Stemtech Corp - Annual Report: 2015 (Form 10-K)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

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

For the fiscal year ended August 31, 2015

[  ] 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 333-172172

GLOBE NET WIRELESS CORP.

(Exact name of registrant as specified in its charter)

2302-3 Pacific Plaza

410 Des Voeux Road West

Hong Kong, China

(Address of principal executive offices)

Registrant’s telephone number, including area code: (852) 37-55-8010

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 whether the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes [  ] 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 [  ] 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 shorter period that the registrant as required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [  ]

Indicate by check mark whether the registrant has submitted and electronically posted on its corporate Website, 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 [  ] No [X]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [X]

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 definition 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 Act) Yes [X] No [  ]

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter.

As of November 30, 2015, the registrant had 8,800,000 shares of voting common stock that were held by non-affiliates. Based on the last sales price of the registrant’s common stock of $0.05, these non-affiliate shares have an aggregate market value of $440,000.

Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date.

As of November 30, 2015, the registrant had 10,800,000 shares of common stock with par value $0.001 issued and outstanding.

TABLE OF CONTENTS

PART I

Item 1: Description of Business

FORWARD-LOOKING STATEMENTS

This annual report contains forward-looking statements. These statements relate to future events or our future financial performance. These statements often can be identified by the use of terms such as “may,” “will,” “expect,” “believe,” “anticipate,” “estimate,” “approximate” or “continue,” or the negative thereof. We intend that such forward-looking statements be subject to the safe harbors for such statements. We wish to caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. Any forward-looking statements represent management’s best judgment as to what may occur in the future. However, forward-looking statements are subject to risks, uncertainties and important factors beyond our control that could cause actual results and events to differ materially from historical results of operations and events and those presently anticipated or projected. We disclaim any obligation subsequently to revise any forward-looking statements to reflect events or circumstances after the date of such statement or to reflect the occurrence of anticipated or unanticipated events.

All dollar amounts refer to US dollars unless otherwise indicated.

Description of Business

Globe Net is a Nevada company and was incorporated on September 4, 2009. Globe Net is a startup company engaged in the development of proprietary wireless broadband technology for the purpose of becoming a rural internet service provider (RISP). Globe Net is a “shell” company as defined by the SEC as a result of only having nominal operations and nominal assets. Globe Net is an “emerging growth company” under the federal securities laws and will be subject to reduced public company reporting requirements.

Globe Net’s mission is to provide rural communities with high-speed internet connectivity at speeds equal or better than existing competing services. Through the use of its Internet and wireless connectivity systems, Globe Net will try to provide internet and related services to both consumers and businesses in currently under serviced or unserviceable areas at real broadband speeds. Globe Net plans to offer for sale its GNW Systems to residents and businesses located in under-serviced or non-serviced rural areas worldwide with the initial focus on North America and China. See “Plan of Operation” and “Management’s Discussion and Analysis of Financial Condition” below for more information. As of the effective date of this prospectus Globe Net has not conducted any business operations nor generated any revenues.

Since September 2009, Globe Net has had its executive head office at 2302-3 Pacific Plaza, 410 Des Voeux Road West, Hong Kong. The telephone number at this office is (852) 37-55-8010. Globe Net is renting the administrative office on a month to month basis.

Globe Net has an authorized capital of 200,000,000 common shares with a par value of $0.001 per share with 10.8 million common shares currently issued and outstanding.

Globe Net has not been involved in any bankruptcy, receivership or similar proceedings. There have been no material reclassifications, mergers, consolidations or purchases or sales of a significant amount of assets not in the ordinary course of Globe Net’s business.

Jumpstart Our Business Startups Act

As an “emerging growth company” Globe Net will be governed by the Jumpstart Our Business Startups Act (the “JOBS Act”).

In April 2012, the JOBS Act was enacted into law. The JOBS Act provides, among other things:

In general, under the JOBS Act a company is an “emerging growth company” if its initial public offering (“IPO”) of common equity securities was effected after December 8, 2011 and the company had less than $1 billion of total annual gross revenues during its last completed fiscal year. A company will no longer qualify as an “emerging growth company” after the earliest of:

The JOBS Act provides additional new guidelines and exemptions for non-reporting companies and for non-public offerings. Those exemptions that impact Globe Net are discussed below.

Financial Disclosure. The financial disclosure in a registration statement filed by an “emerging growth company” pursuant to the Securities Act will differ from registration statements filed by other companies as follows:

However, the requirements for financial disclosure provided by Regulation S-K promulgated by the Rules and Regulations of the SEC already provide certain of these exemptions for smaller reporting companies. Globe Net is a smaller reporting company. Currently a smaller reporting company is not required to file as part of its registration statement selected financial data and only needs to include audited financial statements for its two most current fiscal years with no required tabular disclosure of contractual obligations.

The JOBS Act also exempts Globe Net’s independent registered public accounting firm from having to comply with any rules adopted by the Public Company Accounting Oversight Board (“PCAOB”) after the date of the JOBS Act’s enactment, except as otherwise required by SEC rule.

The JOBS Act further exempts an “emerging growth company” from any requirement adopted by the PCAOB for mandatory rotation of the Company’s accounting firm or for a supplemental auditor report about the audit.

Internal Control Attestation. The JOBS Act also provides an exemption from the requirement of Globe Net’s independent registered public accounting firm to file a report on Globe Net’s internal control over financial reporting, although management is still required to file its report on the adequacy of Globe Net’s internal control over financial reporting.

Section 102(a) of the JOBS Act exempts “emerging growth companies” from the requirements in §14A(e) of the Exchange Act for companies with a class of securities registered under the Exchange Act to hold shareholder votes for executive compensation and golden parachutes.

