LIVING 3D HOLDINGS, INC. - Annual Report: 2016 (Form 10-K)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

 ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 

For the fiscal year ended December 31, 2016

or

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934  

For the transition period from                  to __________

Commission file number:  000-01900

Living 3D Holdings, Inc.
(Exact name of registrant as specified in its charter)

Rm. 1801-02, Office Tower Two, Grand Plaza,

625 Nathan Road, Mongkok, Kowloon. Hong Kong

(Address of principal executive offices, including zip code)

(852) 3563-9280
Registrant’s telephone number, including area code

Room S, 2/F, Block D East Sun Industrial Center,

16 Shing Yip Street, Kwun Tong, Kowloon, Hong Kong.

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:  None

Securities registered pursuant to Section 12(g) of the Act:  None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes  o  No  x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

Yes  o  No  x

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

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  

 Yes  x  No o  

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.    Yes  x   No o

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

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

  Yes o  No x

As of June 30, 2016, the aggregate market value of the registrant's voting and non-voting common equity held by non-affiliates computed by reference to the average bid and ask price ($0.18) of such common equity, as of the last business day of the registrant's most recently completed second fiscal quarter was: $1,819,262  

There were 30,697,043 shares of the registrant’s common stock issued and outstanding as of April 13, 2017.

Documents Incorporated by Reference:  None.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This annual report contains forward-looking statements, as that term is defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.  These statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to be materially different from any future results, performances or achievements expressed or implied by the forward-looking statements. In some cases, you can identify forward-looking statements by terms such as “anticipates,” “believes,” “could,” “estimates,” “expects,” “intends,” “may,” “plans,” “potential,” “predicts,” “projects,” “should,” “would” and similar expressions intended to identify forward-looking statements.  Forward-looking statements reflect our current views with respect to future events and are based on assumptions and subject to risks and uncertainties.  

Given these uncertainties, you should not place undue reliance on these forward-looking statements.  These forward-looking statements include, among other things, statements relating to:

 our ability to find suitable markets for and increase sales of products we develop and commercialize; 

 our ability to successfully source manufacturing capacity for our products; 

 our ability to obtain additional capital in future years to fund expansion of our product line, new marketing initiatives and/or acquisitions; 

 economic, political, regulatory, legal and foreign exchange risks associated with our operations; or 

 the loss of key members of our senior management. 

Also, forward-looking statements represent our estimates and assumptions only as of the date of this annual report. You should read this report and the documents that we reference and filed as exhibits to this report completely and with the understanding that our actual future results may be materially different from what we expect.  Except as required by law, we assume no obligation to update any forward-looking statements publicly, or to update the reasons actual results could differ materially from those anticipated in any forward-looking statements, even if new information becomes available in the future or other events occur in the future.

Use of Certain Defined Terms

Except where the context otherwise requires and for the purposes of this report only:

 "Company," "we," "us," "our," "Living 3D" and "Registrant" refer to Living 3D Holdings, Inc. (formerly known as AirWare International Corp.; formerly known as Concrete Casting Incorporated), a corporation incorporated in Nevada; 

 "Exchange Act" refers to the Securities Exchange Act of 1934, as amended; 

 "PRC," "China," and "Chinese," refer to the People’s Republic of China (excluding Hong Kong, Macau and Taiwan); 

 "Securities Act" refers to the Securities Act of 1933, as amended;  

 "U.S. dollars," "dollars" and "$" refer to the legal currency of the United States;  

 "HK Dollars" refers to Hong Kong dollars, the legal currency of Hong Kong; 

 "Renminbi" and "RMB" refers to the legal currency of the People’s Republic of China. 

Unless otherwise stated, the accounting books and records of the Company for 2016 have been stated in U. S. Dollars. We have translated balance sheet amounts with the exception of equity at December 31, 2015 at HK Dollars 7.8 to US $1.00.  We have stated equity accounts at their historical rates.  The average translation rates applied to income statement accounts for the year ended December 31, 2015 were at HK Dollars 7.8. We make no representation that the HK Dollars or U.S. dollar amounts referred to in this annual report could have been or could be converted into U.S. dollars or HK Dollars as the case may be, at any particular rate or at all.

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  For the sake of clarity, this report follows English naming convention of first name followed by last name, regardless of whether an individual’s name is Chinese or English. For example, the name of our Chief Executive Officer will be presented as "Man Wah Stephen Yip," even though, in Chinese, his name would be presented as "Yip Man Wah Stephen."

WHERE TO OBTAIN MORE INFORMATION

We are a reporting company under the Exchange Act. You may obtain annual, quarterly, and special reports and other information that we file with the Securities and Exchange Commission (“SEC”).  You may read and copy any document that we file with the SEC at the SEC’s Public Reference Room, 100 F Street, N.E., Room 1580, Washington, D.C. 20549.  You may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330.  Electronic filings filed on or after July 1, 1992 are available via the Electronic Data Gathering Analysis and Retrieval System (“EDGAR”) at the public reference facility.  The SEC also maintains a web site that contains reports, proxy and information statements and other materials that are filed through EDGAR which can be accessed at http://www.sec.gov.

Our filings may also be accessed through the SEC’s website (http://www.sec.gov).  We will provide a copy of any or all documents incorporated by reference herein (exclusive of exhibits unless such exhibits are specifically incorporated by reference therein), without charge, to each person to whom this annual report is delivered, upon written or oral request to Living 3D Holdings, Inc., at Room. 1801-02, Office Tower Two, Grand Plaza, 625 Nathan Road, Mongkok, Kowloon, Hong Kong, our telephone number is (852-3563-9280) and our web address is ltdh-online.com.

We intend to furnish record-holders of our securities with annual reports containing financial statements, audited and reported upon by our independent auditors, and may also furnish quarterly reports containing unaudited interim financial information and such other periodic reports as we determine to be appropriate or as may be required by law.

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PART I

Item 1. Business. 

