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Form 10-12G/A JJY Holding Group

August 16, 2022 1:09 PM EDT

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Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.

 

FORM 10/A

Amendment No. 4

 

GENERAL FORM FOR REGISTRATION OF SECURITIES

Pursuant to Section 12(b) or (g) of the Securities Exchange Act of 1934

 

BEESFREE, INC.

AKA JJY HOLDING GROUP

(Exact name of registrant as specified in its charter)

 

     
Nevada   92-0189305

(State of other jurisdiction of

incorporation or organization)

 

(IRS Employer

Identification No.)

 

528 Pudong Road

16th Floor

Shanghai 200120

China

(Address of Principal Executive Offices) (Zip Code)

 

+86-21-50917695

 

(Registrant’s telephone number, including area code)

 

Securities to be Registered Under Section 12(b) of the Act:

None

 

Securities to be Registered Under Section 12(g) of the Act:

 

Common Stock, Par Value $0.001

(Title of Class)

 

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

 

Large accelerated filer Accelerated filer
Non-accelerated filer Smaller reporting company
    Emerging growth company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

 

 

   

 

 

BEESFREE, INC.

AKA JJY HOLDING GROUP

INDEX TO FORM 10

 

Description     Page
       
Item 1. Business   8
       
Item 1A. Risk Factors   13
       
Item 2. Financial Information   24
       
Item 3. Properties   25
       
Item 4. Security Ownership of Certain Beneficial Owners and Management   25
       
Item 5. Directors and Executive Officers   26
       
Item 6. Executive Compensation   26
       
Item 7. Certain Relationship and Related Transactions, and Director Independence   26
       
Item 8. Legal Proceedings   27
       
Item 9. Market Price and Dividends on the Registrant’s Common Stock and Related Stockholder Matters   27
       
Item 10. Recent Sale of Unregistered Securities   28
       
Item 11. Description of Registrant’s Securities to be Registered   28
       
Item 12. Indemnification of Directors and Officers   29
       
Item 13. Financial Statements and Supplementary Data   30
       
Item 14. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure   31
       
Item 15. Financial Statements and Exhibits   31

 

 

 

 

 i 

 

 

Cautionary Note Regarding Forward-Looking Statements

 

This registration statement on Form 10 contains “forward-looking statements” concerning our future results, future performance, intentions, objectives, plans, and expectations, including, without limitation, statements regarding the plans and objectives of management for future operations, any statements concerning our proposed services, any statements regarding future economic conditions or performance, and any statements of assumptions underlying any of the foregoing. All forward-looking statements included in this document are made as of the date hereof and are based on information available to us as of such date. We assume no obligation to update any forward-looking statements. In some cases, forward-looking statements can be identified by the use of terminology such as “may,” “will,” “expects,” “plans,” “anticipates,” “intends,” “believes,” “estimates,” “potential,” or “continue,” or the negative thereof or other comparable terminology. Although we believe that the expectations reflected in the forward-looking statements contained herein are reasonable, there can be no assurance that such expectations or any of the forward-looking statements will prove to be correct, and actual results could differ materially from those projected or assumed in the forward-looking statements. Future financial condition and results of operations, as well as any forward-looking statements are subject to inherent risks and uncertainties, including those discussed under “Risk Factors” and elsewhere in this Form 10.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 2 

 

 

Introductory Comment

 

We are filing this General Form for Registration of Securities on Form 10 to register our common stock pursuant to Section 12(g) of the Exchange Act. Once this registration statement is deemed effective, we will be subject to the requirements of Section 13(a) under the Exchange Act, which will require us to file annual reports on Form 10-K (or any successor form), quarterly reports on Form 10-Q (or any successor form), and current reports on Form 8-K, and we will be required to comply with all other obligations of the Exchange Act applicable to issuers filing registration statements pursuant to Section 12(g) of the Exchange Act.

 

Throughout this Form 10, unless the context otherwise requires, the terms “we,” “us,” “our,” the “Company,” “BEES" and “our Company” refer to Beesfree, Inc., a Nevada corporation.

 

JJY Holding Group formerly Beesfree, Inc. is a development stage Blank Check Company as defined by Securities Act Rule 419(a)(2):

 

(2) For purposes of this section, the term “blank check company” shall mean a company that:

 

(i) Is a development stage company that has no specific business plan or purpose or has indicated that its business plan is to engage in a merger or acquisition with an unidentified company or companies, or other entity or person; and

 

(ii) Is issuing “penny stock,” as defined in Rule 3a51-1 (17 CFR 240.3a51-1) under the Securities Exchange Act of 1934 (“Exchange Act”).

 

Our business plan is to engage in a merger or acquisition with a company whose business is in trading agricultural products, food processing, and supply chain management for supermarkets.

 

The Company and the majority of our executive officers and directors, being located in China, may make JJY Holding Group a less attractive partner to target companies than a non-PRC company. Therefore, it may make it more likely for the Company to consummate a business combination in the PRC.

 

Our executive officers and directors are located in and has significant ties to China, and we may seek to acquire a company that may be based in China or Hong Kong in an initial business combination.

 

We are a Nevada company and may conduct operations by subsidiaries and/or through contractual arrangements with a variable interest entity (VIE) based in China and that the structure involves unique risks to investors.

 

There are greater legal and operational risks associated having the majority of our contemplated operations in China.

 

China may be subject to considerable degrees of economic, political and social instability. Investments in securities of Chinese issuers involve risks that are specific to China, including regulatory, liquidity and enforcement risks. These risks could result in a material change in our operations and/or the value of our securities and cause the value of such securities to significantly decline or be worthless.

 

Regulatory cycles are not uncommon in China. Policy and regulatory scrutiny should be seen as ongoing risks when it comes to investing in China. The revised Chinese regulations have not ruled on for our industry. We are not currently engaged in a VIE structure, however that could change moving forward.

 

Legal claims, including federal securities law claims, against China-based Issuers, or their officers, directors, and gatekeepers, may be difficult or impossible for investors to pursue in U.S. courts. Even if an investor obtains a judgment in a U.S. court, the investor may be unable to enforce such judgment, particularly in the case of a China-based Issuer, where the related assets or persons are typically located outside of the United States and in jurisdictions that may not recognize or enforce U.S. judgments. If an investor is unable to bring a U.S. claim or collect on a U.S. judgment, the investor may have to rely on legal claims and remedies available in China or other overseas jurisdictions where the China-based Issuer may maintain assets. The claims and remedies available in these jurisdictions are often significantly different from those available in the United States and difficult to pursue.

 

We are subject to differing and sometimes conflicting laws and regulations in the various China jurisdictions where we provide our services. New laws and regulations may be adopted from time to time to address new issues that come to the authorities' attention. In addition, considerable uncertainties still exist with respect to the interpretation and implementation of existing laws and regulations governing our contemplated business activities. A large number of proposals are before various national, regional, and local legislative bodies and regulatory entities regarding issues related to our industry or our business model. As we implement our business plan and expand into new cities or countries or as we add new products and services to our platform, we may become subject to additional laws and regulations that we are not subject to now. Existing or new laws and regulations could expose us to substantial liability, including significant expenses necessary to comply with such laws and regulations, and could dampen our growth, which could adversely affect our business and results of operations. See Risk Factors 1A. Risks related to China’s evolving regulatory environment.

 

 

 1 

 

 

The Chinese government may intervene or influence our operations at any time or may exert more control over offerings conducted overseas and/or foreign investment in China-based issuers. This elevated oversight could result in a material change in our operations and/or the value of our common stock.

 

Actions by the Chinese government to exert more oversight and control over offerings that are conducted overseas and/or foreign investment in China-based issuers could significantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause the value of such securities to significantly decline or be worthless.

 

Recent statements and regulatory actions by the Chinese government have addressed the issue of anti-monopoly concerns. When a business operator’s abuse of intellectual property rights to exclude or restrict competition constitutes a monopoly agreement, the anti-monopoly law enforcement agency shall order it to stop the illegal activity, confiscate the illegal income, and impose fines. Upon execution of our business plan, the Company will be subject to anti-monopoly laws and, if found in violation, our stock price could decline or become worthless.

 

It will be difficult for investors to assert claims against China-based issuers, including their officers, directors, and agents and it may be challenging for investors to pursue their claims in U.S. courts. Even if an investor secures a judgment, the investor may still be unable to enforce it in China.

 

In addition, the assertion of new regulation by the Chinese government could hinder our ability to continue to offer our stock to foreign investors and our ability to execute of our business plan.

 

The Company is currently organized under the operating structure of the public entity, JJY Holding Group (formerly Beesfree, Inc.), incorporated in the state of Nevada. The Company plans to conduct operations in China and may acquire Chinese companies as subsidiaries to carry out its plan of operation.

 

China’s legal system is substantially different from the legal system in the United States and may raise risks and uncertainties concerning the intent, effect, and enforcement of its laws, rules, and regulations, including those that restrict the inflow and outflow of foreign capital or provide the Chinese government with significant authority to exert influence on a China-based Issuer’s ability to conduct business or raise capital. This lack of certainty may result in the inconsistent and unpredictable interpretation and enforcement of laws, rules, and regulations, which may change quickly. China-based Issuers face risks related to evolving laws and regulations, which could impede their ability to obtain or maintain permits or licenses required to conduct business in China. In the absence of required permits or licenses, governmental authorities may impose material sanctions or penalties on the company. Such actions could significantly limit or completely hinder your ability to offer or continue to offer securities to investors and cause the value of such securities to significantly decline or be worthless. See Risk Factors 1A. Our business is subject to numerous legal and regulatory risks that could have an adverse impact on our contemplated business.

 

We are a Nevada company and may conduct operations by subsidiaries and/or through contractual arrangements with a variable interest entity (VIE) based in China and that the structure involves unique risks to investors.

 

China’s Foreign Investment Law (“FIL”) may prohibit direct foreign investment in Chinese operating companies moving forward and many Chinese companies are using Variable Interest Entities to circumvent this ruling.

 

VIEs are structured as a Cayman Islands holding company with operations conducted by the company’s subsidiaries and through contractual arrangements with a Variable Interest Entity (VIE) based in China and this structure involves unique risks to investors. These contracts have not been tested in court. 

 

The VIE structure is used to provide investors with exposure to foreign investment in China-based companies where Chinese law prohibits direct foreign investment in the operating companies, and investors may never hold equity interests in the Chinese operating company.

 

 

 

 2 

 

 

Chinese regulatory authorities could disallow this structure, which would likely result in a material change in our contemplated operations and/or a material change in the value of our securities. These regulations could cause the value of such securities to significantly decline or become worthless

 

If we decide to implement a VIE structure, it will consist of at least three core entities: a Chinese company with legitimate operations; a wholly foreign-owned enterprise established as an intermediary in China; and an offshore shell company that lists on a U.S. or other foreign exchange. The structure is such that subsidiaries and/or the VIE conduct operations in China, and the VIE is consolidated for accounting purposes but is not an entity in which the investor owns equity, and the holding company does not conduct operations.

 

These contracts have not been tested in court and courts are unlikely to enforce the VIE contracts. Because the value of the offshore shell company derives from its ability to consolidate the Chinese VIE on its financial statements, losing the VIE as a result of breached contracts (or government enforcement) would significantly devalue shareholders’ investments.

 

The Chinese government could rule that the VIE structure is against public policy, Chinese laws, and regulations. This ruling would likely result in a material change in our contemplated operations if we were to implement a VIE. Furthermore, the disruption or termination of our contemplated operations could result in the decline in the value of our stock may become worthless, and the shareholder could lose their entire investment.

 

Any failure by a VIE or its shareholders to perform their obligations under our contractual arrangements with them would have a material and adverse effect on its business. If a VIE or their shareholders fail to perform their respective obligations under the contractual arrangements, a company would incur substantial costs and expend additional resources to enforce such arrangements. A company would rely on legal remedies under PRC law, including seeking specific performance or injunctive relief, and contractual remedies, which we cannot assure you will be sufficient or effective under PRC law.

 

In addition, if any third parties claim any interest in such shareholders' equity interests in a VIE, the ability to exercise shareholders' rights or foreclose the share pledge according to the contractual arrangements may be impaired. If these or other disputes between the shareholders of a VIE and third parties were to impair our control over the VIE, the company’s ability to consolidate the financial results of the VIE would be affected, which would in turn result in a material adverse effect on business, operations and financial condition of the company.

 

The Company does not currently have operations or use a VIE structure, but that if we do implement this structure, there would be substantial legal uncertainties surrounding the related contractual arrangements. Chinese regulatory authorities could disallow this structure, which would likely result in a material change in the company’s operations and/or a material change in the value of the securities that may be registered for sale and may cause the value of such securities to significantly decline or become worthless.

 

We will continue to monitor the changes in FIL, and the Company may consider migrating to a VIE structure to continue receiving participation from foreign investors.

 

In addition, recent statements and regulatory actions by the Chinese government have addressed the issue of anti-monopoly concerns. Where a business operator’s abuse of intellectual property rights to exclude or restrict competition constitutes a monopoly agreement, the anti-monopoly law enforcement agency shall order it to stop the illegal activity, confiscate the illegal income, and impose fines. Upon execution of our business plan, the Company will be subject to anti-monopoly laws and, if found in violation, our stock price could decline or become worthless.

 

Our contemplated operations are governed by the China Securities Regulatory Commission (“CSRC”), Cyber Administration of China (“CAC”), and China Food and Drug Administration (“CFDA”)

 

CAC oversees data security and recently revised its laws to include operators that possess personal information for over one million individuals would be subject to cybersecurity review when listing of foreign exchanges. Personal information is defined in Article 76(5) of Cybersecurity Law as various information which is recorded in electronic or any other form and used alone or in combination with other information to recognize the identity of a natural person, including but not limited to name, date of birth, ID number, personal biological identification information, address and telephone number of natural persons.

 

 

 

 3 

 

 

As we have not implemented our business plan, the Company does not meet the criteria to trigger the CAC revised rule. However, we anticipate that, upon executing our business model, we will be subject to CAC rules and regulations. Our operations could be suspended if the CAC finds we are in violation of data security laws.

 

The CRSC oversees China's nationwide centralized securities supervisory system, with the power to regulate and supervise securities issuers, as well as to investigate, and impose penalties for illegal activities related to securities and futures.

 

The Company will be subject to CRSC rules and regulations and has not received approval at this time. As such, we will be required to submit information about our business to CRSC for approval and will be subject to continued compliance. In addition, if we decide to implement a VIE structure, the CRSC could deny us permission as an issuer to foreign investors if it is ruled that VIE’s are illegal.

 

The value of our stock could decline or become worthless. The CRSC and SEC are working together to ensure compliance and protection of foreign investor rules. The Company could be delisted as a result of not complying with these rules.

 

If, in the future, we become noncompliant with CRSC rules, our business operations could be suspended and our stock could be worthless. In addition, the CRSC could deny us permission as an issuer to foreign investors if it is ruled that VIE’s are illegal.

