Form S-1 AREM PACIFIC Corp
As filed with the Securities and Exchange Commission on September 23, 2015
Registration No. 333-________
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-1
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
AREM PACIFIC CORPORATION
(Exact name of registrant as specified in its charter)
Delaware |
| 8000 |
| 26-2124961 |
(State or other jurisdiction of incorporation or organization) |
| (Primary Standard Industrial Classification Code Number) |
| (I.R.S. Employer Identification Number) |
47 Mount Pleasant Road
Nunawading, Victoria
Australia 3131
(61) 424-158008
(Address, including zip code, and telephone number, including area code, of registrants principal executive offices)
Thomas Tang
President and Chief Executive Officer
47 Mount Pleasant Road
Nunawading, Victoria
Australia
(Address, including zip code, and telephone number, including area code, of agent for service)
Copies to:
Daniel H. Luciano
Attorney-at-Law
242A West Valley Brook Road, Califon, NJ 07830
Telephone No.: (908) 832-5546
As soon as practicable and from time to time after the effective date of this Registration Statement.
Approximate date of proposed sale to the public
If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. x
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨
If this Form is a post-effective amendment filed pursuant to rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of large accelerated filer, accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer | ¨ | Accelerated filer | ¨ |
Non-accelerated filer | ¨ (Do not check if a smaller reporting company) | Smaller reporting company | x |
Large Accelerated Filer ¨ Accelerated Filer ¨ Non-Accelerated Filer ¨ Smaller Reporting Company x
CALCULATION OF REGISTRATION FEE
Title of Each Class of Securities to be Registered | Amount to be Registered(1) | Proposed Maximum Offering Price Per Share | Proposed Maximum Aggregate Offering Price | Amount of Registration Fee |
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|
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Common Stock, par value $0.000001/share | 13,746,185(2) | $0.05(3) | $687,309 | $79.82 |
(1)
In the event of a stock split, stock dividend or similar transaction involving our common stock, the number of shares registered shall automatically be increased to cover the additional shares of common stock issuable pursuant to Rule 416 under the Securities Act of 1933, as amended.
(2)
Represents the number of shares of common stock currently outstanding to be sold by the selling security holders.
(3)
Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(a) and (o) of the Securities Act.
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE SECURITIES ACT OF 1933, OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SECTION 8(A), MAY DETERMINE.
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PRELIMINARY PROSPECTUS SUBJECT TO COMPLETION DATED _______, 2015
Arem Pacific Corporation
13,746,185 SHARES OF COMMON STOCK
This prospectus relates to the resale by certain selling security holders of Arem Pacific Corporation of up to 13,746,185 shares of common stock held by selling security holders of Arem Pacific Corporation.
The shares offered by this prospectus may be sold by the selling stockholders at $0.05 per share until the shares are quoted on the OTCQB® tier of OTC Markets or an exchange. Thereafter, they may sell in the open market at prevailing prices, through privately negotiated transactions or a combination of these methods. The resale of the shares by the selling stockholders is not subject to any underwriting agreement. We will not receive any of the proceeds from the sale of such shares. We will bear all expenses of registration incurred in connection with this offering.
Our common stock is quoted on OTCPINK ® tier of OTC Markets Group under the symbol ARPC; however we have not provided any recent financial information on such marketplace and is the subject of a stop sign on such site. The trading market in our common stock is limited and sporadic. On July 29, 2015, the last reported sale price for our common stock was $2.90 per share.
OUR BUSINESS IS SUBJECT TO MANY RISKS AND AN INVESTMENT IN OUR SHARES OF COMMON STOCK WILL ALSO INVOLVE A HIGH DEGREE OF RISK. YOU SHOULD CAREFULLY CONSIDER THE FACTORS DESCRIBED UNDER THE HEADING RISK FACTORS BEGINNING ON PAGE 9 BEFORE INVESTING IN OUR SHARES OF COMMON STOCK.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The Company qualifies as an emerging growth company as defined in the Jumpstart Our Business Startups Act, which became law in April 2012 and will be subject to reduced public company reporting requirements.
The information in this prospectus is not complete and may be changed. This prospectus is included in the registration statement that was filed by us with the Securities and Exchange Commission. The selling security holders may not sell these securities until the registration statement becomes effective. This prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.
The date of this prospectus is _______, 2015.
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The following table of contents has been designed to help you find information contained in this prospectus. We encourage you to read the entire prospectus.
TABLE OF CONTENTS
SUMMARY OF FINANCIAL INFORMATION
DETERMINATION OF THE OFFERING PRICE
FORWARD-LOOKING STATEMENTS AND INFORMATION
MARKET FOR SECURITIES AND RELATED STOCKHOLDER MATTERS
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
SHARES ELIGIBLE FOR FUTURE SALE
DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION FOR SECURITIES LIABILITIES
WHERE YOU CAN FIND MORE INFORMATION
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PROSPECTUS SUMMARY
As used in this prospectus, references to the Company, we, our, us, Arem or Arem Pacific-Delaware refer to Arem Pacific Corporation, a Delaware company, and its subsidiaries unless the context otherwise indicates. The following summary highlights selected information contained in this prospectus. Before making an investment decision, you should read the entire prospectus carefully, including the Risk Factors section, the financial statements, and the notes to the financial statements.
OUR COMPANY
Company Overview
We were incorporated in the State of Delaware on November 8, 2007 under the name of Aspen Global Corp. On June 10, 2008, we changed our name to Diversified Mortgage Workout Corp. On June 19, 2013, Arem Pacific Corporation, an Arizona corporation (Arem Pacific-Arizona), acquired voting control of the Company (then Diversified Workout Corporation). Subsequently, on August 8, 2013, we acquired all of the issued and outstanding shares of Arem Pacific Corporation, an Arizona corporation (Arem Pacific-Arizona), from its then existing shareholders. In connection with that transaction, we retired and returned to our treasury all of the capital stock acquired by Arem Pacific-Arizona in the July 19, 2013 transaction and we also changed our name in Delaware to Arem Pacific Corp (Arem Pacific-Delaware). On July 23, 2013, we effected a 388 to 1 reverse stock split of our common stock. Arem Pacific-Arizona, our wholly owned subsidiary, was incorporated on July 11, 2007.
In addition, on June 30, 2012, pursuant to an Acquisition Agreement with Sanyi Pty Ltd, an Australian company, Arem acquired all of the equity interest in that company. In exchange, the sole owner of Sanyi Pty Ltd, Mr. Xin Jin, received 10,000,000 shares of our common stock. The shares were issued on August 30, 2013. We operate two wellness centers in Victoria State, Australia. At our centers, we provide a range of services, including acupressure/reflexology, massage and cupping.
For the nine month period ended March 31, 2015, we generated revenues of $381,993, as compared with revenues of $387,631 for the comparable period in 2014, a slight decrease of approximately 1.5%. Our pre tax, net loss for the nine month period ended March 31, 2015 was $76,658, which represents a decrease from the pre tax, net loss of $10,298 for the corresponding period in 2014.
For fiscal year end 2014, we generated revenues of $501,948, which represents a 20% decrease from revenues of $628,033 for fiscal year 2013. Our fiscal year end 2014 total comprehensive loss was $92,893, which represents a 770% decrease from total comprehensive income of $12,108 for fiscal year 2013.