Living 3D is a globally integrated enterprise that targets the intersection of 3D technology and effective business. The Company specialized in the design, development, production, sale and marketing of “auto stereoscopic 3D" technology, or Auto 3D products. The products we marketed were based on Auto 3D, which means that viewers are not required to wear 3D glasses in order to experience the 3D effects of the screen, and instant switching between two dimensional, or 2D, and 3D viewing is enabled.  We believe that this gave us a competitive advantage over other suppliers of 3D products requiring the use of a visor or glasses in order to experience a 3D effect.

The Company also provided technical and support services of 3D in software development, contents production and hardware configuration to a wide range of industries, including entertainment, education, consumer electronics, medical diagnosis, scientific research and, in particular, media and advertising. The Company aimed at customizing product requirements and specifications in order to enhance the power of product displays in business advertising and special operational environments.

         Through innovative and reliable provision of products and services as well as collaboration with other strategic partners, the Company embarked on the following new strategic directions:

 Enabling enterprises to fully exploit the power and capacity of 3D technology; 

 Satisfying the full range of media display in business advertising and business operation; 

 Enabling a truly integrated solution for 3D applications and powerful display specially customized for business requirements and operations; and 

 Developing and delivering a comprehensive low cost media content development and productivity environment. 

We marketed our 3D technologies and products under our Living 3D brand in the PRC.

With the change in the Company’s control in December 2015, the Company redefined its business from 3D technology development to computer software development with major operations in Hong Kong and Mainland China. The Company now focuses on the research and development of ecommerce platform, mobile game and virtual reality application. Our ecommerce platform seeks to integrate web application with product manufacturing which will increase the productivity and efficiency of the operation. Along with the ever increasing usage of the internet, our O2O (O2O stands for “online to offline,”  a term used to describe a variety of ecommerce services that provide online information, services, or discounts to consumers that enhance their offline shopping experiences.) ecommerce platform is expected to bring in more business opportunities to the manufacturer.

Corporate History

The Company was incorporated on October 28, 1987 in the state of Nevada under the name Staco Incorporated.  It was organized for the purpose of conducting business as a transfer agent.  This business was unsuccessful as a transfer agent and the Company became inactive.  The business remained inactive until November 30, 2001, when it acquired certain assets from Cordell Henrie, a sole proprietor doing business as "Concrete Casting" and he became its president.  Staco Incorporated changed its name to Concrete Casting Incorporated on January 17, 2002.  The assets acquired included drawings, plans and concepts regarding the design of replicas of antiquities to be cast in concrete and marketed to the U.S. landscaping market.  From such point through December 31, 2007, Concrete Casting focused on concrete products though its emphasis changed from replicas of antiquities to construction applications, such as casted window wells and water features for landscaping use. Mr. Henrie eventually was no longer able to devote the time necessary to Concrete Casting’s product development and he resigned as an officer and a director as of December 31, 2007.  Because Concrete Casting's development in the concrete casting business was not sufficiently mature to make it commercially viable, the decision was made to shut down development of concrete products and discontinue those operations.

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In 2008, Concrete Casting hired Kevin J. Asher as its new president to locate and acquire new business opportunities.  At such time, Concrete Casting was a shell company with nominal assets whose sole business was to identify, evaluate and investigate various companies with the intent to effect a reverse merger transaction in which it would acquire a target company with an operating business to continue the acquired company’s business as a publicly-held entity. On July 1, 2010, Concrete Casting changed its name to "AirWare International Corp." and on September 27, 2011, AirWare International changed its name to "Living 3D Holdings, Inc."

On December 8, 2011, certain of the prior shareholders of Living 3D Holdings, Inc. , a Nevada corporation and a publicly held and traded company (the "Company”), who were the holders of a majority of the issued and outstanding shares of capital stock of the Company (the "Selling Shareholders") and Jimmy Kent-Lam Wong, June Mon Yon, Chang Li, Kin Wah Ngai and Lin Su (each, a "Purchaser" and collectively, the "Purchasers"), entered into a stock purchase agreement (the "Stock Purchase Agreement").  Under the terms of the Stock Purchase Agreement, the Purchasers purchased from the Selling Shareholders an aggregate of 3,627,426 of the shares (the "Purchase Shares") of common stock, par value $0.001 per share, of the Company owned by the Selling Shareholders on December 8, 2011 (the “Closing Date”), for an aggregate consideration of $385,000 (the "Stock Purchase").

Also on the Closing Date, the Company, Living 3D Holdings, Limited, a British Virgin Islands corporation and a privately held company (“L3D-BVI”), and all of the shareholders of L3D-BVI (the “L3D-BVI Shareholders”) entered into a share acquisition and exchange agreement (the "Share Exchange Agreement"). Under the terms of the Share Exchange Agreement, the Company acquired from the L3D-BVI Shareholders all of the issued and outstanding shares of common stock of L3D-BVI (the "L3D-BVI Shares"), making L3D-BVI a wholly-owned subsidiary of the Company, and, in exchange for all of the L3D-BVI Shares (the “Share Exchange”), the Company issued to the L3D-BVI Shareholders an aggregate of 62,590,880 shares (the “Exchange Shares”) of its common stock.  L3D-BVI was incorporated on June 23, 2008 under the laws of the British Virgin Islands and was, at the time of the Stock Purchase and Share Exchange, a privately held company, while the Company was a publicly held and traded company on the OTC Bulletin Board under the symbol "CCSG."    

Upon the completion of the Stock Purchase and the Share Exchange, our business became that of L3D-BVI, our wholly-owned subsidiary. As prior to the Stock Purchase and the Share Exchange, the Company had no operating activities, the financial statements and Management’s Discussion and Analysis reflect the activity of L3D-BVI for all periods presented.  Upon the closing of the Stock Purchase and the Share Exchange, the shareholders of the Company retained an aggregate of 3,485,174 shares of common stock and the former L3D-BVI Shareholders acquired an aggregate of 66,218,306 shares of common stock, for a total of 69,703,480 shares of common stock issued and outstanding.  Accordingly, the former L3D-BVI Shareholders owned approximately 95% of the Company's total issued and outstanding common stock.  The foregoing descriptions of the terms of the Stock Purchase Agreement and the Share Exchange Agreement are qualified in their entirety by reference to the provisions of such documents included as exhibits in our filings with the SEC.  