 

The Company will also be under the oversight of CFDA. The CFDA establishes safety regulations for the food industry, including the trading in agricultural products, food processing and food supply chain management. We will be required to submit information about our business and receive a license to do business. CFDA and will be subject to continued compliance with CFDA regulation.

 

If we become noncompliance with CFDA rules, our business operation could be suspended. In addition, CFDA could deny our application for licensing.

 

The value of the Company’s stock could decline or become worthless. The CAC, CRSC and CFDA are working to ensure compliance and protection of foreign investors, global security and safety of our products and services. The Company could be delisted as a result of not complying with these rules and its shareholders could lose the some or all of their investment.

 

The assertion of new regulation by the Chinese government could hinder our ability to continue to offer our stock to foreign investors and our ability to execute of our business plan.

 

Our company may conduct operations in China and may acquire Chinese companies as subsidiaries to carry out its plan of operation. Daily operations in PRC include purchase of raw materials, manufacturing, selling, hiring labor forces, and R&D. Cash associated with these activities will circulate in PRC in the form of local currency. Activities such as raising capitals to support PRC operations, hiring US employees, paying for working capital, and paying out dividends will involve cross-border payments.

 

Cross-border payments must comply with the relevant regulation of the China State Administration of Foreign Exchange (SAFE). PRC adopts a partial foreign exchange administration. Foreign currency is forbidden to circulate within the territory. It allows exchange and payment on current accounts such as trading while implementing certain controls on capital accounts such as investment. Shanghai Free-Trade Zone even implements a more relaxed policy.

 

Payrolls and working capitals are on current accounts. Investment and dividends payment will be on capital accounts. We may face obstacles even if transactions are legal and reasonable after proper registration. So far, the Company has not yet to establish a VIE nor has determined the structure. However. There have been no transfers, dividends, or distributions as of this date.

 

 

 

 4 

 

 

In compliance with US laws, PRC laws and regulations, we will also work out financial plans to establish cash flow to parent company, subsidiaries level and VIE level regarding daily operation and dividends pay out, if we choose to utilize a VIE structure.

 

We could be restricted by PRC laws. There is no guarantee that cash will be distrusted from businesses, including subsidiaries and/or consolidated VIEs, to the parent company. There is also no guarantee we will have the ability to settle amounts owed under the contemplated VIE agreements.

 

If we merge or acquire a company located in China we will subject to extensive national, provincial and local governmental regulations, policies and controls. Central governmental authorities and provincial and local authorities and agencies regulate many aspects of Chinese industries, including without limitation, among others and in addition to specific industry-related regulations, the following aspects:

 

  · banking regulations
  · environmental protection laws and regulations;
  · security laws and regulations;
  · establishment of or changes in shareholder of foreign investment enterprises;
  · foreign exchange;
  · taxes, duties and fees;
  · cyber security and information protection laws and regulations

 

The liabilities, costs, obligations, and requirements associated with these laws and regulations may be material, may delay the commencement of operations. Failure to comply with the relevant laws and regulations in our contemplated operations may result in various penalties, and thus adversely and materially affect our business, prospects, and financial condition. While we plan to comply with the relevant laws and regulations in the development and operation of our contemplated business combination, we may incur additional costs in order to fulfill such requirements, and we cannot assure you that we have complied with or will comply with the requirements of all relevant laws and regulations. Additionally, there can be no assurance that the relevant government agencies will not change such laws or regulations or impose additional or more stringent laws or regulations. We cannot assure you that we will comply with the requirements of all new laws and regulations. Compliance with such laws or regulations may require us to incur material capital expenditures or other obligations or liabilities.

 

Furthermore, if future legislations mandate further actions to be taken by companies, we may face substantial uncertainties as to whether we can complete such actions in a timely manner, or at all. If we fail to take appropriate and timely measures to comply with any of these or similar regulatory compliance requirements, our current corporate structure, corporate governance, and business operations could be materially and adversely affected.

 

Any actions by the Chinese government to exert more oversight and control over offerings that are conducted overseas and/or foreign investment in China-based issuers could significantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause the value of such securities to significantly decline or be worthless.

 

 

 

 5 

 

 

If we adopt a VIE structure, the Company will comply with US laws, PRC laws and regulations. the Company will also work out financial plans to establish cash flow to parent company, subsidiaries level and VIE level regarding daily operation and dividends pay out. However, there is no guarantee that cash will be distributed from businesses, including subsidiaries and/or consolidated VIEs, to the parent company. There is also no guarantee we will have the ability to settle amounts owed under the VIE agreements. If this occurs our business would be greatly affected, and our stock could decline or become worthless. In addition, the investor could lose all their investment.

  

In compliance with US laws and PRC laws and regulations, the Company will also work out financial plans to guarantee cash flow on parent company level, subsidiaries level and VIE level regarding daily operation and dividends pay out.

 

Our Auditor is U.S. based, registered with the PCAOB, and is subject to PCAOB inspections

 

The Holding Foreign Companies Accountable Act (“HFCAA”) became law in December 2020 and prohibits foreign companies from listing their securities on U.S. exchanges if the company has been unavailable for PCAOB inspection or investigation for three consecutive years.

 

The HFCAA requires the SEC to identify registrants that have retained a registered public accounting firm to issue an audit report where that registered public accounting firm has a branch or office that:

 

· Identify areas of shortage in the agricultural trade industry
· Is located in a foreign jurisdiction; and
· Identify areas of shortage in the agricultural trade industry
· The PCAOB has determined that it is unable to inspect or investigate completely because of a position taken by an authority in the foreign jurisdiction
· Identify areas of shortage in the agricultural trade industry
· As reflected on the PCAOB's website, the PCAOB is currently unable to inspect or investigate accounting firms due to a position of the local authority in two jurisdictions: China and Hong Kong

 

If a PCAOB auditor is unable to inspect the issuer's public accounting firm for three consecutive years, the issuer's securities are banned from trade on a national exchange or through other methods. The United States Senate passed the Accelerating Holding Foreign Companies Accountable Act, which, if enacted, would decrease the number of non-inspection years from three years to two years. As a result, our securities could be delisted rendering our stock worthless as a result of "non-inspection" by the PCAOB.

 

On December 16, 2021, the PCAOB issued a report on its determinations that if the Board is unable to inspect or investigate completely PCAOB-registered public accounting firms headquartered in mainland China and in Hong Kong, a Special Administrative Region of the People’s Republic of China (PRC), because of positions taken by PRC authorities in those jurisdictions, it will suspend trading of the issuer. The Board made these determinations pursuant to PCAOB Rule 6100 which provides a framework for how the PCAOB fulfills its responsibilities under the Holding Foreign Companies Accountable Act (HFCAA).

 

On December 16, 2021, the following amendments to the HCFAA were adopted by the Securities and Exchange Commission:

 

Consistent with the HFCAA, the final amendments require Commission-Identified Issuers to submit documentation to the SEC through the EDGAR system on or before its annual report due date that establishes that it is not owned or controlled by a governmental entity in its public accounting firm’s foreign jurisdiction. The final amendments also require a Commission-Identified Issuer that is also a “foreign issuer,” as defined in Exchange Act Rule 3b-4, to provide certain additional specified disclosures in their annual report for itself and its consolidated foreign operating entity or entities, including any variable-interest entity or similar structure that results in additional foreign entities being consolidated in the registrant’s financial statements.

 

 

 

 6 

 

 

The required disclosures include:

 

·

During the period covered by the form, the registered public accounting firm has prepared an audit report for the issuer;

·

The percentage of the shares of the issuer owned by governmental entities in the foreign jurisdiction in which the issuer is incorporated or otherwise organized;

·

Whether governmental entities in the applicable foreign jurisdiction with respect to that registered public accounting firm have a controlling financial interest with respect to the issuer;

· The name of each official of the Chinese Communist Party who is a member of the board of directors of the issuer or the operating entity with respect to the issuer; and
· Whether the articles of incorporation of the issuer (or equivalent organizing document) contains any charter of the Chinese Communist Party, including the text of any such charter.

 

The SEC will identify a registrant as a Commission-Identified Issuer as early as possible after the registrant files its annual report and on a rolling basis. The SEC will “provisionally identify” a registrant as a Commission-Identified Issuer on the SEC’s website at www.sec.gov/HFCAA. For 15 business days after this provisional identification, a registrant may email the SEC if it believes it has been incorrectly identified, providing evidence supporting its claim. After reviewing the information, the registrant will be notified whether the SEC will “conclusively identify” the registrant as a Commission-Identified Issuer.

  

A Commission-Identified Issuer is a registrant identified by the SEC as having filed an annual report with an audit report issued by a registered public accounting firm that is located in a foreign jurisdiction and that the Public Company Accounting Oversight Board (PCAOB) is unable to inspect or investigate completely because of a position taken by an authority in that jurisdiction (PCAOB-Identified Firm). The SEC will identify such issuers promptly after the filing of their annual reports by evaluating whether the annual report contains an audit report signed by a PCAOB-Identified Firm. We may be subject to the HFCAA if we are identified as a "Commission-Identified Issuer" in accordance with such HFCAA amendments

 

If the registrant does not contact the SEC to dispute the provisional identification within 15 business days, the SEC will conclusively identify the registrant as a Commission-Identified Issuer. The SEC will publish a list on its website identifying Commission-Identified Issuers, indicating the number of years a Commission-Identified Issuer has been published on the list, and noting whether the Commission-Identified Issuer has been subject to any prior trading prohibitions.

  

The HFCAA requires the SEC to prohibit the trading of the securities of certain Commission Identified Issuers on a national securities exchange or through any other method that is within the jurisdiction of the SEC to regulate, including through over-the-counter trading. As a result, the SEC will impose an initial trading prohibition on a registrant as soon as practicable after it is conclusively identified as a Commission-Identified Issuer for three consecutive years.

 

If the SEC ends the initial trading prohibition and, thereafter, the registrant is again determined to be a Commission-Identified Issuer, the SEC will impose a subsequent trading prohibition on the registrant for a minimum of five years. To end an initial or subsequent trading prohibition, a Commission-Identified Issuer must certify that it has retained or will retain a registered public accounting firm that the PCAOB has determined it is able to inspect or investigate. To make that certification, the Commission-Identified Issuer must file financial statements that include an audit report signed by such a registered public accounting firm.

 

Our auditor, BFBorgers CPA PC, is required to undergo regular inspections by the PCAOB as an auditor of companies that are publicly traded in the United States and a firm registered with the PCAOB. BFBorgers CPA PC will be subject to the HFCAA adopted amendments if it is located within the PRC jurisdiction where the PCAOB is unable to conduct inspections without the approval of the Chinese government authorities. If our auditor is not inspected by the PCAOB as specified in the HFCAA, our securities may be prohibited from trading, and this ultimately could result in being delisted.

 

 

 7 

 

 

Item 1. Business

 

(a) Business Development

 

Beesfree, Inc. (the “Company”) was originally incorporated in the State of Nevada on September 4, 2007 as BNH, Inc. On October 4, 2011, the Company filed Articles of Merger with the Nevada Secretary of State. BNH, Inc merged with Beesfree, Inc. and the surviving entity name was Beesfree, Inc. The Company was a development stage company that planned to develop a proprietary composite food supplement for honeybees, BeesVita PlusTM which believed to prevent the effects of colony collapse disorder (“CCD”). CCD is a phenomenon in which worker bees from a beehive or colony abruptly disappear effectively killing the colony. The Company’s goal was to initially sell products directly to large beekeepers in the United States, Europe and Argentina.

 

Business operations for Beesfree, Inc. and its subsidiaries were abandoned by former management and a custodianship action, as described in the subsequent paragraph, was commenced in 2016. The Company filed its last 10-K in 2013, this financial report included liabilities and debts.

 

On June 16, 2016, the Eighth District Court of Clark County, Nevada granted the Application for Appointment of Custodian as a result of the absence of a functioning board of directors and the revocation of the Company’s charter. The order appointed Bryan Glass (“Mr. Glass”, the “Custodian”) custodian with the right to appoint officers and directors, negotiate and compromise debt, execute contracts, issue stock, and authorize new classes of stock.

 

The court awarded custodianship to Mr. Glass based on the absence of a functioning board of directors, revocation of the company’s charter, and abandonment of the business. At this time, Mr. Glass was appointed sole officer and director.

 

The Company was severely delinquent in filing annual reports for the Company’s charter. The last annual report was filed on December 31, 2013 in on Form 10-K. In addition, the company was subject to Exchange Act reporting requirements including filing 10Q’s and 10Ks. The Company filed its last 10Q for quarter ending September 30, 2013 and was out of compliance with Exchange Act reporting. Mr. Glass attempted to contact the Company’s officers and directors through letters, emails, and phone calls, with no success.

 

Mr. Glass was a shareholder in the Company and applied to the Court for an Order appointing Brian Glass as the Custodian. This application was for the purpose of reinstating The Company’s corporate charter to do business and restoring value to the Company for the benefit of the stockholders.

 

Mr. Glass performed the following actions in its capacity as custodian:

 

  · Funded any expenses of the company including paying off outstanding liabilities
  · Brought the Company back into compliance with the Nevada Secretary of State, resident agent, transfer agent
  · Appointed officers and directors and held a shareholders meeting

 

The Custodian paid the following expenses on behalf of the company:

 

Nevada Secretary of State for reinstatement of the Company, $4,311

Transfer agent, VStock Transfer LLC, $3,045

Amended and Restated Articles of Incorporation for the Company, $175

 

 

 

 8 

 

 

Upon appointment as the Custodian of the Company and under its duties stipulated by the Nevada court, Mr. Glass took initiative to organize the business of the issuer. As Custodian, the duties were to conduct daily business, hold shareholder meetings, appoint officers and directors, reinstate the company with the Nevada Secretary of State. Mr. Glass also had authority to enter into contracts and find a suitable merger candidate. Mr. Glass was compensated for its role as custodian in the amount of 30,000,000 shares of Restricted Common Stock. Mr. Glass did not receive any additional compensation, in the form of cash or stock, for custodian services. The custodianship was discharged on January 19, 2017.

  

On April 2, 2018, Mr. Glass entered into a Stock Purchase Agreement with Yan Ping Sheng, whereby Mr. Sheng purchased 30,000,000 shares of Restricted Common Stock. These shares represent the controlling block of stock. Mr. Glass resigned his position of sole officer and director and appointed Yan Ping Sheng as CEO, Treasurer, Secretary, and Director of the Company.

 

We are currently a shell company, as defined in Rule 405 under the Securities Act of 1933, as amended (the “Securities Act”), and Rule 12b-2.

 

(b) Business of Issuer

 

Beesfree, Inc. is a developmental stage company, incorporated under the laws of the State of Nevada on September 4, 2007. Our plan of business has not been implemented but we plan to merge or acquire a company whose business is in trading agricultural products, food processing, and be a supply chain for supermarkets.