We are an "emerging growth company" within the meaning of the federal securities laws. For as long as we are an emerging growth company, we will not be required to comply with the requirements that are applicable to other public companies that are not "emerging growth companies" including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, the reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements and the exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. We intend to take advantage of these reporting exemptions until we are no longer an emerging growth company.
Following this offering, we will continue to be an emerging growth company until the earliest to occur of (1) the last day of the fiscal year during which we had total annual gross revenues of at least $1 billion (as indexed for inflation), (2) the last day of the fiscal year following the fifth anniversary of the date of our initial public offering under this prospectus, (3) the date on which we have, during the previous three-year period, issued more than $1 billion in non-convertible debt and (4) the date on which we are deemed to be a large accelerated filer, as defined under the Securities Exchange Act of 1934, as amended (which we refer to as the Exchange Act).
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Under U.S. federal securities legislation, our common stock will be "penny stock". Penny stock is any equity security that has a market price of less than $5.00 per share, subject to certain exceptions. For any transaction involving a penny stock, unless exempt, the rules require that a broker or dealer approve a potential investor's account for transactions in penny stocks, and the broker or dealer receive from the investor a written agreement to the transaction, setting forth the identity and quantity of the penny stock to be purchased. In order to approve an investor's account for transactions in penny stocks, the broker or dealer must obtain financial information and investment experience objectives of the person, and make a reasonable determination that the transactions in penny stocks are suitable for that person and the person has sufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks. The broker or dealer must also deliver, prior to any transaction in a penny stock, a disclosure schedule prepared by the Commission relating to the penny stock market, which, in highlight form sets forth the basis on which the broker or dealer made the suitability determination. Brokers may be less willing to execute transactions in securities subject to the "penny stock" rules. This may make it more difficult for investors to dispose of our common stock and cause a decline in the market value of our stock. Disclosure also has to be made about the risks of investing in penny stocks in both public offerings and in secondary trading and about the commissions payable to both the broker-dealer and the registered representative, current quotations for the securities and the rights and remedies available to an investor in cases of fraud in penny stock transactions. Finally, monthly statements have to be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks.
Our Corporate and Other Information
We were incorporated in the State of Delaware on November 8, 2007 under the name of Aspen Global Corp. On June 10, 2008, we changed our name to Diversified Mortgage Workout Corp. On June 19, 2013, Arem Pacific Corporation, an Arizona corporation (Arem Pacific-Arizona), acquired voting control of the Company (then Diversified Workout Corporation). Subsequently, on August 8, 2013, we acquired all of the issued and outstanding shares of Arem Pacific-Arizona, from its then existing shareholders. In connection with that transaction, we retired and returned to our treasury all of the capital stock acquired by Arem Pacific-Arizona in the July 19, 2013 transaction and we also changed our name in Delaware to Arem Pacific Corp. On July 23, 2013, we effected a 388 for 1 reverse split of our outstanding common stock. Arem Pacific-Arizona, our wholly owned subsidiary, was incorporated on July 11, 2007. In addition, on June 30, 2012, pursuant to an Acquisition Agreement with Sanyi Pty Ltd, an Australian company, we acquired all of the equity interest in that company.
Our corporate structure is depicted below:
Arem Pacific Corporation a Delaware company |
100% owned |
Arem Pacific Corporation an Arizona company |
100% owned |
Sanyi Pty Ltd an Australian company |
Our principal office address is 47 Mount Pleasant Road, Nunawading, Victoria, Australia 3131 and our telephone is (61) 424-158008. As of March 31, 2015, we have 12 employees, including four officers who work part-time for the company. Currently, we do not have a web-site.
We are not a blank check corporation. Section 7(b)(3) of the Securities Act of 1933, as amended defines the term blank check company to mean, any development stage company that is issuing a penny stock that, (A) has no specific plan or purpose, or (B) has indicated that its business plan is to merge with an unidentified company or companies. We have a specific plan and purpose. Our business purpose is to expend our existing wellness business through acquisitions and franchised locations. In Securities Act Release No. 6932 which adopted rules relating to blank check offerings, the Securities and Exchange Commission stated in II DISCUSSION OF THE RULES, A. Scope of Rule 419, that, Rule 419 does not apply to...start-up companies with specific business plans...even if operations have not commenced at the time of the offering.
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We have no present plans to be acquired or to merge with another company nor do we, nor any of our shareholders, have any plans to enter into a change of control or similar transaction, however, we intend to acquire complementary service providers in the future to grow our operations.
THE OFFERING
Securities offered: | The selling stockholders are offering hereby up to 13,746,185 shares of common stock. |
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Offering price: | The shares offered by this prospectus may be sold by the selling stockholders at $0.05 per share until the shares are quoted on the OTCQB® tier of OTC Markets or an exchange. Thereafter, they may sell in the open market at prevailing prices, through privately negotiated transactions or a combination of these methods. |
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Shares outstanding prior to offering: | 228,003,081 |
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Shares outstanding after offering: | 228,003,081 |
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Market for the common shares: | Our common stock is quoted on OTCPINK ® tier of OTC Markets Group under the symbol ARPC; however we have not provided any recent financial information on such marketplace and is the subject of a stop sign on such site. After the effective date of the registration statement relating to this prospectus, we may seek to apply to the OTCQB tier. Our current trading market is limited, and there is no assurance that a trading market will develop, or, if developed, that it will be sustained. Consequently, a purchaser of our common stock may find it difficult to resell the securities offered herein should the purchaser desire to do so when eligible for public resale. |
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SUMMARY OF FINANCIAL INFORMATION
The following table summarizes selected historical financial data regarding our business and should be read in conjunction with our consolidated financial statements and related notes contained elsewhere in this prospectus and the information under Managements Discussion and Analysis of Financial Condition and Results of Operations.
The summary consolidated statement of income for the fiscal years ended June 30, 2014 and 2013 respectively and the summary balance sheet data as of June 30, 2014 and 2013 are derived from the audited consolidated financial statements of Arem Pacific Corporation, a Delaware corporation, included elsewhere in this prospectus. We derived our summary consolidated financial data for the nine months ended March 31, 2015 and 2014, respectively, from our unaudited consolidated financial statements included elsewhere in this prospectus, which include all adjustments, consisting of normal recurring adjustments, that our management considers necessary for a fair presentation of our financial position and results of operations as of the dates and for the periods presented. The results of operations for past accounting periods are not necessarily indicative of the results to be expected for any future accounting period.