On November 30, 2015, Jimmy Kent-Lam Wong, who was the holder of a majority of the issued and outstanding shares of the capital stock of the Company (“Wong”), and Man Wah Stephen Yip (“Yip”) entered into a stock purchase agreement (the “Wong-Yip Stock Purchase Agreement”). Under the terms of the Wong-Yip Stock Purchase Agreement, Yip purchased from Wong an aggregate of 37,883,841 of the shares (the “Wong-Yip Purchase Shares”) of common stock, par value $0.001 per share, of the Company owned by Wong, for a nominal consideration of $100.

By a separate Stock Purchase Agreement dated November 30, 2015, the Company had disposed of all of its subsidiary companies, namely, Living 3D Holdings, Limited, Living 3D International (HK) Limited, Colombia College Hollywood International Limited and Living 3D Technology Group Limited to Jimmy Kent-Lam Wong at a nominal consideration of $100. The disposal was effective as of October 1, 2015.

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Recent Development

 On December 30, 2016, the Company entered into a share acquisition and exchange agreement (the "Share Acquisition and Exchange") with Sugar Technology Group Holdings Corporation (“Sugar”), a company incorporated in the British Virgin Islands (the “BVI”). Under the Share Acquisition and Exchange, the Company issued an aggregate of 30,000,000 shares of its common stock at par value of $0.001 each to all of the shareholders of Sugar in exchange for all of the issued and outstanding stock of Sugar. The Share Acquisition and Exchange was closed on January 5, 2017. As a result of the Share Acquisition and Exchange, Sugar became the Company’s wholly-owned subsidiary. 

 Sugar engages in computer software development with major operations in Hong Kong and Mainland China. Sugar focuses on the research and development of e-commerce platform, mobile game and virtual reality application. The e-commerce platform seeks to integrate web application with product manufacturing which will increase the productivity and efficiency of the operation. Along with the ever increasing usage of the internet, our O2O e-commerce platform is expected to bring in more business opportunities to the manufacturer. 

Sources and Availability of Raw Materials and Principal Suppliers

We have relied on third parties in the past to manufacture products for us to market and sell.  Although we may use our current manufacturers for future product orders we obtain, we do not have any obligation to use such manufacturers nor do we currently have any future product orders pending.  Given our current level of operations, we have not had problems obtaining sufficient supplies of raw materials or component parts.  We do not have multiple sources of supply for these items, but believe there are readily available alternative sources at acceptable prices.

Inventory, Operating Capital and Seasonality

                We have no inventory because historically we have our products manufactured only after we receive orders for them.  In the future, we may seek to store products pending sale at the manufacturing facilities that produced such products, if feasible.  We do not maintain any warehouse facility. Our computer software development business is too new to be able to assess whether seasonality could be a material factor in our business.  We do not currently require material amounts of operating capital because we are in the development stage.

Dependence on Major Customers

We do not yet have any major customers of our computer software development business.

Competition

Nearly all established computer software development companies have significantly greater human and economic resources than we currently do and there can be no assurance that we will be able to effectively compete with them for market share.

Intellectual Property, Patents, Trademarks and Trade Secrets

We rely on certain intellectual property rights which consist principally of trade secrets and know-how.  We can offer no assurance that we will be able to obtain future licenses on terms acceptable to us, or on any terms, or to successfully develop or contract for the development of new computer software to enable us to manufacture new products for sale in the future.  We have not registered any trademarks or copyrights and there can be no assurance that we will be able to protect any trademarks and copyrights from infringement or third party claims, if any.  We have not filed for any patents on our technologies.  Lastly, no assurance can be given that third parties will not independently develop substantially equivalent proprietary information and techniques or otherwise gain access to our trade secrets and know-how.

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Research and Development

We have not engaged in research and development activities during the last three fiscal years ended December 31, 2016.

Costs and Effects of Compliance with Environmental Laws; Environmental Matters

We are not aware of any material costs or impacts on our business related to compliance with federal, state or local environmental laws regarding the products we intend to market and sell.   

Insurance

We do not carry any kind of product liability or other business insurance.

Legal and Administrative Proceedings

We are not a party to any material legal or administrative proceedings, and we are not aware of any threatened material legal or administrative proceedings against us.

Facilities

Our office is located at Room S, 2/F, Block D East Sun Industrial Center, 16 Shing Yip Street, Kwun Tong, Kowloon, Hong Kong. Apart from this, we have no other facilities.

Employees

As of December 31, 2016, we had no full-time employees.

Corporate Information

The Company's principal executive office is located at Room 1801-02, Office Tower Two, Grand Plaza, 625 Nathan Road, Mongkok, Kowloon, Hong Kong.

Item 1A. Risk Factors.

Not applicable.

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Item 1B. Unresolved Staff Comments.

None.

Item 2. Properties.

         Our office in Hong Kong consists of approximately 400 square feet located at Room S, 2/F, Block D East Sun Industrial Center, 16 Shing Yip Street, Kwun Tong, Kowloon, Hong Kong.  This office is furnished to us by our CEO at no charge.  

Item 3. Legal Proceedings

There are no claims, actions, suits, proceedings or investigations that are currently pending or, to our knowledge, threatened by or against us, or with respect to our operations or assets, by or against any of our officers, directors or affiliates.

Item 4. Mine Safety Disclosures

Not applicable.

PART II

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

         The common stock of the Company is quoted on the OTC Bulletin Board under the symbol “LTDH” .  Although our common stock is quoted on the OTC Bulletin Board, it has traded sporadically with no significant volume.  Consequently, the information provided below may not be indicative of the price of our common stock under different conditions. The high/low closing prices of our common stock were as follows for the periods below.  The quotations below reflect inter-dealer bid prices without retail markup, markdown, or commission and may not represent actual transactions:

Effective on the opening of business on December 2, 2016, the Financial Industry Regulatory Authority (“FINRA”) granted market effectiveness to our 1:100 Reverse Stock Split. The high and low closing price for the year ended December 31, 2016 has been adjusted accordingly to reflect the Reverse Stock Split.