Other Items of the JOBS Act. The JOBS Act also provides that an “emerging growth company” can communicate with potential investors that are qualified institutional buyers or institutions that are accredited to determine interest in a contemplated offering either prior to or after the date of filing the respective registration statement. The JOBS Act also permits research reports by a broker or dealer about an “emerging growth company” regardless of whether such report provides sufficient information for an investment decision. In addition the JOBS Act precludes the SEC and FINRA from adopting certain restrictive rules or regulations regarding brokers, dealers and potential investors, communications with management and distribution of a research reports on the “emerging growth company’s” IPO.

Section 106 of the JOBS Act permits “emerging growth companies” to submit registration statements under the Securities Act on a confidential basis provided that the registration statement and all amendments thereto are publicly filed at least 21 days before the issuer conducts any road show. This is intended to allow “emerging growth companies” to explore the IPO option without disclosing to the market the fact that it is seeking to go public or disclosing the information contained in its registration statement until the “emerging growth company” is ready to conduct a roadshow.

Election to Opt Out of Transition Period. Section 102(b)(1) of the JOBS Act exempts “emerging growth companies” from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standard.

The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected to opt out of the transition period.

Products

Globe Net plans to deliver high-speed Internet service wirelessly to rural subscribers. It is Globe Net’s goal is to offer quality, high-speed wireless Internet service to end-users who are without Internet service or underserviced as a result of inferior technologies. Globe Net intends to develop a new technology that will broadcast an omni-directional wireless signal with a radius of up to approximately 20 miles using 700MHz spectrum. Unlike microwave, WiFi, or WiMax, direct line of sight is not necessary, which increases its practicality while reducing broadcasting costs. Globe Net’s Internet and wireless connectivity systems will transmit high-speed Internet service wirelessly over the 600MHz - 800MHz spectrum, 700MHz being the optimal band, at speeds as high as 20Mbps (megabits per second) download and 4Mbps upload. The signal will be transmitted from an omni-directional antenna mounted on an elevated structure, such as a transmission or communications tower. Because the signal is transmitted at a relatively low frequency, it is not as susceptible to obstructions as Wi-Fi or satellite services, as the signal can penetrate through most vegetation and other solid obstacles such as buildings.

To date, Globe Net has not started any research or development on the GNW System.

The possible applications of the GNW System are numerous. The Internet is a communications infrastructure and has become a necessity for most businesses. Globe Net will leverage the GNW System to offer a variety of Internet packages and related services.

Globe Net’s VoIP telephone service will take advantage of many of the GNW System’s unique enhancements, most notably its signal noise reduction (SNR) technology. The GNW System will improve voice clarity and increase tonal range, so telephone conversations will sound as good as or better than standard land-line service. Globe Net will deploy its VoIP service once it achieves a monthly subscriber base of at least 300 subscribers in each rural installation community.

Markets

Beginning with and focusing on China and North America, Globe Net plans to offer for sale its GNW Systems to residents and businesses located in under-serviced or non-serviced rural areas. Globe Net will target rural areas or installation communities with the potential for a minimum of 300 subscribers for its Internet packages and related services. When Globe Net has sufficient revenue and assets to expand, Globe Net plans to expand to other markets where residents and businesses require a rural internet service provider, which may include Europe and South America.

Distribution Methods

Globe Net intends to advertise the availability of the GNW System and related service packages in the target markets through traditional print and radio media. Distribution of the GNW System will be conducted by an employee or consultant of Globe Net for both the transmitting end and the receiving end of the GNW System.

Status of Products

As of the effective date of this prospectus Globe Net has not developed any products or the GNW System. GNW plans on procuring and assembling the communication towers in China and delivering the towers via subcontractors. Mr. Li is presently looking for locations in China to have the towers and other equipment assembled stored. To date, Mr. Li has not entered into any agreement for an assembly and storage warehouse.

Competitive Conditions

Almost all rural internet service providers who currently offer wireless Internet to rural areas use either standard Wi-Fi (802.11b) or satellite technology.

Wi-Fi / 802.11b

802.11b products appeared on the market in early 2000. 802.11b has a maximum raw data rate of 11 Mbps, with average throughput of about 4.5Mbps. 802.11b devices suffer interference from other products operating in the 2.4GHz band. When implemented as a rural Internet solution, the path between the transmission tower and the receiving equipment must be in direct line-of-sight or better. Obstructions, such as trees or snow, can cause connection problems. Wi-Fi services typically offer speeds of up to 2.5Mbps download and 1.0Mbps upload. Prices can be relatively low, but speed, reliability, and availability are all common issues.

Satellite

Satellite Internet service is available in even the remotest locations. However, satellite also requires a completely clear line-of-sight between the dish and the satellite for the system to work. In addition to the signal being susceptible to absorption and scattering by moisture, it is similarly impacted by the presence of trees and other vegetation in the path of the signal. Most consumer satellite systems operate above 2 GHz making them sensitive to even minor obstructions such as cloudy skies, heavy rain, or leaves on the receiving dish. Typical satellite services offer speeds of up to 1.0Mbps download and 256kbps upload. Pricing can be quite high, and problems such as low speeds, inconsistent connections, and high latency are common

For most major providers, bringing internet service to these remote locations is simply an unprofitable proposition either because there are not enough potential customers or because it is too costly to justify expansion of their network in the area. Some competitors of Globe Net include Omnicity Corp., a public company located in Rushville, Indiana, and Machlink Corporation, a private company located in Edmonton, Alberta, Canada.