Balance Sheets
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| March 31, 2015 (Unaudited) | |
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| |
Cash and cash equivalents |
| $ | 30,975 |
Total Current Assets |
|
| 84,217 |
Total Current Liabilities |
|
| 227,970 |
Total Stockholders Deficit |
| $ | (17,011) |
|
| June 30, 2014 |
|
| June 30, 2013 | ||
|
| (Audited) |
|
| (Audited) | ||
Cash and cash equivalents |
| $ | 29,673 |
|
| $ | 27,446 |
Total Current Assets |
|
| 94,211 |
|
|
| 102,318 |
Total Current Liabilities |
|
| 295,243 |
|
|
| 283,331 |
Total Stockholders (Deficit) Equity |
|
| (60,560) |
|
|
| 8,782 |
Statements of Operations
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| Nine Months Ended March 31, 2015 (Unaudited) |
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| Nine Months Ended March 31, 2014 (Unaudited) | ||
Revenues |
| $ | 381,993 |
|
| $ | 387,631 |
Pre-Tax Income (Loss) |
|
| (76,658) |
|
|
| (10,298) |
Total Comprehensive Income (Loss) |
| $ | (40,899) |
|
| $ | (26,886) |
|
| Year Ended June 30, 2014 (audited) |
|
| Year Ended June 30, 2013 (audited) | ||
Revenues |
| $ | 501,948 |
|
| $ | 628,033 |
Pre-Tax Net Income (Loss) |
|
| (89,569) |
|
|
| (3,150) |
Total Comprehensive Income (Loss) |
| $ | (92,893) |
|
| $ | 12,108 |
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RISK FACTORS
An investment in our common stock involves a number of very significant risks. You should carefully consider the following known material risks and uncertainties in addition to other information in this prospectus in evaluating our company and its business before purchasing shares of our companys common stock. You could lose all or part of your investment due to any of these risks.
Risk Factors Relating to Our Business
WE HAVE LIMITED OPERATING HISTORY AND LIMITED BUSINESS GROWTH. We acquired the wellness business of Sanyi Pty during 2012, therefore we have had limited operations which makes it difficult to evaluate our business and our prospects. In addition, to date, we have not experienced substantial growth in our business. The likelihood of our success must be considered in light of the problems, expenses, difficulties, complications and delays frequently encountered by a small operating company trying to expand its business enterprise and the highly competitive environment in which we will operate. Therefore, there can be no assurance that the business of the Company will grow in the future. Moreover, because of our limited operating history, it is difficult to extrapolate any meaningful projections about the Company's future.
WE WILL NEED ADDITIONAL FINANCING IN ORDER TO GROW OUR BUSINESS. We do not have significant assets with which to expand our business. We intend to expand our business through the opening of additional locations. These capital expenditures are intended to be funded from third party sources, including the incurring of debt and/or the sale of additional equity securities. In addition to requiring additional financing to fund expansion, the Company may require additional financing to fund working capital and operating losses in the future should the need arise. The incurrence of debt creates additional financial leverage and therefore an increase in the financial risk of the Company's operations. The sale of additional equity securities will be dilutive to the interests of current equity holders. In addition, there can be no assurance that such additional financing, whether debt or equity, will be available to the Company or that it will be available on acceptable commercial terms. Any inability to secure such additional financing on appropriate terms could have a materially adverse impact on the business, financial condition and operating results of the Company.
OUR INDUSTRY IS HIGHLY COMPETITIVE WITH LIMITED BARRIERS TO ENTRY WHICH COULD LIMIT OUR ABILITY TO MAINTAIN OR INCREASE MARKET SHARE. Our industry is highly competitive with limited barriers to entry. We provide our services in local markets and compete with companies providing similar services. The barriers to entry in this industry are limited which makes it easy for competitors to open new shops near our current locations. Many of our competitors have greater marketing, financial and other resources than us that, among other things, could enable them to attempt to maintain or increase their market share by reducing prices. In order to be competitive, we may have to similarly reduce our prices which in turn will affect our results of operation.
AS WE UNDERTAKE OUR BUSINESS, WE WILL BE SUBJECT TO COMPLIANCE WITH GOVERNMENT REGULATION THAT MAY INCREASE THE ANTICIPATED COST OF OUR EXPANSION PROGRAM. Currently, there are no governmental regulations that materially restrict the wellness business. We are subject to the laws of Victoria, Australian as administered by Victoria's Business Licensing Authority (BLA) as we carry out our business. We may be required to obtain work permits in the event that we do not have enough local to do the job, negotiate with shopping malls on terms and rental rate, recruitment and training, shop fittings and refurbishment to comply with rules and regulations of the shopping mall such as operation hours, signage, promotion and cleanliness
There is a risk that new regulations could increase our costs of doing business and prevent us from carrying out our expansion and franchising program. We will also have to sustain the cost of renovation or improvement on the outlet once every five years as required by the shopping malls. If renovation costs exceed our cash reserves we may be unable to complete our expansion program and have to abandon the outlet(s).
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OUR FEES ARE BASED ON NUMEROUS FACTORS OUTSIDE OF OUR CONTROL. Numerous factors beyond our control may affect the marketability of our services and our fee structure. These factors include the local and regional economies, the competition, shortage of human resource, competition and government regulations. The exact effect of these factors cannot be accurately predicted, but the combination of these factors may result in our not receiving an adequate return on invested capital and you may lose your entire investment in this offering by existing investors.
OUR OFFICERS AND DIRECTORS MAY HAVE A CONFLICT OF INTEREST WITH THE MINORITY SHAREHOLDERS AT SOME TIME IN THE FUTURE. SINCE THE MAJORITY OF OUR SHARES OF COMMON STOCK ARE OWNED BY OUR PRESIDENT/CHIEF EXECUTIVE OFFICER AND DIRECTORS, OUR OTHER STOCKHOLDERS MAY NOT BE ABLE TO INFLUENCE CONTROL OF THE COMPANY OR DECISION MAKING BY MANAGEMENT OF THE COMPANY. Our Officers and Directors beneficially own 38.4% of our outstanding common stock. The interests of our Officers and Directors may not be, at all times, the same as that of our other shareholders. Our Officers and Directors are not simply passive investors but are also executives of the Company, their interests as executives may, at times be adverse to those of passive investors. Where those conflicts exist, our shareholders will be dependent upon our directors exercising, in a manner fair to all of our shareholders, their fiduciary duties as officers or as member of the Companys Board of Directors. Also, our directors will have the ability to control the outcome of most corporate actions requiring shareholder approval, including the sale of all or substantially all of our assets and amendments to our articles of incorporation. This concentration of ownership may also have the effect of delaying, deferring or preventing a change of control of us, which may be disadvantageous to minority shareholders.
BECAUSE OUR OFFICERS AND DIRECTORS MAY IN FUTURE HAVE OUTSIDE BUSINESS ACTIVITIES, THERE IS A POTENTIAL CONFLICT OF INTEREST, INCLUDING THE AMOUNT OF TIME THEY WILL BE ABLE TO DEDICATE TO THE COMPANY. Currently our officers, who are also directors, have been working on promoting business for the Company. A potential conflict of interest may arise in the future that may cause our business to fail, including conflicts of interest in allocating their time to our company. While our officers have verbally agreed to devote sufficient time and attention to the affairs of the Company, we have no written arrangement with our officers regarding this matter.
IF THE SELLING SHAREHOLDERS SELL A LARGE NUMBER OF SHARES ALL AT ONCE OR IN BLOCKS, THE MARKET PRICE OF OUR SHARES WOULD MOST LIKELY DECLINE.
The Company is offering up to 13,746,185 shares of our common stock through this prospectus. Our common stock is presently is traded on a limited and sporadic basis the OTCPINK ® tier of OTC Markets Group. However, should a market develop, shares sold at a price below the current market price at which the common stock is quoted will cause that market price to decline. Moreover, the offer or sale of a large number of shares at any price may cause the market price to fall. The outstanding shares of common stock covered by this prospectus represent approximately 6% of the common shares outstanding as of the date of this prospectus.