Holders of Common Stock

As of April 13, 2017, we had approximately 90 stockholders of record for our common stock.  

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Dividend Policy

To date, we have not declared or paid cash dividends on our shares of common stock.  The holders of our common stock will be entitled to non-cumulative dividends on the shares of common stock, when and as declared by our board of directors, in its sole discretion.  We intend to retain all future earnings, if any, for our business and do not anticipate paying cash dividends in the foreseeable future.  Any future determination to pay cash dividends will be at the discretion of our board of directors and will be dependent upon our financial condition, results of operations, capital requirements, general business conditions and such other factors as our board of directors may deem relevant.

Securities Authorized for Issuance under Equity Compensation Plans

As of April 13, 2017, the Company does not have in place any equity compensation plans.

Recent Issuances of Unregistered Securities

         None.  

Item 6. Selected Financial Data.

Not applicable.

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

Forward-Looking Statements

This annual report on Form 10-K contains forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. The words “believe,” “expect,” “anticipate,” “intend,” “estimate,” “may,” “should,” “could,” “will,” “plan,” “future,” “continue” and other expressions that are predictions of or indicate future events and trends and that do not relate to historical matters identify forward-looking statements. These forward-looking statements are based largely on our expectations or forecasts of future events, can be affected by inaccurate assumptions, and are subject to various business risks and known and unknown uncertainties, a number of which are beyond our control. Therefore, actual results could differ materially from the forward-looking statements contained in this annual report, and readers are cautioned not to place undue reliance on such forward-looking statements. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, unless required by law. A wide variety of factors could cause or contribute to such differences and could adversely impact revenues, profitability, cash flows and capital needs. There can be no assurance that the forward-looking statements contained in this annual report will, in fact, transpire or prove to be accurate.

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Factors that could cause or contribute to our actual results to differ materially from those discussed herein or for our stock price to be adversely affected include, but are not limited to: (i) our lack of significant operating history results; (ii) our independent registered public accountants have expressed a going concern opinion; (iii) our ability to raise additional working capital that we may require and, if available, that such working capital will be on terms acceptable to us; (iv) our ability to implement our business plan; (v) uncertainties regarding our ability to increase revenues and penetrate our market; (vi) economic and general risks relating to business; (vii) our ability to manage our costs of production; (viii) our ability to protect our intellectual property through patents and other intellectual property protection; (ix) our dependence on key personnel; (x) increased competition or our failure to compete successfully; (xi) our ability to keep pace with technological advancements in our industry; (xii) our ability to comply with Section 404 of the Sarbanes-Oxley Act of 2002, as required; (xiii) our nonpayment of dividends and lack of plans to pay dividends in the future; (xiv) future sale of a substantial number of shares of our common stock that could depress the trading price of our common stock, if it trades, lower our value and make it more difficult for us to raise capital; (xv) our additional securities available for issuance, which, if issued, could adversely affect the rights of the holders of our common stock; (xvi) our ability to have our common stock trade in an active public market; (xvii) the price of our common stock, if it trades, is likely to be highly volatile because of several factors, including a relatively limited public float; and (xviii) indemnification of our officers and directors.

General

The following discussion should be read in conjunction with our Financial Statements and notes thereto. The following discussion contains forward-looking statements, including, but not limited to, statements concerning our plans, anticipated expenditures, the need for additional capital and other events and circumstances described in terms of our expectations and intentions. You are urged to review the information set forth under the captions for factors that may cause actual events or results to differ materially from those discussed below.

Overview

          Despite the change in control of the Company in December 2015, the Company is still in the early stage of its computer software development efforts. The following discussion summarizes the material changes in our results of operations and our financial condition for the years ended December 31, 2016 and December 31, 2015.

Operating Results

For the Years Ended December 31, 2016 and 2015

The Statement of Operations is included in the Financial Statements attached to this annual report.  Please refer to this Statement of Operations.

Results from Operations

Revenues.  For the years ended December 31, 2016 and December 31, 2015, revenues were $(-0-) and $6,795, respectively, a decrease of $6,795.  The revenues for the year ended December 31, 2015 were derived from sales of 3D technology products manufactured by third parties.  The decrease in revenue was due to a decrease in product sales in the twelve months’ period over the comparable period. Moreover, the Company is still in the early stage of development and its sales fluctuate.

Cost of Revenue. The Company’s cost of revenue decreased to $(-0-) from $6,300 in the year ended December 31, 2016 compared to the same period in 2015.  The decrease was due to the decrease in sales in the current year.

Gross Profit. For the year ended December 31, 2016, the gross profit was $(-0-) compared with $495 for the same period in 2015. The decrease was because of the decrease in sales in the current year.

General and Administrative Expenses.   For the years ended December 31, 2016 and December 31, 2015, general and administrative expenses were $158,124 and $343,920, respectively, a decrease of $185,796.  The decrease in such expenses was primarily attributable to the decrease in the general and administrative expenses of the Company’s subsidiary companies which were disposed of effective October 1, 2015.

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Gain on disposal of subsidiaries.  For the years ended December 31, 2016 and December 31, 2015, gain on disposal of subsidiaries was $(-0-) and $2,121,795, respectively, a decrease of $ 2,121,795. The decrease was primarily due to the net gain on the disposal of the Company’s interest in Living 3D Holdings, Limited effective October 1, 2015 to Jimmy Kent-Lam Wong. There was no such disposal in the current year.

Operating Income or Operating (Loss).  For the year ended December 31, 2016, the operating loss was $158,124 and, for the same year ended December 31, 2015, the operating income was $1,778,370, a decrease of $1,936,494.  The increase of operating loss between the years was explained by the decrease in general and administrative expenses which were further offset by the gain on disposal of subsidiaries discussed above.

