Value Exchange International, Inc. - Quarter Report: 2012 May (Form 10-Q)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549 

 FORM 10-Q

 

.                     X  .  QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended May 31, 2012

.       .   TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

For the transition period from ______ to _______

Commission File Number 000-53537

 

SINO PAYMENTS, INC.

(Exact name of registrant as specified in its charter)

 

Nevada	26-3767331
(State of incorporation)	(I.R.S. Employer Identification No.)

 

Unit G, 18th Floor, Legend Tower

7 Shing Yip Street, Kwun Tong

 Kowloon, Hong Kong

(Address of principal executive offices)

 877-205-6270

(Registrant’s telephone number)

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       .  

 

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       .  No       .   (Not required)

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.

Large Accelerated Filer       .                        Accelerated Filer        .
Non-Accelerated Filer        .                          Smaller Reporting Company     X  .

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes   X  .  No       .  

As of July 13, 2012, there were 72,000,000 shares of the registrant’s $0.00001 par value common stock issued and outstanding.

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SINO PAYMENTS, INC. *

TABLE OF CONTENTS 

		Page
PART I.                 FINANCIAL INFORMATION
ITEM 1.	FINANCIAL STATEMENTS	3
ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	9
ITEM 3.	QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT MARKET RISK	11
ITEM 4.	CONTROLS AND PROCEDURES	11
PART II.               OTHER INFORMATION
ITEM 1.	LEGAL PROCEEDINGS	12
ITEM 1A.	RISK FACTORS	12
ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	12
ITEM 3.	DEFAULTS UPON SENIOR SECURITIES	12
ITEM 4.	MINE SAFETY DISCLOSURES	12
ITEM 5.	OTHER INFORMATION	12
ITEM 6.	EXHIBITS	13

Special Note Regarding Forward-Looking Statements

 

Information included in this Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (“Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (“Exchange Act”). This information may involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Sino Payments, Inc. (the “Company”), to be materially different from future results, performance or achievements expressed or implied by any forward-looking statements. Forward-looking statements, which involve assumptions and describe future plans, strategies and expectations of the Company, are generally identifiable by use of the words “may,” “will,” “should,” “expect,” “anticipate,” “estimate,” “believe,” “intend,” or “project” or the negative of these words or other variations on these words or comparable terminology. These forward-looking statements are based on assumptions that may be incorrect, and there can be no assurance that these projections included in these forward-looking statements will come to pass. Actual results of the Company could differ materially from those expressed or implied by the forward-looking statements as a result of various factors. Except as required by applicable laws, the Company has no obligation to update publicly any forward-looking statements for any reason, even if new information becomes available or other events occur in the future.

*Please note that throughout this Quarterly Report, except as otherwise indicated by the context, references in this report to “Company”, “SNPY”, “we”, “us” and “our” are references to Sino Payments, Inc.

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PART I - FINANCIAL INFORMATION

ITEM 1.

FINANCIAL STATEMENTS

SINO PAYMENTS, INC.

(A Development Stage Company)

Condensed Financial Statements

(unaudited)

May 31, 2012

Index

Condensed Balance Sheets (unaudited)

4

Condensed Statements of Operations (unaudited)

5

Condensed Statements of Cash Flows (unaudited)

6

Notes to the Condensed Financial Statements (unaudited)

7

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SINO PAYMENTS, INC.

(A Development Stage Company)

Condensed Balance Sheets

(unaudited)

	May 31, 2012 $	August 31, 2011 $
ASSETS
Current Assets
Cash	-	-
Total Assets	-	-
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current Liabilities
Bank indebtedness	-	9
Accounts payable and accrued liabilities	112,095	97,495
Due to related party	42,376	4,876
Line of Credit – related party	40,303	16,128
Total Liabilities	194,774	118,508
Stockholders’ Deficit
Preferred stock, 100,000,000 shares authorized, $0.00001 par value; no shares issued and outstanding	-	-
Common stock, 100,000,000 shares authorized, $0.00001 par value; 72,000,000 shares issued and outstanding respectively	720	720
Additional paid-in capital	1,041,000	1,041,000
Deficit accumulated during the development stage	(1,236,494)	(1,160,228)
Total Stockholders’ Deficit	(194,774)	(118,508)
Total Liabilities and Stockholders’ Deficit	-	-

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SINO PAYMENTS, INC.