RISKS FACTORS RELATING TO OUR COMMON STOCK. Our common stock is quoted on OTCPINK® tier of OTC Markets Group under the symbol ARPC; however we have not provided any recent financial information on such marketplace and our stock is the subject of a stop sign on such site. To date, the market for our common stock has been limited and sporadic. While we intend to have our stock quoted on the OTCQB® tier of the OTC Markets Group, there can be no assurance that we will be successful in having our common stock quoted on the OTCQB® tier nor that we will be able to successfully develop a public market. If our common stock is not quoted on OTCQB® tier, it may be very difficult for an investor to find a buyer for their shares in our Company.
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OUR COMMON STOCK IS SUBJECT TO THE PENNY STOCK RULES OF THE SEC AND THE TRADING MARKET IN OUR SECURITIES IS LIMITED, WHICH MAKES TRANSACTIONS IN OUR STOCK CUMBERSOME AND MAY REDUCE THE VALUE OF AN INVESTMENT IN OUR STOCK. Under U.S. federal securities legislation, our common stock will constitute penny stock. Penny stock is any equity security that has a market price of less than $5.00 per share, subject to certain exceptions. For any transaction involving a penny stock, unless exempt, the rules require that a broker or dealer approve a potential investors account for transactions in penny stocks, and the broker or dealer receive from the investor a written agreement to the transaction, setting forth the identity and quantity of the penny stock to be purchased. In order to approve an investors account for transactions in penny stocks, the broker or dealer must obtain financial information and investment experience objectives of the person, and make a reasonable determination that the transactions in penny stocks are suitable for that person and the person has sufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks. The broker or dealer must also deliver, prior to any transaction in a penny stock, a disclosure schedule prepared by the Commission relating to the penny stock market, which, in highlight form sets forth the basis on which the broker or dealer made the suitability determination. Brokers may be less willing to execute transactions in securities subject to the penny stock rules. This may make it more difficult for investors to dispose of our common stock and cause a decline in the market value of our stock. Disclosure also has to be made about the risks of investing in penny stocks in both public offerings and in secondary trading and about the commissions payable to both the broker-dealer and the registered representative, current quotations for the securities and the rights and remedies available to an investor in cases of fraud in penny stock transactions. Finally, monthly statements have to be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks.
IN THE FUTURE, WE MAY ISSUE ADDITIONAL COMMON SHARES, WHICH WOULD REDUCE INVESTORS PERCENT OF OWNERSHIP AND MAY DILUTE OUR SHARE VALUE.
Our Articles of Incorporation authorize the issuance of 500,000,000 shares of common stock. As of July 7, 2015, the Company had 228,003,081 shares of common stock outstanding. Accordingly, we may issue up to an additional 271,996,919 shares of common stock. The future issuance of common stock may result in substantial dilution in the percentage of our common stock held by our then existing shareholders. We may value any common stock issued in the future on an arbitrary basis. The issuance of common stock for future services or acquisitions or other corporate actions may have the effect of diluting the value of the shares held by our investors, and might have an adverse effect on any trading market for our common stock.
UPON EFFECTIVENESS OF THIS REGISTRATION STATEMENT, WE WILL NOT BE A FULLY REPORTING COMPANY UNDER SECTION 12(G) OF THE SECURITIES EXCHANGE ACT OF 1934, RATHER WE WILL BE SUBJECT TO THE REPORTING REQUIREMENTS OF SECTION 15(D) OF THE EXCHANGE ACT WHICH IS LESS RESTRICTIVE ON US AND OUR INSIDERS. In order for us to become a fully reporting company under Section 12(g) of the Exchange Act, we will have to file a Registration Statement on Form 8-A. If we do not become subject to Section 12 of the Exchange Act, we will be subject to Section 15(d) of the Exchange Act, and as such we will not be required to comply with (i) the proxy statement requirements which means shareholders may have less notice of pending matters, and (ii) the Williams Act which requires disclosure of persons or groups that acquire 5% of a companys publicly traded stock and also regulates tender offers. In addition, our officer, director and 10% stockholder will not be required to submit reports to the SEC on their stock ownership and stock trading activity. These reports include Form 3, 4 and 5. Therefore, as a shareholder, less information and disclosure concerning these matters will be available to you.
WE DO NOT INTEND TO PAY ANY CASH DIVIDENDS ON OUR COMMON STOCK, OUR STOCKHOLDERS WILL NOT BE ABLE TO RECEIVE A RETURN ON THEIR SHARES UNLESS THEY SELL THEM. We intend to retain any future earnings to finance the development and expansion of our business. We do not anticipate paying any cash dividends on our common stock in the foreseeable future. Unless we pay dividends, our stockholders will not be able to receive a return on their shares unless they sell them. There is no assurance that stockholders will be able to sell shares when desired.
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REDUCED DISCLOSURE REQUIREMENTS APPLICABLE TO EMERGING GROWTH COMPANIES MAY MAKE OUR COMMON STOCK LESS ATTRACTIVE TO INVESTORS. We qualify as an "emerging growth company" under the JOBS Act. As a result, we are permitted to, and intend to, rely on exemptions from certain disclosure requirements. For so long as we are an emerging growth company, we will not be required to:
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have an auditor report on our internal controls over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act;
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comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor's report providing additional information about the audit and the financial statements (i.e., an auditor discussion and analysis);
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submit certain executive compensation matters to shareholder advisory votes, such as "say-on-pay" and "say-on-frequency;" and
·
disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of the CEO's compensation to median employee compensation.
In addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We will remain an emerging growth company for up to five full fiscal years, although if the market value of our common stock that is held by non-affiliates exceeds $700 million as of any January 31 before that time, we would cease to be an emerging growth company as of the following December 31, or if our annual revenues exceed $1 billion, we would cease to be an emerging growth company the following fiscal year, or if we issue more than $1 billion in non-convertible debt in a three-year period, we would cease to be an emerging growth company immediately.
Notwithstanding the above, we are also currently a "smaller reporting company," meaning that we are not an investment company, an asset-backed issuer, nor a majority-owned subsidiary of a parent company that is not a smaller reporting company, and has a public float of less than $75 million and annual revenues of less than $50 million during the most recently completed fiscal year. If we are still considered a "smaller reporting company" at such time as we cease to be an "emerging growth company," we will be subject to increased disclosure requirements. However, the disclosure requirements will still be less than they would be if we were not considered either an "emerging growth company" or a "smaller reporting company." Specifically, similar to "emerging growth companies", "smaller reporting companies" are able to provide simplified executive compensation disclosures in their filings; are exempt from the provisions of Section 404(b) of the Sarbanes-Oxley Act requiring that independent registered public accounting firms provide an attestation report on the effectiveness of internal control over financial reporting; are not required to conduct say-on-pay and frequency votes until annual meetings occurring on or after January 21, 2015; and have certain other decreased disclosure obligations in their SEC filings, including, among other things, only being required to provide two years of audited financial statements in annual reports. Decreased disclosures in its SEC filings due to its status as an "emerging growth company" or "smaller reporting company" may make us less attractive to investors given that it will be harder for investors to analyze the Company's results of operations and financial prospects and, as a result, it may be difficult for us to raise additional capital as and when we need it.