 

On September 29, 2020, Company changed its name in Nevada, the state of domicile, to JJY Holding Group. (See Exhibit)

 

At this time, the Company also cancelled its Convertible Series A Cumulative Stock and its Convertible Series B Cumulative Stock. There were no shares issued and outstanding.

 

At present financial revenue has not yet been realized. The Company hopes to raise capital in order to fund the acquisitions.

 

All statements involving our business plan are forward looking statements and have not been implemented as of this filing.

 

The Company is moving in a new direction, statements made relating to our business plan are forward looking statements and we have no history of performance. Current management does not have any experience in trading agricultural products, food processing, and supply chain management for supermarkets.

 

We plan to merge or acquire a company in the business of trading agricultural products, food processing, or supply chain management for supermarkets. Our vision incorporates the distribution food to supermarkets.

 

Sources of target businesses.

 

In the next twelve months management anticipates that target business candidates will be brought to our attention from various unaffiliated sources, including securities broker-dealers, investment bankers, venture capitalists, bankers, and other members of the financial community, who may present solicited or unsolicited proposals. Management may also bring to our attention target business candidates. While we do not presently anticipate engaging the services of professional firms that specialize in business acquisitions on any formal basis, we may engage these firms in the future, in which event we may pay a finder’s fee or other compensation in connection with a business combination. In no event, however, will we pay management any finder’s fee or other compensation for services rendered to us prior to or in connection with the consummation of a business combination.

 

 

 

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Selection of a target business and structuring of a business combination.

 

In evaluating a prospective target business, management will consider, among other factors, the following:

 

· financial condition and results of operation of the target company;
· growth potential;
· experience and skill of management and availability of additional personnel;
· capital requirements;
· competitive position;
· stage of development of the products, processes, or services;
· degree of current or potential market acceptance of the products, processes, or services;
· proprietary features and degree of intellectual property or other protection of the products, processes, or services;
· regulatory environment of the industry; and
· costs associated with effecting the business combination.

  

These criteria are not intended to be exhaustive. Any evaluation relating to the merits of a particular business combination will be based, to the extent relevant, on the above factors as well as other considerations deemed relevant by our management in effecting a business combination consistent with our ultimate business objective of distributing our agricultural products through our supply chain management to supermarkets. In evaluating a prospective target business, we will conduct a due diligence review which will encompass, among other things, meetings with incumbent management and inspection of facilities, as well as review of financial and other information which will be made available to us.

 

We will endeavor to structure a business combination so as to achieve the most favorable tax treatment to us, the target business and both companies’ shareholders. However, there can be no assurance that the Internal Revenue Service or applicable state tax authorities will necessarily agree with the tax treatment of any business combination we consummate.

 

The time and costs required to select and evaluate a target business and to structure and complete the business combination cannot presently be ascertained with any degree of certainty. Any costs incurred with respect to the identification and evaluation of a prospective target business with which a business combination is not ultimately completed will result in a loss to us.

 

Future acquisitions could prove difficult to integrate, disrupt our business, dilute stockholder value and strain our resources. 

 

In the future, we plan to acquire additional businesses that we believe could complement or expand our business or increase our customer base. Whether we realize the anticipated benefits from these acquisitions and related activities depends, in part, upon our ability to integrate the operations of the acquired business, the performance of the underlying product and service portfolio, and the performance of the management team and other personnel of the acquired operations. Integrating the operations of acquired businesses successfully or otherwise realizing any of the anticipated benefits of acquisitions, including anticipated cost savings and additional revenue opportunities, involves a number of potential challenges. The failure to meet these integration challenges could seriously harm our financial condition and results of operations. Realizing the benefits of acquisitions depends in part on the integration of operations and personnel. These integration activities are complex and time-consuming, and we may encounter unexpected difficulties or incur unexpected costs, including:

 

· our inability to achieve the operating synergies anticipated in the acquisitions;
· diversion of management attention from ongoing business concerns to integration matters; 
· difficulties in consolidating and rationalizing IT platforms and administrative infrastructures; 
· complexities associated with managing the geographic separation of the combined businesses and consolidating multiple business;
· difficulties in integrating personnel from different corporate cultures while maintaining focus providing consistent service;
· possible cash flow interruption or loss of revenue as a result of change of ownership transitional matters; and 
· inability to generate sufficient revenue to offset acquisition costs. 

 

 

 

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Acquired businesses may have liabilities or adverse operating issues that we fail to discover through due diligence prior to the acquisition, including cyber and other security vulnerabilities. In particular, to the extent that prior owners of any acquired businesses or properties failed to comply with or otherwise violated applicable laws or regulations or failed to fulfill their contractual obligations to the U.S. Government or other customers, we, as the successor owner, may be financially responsible for these violations and failures and may suffer reputational harm or otherwise be adversely affected. Acquisitions also frequently result in the recording of goodwill and other intangible assets that are subject to potential impairment in the future that could harm our financial results. In addition, if we finance acquisitions by issuing debt or equity securities, our existing stockholders may be diluted, which could affect the market price of our stock. Acquisitions and/or the related equity financings could also impact our ability to utilize our NOL carryforwards. As a result, if we fail to properly evaluate acquisitions or investments, we may not achieve the anticipated benefits of any such acquisitions, and we may incur costs in excess of what we anticipate. Acquisitions frequently involve benefits related to integration of operations. The failure to successfully integrate the operations or to otherwise realize any of the anticipated benefits of the acquisition could seriously harm our financial condition and results of operations. While we believe that we have established appropriate and adequate procedures and processes to mitigate these risks, there is no assurance that these transactions will be successful. 

 

Competition

 

Our company expects to compete with many countries in the agricultural, food processing and supermarket supply chain management industry. In addition, there are several competitors that are larger and more profitable than the Company. We expect that the quantity and composition of our competitive environment will continue to evolve as the industry changes and grows. Additionally, increased competition is possible to the extent that new geographies enter the marketplace as a result of continued enactment of regulatory and legislative changes. We believe that diligently establishing and expanding our funding sources will establish us in an already established industry. Additionally, we expect that establishing our product offerings and supply chain management are factors that mitigate the risk associated with operating in a developing competitive environment. Additionally, the change of the industry as a whole due to COVID-19 regulation will result in our food processing and supply chain management to supermarkets being more efficient due our control of the process from growing to delivery to supermarkets, thereby further mitigating the impact of competition on our future operations and results.

 

Compliance with agricultural and food processing guidelines will increase development costs and the cost of operating our business. In turn, we may not be able to meet the competitive price point for our end product dictated by the market and our competitors.

 

Again, these are forward looking statements and not an indication of past performance. There is no guarantee that we will be able to implement our business plan and have no merger candidates as of the time of this filing.

 

Effect of Existing or Probable Governmental Regulations on the Business

 

Upon effectiveness of this Form 10, we will be subject to the Exchange Act and the Sarbanes-Oxley Act of 2002. Under the Exchange Act, we will be required to file with the SEC annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K. The Sarbanes-Oxley Act creates a strong and independent accounting oversight board to oversee the conduct of auditors of public companies and to strengthen auditor independence. It also (1) requires steps be taken to enhance the direct responsibility of senior members of management for financial reporting and for the quality of financial disclosures made by public companies; (2) establishes clear statutory rules to limit, and to expose to public view, possible conflicts of interest affecting securities analysts; (3) creates guidelines for audit committee members’ appointment, and compensation and oversight of the work of public companies’ auditors; (4) prohibits certain insider trading during pension fund blackout periods; and (5) establishes a federal crime of securities fraud, among other provisions.

 

We will also be subject to Section 14(a) of the Exchange Act, which requires all companies with securities registered pursuant to Section 12(g) of the Exchange Act to comply with the rules and regulations of the SEC regarding proxy solicitations, as outlined in Regulation 14A. Matters submitted to our stockholders at a special or annual meeting thereof or pursuant to a written consent will require us to provide our stockholders with the information outlined in Schedules 14A or 14C of Regulation 14A. Preliminary copies of this information must be submitted to the SEC at least 10 days prior to the date that definitive copies of this information are provided to our stockholders.

 

We will also be subject to by the China Securities Regulatory Commission (“CSRC”), Cyber Administration of China (“CAC”), and China Food and Drug Administration (“CFDA”).

 

The CRSC oversees China's nationwide centralized securities supervisory system, with the power to regulate and supervise securities issuers, as well as to investigate, and impose penalties for illegal activities related to securities and futures.

 

The Company will be subject to CRSC rules and regulations and has not received approval at this time. As such, we will be required to submit information about our business to CRSC for approval and will be subject to continued compliance. In addition, if we decide to implement a VIE structure, the CRSC could deny us permission as an issuer to foreign investors if it is ruled that VIE’s are illegal.

 

 

 

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The value of our stock could decline or become worthless. The CRSC and SEC are working together to ensure compliance and protection of foreign investor rules. The Company could be delisted as a result of not complying with these rules.

 

If, in the future, we become noncompliant with CRSC rules, our business operations could be suspended, and our stock could be worthless. In addition, the CRSC could deny us permission as an issuer to foreign investors if it is ruled that VIE’s are illegal.

 

The CAC regulates the collection of personal information, which is recorded electronically, or in any other form, to recognize the identity of a natural person. In light of greater oversight regarding the collection of personal information we will be subject to cybersecurity review upon execution of our contemplated business plan.

 

Our potential business combination, food supply chain management, will have operations in China and will be subject to cybersecurity review. We face uncertainties as to whether such clearance can be timely obtained, or at all, and we may incur additional time delays to complete any anticipated acquisitions.

 

In light of greater oversight by CAC for companies seeking to list on a foreign exchange, target business combinations could be impacted. If CAC determines our target business does not meet its requirements, our ability to implement our business plan will be greatly affected

 

If CAC determines that we have violated any portion of PRC laws and regulation, our ability to obtain or maintain permits or licenses required to conduct business in China may be affected. In the absence of required permits or licenses, governmental authorities may impose material sanctions or penalties on the company. Such actions could significantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause the value of our securities to significantly decline or be worthless.

 

The Company plans to merger or acquire a company that would be under the oversight of China Food and Drug Administration (‘CFDA”). The CFDA establishes safety regulations for the food industry, including the trading in agricultural products, food processing and food supply chain management. We would be required to submit information about our business and receive a license to do business. If the CFDA finds that the company we merge with or acquire is in violation of imposed laws, and our products meet the standards of the food sanitation laws of the PRC we could face halting of our business, fines, revocation of our health permit, and our officers could face criminal charges.

 

As of the date of this filing of the Amendment, we have no operating subsidiaries and are not involved in any investigations on cybersecurity review initiated by the CRSC, CAC or CFDA based on the draft measures, and we have not received any inquiry, notice, warning, sanctions in such respect or any regulatory objections to this registration. As of the date of this registration statement, recent regulatory actions by China’s government related to data security or anti-monopoly have not materially impacted our ability to conduct our business, accept foreign investments or list on a U.S. or other foreign exchanges.

 

Employees

 

As of September 30, 2021, we had one officer, three directors and no employees. We anticipate that we will begin to fill out our management team as and when we raise capital to begin implementing our business plan. In the interim, we will utilize independent consultants to assist with accounting and administrative matters. We currently have no employment agreements and believe our consulting relationships are satisfactory. We plan to continue to hire independent consultants from time to time on an as-needed basis.

 

 

 

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Item 1A. Risk Factors

 

Risks Relating to Our Business

 

Our business plan involves a number of very significant risks. Our future business, operating results and financial condition could be seriously harmed as a result of the occurrence of any of the following risks. You could lose all or part of your investment due to any of these risks. You should invest in our common stock only if you can afford to lose your entire investment.

 

Our officers and directors reside outside the United States, investors may have limited legal recourse against them including difficulties in enforcing judgments made against them by U.S. courts. There is neither treaty nor any reciprocal arrangement between China and the United States regarding recognition or enforcement of civil judgments.

 

Recent statements by the Chinese government indicate an intent to exert more oversight and control over offerings that are conducted overseas and/or foreign investment in China-based issuers. Such actions could significantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause the value of such securities to significantly decline or be worthless.

 

The Company may implement a VIE structure in the future if our operations are located in China. If the PRC government determines that the contractual arrangements constituting part of our VIE structure does not comply with PRC regulations, or if these regulations change or are interpreted differently in the future, our shares may decline in value or be worthless if we are unable to assert our contractual control rights over the assets of our PRC subsidiaries that may conduct all or substantially all of our operations.

 

We are not currently required to comply with regulations and policies of the Cyberspace Administration of China (CAC) because we have not commenced our business in China.

 

CAC regulates the collection of personal information, which is recorded electronically, or in any other form, to recognize the identity of a natural person. In light of greater oversight regarding the collection of personal information we will be subject to cybersecurity review upon execution of our contemplated business plan.

 

Our potential business combination, food supply chain management, will have operations in China and will be subject to cybersecurity review. We face uncertainties as to whether such clearance can be timely obtained, or at all, and we may incur additional time delays to complete any anticipated acquisitions.

 

In light of greater oversight by CAC for companies seeking to list on a foreign exchange, target business combinations could be impacted. If CAC determines our target business does not meet its requirements, our ability to implement our business plan will be greatly affected

 

If CAC determines that we have violated any portion of PRC laws and regulation, our ability to obtain or maintain permits or licenses required to conduct business in China may be affected. In the absence of required permits or licenses, governmental authorities may impose material sanctions or penalties on the company. Such actions could significantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause the value of our securities to significantly decline or be worthless.

 

Our Auditor is U.S. based, registered with the PCAOB, and is subject to PCAOB inspections

 

The Holding Foreign Companies Accountable Act (“HFCAA”) became law in December 2020 and prohibits foreign companies from listing their securities on U.S. exchanges if the company has been unavailable for PCAOB inspection or investigation for three consecutive years.

 

 

 

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The Holding Foreign Companies Accountable Act (“HFCAA”) became law in December 2020 and prohibits foreign companies from listing their securities on U.S. exchanges if the company has been unavailable for PCAOB inspection or investigation for three consecutive years.

 

The HFCAA requires the SEC to identify registrants that have retained a registered public accounting firm to issue an audit report where that registered public accounting firm has a branch or office that:

 

· Identify areas of shortage in the agricultural trade industry
· Is located in a foreign jurisdiction; and
· Identify areas of shortage in the agricultural trade industry
· The PCAOB has determined that it is unable to inspect or investigate completely because of a position taken by an authority in the foreign jurisdiction
· Identify areas of shortage in the agricultural trade industry
· As reflected on the PCAOB's website, the PCAOB is currently unable to inspect or investigate accounting firms due to a position of the local authority in two jurisdictions: China and Hong Kong

 

If a PCAOB auditor is unable to inspect the issuer's public accounting firm for three consecutive years, the issuer's securities are banned from trade on a national exchange or through other methods. The United States Senate passed the Accelerating Holding Foreign Companies Accountable Act, which, if enacted, would decrease the number of non-inspection years from three years to two years. As a result, our securities could be delisted rendering our stock worthless as a result of "non-inspection" by the PCAOB.