(A Development Stage Company)

Condensed Statements of Operations

(unaudited)

	For the Three Months Ended May 31, 2012	For the Three Months Ended May 31, 2011	For the Nine Months Ended May 31, 2012	For the Nine Months Ended May 31, 2011	Accumulated from June 26, 2007 (Date of Inception) to May 31, 2012
	$	$		$	$
Revenues	-	-	-	-	-
Gain on joint venture		14,999		14,999
Operating Expenses
General and administrative	11,051	57,274	73,992	192,821	1,196,796
Foreign exchange loss (gain)	-	-	481	-	415
Loss from joint venture	-	-	-	-	10,000
Total Operating Expenses	11,051	57,274	74,473	192,821	1,207,211
Operating Loss	(11,051)	(42,275)	(74,473)	(177,822)	(1,207,211)
Other Expense
Interest expense	(768)	(325)	(1,793)	(1,017)	(5,445)
Loss on settlement of debt	–	(47,199)	–	(47,576)	(23,838)
Total Other Expenses	(768)	(47,524)	(1,793)	(48,593)	(29,283)
Net loss	(11,819)	(89,799)	(76,266)	(226,415)	(1,236,494)
Net loss per share, basic and diluted	-	-	-	-
Weighted average number of shares outstanding	72,000,000	63,333,732	72,000,000	57,491,005

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SINO PAYMENTS, INC.

(A Development Stage Company)

Condensed Statements of Cash Flows

(unaudited)

	For the Nine Months Ended May 31, 2012 $	For the Nine Months Ended May 31, 2011 $	Accumulated from June 26, 2007  (Date of Inception) to May 31, 2012 $
Operating Activities
Net loss for the period	(76,266)	(226,415)	(1,236,494)
Adjustments to reconcile net loss to net cash used In operating activities:
Accretion expense	-	-	3,600
Loss on settlement of debt	-	49,199	23,838
Loss (Gain) from joint venture	-	(14,999)	10,000
Shares issued for services	-	244,261	637,995
Warrants issued for services	-	-	2,938
Changes in operating assets and liabilities:
Accounts payable and accrued liabilities	14,590	(56,852)	334,275
Net cash used in operating activities	(61,676)	(4,806)	(223,848)
Financing Activities
Proceeds from issuance of common stock	-	-	85,130
Proceeds from promissory note	-	-	30,517
Proceeds from convertible notes payable	-	-	7,200
Proceeds from  line of credit – related party	24,176	8,749	24,176
Proceeds from related parties, net	37,500	(3,952)	76,825
Net cash provided by financing activities	61,676	4,797	223,848
Change in cash	-	(9)	-
Cash, beginning of period	-	10	-
Cash, end of period	-	1	-
Supplemental disclosures:
Interest paid	-	-	-
Income taxes paid	-	-	-
Non-cash investing and financing activities:
Beneficial conversion expense of convertible notes	-	-	3,600
Shares issued for joint venture	-	10,000	10,000
Shares issued to settle notes payable	-	18,314	294,087

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SINO PAYMENTS, INC.

(A Development Stage Company)

Notes to the Condensed Financial Statements

May 31, 2012

(unaudited)

1.

Nature of Operations and Continuance of Business

Sino Payments Inc. (the “Company”) was incorporated in the State of Nevada on June 26, 2007. The Company is a Development Stage Company, as defined by Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 915, Development Stage Entities. The Company’s principal business is to provide credit and debit card processing services to multinational retailers in Asia.

Going Concern

These financial statements have been prepared on a going concern basis, which implies the Company will continue to realize its assets and discharge its liabilities in the normal course of business. The Company has not generated significant revenues since inception and is unlikely to generate significant revenue or earnings in the immediate or foreseeable future. The continuation of the Company as a going concern is dependent upon the continued financial support from its shareholders, the ability of the Company to obtain necessary equity financing to continue operations, and the attainment of profitable operations. As at May 31, 2012, the Company has not generated revenues, has a working capital deficiency of $194,774 and has accumulated losses totaling $1,236,494 since inception. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern. These financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

2.

Summary of Significant Accounting Policies

a)

Basis of Presentation

These financial statements and related notes are presented in accordance with accounting principles generally accepted in the United States, and are expressed in U.S. dollars. The Company’s fiscal year end is August 31.  

b)

Use of Estimates

The preparation of financial statements in conformity with U.S. 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 revenues and expenses during the reporting period. The Company regularly evaluates estimates and assumptions related to the deferred income tax asset valuation allowances. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.

c)

Interim Financial Statements

These interim unaudited financial statements have been prepared on the same basis as the annual financial statements and in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly the Company’s financial position, results of operations and cash flows for the periods shown. The results of operations for such periods are not necessarily indicative of the results expected for a full year or for any future period.

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SINO PAYMENTS, INC.

(A Development Stage Company)

Notes to the Condensed Financial Statements

May 31, 2012

(unaudited)

2.