The GNW System offers faster Internet speeds than what some competing companies are currently offering to their rural subscribers. While higher download speeds are immediately obvious to most internet users (i.e. loading pages faster, downloading content faster), faster upload speeds achievable through the use of the GNW System will appeal to commercial and business users as information can be sent from the location faster. This is a definite advantage for organizations running servers that often transmit information (i.e. medical, governmental) or, transmit large amounts of information (i.e. file server, content provider).

Some people still regard higher Internet speed as a luxury, only good for loading web pages faster or downloading the latest music videos quicker. However, having faster Internet provides many more advantages not only for consumers but for businesses as well.

Increased Productivity – Users can retrieve large documents, research information, and send and receive email quicker. Rural business employees do not need to go on trips to other locations for meetings. Instead, they can join web conferences, allowing businesses save time that would otherwise be spent on several days of travel as well as on money for flights, hotels, meals, and rental cars.

Increased Flexibility – Broadband Internet makes working at home possible. Users can remotely connect to their office computers and perform tasks as if they were in that office. This makes it possible for employees in remote areas to work as part of a larger office environment without the expense of traveling to and from work.

Internet Telephony – Rural users really take advantage of Voice-Over-IP (VoIP) for their telephone service. In areas were cellular phone coverage is non-existent or unreliable and land-line service is only partially available, VoIP is a good solution. Plus, with typically lower monthly and long distance fees, VoIP users can realize substantial cost savings. VoIP will not work well with satellite Internet because of the high latency inherent in that technology.

Expanded Communications – Many people use programs like Skype and Google Chat to video conference or voice chat with family members and friends. Businesses use web conferencing to have meetings or real-time collaboration software to work on team-centric projects. Educational establishments are using it to reach out to students who cannot attend classes physically or post videos of lectures for students to download and review at a later time. All of these applications require high-speed access.

Multimedia Entertainment – Faster Internet delivers better multimedia entertainment. Without real broadband connectivity, viewing videos or downloading music is not a satisfying experience. In fact, some services will not even work without a fast enough Internet connection.

Also, with the GNW System, Globe Net can bring the Internet to areas where Wi-Fi service cannot reach simply because the GNW System is not as susceptible to the pitfalls that affect the other technologies and will not be prone to these interference problems.

Line-of-Sight - Wi-Fi relies on having direct line-of-sight between the transmission tower and the receiving antenna, leaving many locations unserviceable. For example, with trees or other vegetation in the signal path between the source and receiver, Wi-Fi service would not work. Satellite Internet requires a clear line-of-sight between the receiving dish and the orbiting satellite, so inclement weather such as snow or heavy rain or even cloudy skies, can adversely affect the service. The GNW System’s lower operating frequency will allows its signal to pass through buildings, trees and other obstacles, thereby reaching locations Wi-Fi simply cannot “see”.

Interference - Wi-Fi operates at 2.4GHz. Other devices operating at this frequency, like microwave ovens, Bluetooth devices, baby monitors, and cordless telephones will interfere with a Wi-Fi signal. Satellite systems are prone to rain fade (degradation during heavy precipitation) and occasional brief periods of solar interference in mid-March and late September, when the sun lines up with the satellite for a few minutes each day. Rain fade and solar interference affect all satellite links from time to time, not just Internet systems

Raw Materials / Equipment

Globe Net will need the following equipment to provide its GNW System for Internet packages and related services:

Transmitting End:

The equipment used at the transmitting location will support up to 5,000 subscribers. The omni-directional antenna must be mounted on a communication or equipment tower, with wiring running into an enclosed base location where the balance of the equipment is housed. Getting fibre optic connectivity to the tower may not always be feasible. If broadband / fibre optic lines are not available in the vicinity of an optimal tower location, fibre optic cables would need to be laid at a cost of $2-$5 per foot. If the distance from the closest broadband source to the tower is long, the cost would be prohibitively high and a microwave solution would need to be implemented.

Receiving End:

The Yagi-Uda antenna will be mounted outside and point in the general direction of the communication tower location. However, the tower does not have to be in line-of-sight of the antenna. The installation setup at the receiving location is relatively simple. Installation of the external antenna, coaxial cabling to the inside and installation and setup of the cable modem takes approximately 45-60 minutes.

For multi-dwelling unit buildings (i.e. apartment buildings, condominiums), a single Yagi-Uda antenna can be installed on the top of the building. Using a signal amplifier, the GNW System signal can be connected directly into the building’s coaxial cabling system which would be available in every unit. A cable modem would still be required for each subscriber installation. The cable modems can communicate bi-directionally and can be managed remotely. From there it will be easy for a service provider to diagnose connection problems, update modem software, and impose or remove access restrictions as needed.

Principal Suppliers

Globe Net currently has no principal suppliers for equipment or services. Globe Net needs to establish a supply chain for the required equipment and the raw materials for its GNW Systems. Also, Globe Net will need to identify service providers within the rural installation communities to provide the required services to the subscribers. Mr. Li, through his accounting background in the Chinese electronic manufacturing industry, will provide Globe Net with management for production and for supply chains and will procure competitive labor and supply costs.

Dependence on Customers

Currently, Globe Net is not and will not be dependent on one or a few major customers.

Trademark and Licenses

Globe Net currently has no patents or trademarks; and Globe Net is not party to any license, franchise, concession, or royalty agreements or any labor contracts.

Government Approvals and Regulations

Currently, Globe Net is in compliance with all business and operations licenses that are typically applicable to most commercial ventures. However, there can be no assurance that existing or new laws or regulations that may be adopted in various jurisdictions in the future will not impose additional fees and taxes on Globe Net and its business operations. Management is not aware of any such revisions to existing laws and regulations nor new laws or regulations that could have a negative impact on Globe Net’s business and add additional costs to Globe Net’s business operations.