 

On December 16, 2021, the PCAOB issued a report on its determinations that if the Board is unable to inspect or investigate completely PCAOB-registered public accounting firms headquartered in mainland China and in Hong Kong, a Special Administrative Region of the People’s Republic of China (PRC), because of positions taken by PRC authorities in those jurisdictions, it will suspend trading of the issuer. The Board made these determinations pursuant to PCAOB Rule 6100 which provides a framework for how the PCAOB fulfills its responsibilities under the Holding Foreign Companies Accountable Act (HFCAA).

 

On December 16, 2021, the following amendments to the HCFAA were adopted by the Securities and Exchange Commission:

 

Consistent with the HFCAA, the final amendments require Commission-Identified Issuers to submit documentation to the SEC through the EDGAR system on or before its annual report due date that establishes that it is not owned or controlled by a governmental entity in its public accounting firm’s foreign jurisdiction. The final amendments also require a Commission-Identified Issuer that is also a “foreign issuer,” as defined in Exchange Act Rule 3b-4, to provide certain additional specified disclosures in their annual report for itself and its consolidated foreign operating entity or entities, including any variable-interest entity or similar structure that results in additional foreign entities being consolidated in the registrant’s financial statements.

 

The required disclosures include:

 

·

During the period covered by the form, the registered public accounting firm has prepared an audit report for the issuer;

·

The percentage of the shares of the issuer owned by governmental entities in the foreign jurisdiction in which the issuer is incorporated or otherwise organized;

·

Whether governmental entities in the applicable foreign jurisdiction with respect to that registered public accounting firm have a controlling financial interest with respect to the issuer;

· The name of each official of the Chinese Communist Party who is a member of the board of directors of the issuer or the operating entity with respect to the issuer; and
· Whether the articles of incorporation of the issuer (or equivalent organizing document) contains any charter of the Chinese Communist Party, including the text of any such charter.

 

 

 

 

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The SEC will identify a registrant as a Commission-Identified Issuer as early as possible after the registrant files its annual report and on a rolling basis. The SEC will “provisionally identify” a registrant as a Commission-Identified Issuer on the SEC’s website at www.sec.gov/HFCAA. For 15 business days after this provisional identification, a registrant may email the SEC if it believes it has been incorrectly identified, providing evidence supporting its claim. After reviewing the information, the registrant will be notified whether the SEC will “conclusively identify” the registrant as a Commission-Identified Issuer.

  

A Commission-Identified Issuer is a registrant identified by the SEC as having filed an annual report with an audit report issued by a registered public accounting firm that is located in a foreign jurisdiction and that the Public Company Accounting Oversight Board (PCAOB) is unable to inspect or investigate completely because of a position taken by an authority in that jurisdiction (PCAOB-Identified Firm). The SEC will identify such issuers promptly after the filing of their annual reports by evaluating whether the annual report contains an audit report signed by a PCAOB-Identified Firm. We may be subject to the HFCAA if we are identified as a "Commission-Identified Issuer" in accordance with such HFCAA amendments

 

If the registrant does not contact the SEC to dispute the provisional identification within 15 business days, the SEC will conclusively identify the registrant as a Commission-Identified Issuer. The SEC will publish a list on its website identifying Commission-Identified Issuers, indicating the number of years a Commission-Identified Issuer has been published on the list, and noting whether the Commission-Identified Issuer has been subject to any prior trading prohibitions.

  

The HFCAA requires the SEC to prohibit the trading of the securities of certain Commission Identified Issuers on a national securities exchange or through any other method that is within the jurisdiction of the SEC to regulate, including through over-the-counter trading. As a result, the SEC will impose an initial trading prohibition on a registrant as soon as practicable after it is conclusively identified as a Commission-Identified Issuer for three consecutive years.

 

If the SEC ends the initial trading prohibition and, thereafter, the registrant is again determined to be a Commission-Identified Issuer, the SEC will impose a subsequent trading prohibition on the registrant for a minimum of five years. To end an initial or subsequent trading prohibition, a Commission-Identified Issuer must certify that it has retained or will retain a registered public accounting firm that the PCAOB has determined it is able to inspect or investigate. To make that certification, the Commission-Identified Issuer must file financial statements that include an audit report signed by such a registered public accounting firm.

 

Our auditor, BFBorgers CPA PC, is required to undergo regular inspections by the PCAOB as an auditor of companies that are publicly traded in the United States and a firm registered with the PCAOB. BFBorgers CPA PC will be subject to the HFCAA adopted amendments if it is located within the PRC jurisdiction where the PCAOB is unable to conduct inspections without the approval of the Chinese government authorities. If our auditor is not inspected by the PCAOB as specified in the HFCAA, our securities may be prohibited from trading, and this ultimately could result in being delisted.

 

We are not a blank check company

 

Beesfree, Inc. is not a Blank Check Company as defined by Securities Act Rule 419(a)(2):

 

(2)  For purposes of this section, the term “blank check company” shall mean a company that:

 

(i)  Is a development stage company that has no specific business plan or purpose or has indicated that its business plan is to engage in a merger or acquisition with an unidentified company or companies, or other entity or person; and

 

(ii)  Is issuing “penny stock,” as defined in Rule 3a51-1 (17 CFR 240.3a51-1) under the Securities Exchange Act of 1934 (“Exchange Act”).

 

Our business plan involves merging with or acquiring a company in trading agricultural products, food processing, and supply chain management for supermarkets.

  

 

 

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The PRC Anti-monopoly Law Requires Approval for Merger & Acquisition

 

Under the PRC Anti-monopoly Law, merger & acquisitions that meet certain turnover thresholds must notify the State Administration for Market Regulation (“SAMR”) for merger control clearance and may not be implemented without SAMR’s approval.

 

The Company may merge with, or acquire, a target company to commence its business operations. If our target business meets the threshold for review by SAMR, Ministry of Commerce (“MOFCOM”), and other national security laws. We will be required to submit applications for review to these regulatory agencies.

 

The SAMR utilizes a substantive test for merger review. The substantive test takes into consideration the:

 

  · Market shares and market control power of the business operators concerned
  · Concentration levels of relevant markets
  · Impact of the concentration on market entry, technological development, consumers and other relevant operators
  · Impact of the concentration on national economic development
  · Foreign investment

 

If the merger or acquisition does not meet the SAMR criteria, our application will be denied.

 

Such action could significantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause the value of such securities to significantly decline or be worthless.

 

MOFCOM requires the disclosure of the control persons, defined as any natural person, enterprise, government authority, or international organization that ultimately exercises control over a foreign investment enterprise directly or indirectly through equity interests, contract, trust, or any other means. China has escalated the national security review system (“NSR”) as requested by the MOFCOM. China expanded the scope of its national security review to capture transactions between two foreign parties involving a Chinese company or Chinese interests in conjunctions with PRC Foreign Investment Law and its implementation regulations.

 

In addition to the NSR system, MOFCOM promulgated the Provisions on the Unreliable Entity List (UEL), under which foreign individuals and entities who are on the UEL may be restricted or prohibited from investing in China. The Company is not on the list of as this time and the list is constantly changing.

 

Actions by the Chinese government to exert more oversight and control over offerings that are conducted overseas and/or foreign investment in China-based issuers could significantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause the value of such securities to significantly decline or be worthless.

 

Our business is subject to conflicting laws and regulations in China

 

We are subject to differing and sometimes conflicting laws and regulations in the various China jurisdictions where we provide our services. New laws and regulations may be adopted from time to time to address new issues that come to the authorities' attention. In addition, considerable uncertainties still exist with respect to the interpretation and implementation of existing laws and regulations governing our contemplated business activities. A large number of proposals are before various national, regional, and local legislative bodies and regulatory entities regarding issues related to our industry or our business model. As we implement our business plan and expand into new cities or countries or as we add new products and services to our platform, we may become subject to additional laws and regulations that we are not subject to now. Existing or new laws and regulations could expose us to substantial liability, including significant expenses necessary to comply with such laws and regulations, and could dampen our growth, which could adversely affect our business and results of operations. Such action could significantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause the value of such securities to significantly decline or be worthless.

 

 

 

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Risks related to PRC Securities Law that prevent access to information and regulatory oversight of U.S. authorities

  

PRC Securities Law state that no overseas securities regulator can directly conduct investigations or evidence collection activities within the PRC and no entity or individual in China may provide documents and information relating to securities business activities to overseas regulators without Chinese government approval. The SEC, U.S. Department of Justice, and other U.S. authorities face substantial challenges in bringing and enforcing actions against China-based Issuers and their officers and directors. As a result, investors in China-based Issuers may not benefit from a regulatory environment that fosters effective enforcement of U.S. federal securities laws.

 

Risks related to China’s evolving regulatory environment

 

China’s legal system is substantially different from the legal system in the United States and may raise risks and uncertainties concerning the intent, effect, and enforcement of its laws, rules, and regulations, including those that restrict the inflow and outflow of foreign capital or provide the Chinese government with significant authority to exert influence on a China-based Issuer’s ability to conduct business or raise capital. This lack of certainty may result in the inconsistent and unpredictable interpretation and enforcement of laws, rules, and regulations, which may change quickly. China-based Issuers face risks related to evolving laws and regulations, which could impede their ability to obtain or maintain permits or licenses required to conduct business in China. In the absence of required permits or licenses, governmental authorities may impose material sanctions or penalties on the company. The Chinese government may intervene or influence our operations at any time, which could result in a material change in our operations and/or the value of our common stock. Such actions could significantly limit or completely hinder your ability to offer or continue to offer securities to investors and cause the value of such securities to significantly decline or be worthless.

 

Legal limitations on shareholder rights and recourse for legal claims

 

 Legal claims, including federal securities law claims, against China-based Issuers may be difficult or impossible for investors to pursue in U.S. courts. Even if an investor obtains a judgment in a U.S. court, the investor may be unable to enforce such judgment, particularly in the case of a China-based Issuer, where the related assets or persons are typically located outside of the United States and in jurisdictions that may not recognize or enforce U.S. judgments. If an investor is unable to bring a U.S. claim or collect on a U.S. judgment, the investor may have to rely on legal claims and remedies available in China or other overseas jurisdictions where the China-based Issuer may maintain assets. The claims and remedies available in these jurisdictions are often significantly different from those available in the United States.

 

Resale limitations of Rule 144(i) on your shares

 

According to the Rule 144(i), Rule 144 is not available for the resale of securities initially issued by either a reporting or non-reporting shell company. Moreover, Rule 144(i)(1)(ii) states that Rule 144 is not available to securities initially issued by an issuer that has been “at any time previously” a reporting or non-reporting shell company. Rule 144(i)(1)(ii) prohibits shareholders from utilizing Rule 144 to sell their shares in a company that at any time in its existence was a shell company. However, according to Rule 144(i)(2), an issuer can “cure” its shell status.

 

To “cure” a company’s current or former shell company status, the conditions of Rule 144(i)(2) must be satisfied regardless of the time that has elapsed since the public company ceased to be a shell company and regardless of when the shares were issued. The availability of Rule 144 for resales of shares issued while the company is a shell company or thereafter may be restricted even after the expiration of the one-year period since it filed its Form 10 information if the company is not current on all of its periodic reports required to be filed within the SEC during the 12 months before the date of the shareholder’s sale. Thus, the company must file all 10-Qs and 10K for the preceding 12 months and since the filing of the Form 10, or Rule 144 is not available for the resale of securities.

 

 

 

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There is no guarantee that our business model will be profitable, we have extremely limited assets, have incurred operating losses, and have no current source of revenue

 

We have had minimal assets. We do not expect to generate revenues until we begin to implement our business plan. However, we can provide no assurance that we will produce any material revenues for our stockholders, or that our business will operate on a profitable basis.

 

We will, likely, sustain operating expenses without corresponding revenues, at least until the consummation of our business plan. This may result in our incurring a net operating loss that will increase unless we consummate a business plan with a profitable business or internally develop our business. We cannot assure you that we can identify a suitable business combination or successfully internally develop our business, or that any such business will be profitable at the time of its acquisition by the Company or ever.

 

Our auditors have deemed our Company as a going concern and capital resources may not be sufficient to fund our anticipated future operating needs

 

We have historically generated negative cash flow and losses from operations and could experience negative cash flow and losses from operations in the future. Our independent auditors have included an explanatory paragraph in their report on our financial statements for the fiscal years ended December 31, 2020, and 2019 expressing doubt regarding our ability to continue as a going concern. We currently only have a minimal amount of cash available, which will not be sufficient to fund our anticipated future operating needs. The Company will need to raise substantial sums to implement its business plan. There can be no assurance that the Company will be successful in raising funds. To the extent that the Company is unable to raise funds, we will be required to reduce our planned operations or cease any operations.

 

We may encounter substantial competition in food supply chain industry and our failure to compete effectively may adversely affect our ability to generate revenue

 

Food chain supply is a competitive industry. We believe that existing and new competitors will continue to improve in cost control and performance of their food processing and delivery methods. We have global competitors, and we will be required to continue to invest in product development and productivity improvements to compete effectively in our markets. Our competitors could develop a more efficient product delivery system or undertake more aggressive and costly marketing campaigns than ours, which may adversely affect our marketing strategies and could have a material adverse effect on our business, results of operations and financial condition.

 

Our major competitors may be better able than we to successfully endure downturns in our industrial sector. In periods of reduced demand for our product, we can either choose to maintain market share by reducing our selling prices to meet competition or maintain selling prices, which would likely sacrifice market share. Sales and overall profitability would be reduced in either case. In addition, we cannot assure you that additional competitors will not enter our existing markets, or that we will be able to compete successfully against existing or new competition.

 

Environmental laws compliance

 

We believe we are in compliance with all applicable environmental laws, food safety laws, and international trade laws in all material respects. We do not expect future compliance with these laws to have a material adverse effect on our business.

 

We may not be able to obtain China’s regulatory approvals for our product

 

Our business is subject to China laws and regulations governing agriculture, food processing, supply chain management, and other matters. The Company believes acquisition of already accredited private corporations will mitigate this risk.

 

All operating plans have been made in consideration of existing codes and regulations.

 

 

 

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We face a number of risks associated with our business plan, including the possibility that we may incur substantial debt or convertible debt, which could adversely affect our financial condition

 

We intend to use reasonable efforts to complete our business plan. The risks commonly encountered in implementing our business plan is insufficient revenues to offset increased expenses associated with finding a merger candidate. Failure to raise sufficient capital to carry out our business plan. Additionally, we have no operations at this time so our expenses are likely to increase and it is possible that we may incur substantial debt or convertible debt in order to complete our business plan, which can adversely affect our financial condition. Incurring a substantial amount of debt or convertible debt may require us to use a significant portion of our cash flow to pay principal and interest on the debt, which will reduce the amount available to fund working capital, capital expenditures, and other general purposes. Our indebtedness may negatively impact our ability to operate our business and limit our ability to borrow additional funds by increasing our borrowing costs, and impact the terms, conditions, and restrictions contained in possible future debt agreements, including the addition of more restrictive covenants; impact our flexibility in planning for and reacting to changes in our business as covenants and restrictions contained in possible future debt arrangements may require that we meet certain financial tests and place restrictions on the incurrence of additional indebtedness and place us at a disadvantage compared to similar companies in our industry that have less debt. 