Interest Income (Expenses). The interest expenses for the year ended December 31, 2016 amounted to $(-0-) and ($16,267) for the year ended December 31, 2015. The interest expenses represented interest payable to Kingdom Industry Group, Inc. on advances of US$300,000. The loan bears interest of 7.33% per annum. The Company ceased to accrue the interest on disposal of Living 3D Holdings, Limited to Jimmy Kent- Lam Wong effective October 1, 2015.

Net Income/(Loss).  For the year ended December 31, 2016, the net loss was $(158,124) compared with a net income of 1,761,796 for the year ended December 31, 2015, a decrease of $1,919,920. The decrease in the net income was primarily due to the decrease in the general and administrative expenses which were further offset by the gain on disposal of subsidiaries as discussed above.

Income Tax Provision.  No provision for income tax benefit from net operating losses had been made for the years ended December 31, 2016 and 2015 as we had fully reserved the asset until realization is more reasonably assured.

Liquidity and Capital Resources.  Cash and cash equivalents as of December 31, 2016 and December 31, 2015 was $100. There were no changes to the liquidity and capital resources of the Company since all expenses were paid by the Chairman of the Board on behalf of the Company.

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Liquidity and Capital Resources

Current and Expected Liquidity

Historically, we have financed operations primarily through the issuance of debt.  In the near future, as additional capital is needed, we expect to rely primarily on loans from our major shareholder and sales of our equity securities.  We financed operations by increasing the amount due to related parties to $82,496 at December 31, 2016 from $3,028 at December 31, 2015, an increase of $79,468. The increase is due principally to professional fees paid by related parties on behalf of the Company for the services rendered for the year ended December 31, 2016.

Our cash flows used for operating activities decreased by $132,832 from $132,832 at December 31, 2015 to $(-0-) at December 31, 2016, due principally to the fact that all expenses are paid by the Chairman of the Board on behalf of the Company.

Our cash used in investing activities decreased by $2,087, from $2,087 at December 31, 2015 to $(-0-) at December 31, 2016, due primarily to the decrease in cash paid on disposal of subsidiaries discussed above. There was no such disposal in current year.

Our cash from financing activities decreased by $131,328, from $131,328 at December 31, 2015 to $(-0-) at December 31, 2016, due principally to a decrease in loans from related parties.

Our non cash transactions increased by $79,468 from $(-0) at December 31, 2015 to $79,468 at December 31, 2016 primarily due to the fact that all expenses were paid by the Company’s Chairman of the Board on behalf of the Company.

We will require substantial additional capital to develop a market for our computer software product and implement our business plan.  We plan to pursue financing from private investors and institutions in and outside the PRC.  We do not have any commitments for additional financing. Such new financing could include equity, which would likely be dilutive to our shareholders, or debt, which would likely restrict our ability to borrow from other sources.  In addition, such securities may contain rights, preferences or privileges senior to the rights of our current shareholders.  

There can be no assurance that additional funds will be available on terms acceptable to us or at all.  If adequate funds are not available, we may have to materially curtail our operations.  Any inability to raise adequate funds could have a material adverse effect on our business, results of operation and financial condition.

Due to the uncertainties related to these matters, there exists substantial doubt about our ability to continue as a going concern. The financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that might result should we be unable to continue as a going concern.

Capital Commitments

We had no material commitments for capital expenditures.

Off-Balance Sheet Arrangements

There were no off-balance sheet arrangements at December 31, 2016.

Critical Accounting Policies and Estimates

Accounting Estimates.  The preparation of financial statements in conformity with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results when ultimately realized could differ from those estimates.

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Fair Value of Financial Instruments.  The carrying amounts of financial instruments, including cash, other receivables, accounts payable and accrued expenses, approximates their fair value due to the relatively short-term nature of these instruments.

Revenue Recognition.  We recognize revenue when the significant risks and rewards of ownership have been transferred to the customer, including factors such as when persuasive evidence of an arrangement exists, delivery or service has been performed, the sales price is fixed and determinable, and collectability is probable. The Company recognizes sales when the merchandise is shipped, title has been passed to the customers or the service is provided, and collectability is reasonably assured.

Foreign Currency Translation.  The Company maintains its books and accounting records in United States Dollars with the United States Dollars being the functional currency. Transactions denominated in foreign currencies are translated into the functional currency at the exchange rates prevailing on the transaction dates. Assets and liabilities denominated in foreign currencies are translated into the functional currency at the exchange rates prevailing at the balance sheet date.

We follow FASB ASC 830-30, “Foreign Currency Translation”, for both the translation and re-measurement of balance sheet and income statement items into U.S. dollars. Resulting translation adjustments are reported as a separate component of accumulated comprehensive income (loss) in stockholders’ equity.

Income Taxes.  Taxes are calculated in accordance with taxation principles currently effective in Hong Kong.  We account for income taxes using the liability method.  Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of 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.  The effect on deferred tax assets and liabilities of a change in tax rates is recognized as income in the period that includes the enactment date.  A valuation allowance is provided for the amount of deferred tax assets that, based on available evidence, are not expected to be realized.  

Related Parties.  A party is considered to be related to the Company if the party directly or indirectly or through one or more intermediaries, controls, is controlled by, or is under common control with the Company.  Related parties also include principal owners of the Company, its management, members of the immediate families of principal owners of the Company and its management and other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests.  A party which can significantly influence the management or operating policies of the transacting parties or if it has an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one of more of the transacting parties might be prevented from fully pursuing its own separate interests is also a related party.

Recent Accounting Pronouncements

The Company has implemented all new accounting pronouncements that are in effect and that may impact its financial statements and does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations. Also see the recently adopted accounting pronouncements included in Note 2 to our audited financial statements included elsewhere in this report.

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Item 7A. Quantitative and Qualitative Disclosures about Market Risk.

Not applicable.

Item 8. Financial Statements and Supplementary Data.