USE OF PROCEEDS
This prospectus relates to shares of our common stock that may be offered and sold from time to time by the selling stockholders. We will not receive any of the proceeds from the sale of the common shares being offered for sale by the selling security holders.
12
DETERMINATION OF THE OFFERING PRICE
As there is no established public market for our shares, we have arbitrarily determined the offering price and other terms and conditions relative to our shares and do not bear any relationship to assets, earnings, book value or any other objective criteria of value. In addition, we have not consulted any investment banker, appraiser, or other independent third party concerning the offering price for the shares or the fairness of the offering price used for the shares. The shares offered by this prospectus may be sold by the selling stockholders at $0.05 per share until the shares are quoted on the OTCQB® tier of OTC Markets or an exchange. Thereafter, they may sell in the open market at prevailing prices, through privately negotiated transactions or a combination of these methods.
FORWARD-LOOKING STATEMENTS AND INFORMATION
This prospectus contains forward-looking statements, which relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as may, should, expects, plans, anticipates, believes, estimates, predicts or potential or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks in the section entitled Risk Factors beginning on page 9 that may cause our or our industrys actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.
While these forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment regarding the direction of our business, actual results will almost always vary, sometimes materially, from any estimates, predictions, projections, assumptions or other future performance suggested herein. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results. The safe harbor for forward-looking statements provided in the Private Securities Litigation Reform Act of 1995 does not apply to the offering made in this prospectus.
SELLING SECURITY HOLDERS
The following table sets forth the shares beneficially owned, as of the date hereof, by the selling security holders prior to the offering by existing shareholders contemplated by this prospectus, the number of shares each selling security holder is offering by this prospectus and the number of shares which each would own beneficially if all such offered shares are sold.
Beneficial ownership is determined in accordance with Securities and Exchange Commission rules. Under these rules, a person is deemed to be a beneficial owner of a security if that person has or shares voting power, which includes the power to vote or direct the voting of the security, or investment power, which includes the power to vote or direct the voting of the security. The person is also deemed to be a beneficial owner of any security of which that person has a right to acquire beneficial ownership within 60 days. Under the Securities and Exchange Commission rules, more than one person may be deemed to be a beneficial owner of the same securities, and a person may be deemed to be a beneficial owner of securities as to which he or she may not have any pecuniary beneficial interest. Except as noted below, each person has sole voting and investment power.
The percentages below are calculated based on 228,003,081 shares of our common stock issued and outstanding as of July 7, 2015. We do not have any outstanding options, warrants or other securities exercisable for or convertible into shares of our common stock.
13
SELLING SHAREHOLDERS LIST OF AREM PACIFIC CORPORATION | ||||
Selling Shareholders | Shares of Common Stock owned prior to Offering(1) | Maximum Number of Shares of Common Stock to be offered | Shares of Common Stock owned after Offering(2) | Percent of Common Stock owned after Offering(2) |
ABAS AMEERALI BIN | 4,000,000 | 400,000 | 3,600,000 | 90% |
ACOSTA & JESUS OSVALDO SILVIA I IBANEZ DE ACOSTA | 31 | 31 | 0 | 0 |
AGUIAR ALEJANDRO DRUCAROFF | 13 | 13 | 0 | 0 |
AGUILAR ALESANDRO DRUCAROF | 129 | 12 | 117 | 90% |
AKERMAN & NOE M OLGA ESPINSKY | 91 | 91 | 0 | 0 |
ALAFACI MICHAEL | 10,000 | 1,000 | 9,000 | 90% |
ALAGNA & DOMENICA FARA DE TERESA ALAGNA DE MONTU | 3 | 3 | 0 | 0 |
ALALOUF & MONICA S DE SALVADOR ALALOUF | 6 | 6 | 0 | 0 |
ALEJANDRO & PUENTE MARIA LUCILA MIGLIORE | 16 | 16 | 0 | 0 |
ALLEN JANET E | 26 | 26 | 0 | 0 |
ALMES JANE | 4 | 4 | 0 | 0 |
ALVES & ANTONIO FERREIRA LIDIA M RIBA DE FERREIRA ALVES | 15 | 15 | 0 | 0 |