Additionally, most of the broadband spectrum that Globe Net intends to use for transmission of its services is not required to be licensed as it does not cause radio frequency interference. However, many of the frequencies that Globe Net may use in the future are currently highly regulated by those and other applicable regulators. EMC transmissions are regulated by the US Federal Communications Commission and Industry Canada. All equipment liable to cause radio frequency interference is subject to the regulations of these regulatory bodies.

Also, Globe Net may be subject to regulation by the US Federal Aviation Administration and Transport Canada regarding the use and construction of transmission towers and to certain local zoning regulations affecting construction of transmission towers and other facilities. There may also be restrictions imposed by local authorities. Currently, Globe Net is not regulated by any such regulatory bodies.

Research and Development Costs

Globe Net has not spent any funds on either company-sponsored research and development activities or customer-sponsored research activities relating to the development of new products, services or techniques or the improvement of existing products, services, or techniques.

Employees

Globe Net currently does not have any employees. Globe Net intends to retain the services of trained staff and technicians as needed, which will include technical and administrative personnel and service provider technicians. Globe Net will also retain consultants on an “as needed basis”.

Item 1A: Risk Factors

Not applicable.

Item 1B: Unresolved Staff Comments

None.

Item 2: Properties

Globe Net executive offices are located at 2302-3 Pacific Plaza 410 Des Voeux Road West Hong Kong, China

Globe Net currently has no interest in any property.

Item 3: Legal Proceedings

We are not currently a party to any legal proceedings.

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.

Market Information

Globe Net’s common shares have been quoted on the NASD OTC Bulletin Board under the symbol “GNTW” since October 30, 2014. The table below gives the high and low bid information for each fiscal quarter of trading for the last two fiscal years and for the interim period ended November 30, 2015. The bid information was obtained from Pink OTC Markets Inc. and reflects inter-dealer prices, without retail mark-up, mark-down or commission, and may not represent actual transactions.

As of November 30, 2015, Globe Net had 10.8 million common shares outstanding of which 8.8 million common shares are owned by non-affiliate shareholders and 2 million common shares are owned by Globe Net’s sole director and officer who is an affiliate.

Subject to the Rule 144 volume limitations and the “shell company” trading restrictions described in the paragraph below, there are a total of 9,500,000 shares of Globe Net’s common stock that can be sold pursuant to Rule 144 as follows:

Rule 144 Shares

Subject to Globe Net’s status as a “shell company” as defined by the SEC and discussed below, under Rule 144 a shareholder, including an affiliate of Globe Net, may sell shares of common stock after at least six months have elapsed since such shares were acquired from Globe Net or an affiliate of Globe Net. Rule 144 further restricts the number of shares of common stock which may be sold within any 90 day period to the greater of one percent of the then outstanding shares of common stock or the average weekly trading volume in the common stock during the four calendar weeks preceding the date on which notice of such sale was filed under Rule 144. Certain other requirements of Rule 144 concerning availability of public information, manner of sale and notice of sale must also be satisfied. In addition, a shareholder who is not an affiliate of Globe Net, and who has not been an affiliate of Globe Net for 90 days prior to the sale, and who has beneficially owned shares acquired from Globe Net or an affiliate of Globe Net for more than one year may resell the shares of common stock without compliance with the foregoing requirements under Rule 144.

If Globe Net is classified as a “shell company” for having (1) no or nominal operations and (2) no or nominal assets, then Rule 144 will not be available to the shareholders of Globe Net and they would not be able to sell their shares until Globe Net is no longer classified as a “shell company” or the shares are registered. Shareholders would only be able to rely on Rule 144 and to sell their shares (a) once the shares are registered or (b) one year after Globe Net files the required information once it ceases to be a “shell company”.

Holders of Globe Net’s Common Stock

As of November 30, 2015, Globe Net had 35 holders of its common stock.

Equity Compensation Plans

Globe Net has no equity compensation program including no stock option plan and none are planned for the foreseeable future.

Registration Rights

Globe Net has not granted registration rights to the selling shareholders or to any other person.

Dividends

There are no restrictions in Globe Net’s articles of incorporation or bylaws that restrict Globe Net from declaring dividends. The Nevada Revised Statutes, however, do prohibit Globe Net from declaring dividends where, after giving effect to the distribution of the dividend:

Globe Net would not be able to pay its debts as they become due in the usual course of business; or

Globe Net’s total assets would be less than the sum of its total liabilities, plus the amount that would be needed to satisfy the rights of shareholders who have preferential rights superior to those receiving the distribution.

Globe Net has not declared any dividends. Globe Net does not plan to declare any dividends in the foreseeable future.

Securities authorized for issuance under equity compensation plans

We currently do not have any equity compensation plans.

Purchases of equity securities by the registrant and affiliated purchasers

No purchases of any of our registered equity securities have been made by us, on our behalf, or by any affiliated purchaser during the fourth quarter of the fiscal year covered by this annual report.

Item 6: Selected Financial Data

Not Applicable.

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

The following discussion should be read in conjunction with our financial statements, including the notes thereto, appearing elsewhere in this annual report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward looking statements. Factors that could cause or contribute to such differences include, but are not limited to those discussed below and elsewhere in this annual report. Our audited financial statements are stated in United States Dollars and are prepared in accordance with United States Generally Accepted Accounting Principles.

Results of Operations

We have not earned any revenue from our incorporation on September 4, 2009 to August 31, 2015. During the fiscal year ended August 31, 2015, we incurred net losses of $19,841 (2014: $38,533) consisting of $16,641 in general and administrative expenses (2014: $35,333), and $3,200 in interest expense (2014: $3,200).