The financial statements of the Company are included as an exhibit to this annual report on Form 10-K commencing on page F-1.

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

None.

Item 9A. Controls and Procedures.

Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures

Under the supervision and with the participation of our Chief Executive Officer, we conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act.  Based on his evaluation as of December 31, 2016, the end of the period covered by this annual report on Form 10-K, he concluded that our disclosure controls and procedures were not effective at a reasonable assurance level to ensure that the information required to be disclosed in reports filed or submitted under the Exchange Act, including this annual report, were recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and was accumulated and communicated to management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

Management’s 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 designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that:

 Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets; 

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

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

All internal control systems, no matter how well designed, have inherent limitations.  Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.  Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.  Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate.

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In connection with the filing of our annual report on Form 10-K, our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2016.  In making this assessment, our management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control—Integrated Framework (2013).  Based on our assessment using those criteria, management believes that, as of December 31, 2016, our internal control over financial reporting is not effective. Our management identified the following material weaknesses in our internal control over financial reporting, which are indicative of many small companies with small staff: (i) inadequate segregation of duties and effective risk assessment; and (ii) insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of both US GAAP and SEC guidelines.

We plan to take steps to enhance and improve the design of our internal control over financial reporting. During the period covered by this annual report on Form 10-K, we have not been able to remediate the material weaknesses identified above. To remediate such weaknesses, we hope to implement the following changes during our fiscal year ending December 31, 2017: (i) appoint additional qualified personnel to address inadequate segregation of duties and ineffective risk management; (ii) adopt sufficient written policies and procedures for accounting and financial reporting; and (iii) appoint additional independent directors that can serve as members of an audit committee. The remediation efforts will be largely dependent upon our securing additional financing to cover the costs of implementing the changes required. If we are unsuccessful in securing such funds, remediation efforts may be adversely affected in a material manner.

This annual report does not include an attestation report of our independent registered public accounting firm regarding internal control over financial reporting.  Management’s report was not subject to attestation by the Company’s independent registered public accounting firm pursuant to rules of the Securities and Exchange Commission that permit the Company to provide only management’s report in this annual report.

Changes in Internal Control over Financial Reporting

Except as noted above, there have been no changes in our internal controls over financial reporting during the year ended December 31, 2016 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Item 9B. Other Information.

None.

Item 10. Directors, Executive Officers and Corporate Governance.

The following table sets forth the names, positions and ages of our directors and executive officers.  Our directors are typically elected at each annual meeting and serve for one year and until their successors are elected and qualify.  Officers are appointed by our Board of Directors and their terms of office are at the discretion of our Board of Directors.

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Man Wah Stephen Yip, Chief Executive Officer and Chairman of the Board of Directors. Mr. Yip joined the Group in November 2015. He is the Chairman of the Board of Directors, the Chief Executive Officer and the Chief Technology Officer of the Group. Before joining the Group, Mr. Yip was the Chairman of Sugar Computing Limited. Prior to that, he served in a number of senior positions in selected IT companies in Hong Kong.  Mr. Yip is now responsible for the product development of the Group. Mr. Yip has over 16 years of experience in business IT system and video game development and has developed well established connections in the industry through his extensive experience. Mr. Yip holds a LLB degree from University of London and both a BS and MS degree from Fairleigh Dickinson University in New Jersey, United States.

So Ka Yan, Secretary and Director. Ms. So joined the Group as a Director and Secretary in November 2015. Ms. So is responsible for the overall corporate strategy and the daily operations of the Group, including business development and overall management. She graduated from the Chinese University in Hong Kong and holds a law degree from University of London. She has over 10 years of experience in the market development in Mainland China and Hong Kong.  Ms. So is the wife of Mr. Yip.

Sze Cheong Eric Ng, Chief Financial Officer, Treasurer and Director. Mr. Ng joined the Group in 2012 as a senior consultant. He has been appointed as a Director and the Chief Financial Officer in November 2015. Mr. Ng is one of the Group’s key China specialists, having spent well over a decade representing a number of listed Chinese companies in the United States.  He initially served as a manager at KPMG Peat Marwick from 1980 to 1986, responsible for audit and taxation affairs of listed companies in Hong Kong. Through his experiences at KPMG, Mr. Ng developed an expertise in mergers and acquisitions.

In the early 1990s, Mr. Ng acted as CFO/Finance Director for a US-listed company that became public through a reverse merger. He was responsible for fund raising, private placement transactions, and dealing with merchant bankers and the SEC. Mr. Ng was also responsible for various mergers and acquisitions for the listed company. Since then, Mr. Ng has acted as an investment consultant for numerous Chinese companies, guiding them through the complex path toward the United States public listing.

In the late 1990s, he assisted a biotech company get listed in the United States through a reverse takeover and acted as CFO/Finance Director for that company. Before joining the Group, Mr. Ng acted as an advisor to Chinese enterprises seeking growth through possible United States public listings.

None of the current executive officers and directors, nor any of their affiliates, beneficially owns any equity securities or rights to acquire any securities of the Company except as otherwise described in this report, and no such persons have been involved in any transaction with the Company or any of our directors, executive officers or affiliates that is required to be disclosed pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”), other than with respect to the transactions that have been described in this report or in any prior reports filed by the Company with the SEC.  

None of the current officers and directors has been convicted in a criminal proceeding, excluding traffic violations or similar misdemeanors, nor have they been a party to any judicial or administrative proceeding during the past five years, except for matters that were dismissed without sanction or settlement, that resulted in a judgment, decree or final order enjoining the person from future violations of, or prohibiting  activities subject to, federal or state securities laws, or a finding of any violation of federal or state securities laws.

Board of Directors and Committee Meetings

Our Board of Directors held four meetings during the fiscal year ended December 31, 2016.  In addition, our Board of Directors acted by unanimous written consent during fiscal year ended December 31, 2016.  Each of our directors attended 100% of the meetings of the Board of Directors and the committees on which they served in the fiscal year ended December 31, 2016. Our directors are expected, absent exceptional circumstances, to attend all board meetings and meetings of any committees on which they serve.