ARCURI & CARMELO E MIRTA G ARISTIDE JTWROS | 11 | 11 | 0 | 0 |
ARIAS & MARIA JOSEFINA JUAREZ RAFAEL E CORREA LLANO | 11 | 11 | 0 | 0 |
ARQUERO & MATEO A MARIA S RUGGIERI | 3 | 3 | 0 | 0 |
BABAB FAMILY HOLDINGS INC | 52 | 52 | 0 | 0 |
BAI LU | 10,900 | 1,090 | 9,810 | 90% |
BAIN & GLADYS ELSA M DE BAIN | 11 | 11 | 0 | 0 |
BAIOCCHINI & ERNESTO JULIO MARIA ELENA CONDE BAIOCCHINI | 13 | 13 | 0 | 0 |
BALDUCCI & MARIA E FERRARI & MARIENRIQUE E ENRIQUE A BALDUCCI | 6 | 6 | 0 | 0 |
BARLETTA & MARCELO ALEJANDRO TERESA ZUNGRI DE BARLETTA | 3 | 3 | 0 | 0 |
BARROS & ROSA VCB DE SOUTO BARROS & EDUARDO SOUTO CLAUDIA A SOUTO BARROS Y SILVINA N SOUTO BARROS | 91 | 91 | 0 | 0 |
BARTHOLOMAI & GUALTERIO B FRANSISCA JL DE BARTHOLOMAI | 21 | 21 | 0 | 0 |
BASILE & MIGUEL JUANA DE MUZIO | 21 | 21 | 0 | 0 |
BAUMANN & HANS EBERHARD HAYDEE H MONETTI DE BAUMANN | 7 | 7 | 0 | 0 |
BCOCOLLO & PABLO DOLORES RANA DE COCCOLO | 3 | 3 | 0 | 0 |
BEAVER VREEK FINANCIAL CORP | 1,608 | 160 | 1,448 | 90% |
BENNETT ALLEN | 10 | 10 | 0 | 0 |
BEREZOVSKY & MICAEL A GABRIELA P BARINDORFF | 16 | 16 | 0 | 0 |
BERGNER RENATA ISABEL | 34 | 34 | 0 | 0 |
BETTINOTTI & JORGE L GABRIEL E MESCH | 4 | 4 | 0 | 0 |
BLADWIN CHRISTOPHER J | 20,000 | 2,000 | 18,000 | 90% |
BOBAL & BRIAN J JACQUELINE BOBAL JT TEN | 2 | 2 | 0 | 0 |
14
SELLING SHAREHOLDERS LIST OF AREM PACIFIC CORPORATION | ||||
Selling Shareholders | Shares of Common Stock owned prior to Offering(1) | Maximum Number of Shares of Common Stock to be offered | Shares of Common Stock owned after Offering(2) | Percent of Common Stock owned after Offering(2) |
BOGLIONE JUAN CARLOS | 5 | 5 | 0 | 0 |
BOO HAM WEE | 5,000 | 500 | 4,500 | 90% |
BOTTINI JOSE BERNARDO | 52 | 52 | 0 | 0 |
BOVER & CAROLINA MEYER & VIVIANA MAXIMILIANO MEYER | 10 | 10 | 0 | 0 |
BRANSFIELD DENISE | 12,887 | 1,288 | 11,599 | 90% |
BUNGE & SILVIA NICOLAS WINGORD & MARINA WINGORD | 8 | 8 | 0 | 0 |
BURSON III EN | 3,554 | 355 | 3,199 | 90% |
BURSON III ERNEST N | 3,539 | 353 | 3,186 | 90% |
BUSTELO & OSVALDO J MARIA E POSTERMAK | 3 | 3 | 0 | 0 |
THE CADDO CORPORATION | 25,787 | 2578 | 23,209 | 90% |
CAI LAN | 1,500 | 150 | 1,350 | 90% |
CANDIA CORP | 52 | 52 | 0 | 0 |
CANDIDUS CORPORATION | 10 | 10 | 0 | 0 |
CANDRIAN DANIEL C | 10 | 10 | 0 | 0 |
CAPITAL INTERNATIONAL SECURITIES GROUP | 210 | 21 | 189 | 90% |
CARDENAL & RICARDO ROSA A CACCAVIELLO | 19 | 19 | 0 | 0 |
CASTANO ANTONIO F | 16 | 16 | 0 | 0 |
CATTERSON THOMAS | 10 | 10 | 0 | 0 |
CEDE & CO | 83,165 | 8,316 | 74,849 | 90% |
CEIRANO DANIEL NORBERTO | 8 | 8 | 0 | 0 |
CERINO ERNESTO EDUARDO | 13 | 13 | 0 | 0 |
CHANGHAI CHEN | 50,000 | 5,000 | 45,000 | 90% |
CHAO HE YI | 10,000 | 1,000 | 9,000 | 90% |
CHENFUDONG | 100,000 | 10,000 | 90,000 | 90% |
CHEN QINMING | 1,000 | 100 | 900 | 90% |
CHEN SHUHUAN | 10,000 | 1,000 | 9,000 | 90% |
CHEN YINGSHI | 25,000 | 2,500 | 22,500 | 90% |
CHEN YUAN | 10,000 | 1,000 | 9,000 | 90% |
CHEN ZHONGLIANG | 200,000 | 20,000 | 180,000 | 90% |
CHENG LOKE SUET | 20,000 | 2,000 | 18,000 | 90% |
CHOON TONG HEE | 10,500 | 1,050 | 9,450 | 90% |
CIARROCA & JULIO CESAR DORA L MORABITO | 7 | 7 | 0 | 0 |
CIC INVESTMENTS INC | 7 | 7 | 0 | 0 |
CIOCIOLA STELLA MARIS | 19 | 19 | 0 | 0 |
CISNEROS & HECTOR H CELESTE A DE CISNEROS | 3 | 3 | 0 | 0 |
COLEMAN NANCY | 1 | 1 | 0 | 0 |
COLSON & EDNA I KELLY DE COLSON & EDUARDO S ROMINA COLSON | 3 | 3 | 0 | 0 |
COMMANDER HOWARD | 11 | 11 | 0 | 0 |
CONTI ROBERT | 6 | 6 | 0 | 0 |
15
SELLING SHAREHOLDERS LIST OF AREM PACIFIC CORPORATION | ||||
Selling Shareholders | Shares of Common Stock owned prior to Offering(1) | Maximum Number of Shares of Common Stock to be offered | Shares of Common Stock owned after Offering(2) | Percent of Common Stock owned after Offering(2) |
CORIA & GRACIELA I MARTINA LAPLANE | 39 | 39 | 0 | 0 |
CORIA & GRACIELA I MARTINA LAPLANE JT TEN | 1 | 1 | 0 | 0 |
COSTA BRUNO R | 450,000 | 45,000 | 405,000 | 90% |
COSTEDCAT & ROBERTO E MARIA GABRIELA JARRIGE JTWROS | 2 | 2 | 0 | 0 |
COSTEDOAT ROBERTO | 3 | 3 | 0 | 0 |
CREMONINI & ANDRES S EMILIO O CREMONINI | 47 | 47 | 0 | 0 |
CRIBBAR VENTURES LIMITED | 39 | 39 | 0 | 0 |
CROOKS TONI | 2 | 2 | 0 | 0 |
CUNEO & MARIA CRISTINA JUAN C RAWSON PAZ | 31 | 31 | 0 | 0 |
CURATELLA & ELINA MARIA FLORENCIA CECILIA MAIDANA | 21 | 21 | 0 | 0 |
CURTI & ORLANDO ALBINA CARMEN ANTINORI DE CURTI | 42 | 42 | 0 | 0 |
DAI XIAOMING | 10,000 | 1,000 | 9,000 | 90% |
DALE FINANCIAL CONSULTING SERVICES INC | 80 | 8 | 0 | 0 |
DANE & JOHN WILLIAM VALERIE MARIE DANE TEN ENT | 258 | 25 | 233 | 90% |
DANNER WILBERT C | 13 | 13 | 0 | 0 |