Summary of Significant Accounting Policies (continued)

d)

Loss Per Share

The Company computes net loss per share in accordance with ASC 260, Earnings per Share. ASC 260 requires presentation of both basic and diluted earnings per share (“EPS”) on the face of the income statement. Basic EPS is computed by dividing net loss available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive. No such potentially dilutive shares were outstanding at the end of the period.

e)

Foreign Currency Translation

Transactions in foreign currencies are translated into the currency of measurement at the exchange rates in effect on the transaction date. Monetary balance sheet items expressed in foreign currencies are translated into United States dollars at the exchange rates in effect at the balance sheet date. The resulting exchange gains and losses are recognized in income.  Foreign currency transactions are primarily undertaken in Hong Kong dollars.

f)

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 consolidated financial statements.

3

Investment in Joint Venture

On November 26, 2010, the Company entered into a joint venture agreement with TAP Investments Group Limited (TAP) and agreed to issue 1,000,000 common shares of the Company with a fair value of $10,000 in exchange for 51% interest of TAP. As at May 31, 2012, the Company’s interest in the joint venture was a net loss of $43,036, of which $10,000 was reflected against the investment in joint venture.

4.

Related Party Transactions

a)

As at May 31, 2012, the Company owes $40,303 (2011 - $16,128) to TAP for amounts advanced pursuant to a $100,000 line of credit agreement entered into on January 10, 2011.  The amount owing is unsecured, due interest at 8% per annum, and due on demand.  Accrued interest of $1,755 has been recorded in accrued liabilities. The Company also owes TAP $37,500 for operating expenses paid during the nine months ended May 31, 2012 (2011 - $nil).

b)

As at May 31, 2012, the Company owes $4,876 (2011 - $4,876) to a former director of the Company for payment of general operating expenditures.  The amounts owing are unsecured, bear interest at 10% per annum, and due on demand. Accrued interest of $1,692 has been recorded in accrued liabilities.

5.

Subsequent Events

As at the date of filing, there were no materially reportable transactions subsequent to May 31, 2012.

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ITEM 2.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

FORWARD-LOOKING STATEMENTS

This Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) contains forward-looking statements that involve known and unknown risks, significant uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed, or implied, by those forward-looking statements.  You can identify forward-looking statements by the use of the words may, will, should, could, expects, plans, anticipates, believes, estimates, predicts, intends, potential, proposed, or continue or the negative of those terms.  These statements are only predictions. In evaluating these statements, you should consider various factors which may cause our actual results to differ materially from any forward-looking statements.  Although we believe that the exceptions reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements.  Therefore, actual results may differ materially and adversely from those expressed in any forward-looking statements.  We undertake no obligation to revise or update publicly any forward-looking statements for any reason.

RESULTS OF OPERATIONS

Working Capital

	May 31, 2012 $	August 31, 2011 $
Current Assets	-	-
Current Liabilities	194,774	118,508
Working Capital Deficit	(194,774)	(118,508)

Cash Flows

	Nine months ended	Nine months ended
	May 31, 2012 $	May 31, 2011 $
Cash used in Operating Activities	(61,676)	(4,806)
Cash from Financing Activities	61,676	4,797
Net change in Cash During Period	-	(9)

Operating Revenues

The Company has not earned any revenue during the nine months ended May 31, 2012 or the comparable period ending May 31, 2011.

Operating Expenses and Net Loss

Operating expenses for the nine months ended May 31, 2012 were $74,473 compared to $192,821 for the nine months ended May 31, 2011.  The decrease in operating expenses were attributed to lower general and administrative expenditures as the Company ceased all management fees and minimized consulting expense in order to preserve cash flow.

Net loss for the period ended May 31, 2012 was $76,266 compared with a net loss of $226,415 for the period ended May 31, 2011.  In addition to operating expenses, the Company also incurred $1,793 of interest expense relating to interest accrued on notes payable to related party of $40,303 and $4,876, which are unsecured, due interest at 8% and 10% respectively, and due on demand. The Company had a basic and diluted net loss per share of $nil during the periods ended May 31, 2012 and May 31, 2011.

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Liquidity and Capital Resources

As at May 31, 2012, the Company’s cash and asset balance was $nil which was consistent with the cash and asset balance as at August 31, 2011.  

As at May 31, 2012, the Company had total liabilities of $194,774 compared with total liabilities of $118,508 as at August 31, 2011.  The increase in total liabilities were attributed to an increase of $52,100 for accounts payable and accrued liabilities due to the lack of sufficient cash flow to repay outstanding day-to-day obligations incurred by the Company and an increase of $24,175 of loan payable used to fund day-to-day operating expenses.

As at May 31, 2012, the Company had a working capital deficit of $194,774 compared with a working capital deficit of $118,508 as at August 31, 2011.  The increase in working capital deficit was attributed to the lack of sufficient cash flows to pay outstanding day-to-day obligations.    