 

Our future success is highly dependent on the ability of management to locate and attract suitable business opportunities

 

At this time, we have no operations and future implementation of our food supply chain business plan is highly speculative, there is a consequent risk of loss of an investment in the Company. The success of our plan of operations will depend to a great extent on the operations, financial condition and management of future business and internal development. While management intends to seek businesses opportunities with entities having established operating histories, we cannot provide any assurance that we will be successful in locating opportunities meeting that criterion. In the event we complete a business plan, the success of our operations will be dependent upon management, its financial position and numerous other factors beyond our control.

 

There can be no assurance that we will successfully consummate our food supply chain business plan or internally develop a successful business

 

We are a blank check company and can give no assurance that we will successfully identify and evaluate suitable business opportunities or that we will successfully implement our business plan. We cannot guarantee that we will be able to negotiate contracts on favorable terms. No assurances can be given that we will successfully identify and evaluate suitable business opportunities, that we will conclude a business plan or that we will be able to develop a successful business. Our management and affiliates will play an integral role in establishing the terms for any future business.

 

We will incur increased costs as a result of becoming a reporting company, and given our limited capital resources, such additional costs may have an adverse impact on our profitability.

 

Following the effectiveness of this Form 10, we will be an SEC reporting company. The Company currently has no business and no revenue. However, the rules and regulations under the Exchange Act require a public company to provide periodic reports with interactive data files which will require the Company to engage legal, accounting and auditing services, and XBRL and EDGAR service providers. The engagement of such services can be costly, and the Company is likely to incur losses, which may adversely affect the Company’s ability to continue as a going concern. In addition, the Sarbanes-Oxley Act of 2002, as well as a variety of related rules implemented by the SEC, have required changes in corporate governance practices and generally increased the disclosure requirements of public companies. For example, as a result of becoming a reporting company, we will be required to file periodic and current reports and other information with the SEC and we must adopt policies regarding disclosure controls and procedures and regularly evaluate those controls and process. 

 

 

 

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The additional costs we will incur in connection with becoming a reporting company will serve to further stretch our limited capital resources. The expenses incurred for filing periodic reports and implementing disclosure controls and procedures may be as high as $70,000 USD annually. In other words, due to our limited resources, we may have to allocate resources away from other productive uses in order to pay any expenses we incur in order to comply with our obligations as an SEC reporting company. Further, there is no guarantee that we will have sufficient resources to meet our reporting and filing obligations with the SEC as they come due.

 

The time and cost of preparing a private company to become a public reporting company may preclude us from entering into an acquisition or merger with the most attractive private companies and others

 

From time to time the Company may come across target merger companies. These companies may fail to comply with SEC reporting requirements may delay or preclude acquisitions. Sections 13 and 15(d) of the Exchange Act require reporting companies to provide certain information about significant acquisitions, including certified financial statements for the company acquired, covering one or two years, depending on the relative size of the acquisition. The time and additional costs that may be incurred by some target entities to prepare these statements may significantly delay or essentially preclude consummation of an acquisition. Otherwise, suitable acquisition prospects that do not have or are unable to obtain the required audited statements may be inappropriate for acquisition so long as the reporting requirements of the Exchange Act are applicable.

 

A Business may result in a change of control and a change of management.

 

In conjunction with completion of a business acquisition of a food supply chain company, it is anticipated that we may issue an amount of our authorized but unissued common or preferred stock which represents the majority of the voting power and equity of our capital stock, which would result in stockholders of a target company obtaining a controlling interest in us. As a condition of the business combination agreement, our current stockholders may agree to sell or transfer all or a portion of our common stock as to provide the target company with all or majority control. The resulting change in control may result in removal of our present officers and directors and a corresponding reduction in or elimination of their participation in any future affairs.

 

We depend on our officers and the loss of their services would have an adverse effect on our business

 

We have officers and directors of the Company that are critical to our chances for success in the food supply chain business. We are dependent on their services to operate our business and the loss of these persons, or any of them would have an adverse impact on our future operations until such time as he or she could be replaced, if he could be replaced. We do not have employment contracts or employment agreements with our officers, and we do not carry key man life insurance on their lives.

 

Because we are significantly smaller than the some of our competitors, we may lack the resources needed to capture market share

 

The food processing and supermarket supply chain management industry is highly competitive, and our business plan has not been implemented and we are smaller in size than some of our competitors. We are at a disadvantage as a blank check company, we do not have an established business. Many of our competitors have an already established their business, more established market presence, and substantially greater financial, marketing, and other resources than do we. New competitors may emerge and may develop new or innovative products that compete with our anticipated future production. No assurance can be given that we will be able to compete successfully within this industry.

 

 

 

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Our ability to use our net operating loss carry-forwards and certain other tax attributes may be limited

 

We have incurred losses during our history. To the extent that we continue to generate taxable losses, unused losses will carry forward to offset future taxable income, if any, until such unused losses expire. Under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended, if a corporation undergoes an “ownership change,” generally defined as a greater than 50% change (by value) in its equity ownership over a three-year period, the corporation’s ability to use its pre-change net operating loss carry-forwards, or NOLs, and other pre-change tax attributes (such as research tax credits) to offset its post-change income may be limited. We may experience ownership changes in the future because of subsequent shifts in our stock ownership. As a result, if we earn net taxable income, our ability to use our pre-change net operating loss carryforwards to offset U.S. federal taxable income may be subject to limitations, which could potentially result in increased future tax liability to us. In addition, at the state level, there may be periods during which the use of NOLs is suspended or otherwise limited, which could accelerate or permanently increase state taxes owed.

 

Our ability to hire and retain key personnel will be an important factor in the success of our business and a failure to hire and retain key personnel may result in our inability to manage and implement our business plan

 

Our management has limited experience in the food processing and supermarket supply chain management industry, and we may not be able to attract and retain the necessary qualified personnel. If we are unable to retain or to hire qualified personnel as required, we may not be able to adequately manage and implement our business plan.

 

Legal disputes could have an impact on our Company

 

We plan to engage in business matters that are common to the business world that can result in disputations of a legal nature.  In the event the Company is ever sued or finds it necessary to bring suit against others, there is the potential that the results of any such litigation could have an adverse impact on the Company.

 

Our common stock is listed on the OTC MARKETS. An investment in our common stock is risky and there can be no assurance that the price for our stock will not decrease substantially in the future

 

Our common stock is not currently trading on any exchange. The Company is listed on OTC Markets under the Expert Market tier, meaning there are no available stock price quotes, and you may not buy our stock in the open market. In the past, the market for our stock has been volatile and has been characterized by large swings in the trading price that do not appear to be directly related to our business or financial condition. As a result, an investment in our common stock is risky and there can be no assurance that the price for our stock will not decrease substantially in the future.

 

 

 

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Our stock trades below $5.00 per share and is subject to special sales practice requirements that could have an adverse impact on any trading market that may develop for our stock

 

If our stock trades below $5.00 per share and is subject to special sales practice requirements applicable to "penny stocks" which are imposed on broker-dealers who sell low-priced securities of this type. These rules may be anticipated to affect the ability of broker-dealers to sell our stock, which may in turn be anticipated to have an adverse impact on the market price for our stock if and when an active trading market should develop.

 

Our officers, directors and principal stockholders own a large percentage of our issued and outstanding shares and other stockholders have little or no ability to elect directors or influence corporate matters

 

As of September 30, 2021, our officers, directors, and principal stockholders were deemed to be the beneficial owners of approximately of our 64.73% issued and outstanding shares of common stock. As a result, such persons can determine the outcome of any actions taken by us that require stockholder approval. For example, they will be able to elect all of our directors and control the policies and practices of the Company.

 

Risks Related to Our Shareholders and Shares of Common Stock

 

There is presently no public market for our securities and rule 144 is not currently available

 

Our common stock is not currently trading on any exchange and a robust and active trading market may never develop. Because of our current status as a “shell company,” Rule 144 is not currently available. Future sales of our common stock by existing stockholders pursuant to an effective registration statement or upon the availability of Rule 144 could adversely affect the market price of our common stock. A shareholder who decides to sell some, or all, of their shares in a private transaction may be unable to locate persons who are willing to purchase the shares, given the restrictions. Also, because of the various risk factors described above, the price of the publicly traded common stock may be highly volatile and not provide the true market price of our common stock.

 

Our stock is not traded, so you may be unable to sell your shares at or near the quoted bid prices if you need to sell a significant number of your shares

 

Even if our stock becomes trading, it is likely that our common stock will be thinly traded, meaning that the number of persons interested in purchasing our common shares at or near bid prices at any given time may be relatively small or non-existent. This situation is attributable to a number of factors, including the fact that we are a small company which is relatively unknown to stock analysts, stock brokers, institutional investors and others in the investment community that generate or influence sales volume, and that even if we came to the attention of such persons, they tend to be risk-averse and would be reluctant to follow an unproven company such as ours or purchase or recommend the purchase of our shares until such time as we became more seasoned and viable.

 

Consequently, there may be periods of several days or more when trading activity in our shares is minimal or non-existent, as compared to a seasoned issuer which has a large and steady volume of trading activity that will generally support continuous sales without an adverse effect on share price. We cannot give you any assurance that a broader or more active public trading market for our common shares will develop or be sustained, or that current trading levels will be sustained. Due to these conditions, we can give you no assurance that you will be able to sell your shares at or near bid prices or at all if you need money or otherwise desire to liquidate your shares. 

 

Our common stock is be considered a “penny stock,” and thereby be subject to additional sale and trading regulations that may make it more difficult to sell

 

A common stock is a “penny stock” if it meets one or more of the following conditions (i) the stock trades at a price less than $5.00 per share; (ii) it is not traded on a “recognized” national exchange; (iii) it is not quoted on the Nasdaq Capital Market, or even if so, has a price less than $5.00 per share; or (iv) is issued by a company that has been in business less than three years with net tangible assets less than $5 million.

 

 

 

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The principal result or effect of being designated a “penny stock” is that securities broker-dealers participating in sales of our common stock will be subject to the “penny stock” regulations set forth in Rules 15g-2 through 15g-9 promulgated under the Exchange Act. For example, Rule 15g-2 requires broker-dealers dealing in penny stocks to provide potential investors with a document disclosing the risks of penny stocks and to obtain a manually signed and dated written receipt of the document at least two business days before effecting any transaction in a penny stock for the investor’s account. Moreover, Rule 15g-9 requires broker-dealers in penny stocks to approve the account of any investor for transactions in such stocks before selling any penny stock to that investor. This procedure requires the broker-dealer to (i) obtain from the investor information concerning his or her financial situation, investment experience and investment objectives; (ii) reasonably determine, based on that information, that transactions in penny stocks are suitable for the investor and that the investor has sufficient knowledge and experience as to be reasonably capable of evaluating the risks of penny stock transactions; (iii) provide the investor with a written statement setting forth the basis on which the broker-dealer made the determination in (ii) above; and (iv) receive a signed and dated copy of such statement from the investor, confirming that it accurately reflects the investor’s financial situation, investment experience and investment objectives. Compliance with these requirements may make it more difficult and time consuming for holders of our common stock to resell their shares to third parties or to otherwise dispose of them in the market or otherwise.

 

We may issue more shares in an acquisition or merger, which will result in substantial dilution

 

Our Articles of Incorporation, as amended, authorize the Company to issue an aggregate of 200,000,000 shares of common stock of which 46,344,728 shares are currently outstanding and 0 shares of Preferred Stock are authorized, of which 0 shares are outstanding. Any acquisition or merger effected by the Company may result in the issuance of additional securities without stockholder approval and may result in substantial dilution in the percentage of our common stock held by our then existing stockholders. Moreover, shares of our common stock issued in any such merger or acquisition transaction may be valued on an arbitrary or non-arm’s-length basis by our management, resulting in an additional reduction in the percentage of common stock held by our then existing stockholders. In an acquisition type transaction, our Board of Directors has the power to issue any, or all, of such authorized but unissued shares without stockholder approval. To the extent that additional shares of common stock are issued in connection with a business combination or otherwise, dilution to the interests of our stockholders will occur and the rights of the holders of common stock might be materially adversely affected.

 

Obtaining additional capital though the sale of common stock will result in dilution of stockholder interests

 

We may raise additional funds in the future by issuing additional shares of common stock or other securities, which may include securities such as convertible debentures, warrants or preferred stock that are convertible into common stock. Any such sale of common stock or other securities will lead to further dilution of the equity ownership of existing holders of our common stock. Additionally, the existing conversion rights may hinder future equity offerings, and the exercise of those conversion rights may have an adverse effect on the value of our stock. If any such conversion rights are exercised at a price below the then current market price of our shares, then the market price of our stock could decrease upon the sale of such additional securities. Further, if any such conversion rights are exercised at a price below the price at which any stockholder purchased shares, then that particular stockholder will experience dilution in his or her investment.

 

Our directors have the authority to authorize the issuance of preferred stock

 

Our Articles of Incorporation, as amended, authorize the Company to issue an aggregate of 0 shares of Preferred Stock. Our directors, without further action by our stockholders, have the authority to issue shares to be determined by our board of directors of Preferred Stock with the relative rights, conversion rights, voting rights, preferences, special rights, and qualifications as determined by the board without approval by the shareholders. Any issuance of Preferred Stock could adversely affect the rights of holders of common stock. Additionally, any future issuance of preferred stock may have the effect of delaying, deferring, or preventing a change in control of the Company without further action by the shareholders and may adversely affect the voting and other rights of the holders of common stock. Our Board does not intend to seek shareholder approval prior to any issuance of currently authorized stock, unless otherwise required by law or stock exchange rules. 

 

We have never paid dividends on our common stock, nor are we likely to pay dividends in the foreseeable future. Therefore, you may not derive any income solely from ownership of our stock

 

We have never declared or paid dividends on our common stock and do not presently intend to pay any dividends in the foreseeable future. We anticipate that any funds available for payment of dividends will be re-invested into the Company to further our business strategy. This means that your potential for economic gain from ownership of our stock depends on appreciation of our stock price and will only be realized by a sale of the stock at a price higher than your purchase price.

 

 

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Item 2. Financial Information

 

Management’s Discussion and Analysis or Plan of Operation

 

Upon effectiveness of this Registration Statement, we will file with the SEC annual and quarterly information and other reports that are specified in the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and SEC regulations. Thus, we will need to ensure that we will have the ability to prepare, on a timely basis, financial statements that comply with SEC reporting requirements following the effectiveness of this registration statement. We will also become subject to other reporting and corporate governance requirements, including the listing standards of any securities exchange upon which we may list our Common Stock, and the provisions of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), and the regulations promulgated hereunder, which impose significant compliance obligations upon us. As a public company, we will be required, among other things, to:

 

  · Prepare and distribute reports and other stockholder communications in compliance with our obligations under the federal securities laws and the applicable national securities exchange listing rules;

  · Define and expand the roles and the duties of our Board of Directors and its committees;

  · Institute more comprehensive compliance, investor relations and internal audit functions;

  · Involve and retain outside legal counsel and accountants in connection with the activities listed above.