DAVIDSON LEWIS | 6 | 6 | 0 | 0 |
DE CAMPODONICO & EDUARDO M LARRINAGA & MARIA R MIRAGLIA SILVIA A C DE CAMPODONICO | 13 | 13 | 0 | 0 |
DE PRIETO ALICIA ELENA DALLORSO | 21 | 21 | 0 | 0 |
DENG HONGYAN | 5,000 | 500 | 4,500 | 90% |
DESCOVICH & DARIO L FRANCISCA PARCHI & ANDRES L DESCOVICH JT TEN | 4 | 4 | 0 | 0 |
DESCOVICH & FRANSISCA PARCHI DARIO L DE DESCOVICH & ANDRES L DESCOVISCH | 16 | 16 | 0 | 0 |
DESILLA & VICTORIA LAURA GARDI | 21 | 21 | 0 | 0 |
DIAS & SILVANA C LUIS PERAZZO JT TEN | 2 | 2 | 0 | 0 |
DOLIN ROBERT J | 516 | 51 | 465 | 90% |
DOMINICIS & EDUARDO C DE MONICA G FORGIONE | 6 | 6 | 0 | 0 |
DONALDSON LUFKIN & JENRETTE SECURITIES CORPORATION C/F DIANA MANGRAVETE | 29 | 29 | 0 | 0 |
DORA SMITH | 13 | 13 | 0 | 0 |
DORLEANS & LENOTES JACQUELINE DORLEANS JTWROS | 29 | 29 | 0 | 0 |
DORLEANS & LENOTES JACQUELINE DORLEANS JT TEN | 8 | 8 | 0 | 0 |
DUFFY PAUL K | 129 | 12 | 117 | 90% |
EASTBRIDGE INVESTMENT CORPORATION | 8,000,000 | 800,000 | 7,200,000 | 90% |
EHRLICH & AXEL T SILVIA MAIER DE EHRLICH | 26 | 26 | 0 | 0 |
EN BURSON III | 168 | 16 | 0 | 0 |
ENGEL & ALEJANDRO E MARIA INES COLLE DE ENGEL | 78 | 78 | 0 | 0 |
16
SELLING SHAREHOLDERS LIST OF AREM PACIFIC CORPORATION | ||||
Selling Shareholders | Shares of Common Stock owned prior to Offering(1) | Maximum Number of Shares of Common Stock to be offered | Shares of Common Stock owned after Offering(2) | Percent of Common Stock owned after Offering(2) |
ERASO & JAVIER I ESTER G ERASO | 3 | 3 | 0 | 0 |
EUROPEAN SWIMWEAR IMPORTS UK LTD | 8 | 8 | 0 | 0 |
EXCHANGE S R L | 39 | 39 | 0 | 0 |
EZELL III BOYCE F | 11 | 11 | 0 | 0 |
FABRE RICARDO J | 52 | 52 | 0 | 0 |
FAILLA BEATRIZ SPITTA DE | 3 | 3 | 0 | 0 |
FELICE & ROBERT F SUSAN J FELICE TEN ENT | 3 | 3 | 0 | 0 |
FENG CHEN | 50,000 | 5,000 | 45,000 | 90% |
FERNANDEZ JOSE E | 4 | 4 | 0 | 0 |
FERNANDEZ & MARIO L ELSA S DE FRANCESCO | 26 | 26 | 0 | 0 |
FERNANDEZ & ROBERTO JORGE EULALIA RODRIGUEZ DE FERNANDEZ | 6 | 6 | 0 | 0 |
FERREYRA & GABRIELA A PONCE DE LEON & EGLE E EGLE A PONCE DE LEON & LAURA E PONCE | 3 | 3 | 0 | 0 |
FERREYRA & GABRIELA PONCE DE LEAON & EGLE PONCE DE LEON & LAURA PONCE DE LEON JTWROS | 1 | 1 | 0 | 0 |
FILLIOL GUSTAVO | 12 | 12 | 0 | 0 |
FIRST CAPITAL RESOURCE INC | 27 | 27 | 0 | 0 |
FISCHER KARINA CLAUDIA | 78 | 78 | 0 | 0 |
FISCHER & BIBI HERSKIND DE ERNESTO PEDRO FISCHER | 8 | 8 | 0 | 0 |
FISCHER & BIBI HERSKIND ERNESTO PEDRO DE FISCHER & CARINA C FISCHER | 31 | 31 | 0 | 0 |
FISKE ANDREW | 316 | 31 | 285 | 90% |
FLECK ISABEL ANA MARIA | 26 | 26 | 0 | 0 |
FORGIONE & BEATRIZ LUIS FORGIONE | 3 | 3 | 0 | 0 |
FRIEDMAN MARC | 2 | 2 | 0 | 0 |
FURIA ARTHUR J | 29 | 29 | 0 | 0 |
FUYAO LIU | 3,400 | 340 | 3,060 | 90% |
GANDIA TONY | 22 | 22 | 0 | 0 |
GARCIA MONICA ESTELA | 26 | 26 | 0 | 0 |
GARCIA & NORMA A OSCAR E REOS & CHRISTIAN A REOS | 8 | 8 | 0 | 0 |
GARCIA & ROBERTO A MONICA N RAPETTI | 3 | 3 | 0 | 0 |
GARCIA & MONICA NOEMI MORABITO DE GARCIA ALBERTO NESTOR & EZEQUIEL GARCIA MORABITO | 16 | 16 | 0 | 0 |
GARDI & LAURA ALEJANDRO ENGEL | 39 | 39 | 0 | 0 |
GARIONI & MARLENE I BOE JUAN G GARIONI | 6 | 6 | 0 | 0 |
GASTRELL & ROSA MARIA GENOUD DE MARTA GENOUD | 3 | 3 | 0 | 0 |
GAZZOLA & ROMEO A FANNY Z DE GAZZOLA | 13 | 13 | 0 | 0 |
GBS CAPITAL INVESTMENTS CORPORATION | 7 | 7 | 0 | 0 |
17
SELLING SHAREHOLDERS LIST OF AREM PACIFIC CORPORATION | ||||
Selling Shareholders | Shares of Common Stock owned prior to Offering(1) | Maximum Number of Shares of Common Stock to be offered | Shares of Common Stock owned after Offering(2) | Percent of Common Stock owned after Offering(2) |
GENOUD & MARTA VIVIANA PRINCE DIT CLOTTU | 3 | 3 | 0 | 0 |
GENTILE ROSE | 10,000 | 1,000 | 9,000 | 90% |
GILIO NANCY | 40,000 | 4,000 | 36,000 | 90% |
GIORDANO DANIEL | 3 | 3 | 0 | 0 |
GIULIANI & MARIA LUIS MATEO CRISETTI | 6 | 6 | 0 | 0 |
GLOBAL ASSET MANAGEMENT INC | 65 | 65 | 0 | 0 |
GLOBAL FINANCIAL ADVISORS LTD | 26 | 26 | 0 | 0 |
GOLD EVELYN | 1 | 1 | 0 | 0 |
GOLD MICHAEL | 1 | 1 | 0 | 0 |
GONZALEZ RODOLFO D | 26 | 26 | 0 | 0 |
GONZALEZ SERGIO E | 11 | 11 | 0 | 0 |
GONZALEZ VIVIANA R | 11 | 11 | 0 | 0 |
GONZALEZ & MIRTA ISABEL EMMA MARIA AVALLE | 7 | 7 | 0 | 0 |
GRAFF RONALD | 3 | 3 | 0 | 0 |
GRASSMANN & BERND CECILIA ROCCA | 8 | 8 | 0 | 0 |
GRASSMANN & MONICA A ANA M FRANCK DE GRASSMANN | 11 | 11 | 0 | 0 |
GRAVENHORST & HELGA GRAVENHORST & ANDRES GRAVENHORST & RICARDO SONIA GRAVENHORST & CHRISTIAN GRAVENHORST JTWROS | 11 | 11 | 0 | 0 |
GUGLIOTTI MARY | 55,000 | 5,500 | 49,500 | 90% |
GUICHANDUT & PATRICIA SUSANA LUIS MATEO CRISETTI | 26 | 26 | 0 | 0 |