We have not attained profitable operations and are dependent upon obtaining financing to complete our proposed business plan. For these reasons our auditors believe that there is substantial doubt that we will be able to continue as a going concern.

Our financial statements have been prepared assuming that we will continue as a going concern and, accordingly, do not include adjustments relating to the recoverability and realization of assets and classification of liabilities that might be necessary should we be unable to continue in operation.

Liquidity and Capital Resources

As of August 31, 2015, our current assets consisted of $819 in cash with total liabilities of $66,386, which consisted of convertible notes payable of $10,000, notes payable of $30,000, accounts payable of 10,453 and accrued liabilities of $15,933. We expect we will require additional capital to meet our long term operating requirements. We expect to raise additional capital through, among other things, the sale of equity or debt securities.

Cash Flows from Operating Activities

We have not generated positive cash flows from operating activities. For the fiscal year ended August 31, 2015, net cash flows used in operating activities were ($17,247) consisting of our net loss for the period, adjusted for expensing prepaid expenses and payment of accounts payable and accrued liabilities.

Cash Flows from Financing Activities

We have financed our operations primarily from either advancements or the issuance of equity and debt instruments. For the fiscal year ended August 31, 2015, net cash from financing activities was nil.

Plan of Operation

Globe Net’s plan of operation for the remainder of its fiscal year is to:

Phase 1 - Develop the Internet and wireless connectivity systems (3 months)

In Phase 1, Globe Net plans to (1) develop its Internet and wireless connectivity systems (the “GNW System”) and (2) develop its website.

The development of the GNW System will consist of identifying potential viable target markets, producing a list of equipment required for the GNW System in the particular target markets, and identifying potential suppliers and service providers. Target markets will be identified based on the potential number of (a) potential subscribers and (b) locations for transmission towers or existing transmission towers.

Simultaneously, Globe Net will develop and populate its website (www.globenetwireless.com) with information regarding its business and the GNW System.

Globe Net has budgeted $15,000 for this phase and expects it to take three months to complete, with completion expected within the first three months of Globe Net’s plan of operation.

Phase 2 – Identify and establish supply contracts (6 months)

In Phase 2, Globe Net plans to (1) identify equipment suppliers and service providers in its identified target markets and (2) enter into supply contracts with the particular equipment suppliers and service providers.

In this phase of its plan of operations, Globe Net will identify reliable and competitive equipment suppliers, establish time lines for equipment supply and service capabilities, and establish lease criteria.

Globe Net has budgeted $10,000 for this phase and expects it to take six months to complete, with completion expected within the first six months of Globe Net’s plan of operation. Also, during this phase, Globe Net will continue to (a) develop its GNW System and (b) develop its website. Phase 2 will overlap with Phase 1 and will be worked on simultaneously with Phase 1.

Phase 3 – Identify and obtain required licenses and permits (6 months)

In Phase 3, Globe Net plans to identify and obtain all required licenses and permits in each identified target market. Globe Net will need to identify all required licenses and permits in a particular target market and then prepare and submit an application with the applicable regulatory body with all requisite information and documents. Also, Globe Net may be required to conduct a compliance study to ensure that the GNW System does not interfere or conflict with other transmissions in that target market.

Globe Net has budgeted $20,000 for this phase and expects it to take six months to complete, with completion expected within the first six months of Globe Net’s plan of operation. Also, during this phase, Globe Net will continue to (a) develop its GNW System, (b) develop its website, and (c) identify and establish supply contracts. Phase 3 will overlap and will be worked on simultaneously with Phases 1 and 2.

It is possible that actual costs for Phase 1, 2 and 3 will exceed our estimates. As well, our current cash on hand is not sufficient to meet our anticipated obligations for the next twelve-month period. We intend to raise additional funding either through the sale of our common stock to investors or through loans from our director. However, we do not have any commitments in this regard. If we are unable to raise the required financing, we will be delayed in conducting our business plan.

Accounting and Audit Plan

Globe Net intends to continue to have its outside consultant assist in the preparation of Globe Net’s quarterly and annual financial statements and have these financial statements reviewed or audited by Globe Net’s independent auditor. Globe Net’s outside consultant is expected to charge Globe Net approximately $700 to prepare Globe Net’s quarterly financial statements and approximately $2,000 to prepare Globe Net’s annual financial statements. Globe Net’s independent auditor is expected to charge approximately $1,000 to review each of Globe Net’s quarterly financial statements and approximately $7,500 to audit Globe Net’s annual financial statements. In the next twelve months, Globe Net anticipates spending approximately $12,000 to pay for its accounting and audit requirements.

Off-Balance Sheet Arrangements

As of the date of this annual report, we do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.

Going Concern

The independent auditors’ report accompanying our August, 2015 and 2013 financial statements contains an explanatory paragraph expressing substantial doubt about our ability to continue as a going concern. The financial statements have been prepared assuming that we will continue as a going concern, which contemplates that we will realize our assets and satisfy our liabilities and commitments in the ordinary course of business.

Item 7A: Quantitative and Qualitative Disclosures About Market Risk

Not applicable.

Item 8: Financial Statements and Supplementary Data

GLOBE NET WIRELESS CORP.

Financial Statements

August 31, 2015

Stated in US Dollars

INDEX TO FINANCIAL STATEMENTS

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders of
Globe Net Wireless Corp.:

We have audited the accompanying balance sheet Globe Net Wireless Corp. as of August 31, 2015 and 2014 and the related statements of operations, stockholders’ equity (deficit) and cash flows for the years ended August 31, 2015 and 2014. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States of America). Those standards require that we plan and perform an audit to obtain reasonable assurance whether the financial statements are free of material misstatement. An audit includes examining on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provides a reasonable basis for our opinion.