 

Management for each year commencing with the year ending December 31, 2021 must assess the adequacy of our internal control over financial reporting. Our internal control over financial reporting will be required to meet the standards required by Section 404 of the Sarbanes-Oxley Act. We will incur additional costs in order to improve our internal control over financial reporting and comply with Section 404, including increased auditing and legal fees and costs associated with hiring additional accounting and administrative staff. Ultimately, our efforts may not be adequate to comply with the requirements of Section 404. If we are unable to implement and maintain adequate internal control over financial reporting or otherwise to comply with Section 404, we may be unable to report financial information on a timely basis, may suffer adverse regulatory consequences, may have violations of the applicable national securities exchange listing rules, and may breach covenants under our credit facilities.

 

The significant obligations related to being a public company will continue to require a significant commitment of additional resources and management oversight that will increase our costs and might place a strain on our systems and resources. As a result, our management’s attention might be diverted from other business concerns. In addition, we might not be successful in implementing and maintaining controls and procedures that comply with these requirements. If we fail to maintain an effective internal control environment or to comply with the numerous legal and regulatory requirements imposed on public companies, we could make material errors in, and be required to restate, our financial statements. Any such restatement could result in a loss of public confidence in the reliability of our financial statements and sanctions imposed on us by the SEC.

 

Beesfree Inc. is a blank check company and has no operations. Our business plan includes food processing and supermarket supply chain management. In summary, The Company is focused on raising capital for its business model. As of this filing, we have not raised any capital and our business is not yet operational.

 

Results of Operations for Beesfree, Inc. —Comparison of the Quarter Ended September 30, 2019, and Year Ended 2020

 

Revenue

 

We had no revenues from operations during either September 30, 2019 or December 31, 2020.

 

 

 

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General and Administrative Expense

 

General and Administrative Expenses were $899 for the quarter ended, September 30, 2021 compared to $1,627 for the year ended December 31, 2020, an decrease of $728.

 

Stock compensation expense

 

During the quarter ended September 30, 2020, we incurred Nil on non-cash stock compensation expense from the issuance of common stock for services. There was no stock issued for services in the prior year.

 

Net Loss

 

We had a net loss of $12,099 for the year ended September 30, 2021 compared to $6,114 for the year ended December 31, 2020.

 

Liquidity and Capital Resources

 

As of September 30, 2021, we had $0 of cash, $46,148 in liabilities, and an accumulated deficit of $5,636,173. We used $1,502 of cash in operations for the year ended December 31, 2020 and received net proceeds from financing of $0.

 

The financial statements accompanying this Report have been prepared on a going concern basis, which contemplates the realization of assets and settlement of liabilities and commitments in the normal course of our business. As reflected in the accompanying financial statements, we have not yet generated any revenue, had a net loss of $12,099 and have a accumulated stockholders’ deficit of $5,636,173 as of September 30, 2021. These factors raise substantial doubt about our ability to continue as a going concern. Our ability to continue as a going concern is dependent on our ability to raise additional funds and implement our business plan. The financial statements do not include any adjustments that might be necessary if we are unable to continue as a going concern.

 

Item 3. Properties

 

We do not own any property and do not pay for office space.

 

Item 4. Security Ownership of Certain Beneficial Owners and Management

 

(a) Security ownership of certain beneficial owners.

 

The following table sets forth, as of September 30, 2021, the number of shares of common stock owned of record and beneficially by our executive officer, director and persons who beneficially own more than 5% of the outstanding shares of our common stock.

 

Name and Address of Beneficial Owner  

Amount and

Nature of

Beneficial Ownership

 

Percentage

of Class

 

Yan Ping Sheng

528 Pudong Road

16th Floor

Shanghai 200120

China

  30,000,000   64.73%  

 

 

 

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Item 5. Directors and Executive Officers

 

A. Identification of Directors and Executive Officers.

 

Our Officers and directors and additional information concerning them are as follows:

 

Name   Age     Position
Mr. Yan Ping Sheng     60     CEO, President, Secretary, Treasurer, Director

 

Officer Bios

 

Yan Ping Sheng, CEO, President, Secretary, Treasurer, Director

 

Mr. Sheng graduated from Tsinghua University with the credentials of EMBA and a degree in Risk Management. His employment is as follows:

 

  · 2013 to present, prepared for the registration of World Financial Holding Group (HK) and he has been served as CEO
  · 2014 to present, participated in the merger and acquisition of Baying Ecological Holding Group Inc (ticker symbol: BYIN)
  · 2017 to present, participated in the merger and acquisition of Dong Fang Hui Le Inc. (ticker symbol: DFHL)
  · 2018 to present, CEO of World Financial Holding Group (USA)
  · 2018 to present, served as CEO of Shanghai Capital Holding Co., Ltd
  · 2018 to present, Yan Ping Sheng served as the director of World Capital Holding Ltd (BVI)
  · 2018 to present, served as CEO and CFO of BEESFREE Inc. (ticker symbol: BEES)
  · 2018 to present, served as CEO of Shanghai Qifan Enterprise Management Co., Ltd. 

 

While serving as an officer of these companies, Mr. Sheng formulated medium and long-term development strategies and corporate development goals. His experience includes presiding over board meetings, reviewing financial reports, external relations, and assessment and monitoring of senior personnel.

 

Item 6. Executive Compensation

 

For the past two years, no sole officer or director has received any cash remuneration. No remuneration of any nature has been paid for on account of services rendered by a director in such capacity to date. Our officer and director intend to devote all of his time to the Company and its subsidiaries.

 

The Company for the benefit of its employees has adopted no retirement, pension, profit sharing, stock option or insurance programs or other similar programs.

 

Item 7. Certain Relationship and Related Transactions, and Director Independence

 

Regulation S-K, Item 4, Section C require disclosure of promoters and certain control persons for registrants that are filing a registration statement on Form 10 under the Exchange Act and that had a promoter at any time during the past five fiscal years shall:

 

(i) State the names of the promoter(s), the nature and amount of anything of value (including money, property, contracts, options or rights of any kind) received or to be received by each promoter, directly or indirectly, from the registrant and the nature and amount of any assets, services or other consideration therefore received or to be received by the registrant; and

 

 

 

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(ii) As to any assets acquired or to be acquired by the registrant from a promoter, state the amount at which the assets were acquired or are to be acquired and the principle followed or to be followed in determining such amount, and identify the persons making the determination and their relationship, if any, with the registrant or any promoter. If the assets were acquired by the promoter within two years prior to their transfer to the registrant, also state the cost thereof to the promoter.

 

Bryan Glass is considered a promoter(s) under the meaning of Securities Act Rule 405. Mr. Glass was appointed custodian of the Company and under its duties stipulated by the Nevada court. Mr. Glass took initiative to organize the business of the issuer. As custodian, his duties were to conduct daily business, hold shareholder meetings, appoint officers and directors, reinstate the company with the Nevada Secretary of State. The custodian also had authority to enter into contracts and find a suitable merger candidate. In addition, Mr. Glass was compensated for his role as custodian and paid outstanding bills to creditors on behalf of the company. The custodian has not, and will not, receive any additional compensation, in the form of cash or stock, for custodian services. The custodianship was discharged on January 19, 2017.

 

Under Regulation S-K Item 404(c)(2) Registrants shall provide the disclosure required by paragraphs (c)(1)(i) and (c)(1)(ii) of this Item as to any person who acquired control of a registrant that is a shell company, or any person that is part of a group, consisting of two or more persons that agree to act together for the purpose of acquiring, holding, voting or disposing of equity securities of a registrant, that acquired control of a registrant that is a shell company.

 

As discussed in Item 1, the Company is deemed a shell company. As disclosed in Item 4, there is one person, Mr. Yan Ping Sheng considered to be control persons. As discussed in Item 1, Mr. Yan Ping Sheng purchased 30,000,000 shares of the Company’s Restricted Common Stock. These shares represent the controlling block of stock and were purchased from Bryan Glass for $120,000.

 

Mr. Sheng is our CEO and President. He is not deemed to be independent under applicable rules. We have not established any committees of the Board of Directors.

 

Mr. Yan Ping Sheng has advanced working capital to pay expenses of the Company. The advances are due on demand and non-interest bearing. The outstanding amount due to related parties was $39,349 and $18,432 as of September 30, 2021 and December 31, 2020.

 

Except as set forth above, there have been no related party transactions, or any other transactions or relationships required to be disclosed.

 

Item 8. Legal Proceedings

 

Presently, there are not any material pending legal proceedings to which the Registrant is a party or as to which any of its property is subject, and no such proceedings are known to the Registrant to be threatened or contemplated against it.

 

Item 9. Market Price and Dividends on the Registrant’s Common Equity and Related Stockholder Matters

 

(a) Market information.

 

Our Common Stock is not trading on any stock exchange. However, it is currently quoted on OTC Markets under the symbol BEES and there is no established public trading market for the class of common equity.

 

(b) Holders.

 

As of September 30, 2021, there are approximately 46 holders of an aggregate of 46,344,728 shares of our Common Stock issued and outstanding.

 

 

 

 

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(c) Dividends.

 

We have not paid any cash dividends to date and do not anticipate or contemplate paying dividends in the foreseeable future. It is the president intention of management to utilize all available funds for the development of the Registrant’s business.

 

(d) Securities authorized for issuance under equity compensation plans.

 

None.

 

Item 10. Recent Sale of Unregistered Securities

 

On April 2, 2018, Mr. Glass entered into a Stock Purchase Agreement with Mr. Yan Ping Sheng, whereby Mr. Yan Ping Sheng purchased 30,000,000 shares of Restricted Common Stock, the controlling block of stock, for the purchase price of $120,000.

 

The restricted shares were sold in a private transaction pursuant to Rule 144(i) of the ’33 Securities Act. As of this date, the shares have not been registered.

 

Item 11. Description of Registrant’s Securities to be Registered

 

(a) Common.

 

We are authorized by our Certificate of Incorporation to issue an aggregate of 205,000,000 shares of capital stock, of which 200,000,000 are shares of common stock, Par Value $0.001 per share (the “Common Stock”) and 5,000,000 shares of preferred stock, Par Value $0.001 per share (the “Preferred Stock”). As of September 30, 2021, there are 46,344,728 shares of Common Stock.

 

Common Stock

 

All outstanding shares of Common Stock are of the same class and have equal rights and attributes. The holders of Common Stock are entitled to one vote per share on all matter submitted to a vote of stockholders of the Company. All stockholders are entitled to share equally dividends, if any, as may be declared from time to time by the Board of Directors out of funds legally available. In the event of liquidation, the holders of Common Stock are entitled to share ratably in all assets remaining after payment of all liabilities. The stockholders do not have cumulative or preemptive rights.

 

Preferred Stock

 

Our Certificate of Incorporation authorizes the issuances of up to 5,000,000 shares of Preferred Stock with designations, rights and preferences determined from time to time by its Board of Directors. Accordingly, our Board of Directors is empowered, without stockholder approval, to issue Preferred Stock with dividend, liquidation, conversion, voting, or other rights, which could adversely affect the voting power or, other rights of the holders of the Common Stock. In the event of issuance, the Preferred Stock could be utilized, under certain circumstances, as a method of discouraging, delaying or preventing a change in control of the Company.

 

At this time there are 5,000,000 shares of Preferred Stock authorized and 0 issued and outstanding.

 

The Company amended its Certification of Stock Designation with the Nevada Secretary of State on September 29, 2020 whereby, the Company cancelled its Convertible Series A Cumulative Stock and its Convertible Series B Cumulative Stock. There were no shares issued and outstanding at the time of cancellation.

 

 

 

 

 28 

 

 

The description of certain matters relating to the securities of the Company is a summary and is qualified in its entirely by the provisions of the Company’s Certificate of Incorporation and Bylaws copies of which have been filed as exhibits to this Form 10.

 

(b) Debt Securities.

 

None.

 

(c) Other Securities To Be Registered.

 

None.

 

Item 12. Indemnification of Directors and Officers

 

Our Officers and Directors are indemnified as provided by the Nevada corporate law and our Bylaws. We have agreed to indemnify all our directors and certain officers against certain liabilities, including liabilities under the Securities Act of 1933. Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to our directors, officers and controlling persons pursuant to the provisions described above, or otherwise, we have been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than our payment of expenses incurred or paid by our director, officer or controlling person in connection with the securities being registered, we will, unless in the opinion of our counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the adjudication of such issue.

 

We have been advised that in the opinion of the Securities Exchange Commission indemnification for liabilities arising under the Securities Act against public policy as expressed in the Securities Act, and is, therefore, unenforceable. If a claim for indemnification against such liabilities is asserted by one of our directors, officers, or controlling persons in connection with the securities being registered, we will, unless in the opinion of our legal counsel the matter has been settled by controlling precedent, submit question of whether such indemnification is against public policy to a court of appropriate jurisdiction. We will then be governed by the court’s decision.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 29 

 

 

Item 13. Financial Statements and Supplementary Data

 

BEESFREE INC.

 

CONSOLIDATED FINANCIAL STATEMENTS

 

(Audited)

 

  Page
   
   
Balance Sheets as of September 31, 2021 and December 31, 2020 (Unaudited) F-1
   
Statements of Operations for the Three and Nine Months Ended September 30, 2021 and 2020 (Unaudited) F-2
   
Statement of Stockholders’ Equity for the Three and Nine Months Ended September 30, 2021 and 2020 (Unaudited) F-3
   
Statements of Cash Flows for the Three and Nine Months Ended September 30, 2021 and 2020 (Unaudited) F-4
   
Notes to Financial Statements (Unaudited) F-5
   
   
Report of Independent Registered Public Accounting Firm F-10
   
Balance Sheets as of December 31, 2020 and 2019 F-11
   
Statements of Operations for the Years Ended December 31, 2020 and 20019 F-12
   
Statement of Stockholders’ Equity for the Years Ended December 31, 2020 and 2019 F-13
   
Statements of Cash Flows for the Years Ended December 31, 2020 and 2019 F-14
   
Notes to Financial Statements F-15
   

 

 

 

 

 

 

 

 

 

 

 

 30 

 

 

JJY Holding Group

FORMERLY BEESFREE, Inc.