Cashflow from Operating Activities

During the nine months ended May 31, 2012, the Company used cash of $61,676 for operating activities compared with use of $4,806 for the nine months period ended May 31, 2011.  The increase in the cash used for operating activities was due to the Company’s use of proceeds from a note payable for operating expenditures.  

Cashflow from Investing Activities

During the nine months ended May 31, 2012 and 2011, the Company did not have any investing activities.

Cashflow from Financing Activities

During the nine months ended May 31, 2012, the Company received $61,676 from financing activities relating to a note payable from TAP compared with $4,797 during the period ended May 31, 2011 from line of credit agreement less repayment of amounts due to related parties.  

Going Concern

We have not attained profitable operations and are dependent upon obtaining financing to pursue any extensive acquisitions and activities. For these reasons, our auditors stated in their report on our audited financial statements that they have substantial doubt that we will be able to continue as a going concern without further financing. 

Off-Balance Sheet Arrangements

 

We have no significant 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 stockholders.

Future Financings

We will continue to rely on equity sales of our common shares in order to continue to fund our business operations. Issuances of additional shares will result in dilution to existing stockholders. There is no assurance that we will achieve any additional sales of the equity securities or arrange for debt or other financing to fund planned acquisitions and exploration activities.

 

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Critical Accounting Policies

Our financial statements and accompanying notes have been prepared in accordance with United States generally accepted accounting principles applied on a consistent basis. The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods.

 

We regularly evaluate the accounting policies and estimates that we use to prepare our financial statements. A complete summary of these policies is included in note 1 of the notes to our financial statements. In general, management's estimates are based on historical experience, on information from third party professionals, and on various other assumptions that are believed to be reasonable under the facts and circumstances. Actual results could differ from those estimates made by management.

Recently Issued Accounting Pronouncements

The Company has implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company 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

ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

ITEM 4.

CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Disclosure controls and procedures are controls and procedures that are designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by our company in the reports that it files or submits under the Exchange Act is accumulated and communicated to our management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Our management carried out an evaluation under the supervision and with the participation of our Principal Executive Officer and Principal Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 ("Exchange Act"). Based upon that evaluation, our Principal Executive Officer and Principal Financial Officer have concluded that our disclosure controls and procedures were not effective as of May 31, 2012, due to the material weaknesses resulting from the Board of Directors not currently having any director that qualifies as an audit committee financial expert as defined in Item 407(d)(5)(ii) of Regulation S-K, and controls were not designed and in place to ensure that all disclosures required were originally addressed in our financial statements. Please refer to our Annual Report on Form 10-K as filed with the SEC on December 22, 2011 for a complete discussion relating to the foregoing evaluation of Disclosures and Procedures.

 

Changes in Internal Control over Financial Reporting

 

Our management has also evaluated our internal control over financial reporting, and there have been no significant changes in our internal controls or in other factors that could significantly affect those controls subsequent to the date of our last evaluation.

 

The Company is not required by current SEC rules to include, and does not include, an auditor's attestation report. The Company's registered public accounting firm has not attested to Management's reports on the Company's internal control over financial reporting.

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PART II - OTHER INFORMATION

ITEM 1.

LEGAL PROCEEDINGS

We know of no material, existing or pending legal proceedings against our company, nor are we involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which our director, officer or any affiliates, or any registered or beneficial shareholder, is an adverse party or has a material interest adverse to our interest.

ITEM 1A.

RISK FACTORS

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

ITEM 2.

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

1.

Quarterly Issuances:

During the quarter, we did not issue any unregistered securities other than as previously disclosed.

2.

Subsequent Issuances:

Subsequent to the quarter, we did not issue any unregistered securities other than as previously disclosed.

ITEM 3.

DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4.

MINE SAFETY DISCLOSURES

Not Applicable.

ITEM 5.

OTHER INFORMATION

 

None.

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ITEM 6.

EXHIBITS

*Pursuant to Regulation S-T, this interactive data file is deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, and otherwise is not subject to liability under these sections.

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SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

		SINO PAYMENTS, INC.
Dated: July 16, 2012		/s/ Matthew Mecke
		By: Matthew Mecke
		Its:  President, Chief Executive Officer, Chief Financial Officer, and Principal Accounting Officer

Pursuant to the requirement of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Company and in the capacities and on the dates indicated:

Dated: July 16, 2012

/s/ Matthew Mecke

Matthew Mecke – Director

Dated: July 16, 2012

/s/ Chi Ho Lee

Chi Ho Lee – Director

Dated: July 16, 2012

/s/ Raymond Lee

Raymond Lee – Director

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