In our opinion, based on our audits, these financial statements present fairly, in all material respects, the financial position of the Company as of August 31, 2015 and 2014 and the change in equity and the results of its operations and its cash flows for the years ended August 31, 2015 and 2014 in conformity with accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared using accounting principles generally accepted in the United States of America assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company is a development stage company and has incurred operating losses since inception, which raises substantial doubt about its ability to continue as a going concern. Management’s plans in regard to their planned financing and other matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

GLOBE NET WIRELESS CORP.

BALANCE SHEETS

Going concern – Note 2

The accompanying notes are an integral part of the financial statements

GLOBE NET WIRELESS CORP.

STATEMENT OF OPERATIONS

For the years ended August 31, 2015 and 2014

The accompanying notes are an integral part of the financial statements

GLOBE NET WIRELESS CORP.

STATEMENT OF SHAREHOLDERS’ EQUITY (DEFICIT)

For the years ended August 31, 2015 and 2014

The accompanying notes are an integral part of the financial statements

GLOBE NET WIRELESS CORP.

STATEMENT OF CASH FLOWS

For the years ended August 31, 2015 and 2014

The accompanying notes are an integral part of the financial statements

GLOBE NET WIRELESS CORP.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO THE FINANCIAL STATEMENTS

August 31, 2015

Globe Net Wireless Corp. (“the Company”) was incorporated in the State of Nevada, USA on September 4, 2009. The Company is in its early development stage since its formation and has not realized any revenues from its planned operations. The Company is engaged in the development of a telecommunication business to provide internet and related services to both consumers and businesses currently in under serviced or unserviced areas at real broadband speeds through the proprietary wireless technology it acquired.

The Company has chosen an August 31 year end.

These financial statements have been prepared in conformity with generally accepted accounting principles in the United States, which contemplate continuation of the Company as a going concern. However, the Company has limited operations and has sustained operating losses resulting in a deficit.

The Company has accumulated a deficit of $148,473 since inception September 4, 2009, has yet to achieve profitable operations and further losses are anticipated in the development of its business. The Company’s ability to continue as a going concern is in substantial doubt and is dependent upon obtaining additional financing and/or achieving a sustainable profitable level of operations. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. The Company may seek additional equity as necessary and it expects to raise funds through private or public equity investment in order to support existing operations and expand the range of its business. There is no assurance that such additional funds will be available for the Company on acceptable terms, if at all.

Basis of presentation

The accompanying financial statements are stated in US dollars and have been prepared in accordance with generally accepted accounting principles in the United States of America.

GLOBE NET WIRELESS CORP.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO THE FINANCIAL STATEMENTS

August 31, 2015

Use of estimates

The preparation of financial statements in conformity with generally accepted accounting principles 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. Management makes its best estimate of the ultimate outcome for these items based on historical trends and other information available when the financial statements are prepared. Changes in estimates are recognized in accordance with the accounting rules for the estimate, which is typically in the period when new information becomes available to management. Actual results could differ from those estimates.

Cash and cash equivalents

The Company considers all short-term highly liquid investments that are readily convertible to known amounts of cash and have original maturities of three months or less to be cash equivalents.

Concentration of credit risk

The Company places its cash and cash equivalents with a high credit quality financial institution. The Company maintains United States Dollars at a bank in the Slovenia that are not insured. The Company minimizes its credit risks associated with cash by periodically evaluating the credit quality of its primary financial institution.

Income Taxes

The Company follows the guideline under ASC Topic 740 “Income Taxes” which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates, applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. Since the Company is in the developmental stage and has losses, no deferred tax asset or income taxes have been recorded in the financial statements.

GLOBE NET WIRELESS CORP.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO THE FINANCIAL STATEMENTS

August 31, 2015

Comprehensive income

The Company has adopted ASC 220 “Comprehensive Income”, which establishes standards for reporting and display of comprehensive income, its components and accumulated balances. The Company is disclosing this information on its Statement of Stockholders’ Equity. Comprehensive income comprises equity except that resulting from investments by owners and distributions to owners.

For the period ended August 31, 2015, there are no reconciling items between the net loss presented in the statements of operations and comprehensive loss as defined by ASC 220

Foreign currency translations

The Company is located and operating outside of the United States of America. The functional currency of the Company is the U.S. Dollar. At the transaction date, each asset, liability, revenue and expense is translated into U.S. dollars by the use of the exchange rate in effect at that date. At the period end, monetary assets and liabilities are re-measured by using the exchange rate in effect at that date. The resulting foreign exchange gains and losses are included in operations.

Loss per share

The Company reports basic loss per share in accordance with ASC Topic 260 “Earnings Per Share” (“EPS”). Basic loss per share is based on the weighted average number of common shares outstanding and diluted EPS is based on the weighted average number of common shares outstanding and dilutive common stock equivalents. Basic EPS is computed by dividing net loss (numerator) applicable to common stockholders by the weighted average number of common shares outstanding (denominator) for the period. There are no potentially dilutive securities outstanding and therefore, diluted earnings per share on not presented. All per share and per share information are adjusted retroactively to reflect stock splits and changes in par value.

Financial instruments

The Company’s financial instruments consist of cash, accounts payable and accrued liabilities and their carrying values approximate fair value because of their short-term nature. Management is of the opinion that the Company is not exposed to significant interest or credit risks arising from these financial instruments.