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Committees of the Board of Directors

We do not have Audit, Compensation or Nominating and Governance Committees. Our full Board of Directors discharges the duties that such committees would normally have. We do not have such committees because of our stage of development and because our Board of Directors consists of only three members.  Mr. Yip is our Chairman of the Board of Directors.

Our full Board is currently comprised of three Directors, none of whom is independent, as defined by the rules and regulations of the SEC. The three members of our Board of Directors are Man Wah Stephen Yip, So Ka Yan and Sze Cheong Eric Ng.  The Board of Directors determined that Mr. Ng qualifies as an “audit committee financial expert,” as defined under the rules and regulations of the SEC.  He is not independent, as noted above; however, we do not believe that independence is required at this juncture given our early stage of development.  We intend to have an independent person in this role as we grow and expand our operations.

Under the Sarbanes-Oxley Act of 2002, all audit and non-audit services performed by the Company’s independent accountants must be approved in advance by the Board to assure that such services do not impair the accountants’ independence from the Company.  Our full Board of Directors performs the equivalent functions of an audit committee; therefore, no policies or procedures other than those required by SEC rules on auditor independence have been implemented.  

Report of the Board of Directors Serving the Equivalent Functions of an Audit Committee

Review and Discussion with Management

Our Board has reviewed and discussed with management our audited financial statements for the fiscal year ended December 31, 2016, the process designed to achieve compliance with Section 404 of the Sarbanes-Oxley Act of 2002 and our assessment of internal control over financial reporting.  

Review and Discussions with Independent Registered Public Accounting Firm

Our Board has discussed with Malone Bailey, LLP, our independent registered public accounting firm for fiscal year 2016, the matters the Board, serving the equivalent functions of an audit committee, is required to discuss pursuant to Statement on Auditing Standards No. 114 (Communications with Audit Committees), which includes, among other items, matters related to the conduct of the audit of our financial statements.

Our Board also has received the written disclosures and the letter from Malone Bailey, LLP required by Public Company Accounting Oversight Board Ethics and Independence Rules and Standards (Rule 3526. Communication with Audit Committees Concerning Independence) and has discussed with Malone Bailey, LLP any relationships that may impact its independence, and satisfied itself as to the independent registered public accounting firm’s independence.

Conclusion

Based on the review and discussions referred to above, the Board, serving the equivalent functions of the audit committee, approved our audited financial statements for the fiscal year ended December 31, 2016 to be included in this annual report on Form 10-K for the fiscal year ended December 31, 2016 for filing with the SEC.

Director Independence

The members of our Board of Directors are Man Wah Stephen Yip, So Ka Yan and Sze Cheong Eric Ng.  None of these persons is considered “independent” in accordance with Rule 5605(a)(2) of the NASDAQ Marketplace Rules.  Our common stock is currently traded on the OTC Bulletin Board, which does not require that a majority of the Board be independent.  If we ever become an issuer whose securities are listed on a national securities exchange or on an automated inter-dealer quotation system of a national securities association, which has independent director requirements, we intend to comply with all applicable requirements relating to director independence.

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Board of Directors’ Role in the Oversight of Risk Management

We face a variety of risks, including credit, liquidity and operational risks.  In fulfilling its risk oversight role, our Board of Directors focuses on the adequacy of our risk management process and overall risk management system.  Our Board of Directors believes that an effective risk management system will (i) adequately identify the material risks that we face in a timely manner; (ii) implement appropriate risk management strategies that are responsive to our risk profile and specific material risk exposures; (iii) integrate consideration of risk and risk management into our business decision-making; and (iv) include policies and procedures that adequately transmit necessary information regarding material risks to senior executives and, as appropriate, to the Board or relevant committee.

Our Board of Directors oversees risk management for us.  Accordingly, the Board schedules time for periodic review of risk management, in addition to its other duties.  In this role, the Board receives reports from management, certified public accountants, outside legal counsel, and to the extent necessary, from other advisors, and strives to generate serious and thoughtful attention to our risk management process and system, the nature of the material risks we face, and the adequacy of our policies and procedures designed to respond to and mitigate these risks.

Board Leadership Structure

Our Board of Directors does not have a policy on whether or not the roles of Chief Executive Officer and Chairman of the Board of Directors should be separate and, if they are to be separate, whether the Chairman of the Board should be selected from the non-employee directors or be an employee.  Our Board of Directors believes that it should be free to make a choice from time to time in any manner that is in the best interests of us and our shareholders.  The Board of Directors believes that Mr. Yip's service as both Chief Executive Officer and Chairman of the Board is in the best interest of the Company and its shareholders.  Mr. Yip possesses detailed and in-depth knowledge of the issues, opportunities and challenges we face and is thus best positioned to develop agendas that ensure that the Board’s time and attention are focused on the most critical matters.  His combined role enables decisive leadership, ensures clear accountability, and enhances our ability to communicate our message and strategy clearly and consistently to our shareholders, employees, customers and suppliers.

Shareholder Communications with the Board of Directors

Shareholders may communicate with the Board of Directors by writing to us as follows:  Living 3D Holdings, Inc., attention:  Corporate Secretary, Room. 1801-02, Office Tower Two, Grand Plaza, 625 Nathan Road, Mongkok, Kowloon, Hong Kong.  Shareholders who would like their submission directed to a particular member of the Board of Directors may so specify and the communication will be forwarded as appropriate.

Process and Policy for Director Nominations

Our full Board will consider candidates for Board membership suggested by Board members, management and our shareholders.  In evaluating the suitability of potential nominees for membership on the Board, the Board members will consider the Board's current composition, including expertise, diversity, and balance of inside, outside and independent directors.  The Board considers the general qualifications of the potential nominees, including integrity and honesty; recognized leadership in business or professional activity; a background and experience that will complement the talents of the other board members; the willingness and capability to take the time to actively participate in board and committee meetings and related activities; the extent to which the candidate possesses pertinent technological, political, business, financial or social/cultural expertise and experience; the absence of realistic possibilities of conflict of interest or legal prohibition; the ability to work well with the other directors; and the extent of the candidate's familiarity with issues affecting our business.