BALANCE SHEETS

Unaudited

           

 

   September 30,   December 31, 
   2021   2020 
Assets          
Current Assets          
Cash  $   $ 
Other current receivables and prepayments       498 
Total Current Assets       498 
Total Assets  $   $498 
           
Liabilities          
Current Liabilities          
Accounts payable and accrued expenses   6,799    125 
Due to related party   39,349    18,432 
Total Current Liabilities   46,148    18,557 
Total Liabilities   46,148    18,557 
           
Commitment & contingencies        
           
Stockholders' Deficit          
Common stock, $0.001 par value; 200,000,000 shares authorized; 46,344,728 and 46,344,728 shares issued and outstanding, respectively.   46,345    46,345 
Additional paid-in capital   5,543,680    5,543,680 
Accumulated deficit   (5,636,173)   (5,608,084)
Total Stockholders' Deficit   (46,148)   (18,059)
Total Liabilities and Stockholders' Deficit  $   $498 

 

 

See accompanying notes to financial statements

 

 

 

 

 F-1 

 

 

JJY Holding Group

FORMERLY BEESFREE, Inc.

STATEMENTS OF OPERATIONS

Unaudited

 

  Three Months Ended  Nine Months Ended  
  September 30,  September 30,  September 30,  September 30, 
  2021  2020  2021  2020 
Revenues $  $  $  $ 
                 
Operating expenses                
Other professional fees  11,200      16,200    
Other general & administrative expense  899   1,502   11,889   1,502 
Total operating expenses  12,099   1,502   28,089   1,502 
Loss from operations  (12,099)  (1,502)  (28,089)  (1,502)
                 
Other Income (Expenses)                
Interest income (expense)            
Total Other Income (Expenses)            
                 
Net income (loss) before income taxes  (12,099)  (1,502)  (28,089)  (1,502)
Income tax expense            
Net income (loss)  (12,099)  (1,502)  (28,089)  (1,502)
                 
Net loss attributable to common stockholders $(12,099) $(1,502) $(28,089) $(1,502)
                 
Earnings (Loss) per Share - Basic and Diluted $(0.000) $(0.000) $(0.001) $(0.000)
Weighted Average Shares Outstanding - Basic and Diluted  46,344,728   46,344,728   46,344,728   46,344,728 

 

See accompanying notes to financial statements

 

 

 

 

 

 

 F-2 

 

 

JJY Holding Group

FORMERLY BEESFREE, Inc.

STATEMENTS OF STOCKHOLDERS' DEFICIT

For the Nine Months Ended September 30, 2021 and 2020

Unaudited

 

 

   Common Stock             
   Shares   Par Value,
$0.001
   Additional
Paid-in Capital
   Accumulated
Deficit
   Total
Stockholders'
Deficit
 
Balance, December 31, 2019   46,344,728   $46,345   $5,543,680   $(5,601,970)  $(11,945)
Net income                      
Balance, March 31, 2020   46,344,728    46,345    5,543,680    (5,601,970)   (11,945)
Net income                     
Balance, June 30, 2020   46,344,728    46,345    5,543,680    (5,601,970)   (11,945)
Net loss                  (1,502)   (1,502)
Balance September 30, 2020   46,344,728    46,345    5,543,680    (5,603,472)   (13,447)
                          
                          
Balance, December 31, 2020   46,344,728   $46,345   $5,543,680   $(5,608,084)  $(18,059)
Net income                       
Balance March 31, 2021   46,344,728    46,345    5,543,680    (5,608,084)   (18,059)
Net loss                  (15,990)   (15,990)
Balance June 30, 2021   46,344,728    46,345    5,543,680    (5,624,074)   (34,049)
Net loss                  (12,099)   (12,099)
Balance September 30, 2021   46,344,728    46,345    5,543,680    (5,636,173)   (46,148)

 

 

See accompanying notes to financial statements

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 F-3 

 

 

JJY Holding Group

FORMERLY BEESFREE, Inc.

STATEMENTS OF CASH FLOWS

Unaudited

 

  Nine Months Ended 
   September 30,   September 30, 
   2021   2020 
Cash Flows from Operating Activities          
Net Loss  $(28,089)  $(1,502)
Adjustment to reconcile net loss from operations:          
Depreciation & Amortization expense          
Changes in operating assets and liabilities          
Other current receivables and prepayments   498     
Accounts payable and accrued expenses   6,674     
Net Cash Used in Operating Activities   (20,917)   (1,502)
           
Cash Flows from Investing Activities          
Net Cash Provided by Investing Activities        
           
Cash Flows from Financing Activities          
Proceeds from (Repayment of) related party payables   20,917    1,502 
Net Cash Provided by Financing Activities   20,917    1,502 
           
Net Increase (Decrease) in Cash        
Cash at Beginning of Period        
Cash at End of Period  $   $ 
           
Supplemental Cash Flow Information:          
Income Taxes Paid  $   $ 
Interest Paid  $   $ 
           
Non-Cash Investing and Financing Activities          
Dividends accrued on convertible preferred stock  $   $ 
Common stock issued for payment of related party debt  $   $ 

 

See accompanying notes to financial statements

 

 

 

 

 F-4 

 

 

JJY HOLDING GROUP

Formerly BEESFREE INC.

NOTES TO FINANCIAL STATEMENTS

As of and for the nine months ended September 30, 2021

(Unaudited)

 

NOTE 1 - ORGANIZATION AND OPERATIONS

 

JJY Holding Group (the “Company”) was originally incorporated in the State of Delaware as ARXA International Energy, Inc. On December 1, 2000, the Company changed its' name to Beesfree, Inc. and was re-incorporated under the laws of State of Nevada. The Company was engaged in oil and gas exploration and development in Utah, Louisiana and Texas. The operations of the Company and its subsidiaries were abandoned by former management and a custodianship action under court order commenced in 2016.

 

On June 16, 2016, the Eighth District Court of Clark County of Nevada granted the Application for Appointment of Custodian as a result of the absence of a functioning board of directors and the revocation of the Company’s charter. The order appointed a custodian to take any Corporation actions on behalf of the Company that would further the interests of its shareholders.

 

On April 2, 2018, a change of control occurred with respect to the Company to better reflect its new business direction. The Company intends to merge or acquire a company whose business is trading agricultural products, food processing, and be a supply chain for supermarkets.

 

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Basis of presentation

 

The Company’s financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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. Actual results could differ from those estimates.

 

Use of estimates

 

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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 reported period.

 

The Company’s significant estimates include income taxes provision and valuation allowance of deferred tax assets; the fair value of financial instruments; the carrying value and recoverability of long-lived assets, including the values assigned to an estimated useful lives of computer equipment; and the assumption that the Company will continue as a going concern. Those significant accounting estimates or assumptions bear the risk of change due to the fact that there are uncertainties attached to those estimates or assumptions, and certain estimates or assumptions are difficult to measure or value. Management bases its estimates on historical experience and on various assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.

 

 

 

 F-5 

 

 

Management regularly reviews its estimates utilizing currently available information, changes in facts and circumstances, historical experience and reasonable assumptions. After such reviews, and if deemed appropriate, those estimates are adjusted accordingly. Actual results could differ from those estimates.

 

Cash and cash equivalents

 

The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents.

 

Related parties

 

The Company follows subtopic 850-10 of the FASB Accounting Standards Codification for the identification of related parties and disclosure of related party transactions.

 

Pursuant to Section 850-10-20 the Related parties include a) affiliates of the Company; b) Entities for which investments in their equity securities would be required, absent the election of the fair value option under the Fair Value Option Subsection of Section 825–10–15, to be accounted for by the equity method by the investing entity; c) trusts for the benefit of employees, such as pension and profit-sharing trusts that are managed by or under the trusteeship of management; d) principal owners of the Company; e) management of the Company; f) other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests; and g) Other parties that can significantly influence the management or operating policies of the transacting parties or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests.

 

The financial statements shall include disclosures of material related party transactions, other than compensation arrangements, expense allowances, and other similar items in the ordinary course of business. However, disclosure of transactions that are eliminated in the preparation of consolidated or combined financial statements is not required in those statements. The disclosures shall include: a. the nature of the relationship(s) involved description of the transactions, including transactions to which no amounts or nominal amounts were ascribed, for each of the periods for which income statements are presented, and such other information deemed necessary to an understanding of the effects of the transactions on the financial statements; c. the dollar amounts of transactions for each of the periods for which income statements are presented and the effects of any change in the method of establishing the terms from that used in the preceding period; amounts due from or to related parties as of the date of each balance sheet presented and, if not otherwise apparent, the terms and manner of settlement.

 

Commitments and contingencies

 

The Company follows subtopic 450-20 of the FASB Accounting Standards Codification to report accounting for contingencies. Certain conditions may exist as of the date the consolidated financial statements are issued, which may result in a loss to the Company but which will only be resolved when one or more future events occur or fail to occur. The Company assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings, the Company evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein.

 

If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s consolidated financial statements. If the assessment indicates that a potential material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed.

 

 

 

 F-6 

 

 

Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed. Management does not believe, based upon information available at this time, that these matters will have a material adverse effect on the Company’s consolidated financial position, results of operations or cash flows. However, there is no assurance that such matters will not materially and adversely affect the Company’s business, financial position, and results of operations or cash flows.

 

Revenue recognition

 

The Company adopted ASU 2014-09, Topic 606 on January 1, 2018, using the modified retrospective method. ASC 606 requires the use of a new five-step model to recognize revenue from customer contracts. The five-step model requires that the Company (i) identify the contract with the customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, including variable consideration to the extent that it is probable that a significant future reversal will not occur, (iv) allocate the transaction price to the respective performance obligations in the contract, and (v) recognize revenue when (or as) the Company satisfies the performance obligation.

 

The adoption of Topic 606 has no impact on revenue amounts recorded on the Company’s financial statements as the Company has not generate any revenues.

 

Income Tax Provisions

 

The Company follows Section 740-10-30 of the FASB Accounting Standards Codification, which requires 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 tax assets and liabilities are based on the differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the fiscal year in which the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the fiscal years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the Statements of Income and Comprehensive Income in the period that includes the enactment date.

 

The Company adopted section 740-10-25 of the FASB Accounting Standards Codification (“Section 740-10-25”) with regards to uncertainty income taxes. Section 740-10-25 addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under Section 740-10-25, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent (50%) likelihood of being realized upon ultimate settlement. Section 740-10-25 also provides guidance on de-recognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures.

 

Net income (loss) per common share

 

Net income (loss) per common share is computed pursuant to section 260-10-45 of the FASB Accounting Standards Codification. Basic net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period. Diluted net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock and potentially outstanding shares of common stock during the period. The weighted average number of common shares outstanding and potentially outstanding common shares assumes that the Company incorporated as of the beginning of the first period presented.

 

NOTE 3 – GOING CONCERN

 

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates continuity of operations, realization of assets, and liquidation of liabilities in the normal course of business.

 

 

 

 F-7 

 

 

As reflected in the accompanying financial statements, the Company had an accumulated deficit at September 30, 2021 of $$5,636,173 without any revenues. These factors among others raise substantial doubt about the Company’s ability to continue as a going concern.

 

While the Company has not commenced operations and generate revenues, the Company’s cash position may not be significant enough to support the Company’s daily operations. Management intends to raise additional funds by way of a public or private offering. Management believes that the actions presently being taken to further implement its business plan and generate revenues provide the opportunity for the Company to continue as a going concern. While the Company believes in the viability of its strategy to generate revenues and in its ability to raise additional funds, there can be no assurances to that effect. The ability of the Company to continue as a going concern is dependent upon the Company’s ability to further implement its business plan and generate revenues.

 

The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

 

NOTE 4 – STOCKHOLDERS’ DEFICIT

 

Preferred Stock

 

Prior to the abandonment of the Company’s previous business operation, the Company appeared to have issued certain Series A Preferred Stock and Series B Preferred Stock. Since a change of control occurred with respect to the Company on April 2, 2018, the new management and director of the Company have made attempts to locate shareholder records of the issued and outstanding Preferred Stock. The Company obtained confirmation from the transfer agent that they do not have any preferred stock, stock options or warrants issued and outstanding in their records for the Company since inception. As a result, the Board of Company decided to cancel and remove all 3,500,000 shares of Convertible Series A Cumulative Preferred Stock, stated value $1.00, and 50,000 shares of Convertible Series B Cumulative Preferred Stock, stated value $175.00 (the “Preferred Stock”) in accordance with Nevada Revised Statutes, NRS77.2055, and filed the Certificate, Amendment or Withdrawal of Designation with Nevada State of Secretary on September 29, 2020. The cancellation and removal of the Preferred Stock and its accrued dividend has been retrospectively presented and recorded as additional paid-in capital.

 

As of September 30, 2021 and December 31, 2020, the Company has nil shares of preferred stock issued and outstanding.

 

Common Stock

 

The Company was authorized to issue 200,000,000 shares of Common Stock with a par value of $0.001 per share.

 

In July 2016, pursuant to the Nevada Court Order granting appointment of a custodian to the Company, the Company issued 40,000,000 shares of common stock to the appointed custodian.

 

As of September 30, 2021 and December 31, 2020, the Company has 46,344,728 shares of common stock issued and outstanding.

 

NOTE 5 – RELATED PARTY TRANSACTION

 

Mr. Yan Ping Sheng, majority shareholder, director and officer of the Company, have advanced working capital to pay expenses of the Company. The advances are due on demand and non-interest bearing. The outstanding amount due to related parties was $39,349 and $18,432 as of September 30, 2021 and December 31, 2020.

 

NOTE 6 – INCOME TAX

 

On December 22, 2017, the President of the United States signed into law the Tax Cuts and Jobs Act (“Tax Reform Act”). The legislation significantly changes U.S. tax law by, among other things, lowering corporate income tax rates, implementing a territorial tax system and imposing a transition tax on deemed repatriated earnings of foreign subsidiaries. The Tax Reform Act permanently reduces the U.S. corporate income tax rate from a maximum of 34% to a flat 21% rate, effective January 1, 2018. As a result of the reduction in the U.S. corporate income tax rate from 34% to 21% under the Tax Reform Act, the Company revalued its ending net deferred tax assets.

 

 

 

 F-8 

 

 

The Company has accumulated approximately $5,636,173 of net operating losses (“NOL”) carried forward to offset future taxable income. In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. Based on the assessment, management has established a full valuation allowance against all of the deferred tax asset relating to NOLs for every period because it is more likely than not that all of the deferred tax asset will not be realized.

 

NOTE 7 – SUBSEQUENT EVENTS

 

The Company has evaluated subsequent events to the date the financial statements were issued and has determined that there are no items to disclose or require adjustments.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 F-9 

 

 

Report of Independent Registered Public Accounting Firm

 

To the shareholders and the board of directors of JJY Holding Group

 

Opinion on the Financial Statements

 

We have audited the accompanying balance sheets of JJY Holding Group (the "Company") as of December 31, 2020 and 2019, the related statements of operations, stockholders' equity (deficit), and cash flows for the years then ended, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020 and 2019, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States.

 

Substantial Doubt about the Company’s Ability to Continue as a Going Concern

 

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3 to the financial statements, the Company’s significant operating losses raise substantial doubt about its ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

Basis for Opinion

 

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

 

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

 

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

 

 

/s/ BF Borgers CPA PC

BF Borgers CPA PC

 

We have served as the Company's auditor since 2021

Lakewood, CO

September 7, 2021

 

 

 

 

 

 F-10 

 

 

JJY Holding Group

FORMERLY BEESFREE, Inc.