Fair value measurements

The Company follows the guidelines in ASC Topic 820 “Fair Value Measurements and Disclosures”. Fair value is defined as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities, which are required to be recorded at fair value, the Company considers the principal or most advantageous market in which the Company would transact and the market-based risk measurements or assumptions that market participants would use in pricing the asset or liability, such as inherent risk, transfer restrictions and credit risk.

The Company applies the following fair value hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement:

GLOBE NET WIRELESS CORP.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO THE FINANCIAL STATEMENTS

August 31, 2015

ASC Topic 820, in and of itself, does not require any fair value measurements. As at August 31, 2015, the Company did not have assets or liabilities subject to fair value measurement.

Website Development Costs

The Company recognizes the costs associated with developing a website in accordance with ASC 350-50 “Website Development Cost” that codified the American Institute of Certified Public Accountants (“AICPA”) Statement of Position (“SOP”) NO. 98-1, “Accounting for the Costs of Computer Software Developed or Obtained for Internal Use”. Relating to website development costs the Company follows the guidance pursuant to the Emerging Issues Task Force (EITF) NO. 00-2, “Accounting for Website Development Costs”. The website development costs are divided into three stages, planning, development and production. The development stage can further be classified as application and infrastructure development, graphics development and content development. In short, website development cost for internal use should be capitalized except content input and data conversion costs in content development stage. Amortization is based on estimated useful life on a straight line basis and will start when the software is ready for use.

Recently issued accounting pronouncements

In June 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-10, “Development Stage Entities (Topic 915), Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, “Consolidation” (“ASU 2014-10”). The amendments in ASU 2014-10 remove the definition of a development stage entity from the Master Glossary of the Accounting Standards Codification, thereby removing the financial reporting distinction between development stage entities and other reporting entities from accounting principles generally accepted in the United States of America (“U.S. GAAP”). In addition, the amendments eliminate the requirements for development stage entities to: (i) present inception-to-date information in the statements of income, cash flows, and shareholder equity; (ii) label the financial statements as those of a development stage entity; (iii) disclose a description of the development stage activities in which the entity is engaged; and (iv) disclose in the first year in which the entity is no longer a development stage entity that in prior years it had been in the development stage. The presentation and disclosure requirements in ASC Topic 915, “Development Stage Entities” are no longer required for interim and annual reporting periods beginning after December 15, 2014, and have been applied to the preparation to these financial statements.. The Company has elected not to early adopt the provisions of ASU 2014-10 for these financial statements.

The Company adopts new pronouncements relating to generally accepted accounting principles applicable to the Company as they are issued, which may be in advance of their effective date. Management does not believe that any pronouncement not yet effective but recently issued would, if adopted, have a material effect on the accompanying financial statements.

GLOBE NET WIRELESS CORP.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO THE FINANCIAL STATEMENTS

August 31, 2015

The company has four notes payable that are unsecured, bear interest at 8% per annum and are due on demand. The interest is classified as accrued liabilities for financial statement purposes.

The convertible note payable is unsecured, bearing interest at 8% per annum which is due on demand, and convertible at a conversion price of $0.005 per share at the lender’s option. The interest is classified as accrued liabilities for financial statement purposes.

In accordance with accounting policy, the carrying value of the financial instrument was bifurcated into debt and equity based on the fair value of the two instruments at the time of issuance. Based on a Black-Scholes option pricing model, the value of the conversion option was determined to be $906 making the value of the debt $9,094. The assumption used were: a 5 year term; volatility of 100%; risk free interest rate of 1.0% and dividends paid of $nil.

Because of the demand feature of the note and the relatively small value of the conversion feature, all of the debt discount was amortized and taken into income during the previous year as operating expense.

GLOBE NET WIRELESS CORP.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO THE FINANCIAL STATEMENTS

August 31, 2015

On September 27, 2013, the Company issued 700,000 common shares at $0.05 each for subscriptions received during the year ended August 31, 2013.

On November 8, 2013, the Company issued 600,000 common shares at $0.05 each for cash.

There were no warrants or stock options outstanding as of August 31, 2015.

There were no significant non-cash transactions during the period ended August 31, 2015.

Income tax recovery differs from that which would be expected from applying the effective tax rates to the net loss as follows:

The Company has accumulated non-capital income tax losses of $145,607. Under normal circumstances the losses will expire in the years 2029 to 2035.

As at August 31, 2015, the tax effect of the temporary timing differences that give rise to significant components of deferred income tax asset are noted below. A valuation allowance has been recorded as management believes it is more likely than not that the deferred income tax asset will not be realized.

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

None.

Item 9A (T): Controls and Procedures

A. Disclosure Controls and Procedures

As required by paragraph (b) of Rules 13a-15 or 15d-15 under the Securities Exchange Act of 1934, the Company’s principal executive officer and principal financial officer evaluated our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act) for the period covered by this annual report as of our fiscal year end, August 31, 2015. Based on this evaluation, this officer concluded that as of the end of the period, these disclosure controls and procedures were adequate to ensure that the information required to be disclosed by us in reports it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission and include controls and procedures designed to ensure that such information is accumulated and communicated to management, including our principal executive officer and principal financial officer, to allow timely decisions regarding required disclosure.

An evaluation was conducted under the supervision and with the participation of our management of the effectiveness of the design and operation of our disclosure controls and procedures as of December 31, 2012. Based on that evaluation, our management concluded that our disclosure controls and procedures were not effective as of such date to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms. Such officer also confirmed that there was no change in our internal control over financial reporting during the fiscal year that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

B. Management’s Report on Internal Control over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over our financial reporting. In order to evaluate the effectiveness of internal control over financial reporting, as required by Section 404 of the Sarbanes-Oxley Act, management has conducted an assessment, including testing, using the criteria in the Internal Control - Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”).