While the Board considers diversity and variety of experiences and viewpoints to be important factors, it does not believe that a director nominee should be chosen solely or mainly because of race, color, gender, national origin or sexual identity or orientation. Thus, although diversity may be a consideration in the Board's process, it does not have a formal policy regarding the consideration of diversity in identifying director nominees.

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Shareholder Recommendations for Director Nominations. Our Board of Directors does not have a formal policy with respect to consideration of any director candidate recommendation by shareholders.  While the Board of Directors may consider candidates recommended by shareholders, it has no requirement to do so.  To date, no shareholder has recommended a candidate for nomination to the Board.  Given that we have not received director nominations from shareholders in the past and that we do not canvass shareholders for such nominations, we believe it is appropriate not to have a formal policy in that regard.  We do not pay a fee to any third party to identify or evaluate or assist in identifying or evaluating potential nominees.

Shareholder recommendations for director nominations may be submitted to the Company at the following address:  Living 3D Holdings, Inc., attention:  Corporate Secretary, Room. 1801-02, Office Tower Two, Grand Plaza, 625 Nathan Road, Mongkok, Kowloon, Hong Kong. Such recommendations will be forwarded to the Board for consideration, provided that they are accompanied by sufficient information to permit the Board to evaluate the qualifications and experience of the nominees, and provided that they are in time for the Board to do an adequate evaluation of the candidate before the annual meeting of shareholders.  The submission must be accomplished by a written consent of the individual to stand for election if nominated by the Board of Directors and to serve if elected and to cooperate with a background check.

Shareholder Nominations of Directors. The bylaws of the Company provide that in order for a shareholder to nominate a director at an annual meeting, the shareholder must give timely, written notice to the Secretary of the Company and such notice must be received at the principal executive offices of the Company not less than 120 days before the date of its release of the proxy statement to shareholders in connection with its previous year’s annual meeting of shareholders. Such shareholder’s notice shall include, with respect to each person whom the shareholder proposes to nominate for election as a director, all information relating to such person, including such person’s written consent to being named in the proxy statement as a nominee, serving as a director, that is required under the Exchange Act, and cooperating with a background investigation.  In addition, the shareholder must include in such notice the name and address, as they appear on the Company’s records, of the shareholder proposing the nomination of such person, and the name and address of the beneficial owner, if any, on whose behalf the nomination is made, the class and number of shares of capital stock of the Company that are owned beneficially and of record by such shareholder of record and by the beneficial owner, if any, on whose behalf the nomination is made, and any material interest or relationship that such shareholder of record and/or the beneficial owner, if any, on whose behalf the nomination is made may respectively have in such business or with such nominee. At the request of the Board of Directors, any person nominated for election as a director shall furnish to the Secretary of the Company the information required to be set forth in a shareholder’s notice of nomination which pertains to the nominee.

To be timely in the case of a special meeting or if the date of the annual meeting is changed by more than thirty (30) days from such anniversary date, a shareholder’s notice must be received at the principal executive offices of the Company no later than the close of business on the tenth day following the earlier of the day on which notice of the meeting date was mailed or public disclosure of the meeting date was made.

Code of Ethics and Conduct

Our Board of Directors has adopted a Code of Ethics and Conduct that is applicable to all of our employees, officers and directors. Our Code of Ethics and Conduct is intended to ensure that our employees act in accordance with the highest ethical standards.  A copy of our Code of Ethics and Conduct may be obtained by sending a written request to us at Living 3D Holdings, Inc., attention:  Corporate Secretary, Room 1801-02, Office Tower Two, Grand Plaza, 625 Nathan Road, Mongkok, Kowloon, Hong Kong. The Code of Ethics and Conduct is filed as an exhibit to this annual report on Form 10-K.

Item 11. Executive Compensation.

The table below sets forth all cash compensation paid or proposed to be paid by the Company to the chief executive officer and the most highly compensated executive officers, and key employees for services rendered in all capacities to the Company during fiscal years ended December 31, 2016 and 2015.

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Summary Compensation Table

(1) Ceased to be the CEO and Chairman of the Board with effect from November 30, 2015. 

(2) Ceased to be the CFO, Secretary and Director with effect from November 30, 2015. 

(1) The address of these persons is Room S, 2/F, Block D East Sun Industrial Center, 16 Shing Yip Street, Kwun Tong, Kowloon, Hong Kong  

(2) Man Wah Stephen Yip and So Ka Yan are husband and wife. Man Wah Stephen Yip is deemed to own the same shares which are beneficially owned by So Ka Yan. 

(3) The address of Lai Lai Lung is Flat 7, 37/F., Block A, Kam Fu House, Kam Tai Court. 

(4) The address of Ng Kwai Tai is 1715 Ngan Chun House, Tung Chun Court, Sai Wan Ho, Hong Kong. 

(5) The address of Ho Siu Wai is .15/F Nga Lam House, Tsui Lam Estate, Tseung Kwan O, N.T 

(6) The address of Lai Lai Wan is Flat 318, 3/F Blk E Tsui Yeung House, Tsui Ping Estate, Kwun Tong, KLN. 

(7) The foregoing beneficial owners hold investment and voting power in their shares.  

(8) The percent of common stock owned is calculated using the sum of (A) the number of shares of common stock owned and (B) the number of warrants and options of the beneficial owner that are exercisable within sixty days, as the numerator, and the sum of (Y) the total number of shares of common stock outstanding and (Z) the number of warrants and options of the beneficial owner that are exercisable within sixty days as the denominator.  

The related parties consist of the following:

On October 19, 2016, the Company filed a Certificate of Amendment with the Secretary of State of the State of Nevada to effect a 1-for-100 reverse stock split of its common stock and an increase of its authorized shares of common stock from 90,000,000 to 290,000,000.