BALANCE SHEETS

 

 

   December 31,   December 31, 
   2020   2019 
Assets          
Current Assets          
Cash  $   $ 
Other current receivables and prepayments   498     
Total Current Assets   498     
Total Assets  $498   $ 
           
Liabilities          
Current Liabilities          
Accounts payable and accrued expenses  $125   $125 
Due to related party   18,432    11,820 
Total Current Liabilities   18,557    11,945 
Total Liabilities   18,557    11,945 
           
Commitment & contingencies        
           
Stockholders' Deficit          
Common stock, $0.001 par value; 200,000,000 shares authorized; 46,344,728 shares issued and outstanding, respectively.   46,345    46,345 
Additional paid-in capital   5,543,680    5,543,680 
Accumulated deficit   (5,608,084)   (5,601,970)
           
Total Stockholders' Deficit   (18,059)   (11,945)
Total Liabilities and Stockholders' Deficit  $498   $ 

 

See accompanying notes to financial statements

 

 

 

 

 

 

 

 F-11 

 

 

JJY Holding Group

FORMERLY BEESFREE, Inc.

STATEMENTS OF OPERATIONS

 

 

   Years Ended 
   December 31,   December 31, 
   2020   2019 
Revenues  $   $ 
           
Operating expenses          
Other professional fees   4,487    10,500 
Other general & administrative expense   1,627    1,445 
Total operating expenses   6,114    11,945 
Loss from operations   (6,114)   (11,945)
           
Other Income (Expenses)          
Interest income (expense)        
Total Other Income (Expenses)        
           
Net income (loss) before income taxes   (6,114)   (11,945)
Income tax expense        
Net income (loss)   (6,114)   (11,945)
           
Net loss attributable to common stockholders  $(6,114)  $(11,945)
           
Earnings (Loss) per Share - Basic and Diluted  $(0.000)  $(0.000)
Weighted Average Shares Outstanding - Basic and Diluted   46,344,728    46,344,728 
           
Earnings (Loss) per Share - Basic  $(0.000)  $(0.000)
Weighted Average Shares Outstanding - Basic   46,344,728    46,344,728 

 

See accompanying notes to financial statements

 

 

 

 

 

 

 F-12 

 

 

JJY Holding Group

FORMERLY BEESFREE, Inc.*

STATEMENTS OF STOCKHOLDERS' DEFICIT

For the Years Ended December 31, 2020 and 2019

 

 

   Common Stock   Additional       Total 
   Shares   Par Value,
$0.001
   Paid-in
Capital
   Accumulated
Deficit
   Stockholders'
Deficit
 
Balance, December 31, 2018   46,344,728   $46,345   $5,543,680   $(5,590,025)  $ 
Net loss               (11,945)   (11,945)
Balance, December 31, 2019   46,344,728   $46,345   $5,543,680   $(5,601,970)  $(11,945)
                          
Balance, December 31, 2019   46,344,728   $46,345   $5,543,680   $(5,601,970)  $(11,945)
Net loss               (6,114)   (6,114)
Balance, December 31, 2020   46,344,728   $46,345   $5,543,680   $(5,608,084)  $(18,059)

 

See accompanying notes to financial statements

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 F-13 

 

 

JJY Holding Group

FORMERLY BEESFREE, Inc.

STATEMENTS OF CASH FLOWS

           

 

   Years Ended 
   December 31,   December 31, 
   2020   2019 
Cash Flows from Operating Activities          
Net Loss  $(6,114)  $(11,945)
Adjustment to reconcile net loss from operations:          
Depreciation & Amortization expense        
Changes in operating assets and liabilities          
Other current receivables and prepayments   (498)    
Accounts payable and accrued expenses       125 
Net Cash Used in Operating Activities   (6,612)   (11,820)
           
Cash Flows from Investing Activities        
Net Cash Provided by Investing Activities        
           
Cash Flows from Financing Activities          
Proceeds from related party payables   6,612    11,820 
Net Cash Provided by Financing Activities   6,612    11,820 
           
Net Increase (Decrease) in Cash        
Cash at Beginning of Period        
Cash at End of Period  $   $ 
           
Supplemental Cash Flow Information:          
Income Taxes Paid  $   $ 
Interest Paid  $   $ 
           
Non-Cash Investing and Financing Activities          
Dividends accrued on convertible preferred stock  $   $ 
Common stock issued for payment of related party debt  $   $ 

 

See accompanying notes to financial statements

 

 

 

 

 F-14 

 

 

JJY HOLDING GROUP

Formerly BEESFREE INC.

NOTES TO FINANCIAL STATEMENTS

As of and for the years ended December 31, 2020 and 2019

 

 

NOTE 1 - ORGANIZATION AND OPERATIONS

 

JJY Holding Group (the “Company”) was originally incorporated in the State of Delaware as ARXA International Energy, Inc. On December 1, 2000, the Company changed its name to Beesfree, Inc. and was re-incorporated under the laws of State of Nevada. The Company was engaged in oil and gas exploration and development in Utah, Louisiana and Texas. The operations of the Company and its subsidiaries were abandoned by former management and a custodianship action under court order commenced in 2016.

 

On June 16, 2016, the Eighth District Court of Clark County of Nevada granted the Application for Appointment of Custodian as a result of the absence of a functioning board of directors and the revocation of the Company’s charter. The order appointed a custodian to take any Corporation actions on behalf of the Company that would further the interests of its shareholders.

 

On April 2, 2018, a change of control occurred with respect to the Company to better reflect its new business direction. The Company intends to be in the business that involves trading agricultural products, food processing, and be a supply chain for supermarkets.

 

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Basis of presentation

 

The Company’s financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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. Actual results could differ from those estimates.

 

Use of estimates

 

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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 reported period.

 

The Company’s significant estimates include income taxes provision and valuation allowance of deferred tax assets; the fair value of financial instruments; the carrying value and recoverability of long-lived assets, including the values assigned to an estimated useful lives of computer equipment; and the assumption that the Company will continue as a going concern. Those significant accounting estimates or assumptions bear the risk of change due to the fact that there are uncertainties attached to those estimates or assumptions, and certain estimates or assumptions are difficult to measure or value. Management bases its estimates on historical experience and on various assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.

 

 

 

 

 F-15 

 

 

Management regularly reviews its estimates utilizing currently available information, changes in facts and circumstances, historical experience and reasonable assumptions. After such reviews, and if deemed appropriate, those estimates are adjusted accordingly. Actual results could differ from those estimates.

 

Cash and cash equivalents

 

The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents.

 

Related parties

 

The Company follows subtopic 850-10 of the FASB Accounting Standards Codification for the identification of related parties and disclosure of related party transactions.

 

Pursuant to Section 850-10-20 the Related parties include a) affiliates of the Company; b) Entities for which investments in their equity securities would be required, absent the election of the fair value option under the Fair Value Option Subsection of Section 825–10–15, to be accounted for by the equity method by the investing entity; c) trusts for the benefit of employees, such as pension and profit-sharing trusts that are managed by or under the trusteeship of management; d) principal owners of the Company; e) management of the Company; f) other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests; and g) Other parties that can significantly influence the management or operating policies of the transacting parties or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests.

 

The financial statements shall include disclosures of material related party transactions, other than compensation arrangements, expense allowances, and other similar items in the ordinary course of business. However, disclosure of transactions that are eliminated in the preparation of consolidated or combined financial statements is not required in those statements. The disclosures shall include: a. the nature of the relationship(s) involved description of the transactions, including transactions to which no amounts or nominal amounts were ascribed, for each of the periods for which income statements are presented, and such other information deemed necessary to an understanding of the effects of the transactions on the financial statements; c. the dollar amounts of transactions for each of the periods for which income statements are presented and the effects of any change in the method of establishing the terms from that used in the preceding period; amounts due from or to related parties as of the date of each balance sheet presented and, if not otherwise apparent, the terms and manner of settlement.

 

Commitments and contingencies

 

The Company follows subtopic 450-20 of the FASB Accounting Standards Codification to report accounting for contingencies. Certain conditions may exist as of the date the consolidated financial statements are issued, which may result in a loss to the Company but which will only be resolved when one or more future events occur or fail to occur. The Company assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings, the Company evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein.

 

If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s consolidated financial statements. If the assessment indicates that a potential material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed.

 

 

 

 

 F-16 

 

 

Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed. Management does not believe, based upon information available at this time, that these matters will have a material adverse effect on the Company’s consolidated financial position, results of operations or cash flows. However, there is no assurance that such matters will not materially and adversely affect the Company’s business, financial position, and results of operations or cash flows.

 

Revenue recognition

 

The Company adopted ASU 2014-09, Topic 606 on January 1, 2018, using the modified retrospective method. ASC 606 requires the use of a new five-step model to recognize revenue from customer contracts. The five-step model requires that the Company (i) identify the contract with the customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, including variable consideration to the extent that it is probable that a significant future reversal will not occur, (iv) allocate the transaction price to the respective performance obligations in the contract, and (v) recognize revenue when (or as) the Company satisfies the performance obligation.

 

The adoption of Topic 606 has no impact on revenue amounts recorded on the Company’s financial statements as the Company has not generate any revenues.

 

Income Tax Provisions

 

The Company follows Section 740-10-30 of the FASB Accounting Standards Codification, which requires 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 tax assets and liabilities are based on the differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the fiscal year in which the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the fiscal years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the Statements of Income and Comprehensive Income in the period that includes the enactment date.

 

The Company adopted section 740-10-25 of the FASB Accounting Standards Codification (“Section 740-10-25”) with regards to uncertainty income taxes. Section 740-10-25 addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under Section 740-10-25, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent (50%) likelihood of being realized upon ultimate settlement. Section 740-10-25 also provides guidance on de-recognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures.

 

Net income (loss) per common share

 

Net income (loss) per common share is computed pursuant to section 260-10-45 of the FASB Accounting Standards Codification. Basic net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period. Diluted net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock and potentially outstanding shares of common stock during the period. The weighted average number of common shares outstanding and potentially outstanding common shares assumes that the Company incorporated as of the beginning of the first period presented.

 

 

 

 

 F-17 

 

 

NOTE 3 – GOING CONCERN

 

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates continuity of operations, realization of assets, and liquidation of liabilities in the normal course of business.

 

As reflected in the accompanying financial statements, the Company had an accumulated deficit at December 31, 2020 of $$5,608,084 without any revenues. These factors among others raise substantial doubt about the Company’s ability to continue as a going concern.

 

While the Company has not commenced operations and generate revenues, the Company’s cash position may not be significant enough to support the Company’s daily operations. Management intends to raise additional funds by way of a public or private offering. Management believes that the actions presently being taken to further implement its business plan and generate revenues provide the opportunity for the Company to continue as a going concern. While the Company believes in the viability of its strategy to generate revenues and in its ability to raise additional funds, there can be no assurances to that effect. The ability of the Company to continue as a going concern is dependent upon the Company’s ability to further implement its business plan and generate revenues.

 

The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

 

NOTE 4 – STOCKHOLDERS’ DEFICIT

 

Preferred Stock

 

Prior to the abandonment of the Company’s previous business operation, the Company appeared to have issued certain Series A Preferred Stock and Series B Preferred Stock. Since a change of control occurred with respect to the Company on April 2, 2018, the new management and director of the Company have made attempts to locate shareholder records of the issued and outstanding Preferred Stock. The Company obtained confirmation from the transfer agent that they do not have any preferred stock, stock options or warrants issued and outstanding in their records for the Company since inception. As a result, the Board of Company decided to cancel and remove all 3,500,000 shares of Convertible Series A Cumulative Preferred Stock, stated value $1.00, and 50,000 shares of Convertible Series B Cumulative Preferred Stock, stated value $175.00 (the “Preferred Stock”) in accordance with Nevada Revised Statutes, NRS77.2055, and filed the Certificate, Amendment or Withdrawal of Designation with Nevada State of Secretary on September 29, 2020. The cancellation and removal of the Preferred Stock and its accrued dividend has been retrospectively presented and recorded as additional paid-in capital.

 

As of December 31, 2020 and 2019, the Company has nil shares of preferred stock issued and outstanding.

 

Common Stock

 

In July 2016, pursuant to the Nevada Court Order granting appointment of a custodian to the Company, the Company issued 40,000,000 shares of common stock to the appointed custodian

 

As of December 31, 2020 and 2019, the Company has 46,344,728 shares of common stock issued and outstanding.

 

NOTE 5 – RELATED PARTY TRANSACTION

 

Mr. Yan Ping Sheng, majority shareholder, director and officer of the Company, have advanced working capital to pay expenses of the Company. The advances are due on demand and non-interest bearing. The outstanding amount due to related parties was $18,432 and $11,820 as of December 31, 2020 and December 31, 2019.

 

 

 

 

 F-18 

 

 

NOTE 6 – INCOME TAX

 

On December 22, 2017, the President of the United States signed into law the Tax Cuts and Jobs Act (“Tax Reform Act”). The legislation significantly changes U.S. tax law by, among other things, lowering corporate income tax rates, implementing a territorial tax system and imposing a transition tax on deemed repatriated earnings of foreign subsidiaries. The Tax Reform Act permanently reduces the U.S. corporate income tax rate from a maximum of 34% to a flat 21% rate, effective January 1, 2018. As a result of the reduction in the U.S. corporate income tax rate from 34% to 21% under the Tax Reform Act, the Company revalued its ending net deferred tax assets.

 

The Company has accumulated approximately $5,608,084 of net operating losses (“NOL”) carried forward to offset future taxable income. In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. Based on the assessment, management has established a full valuation allowance against all of the deferred tax asset relating to NOLs for every period because it is more likely than not that all of the deferred tax asset will not be realized.

 

NOTE 7 – SUBSEQUENT EVENTS

 

The Company has evaluated subsequent events to the date the financial statements were issued and has determined that there are no items to disclose or require adjustments.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 F-19 

 

 

 

Item 14. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

 

There are no changes in or disagreements with Accountants on Accounting and Financial Disclosure.

 

Item 15. Financial Statements and Exhibits

 

Exhibit Number and Description   Location Reference
     
3.1 By-Laws   incorporated by reference
       
3.2 Certificate of Incorporation   incorporated by reference
       
3.3 Certificate of Amendment of Articles of Incorporation   incorporated by reference
       
10.1 Stock Purchase Agreement   incorporated by reference
     
10.2 Court Custodial Order   incorporated by reference

 

 

 

 

 

 

 

 31 
 

 

SIGNATURES

 

Pursuant to the requirements of Section 12 of the Securities Exchange Act of 1934, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized.

 

 

 

  Beesfree, Inc.
   
  By:  /s/ Yanping Sheng
    Yanping Sheng
President

 

Date: August 16, 2022

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 32 



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