Our system of 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. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Based on our evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our internal controls over financial reporting were not effective as of August 31, 2015 and were subject to material weaknesses.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis. We have identified the following material weaknesses in our internal control over financial reporting using the criteria established in the COSO:

1. Failing to have an audit committee or other independent committee that is independent of management to assess internal control over financial reporting; and

2. Failing to have a director that qualifies as an audit committee financial expert as defined in Item 407(d)(5)(ii) of Regulation S-K.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. In addition, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions and that the degree of compliance with the policies or procedures may deteriorate.

This annual report does not include an attestation report of our independent registered public accounting firm regarding internal control over financial reporting. Our internal control over financial reporting was not subject to attestation by our independent registered public accounting firm pursuant to temporary rules of the SEC that permit us to provide only management’s report in this annual report.

C. Changes in Internal Control over Financial Reporting.

During the fiscal year ended August 31, 2015, our internal control over financial reporting was not subject to changes.

Item 9B: Other Information

None.

PART III

ITEM 10. Directors, Executive Officers, and Corporate Governance

Directors, Executive Officers, Promoters and Control Persons

The name, address and position of our present officers and directors are set forth below:

Biographical Information and Background of Officer and Director

Mr. Li has acted as Globe Net’s sole Director and Officer since its inception on September 4, 2009. Since July 2004, Mr. Li has also been an accountant for Linfeng Electronics Ltd in the Shenzen Province of China. Mr. Li intends to devote approximately 25% or 10 hours of his business time to the affairs of Globe Net. Mr. Li will provide Globe Net with services for the procuring and management of an assembly and storage facility for Globe Net’s equipment and products. Also, Mr. Li, through his accounting background in the Chinese electronic manufacturing industry, will procure supply chains and competitive labor and supply costs for Globe Net.

Code of Ethics

We have not adopted a Code of Ethics that governs the conduct of our officer.

Audit Committee

We do not have a formal audit committee or an audit committee financial expert. We do not have an audit committee financial expert because we believe the cost related to retaining a financial expert at this time is prohibitive. Further, because we have limited operations, at the present time, we believe the services of a financial expert are not warranted.

ITEM 11. EXECUTIVE COMPENSATION

The following table sets forth the compensation paid by us for the last three completed fiscal years ending for our officer. This information includes the dollar value of base salaries, bonus awards and number of stock options granted, and certain other compensation, if any. The compensation discussed addresses all compensation awarded to, earned by, or paid to named executive officers.

EXECUTIVE OFFICER COMPENSATION TABLE

The compensation discussed herein addresses all compensation awarded to, earned by, or paid to our named executive officers.

There are no stock option plans, retirement, pension, or profit sharing plans for the benefit of our officers and directors.

Compensation of Directors

Our sole director is not compensated for his services as a director. The board has not implemented a plan to award options to any directors. There are no contractual arrangements with any member of the board of directors. We have no director’s service contracts.

Change of Control

We do not have any pension plans or compensatory plans or other arrangements which provide compensation in the event of a termination of employment or a change in our control.

Item 12: Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The following table sets forth information as of August 31, 2015 regarding the ownership of our common stock by each shareholder known by us to be the beneficial owner of more than five percent of our outstanding shares of common stock, each director and all executive officers and directors as a group. Except as otherwise indicated, each of the shareholders has sole voting and investment power with respect to the shares of common stock beneficially owned.

The percent of class is based on 8,800,000 shares of common stock issued and outstanding as of the date of this annual report.

Item 13: Certain Relationships and Related Transactions

None of the following parties has, since our date of incorporation, had any material interest, direct or indirect, in any transaction with us or in any presently proposed transaction that has or will materially affect us:

Item 14: Principal Accountant Fees and Services

Audit Fees

For the years ended August 31, 2015 and 2013, the aggregate fees billed by KR Margetson Ltd., Chartered Accountants for professional services rendered for the audit of our annual consolidated financial statements were:

Audit Related Fees

For the years ended August 31, 2015 and 2013, the aggregate fees billed for assurance and related services by KR Margetson Ltd., Chartered Accountants relating to the performance of the audit of our financial statements which are not reported under the caption “Audit Fees” above, was:

Tax Fees

For the years ended August 31, 2015 and 2013, the aggregate fees billed by KR Margetson Ltd., Chartered Accountants for other non-audit professional services, other than those services listed above, totaled:

All Other Fees

For the years ended August 31, 2015 and 2013, the aggregate fees billed by KR Margetson Ltd., Chartered Accountants for other non-audit professional services, other than those services listed above, totaled:

The audit related fees consist of KR Margetson Ltd., Chartered Accountants’ review of our reviews of our interim unaudited financial statements.

We do not use KR Margetson Ltd., Chartered Accountants for financial information system design and implementation. These services, which include designing or implementing a system that aggregates source data underlying the financial statements or generates information that is significant to our financial statements, are provided internally or by other service providers. We do not engage KR Margetson Ltd., Chartered Accountants to provide compliance outsourcing services.

Effective May 6, 2003, the Securities and Exchange Commission adopted rules that require that before KR Margetson Ltd., Chartered Accountants is engaged by us to render any auditing or permitted non-audit related service, the engagement be:

The board of directors pre-approves all services provided by our independent auditors. All of the above services and fees were reviewed and approved by the board of directors either before or after the respective services were rendered.

PART IV

Item 15: Exhibits

The following exhibits are filed as part of this annual report.

Exhibits:

SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.