounts reported in the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted income tax rates expected to apply when the asset is realized or the liability is settled. The effect of a change in income tax rates on deferred tax liabilities and assets is recognized in income in the period in which the change occurs. Deferred tax assets are recognized to the extent that they are considered more likely than not to be realized.
Per FASB ASC 740 “Income taxes” under the liability method, it is the Company’s policy to provide for uncertain tax positions and the related interest and penalties based upon management’s assessment of whether a tax benefit is more likely than not to be sustained upon examination by tax authorities. At December 31, 2023, the Company believes it has appropriately accounted for any unrecognized tax benefits. To the extent the Company prevails in matters for which a liability for an unrecognized benefit is established or is required to pay amounts in excess of the liability, the Company’s effective tax rate in a given financial statement period may be affected. Interest and penalties associated with the Company’s tax positions are recorded as Interest Expense.
Comprehensive loss
The Company accounts for comprehensive loss under the provisions of ASC Topic 220-10, Comprehensive Income - Overall, which establishes standards for reporting and display of comprehensive income, its components and accumulated balances. The Company is disclosing this information on its Statements of Operations and Comprehensive Loss.
Financial instruments and concentration of risks
Fair value of financial instruments is made at a specific point in time, based on relevant information about financial markets and specific financial instruments. As these estimates are subjective in nature, involving uncertainties and matters of significant judgment, they cannot be determined with precision. Changes in assumptions can significantly affect estimated fair values.
The carrying value of cash held in trust, due to related parties and accounts payable and accrued liabilities approximates their fair value because of the short-term nature of these instruments.
The Company’s cash held in trust is exposed to credit loss for the entire amount in the event of default from the trust holder. However, the Company does not anticipate such default.
The Company is exposed to foreign currency risk on fluctuations related to accounts payable and accrued liabilities which is denominated in Canadian dollars.
- 31 -
2. SIGNIFICANT ACCOUNTING POLICIES (cont’d.)
Fair value of financial instruments
Fair Value of Financial Instruments – the Company adopted SFAS ASC 820-10-50, “Fair Value Measurements”. This guidance defines fair value, establishes a three-level valuation hierarchy for disclosures of fair value measurement and enhances disclosure requirements for fair value measures. The three levels are defined as follows:
| ● | Level one – Quoted market prices in active markets for identical assets or liabilities; |
| ● | Level two – Inputs other than level one inputs that are either directly or indirectly observable; and |
| ● | Level three – Unobservable inputs developed using estimates and assumptions, which are developed by the reporting entity and reflect those assumptions that a market participant would use. |
For the years ended December 31, 2023 and 2022, the Company has no financial instruments recorded at fair value.
Earning (Loss) per share
Basic earning (loss) per share is computed on the basis of the weighted average number of common shares outstanding during each period.
Diluted earning (loss) per share is computed on the basis of the weighted average number of common shares and dilutive securities outstanding.
Stock-based compensation
The Company has adopted the fair value method of accounting for stock-based compensation as recommended by ASC 718 Compensation –Stock Compensation. The Company has granted stock options to directors and certain employees for services provided to the Company under this method. The Company recognizes compensation expense for stock options awarded based on the fair value of the options at the grant date using the Black-Scholes option pricing model. The fair value of the options is amortized over the vesting period.
Recently adopted accounting pronouncements
Pronouncements between December 31, 2023 and the date of this filing are not expected to have a significant impact on the Company’s operations, financial position, or cash flow, nor does the Company expect the adoption of recently issued, but not yet effective, accounting pronouncements to have a significant impact on our results of operations, financial position or cash flows.
3. NOTE RECEIVABLE
As at April 28, 2014, the Company received a promissory note of CAD $
| ● | CDN $ |
| ● | CDN $ |
| ● | CDN $ |
| ● | The remaining principal amount of CDN $ |
- 32 -
3. NOTE RECEIVABLE (cont’d.)
As at December 31, 2018, the Company received payment of CAD $
4. STOCKHOLDERS’ EQUITY
Share Capital
The Company has authorized
5. RELATED PARTY TRANSACTIONS
In January 2023, $
As at December 31, 2023, the Company has amounts due to directors of $
For the year ended December 31, 2023, the Company accrued director fees in the amount of $
6. INCOME TAXES
The Company is subject to the tax laws of Cayman Islands and the tax rate is
| | 2023 | | 2022 | | 2021 | |
|
| $ |
| $ |
| $ | |
Net loss for the year |
| ( | | ( | | ( | |
Statutory Cayman Islands corporate tax rate |
| % | % | % | |||
Expected tax expense (recovery) |
| | | |
As at December 31, 2023, the Company has $
- 33 -
EXHIBIT 12.1
CERTIFICATION PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Chi Cheong Liu, certify that:
1. | I have reviewed this annual report on Form 20-F of ChineseWorldNet.com Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report; |
4. | I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a–15(e) and 15d–15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a–15(f) and 15d–15(f)) for the company and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to me by others within those entities, particularly during the period in which this report is being prepared; |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under my supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; and |
5. | I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the company’s auditors and the audit committee of the company’s board of directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company’s ability to record, process, summarize and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control over financial reporting. |
Dated: Apr 29, 2024 |
| |
| | |
/s/ Chi Cheong Liu | | |
Chi Cheong Liu | | |
Director, President, Chief Executive Officer, Chief Financial Officer, and Treasurer | | |
EXHIBIT 13.1
CERTIFICATION PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
The undersigned, Chi Cheong Liu, hereby certifies, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
1. | The annual report on Form 20-F of ChineseWorldNet.com Inc. for the year ended December 31, 2023 (the “Report”) fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
2. | The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of ChineseWorldNet.com Inc. |
Dated: Apr 29, 2024 |
| |
| | |
/s/ Chi Cheong Liu | | |
Chi Cheong Liu | | |
Director, President, Chief Executive Officer, Chief Financial Officer, and Treasurer | | |