GUO HUANCAI | 10,000 | 1,000 | 9,000 | 90% |
GUO JIAN | 21,000 | 2,100 | 18,900 | 90% |
GUO WANG HONG | 17,200 | 1,720 | 15,480 | 90% |
HABERKORN FLORA | 10 | 10 | 0 | 0 |
HAMMERER DANIEL | 12 | 12 | 0 | 0 |
HAMMERER DANIEL G | 13 | 13 | 0 | 0 |
HAMMERER DIEGO G | 6 | 6 | 0 | 0 |
HAMMERER GERARDO | 58 | 58 | 0 | 0 |
HAN XIE XIAO | 20,000 | 2,000 | 18,000 | 90% |
HANDLINE JAY | 13 | 13 | 0 | 0 |
HAWKESBURY FUNDING INC | 484 | 48 | 436 | 90% |
HE HONGMING | 10,500 | 1,050 | 9,450 | 90% |
HECKLEMAN WENDY | 1 | 1 | 0 | 0 |
HENG FOO SAE | 10,000 | 1,000 | 9,000 | 90% |
HERMIDA & MARCELO FERNANDO GISELA PRINCE DIT CLOTTU | 21 | 21 | 0 | 0 |
HERMIDA & MARCELO FERNANDO VINCENTA GONZALEZ DE HERMIDA | 13 | 13 | 0 | 0 |
18
SELLING SHAREHOLDERS LIST OF AREM PACIFIC CORPORATION | ||||
Selling Shareholders | Shares of Common Stock owned prior to Offering(1) | Maximum Number of Shares of Common Stock to be offered | Shares of Common Stock owned after Offering(2) | Percent of Common Stock owned after Offering(2) |
HILL ARIKI | 20,000 | 2,000 | 18,000 | 90% |
HOCHRAICH & MARCELO SCHNEIDER & LUCY E SILVIA P SCHNEIDER | 26 | 26 | 0 | 0 |
HOHENAUER & BRIGIDA ILSE HOLZER | 13 | 13 | 0 | 0 |
HOLM & GERTRUDIS JENNY DE JUAN CG DE HOLM | 39 | 39 | 0 | 0 |
HOLM & GUILLERMO F JUAN CG HOLM | 8 | 8 | 0 | 0 |
HOLM & JUAN C JUAN CG HOLM | 26 | 26 | 0 | 0 |
HOLM & JUAN CG GERTRUDIS JENNY DE HOLM | 39 | 39 | 0 | 0 |
HOLST & ELFRIDA MARGARITA HM GLEICHENTHEIL | 19 | 19 | 0 | 0 |
HOLZER GRETE KUNICK | 7 | 7 | 0 | 0 |
HOLZER & ILSE BRIGIDA HOHENAUER | 52 | 52 | 0 | 0 |
HOLZER & OLUK GLORIA A SILVANO | 26 | 26 | 0 | 0 |
HONG LI'E | 951,000 | 95,100 | 855,900 | 90% |
HONG LIZHEN | 500 | 50 | 450 | 90% |
HONG XIULI | 500 | 50 | 450 | 90% |
HONG YUMING | 11,000 | 1,100 | 9,900 | 90% |
HOWELL SCOTT | 3 | 3 | 0 | 0 |
HUA YU YUE | 91,300 | 9,130 | 82,170 | 90% |
HUANG CUI | 1,000,000 | 100,000 | 900,000 | 90% |
HUANG LI | 100,000 | 10,000 | 90,000 | 90% |
HUANG YUQUN | 10,000 | 1,000 | 9,000 | 90% |
HUBER JUANA L MOHN DE | 21 | 21 | 0 | 0 |
HUI SHI | 51,000 | 5,100 | 45,900 | 90% |
HURTADO & HAYDEE L DE RICARDO A HURTADO | 39 | 39 | 0 | 0 |
HUYSMAN JAMIE | 11 | 11 | 0 | 0 |
IGLESIAS & OLGA C MANUEL R IGLESIAS JTWROS | 13 | 13 | 0 | 0 |
ILLAS & GUSTAVO C DIANA B DE ILLAS | 8 | 8 | 0 | 0 |
JACOB & ELMA IRMA HARTUNG DE URSULA JACOB | 3 | 3 | 0 | 0 |
JACOB & URSULA MARION BEATRIZ ARNOLD | 11 | 11 | 0 | 0 |
JACOBO & SHEBAR ELIAS | 3 | 3 | 0 | 0 |
JAJAM & ESTELA B ANA F SILBERING | 8 | 8 | 0 | 0 |
JAMES & DENIS KERRY JAMES JT TEN | 1 | 1 | 0 | 0 |
JARITZ & ERICA M HOLZER HEINZ KUNICK DEPPE | 155 | 15 | 140 | 90% |
JAY MERITA | 1 | 1 | 0 | 0 |
JAY SCOTT | 1 | 1 | 0 | 0 |
JI JIN JIAN | 40,000 | 4,000 | 36,000 | 90% |
JI TAO | 50,000 | 5,000 | 45,000 | 90% |
JIN JIUNING | 20,000 | 2,000 | 18,000 | 90% |
19
SELLING SHAREHOLDERS LIST OF AREM PACIFIC CORPORATION | ||||
Selling Shareholders | Shares of Common Stock owned prior to Offering(1) | Maximum Number of Shares of Common Stock to be offered | Shares of Common Stock owned after Offering(2) | Percent of Common Stock owned after Offering(2) |
JIN MINGJIANG | 5,000 | 500 | 4,500 | 90% |
JIN XIN | 19,410,000 | 1,941,000 | 17,469,000 | 90% |
JMONTU & JORGE TERESA ALAGNA DE MONTU | 7 | 7 | 0 | 0 |
JORGE & MELE JOSEFINA M BROCCA | 3 | 3 | 0 | 0 |
JUDKOWITZ HARVEY | 7 | 7 | 0 | 0 |
JUDKOWITZ HARVEY | 52 | 52 | 0 | 0 |
KACZMAREK PATRICIA S | 26 | 26 | 0 | 0 |
KAPIRIS HARRY | 20,000 | 2,000 | 18,000 | 90% |
KEAT WOO KA | 5,000 | 500 | 4,500 | 90% |
KELLY JOHN W | 3 | 3 | 0 | 0 |
KHOON YEOH AIK | 50,000 | 5,000 | 45,000 | 90% |
KIANG CHUA SIEW | 5,000 | 500 | 4,500 | 90% |
KIANG LIM TEE | 9,000 | 900 | 8,100 | 90% |
KING KIMBERLY | 13 | 13 | 0 | 0 |
KINGSTON BARBARA BURSON | 11 | 11 | 0 | 0 |
KLUCK & ELSA M DE MANFREDO G KLUCK | 16 | 16 | 0 | 0 |
KNUTZEN KLAUS | 21 | 21 | 0 | 0 |
KREIZMAN & MICHAEL MATILDA KREIZMAN JTWROS | 13 | 13 | 0 | 0 |
KRUGER ERNESTO A | 47 | 47 | 0 | 0 |
KRYMER & HORACIO DANIEL ALICIA L VACA DE KRYMER | 3 | 3 | 0 | 0 |
LARRINAGA & CAMPODONICO SILVIA & EDUARDO MARIA MIRAGLIA MARIA ROSA | 13 | 13 | 0 | 0 |
LATERZA AMELIA | 13 | 13 | 0 | 0 |
LATERZA MARIA CRISTINA | 10 | 10 | 0 | 0 |
LATERZA & ANA CLAUDIA MARIA ANA CAUSA | 8 | 8 | 0 | 0 |
LAWSON PETER | 10,000 | 1,000 | 9,000 | 90% |
LE PANTO WORLDWIDE ENTERPRISES LTD | 155 | 15 | 140 | 90% |
LEONARDI & CARLOS A FABIANA A RASMUSSEN | 3 | 3 | 0 | 0 |
CHI YUEN LEONG | 29,495,000 | 2,949,500 | 26,545,500 | 90% |
WEI LI LEONG | 501,000 | 50,100 | 450,900 | 90% |
KIN CHIU LEUNG | 5,000,000 | 500,000 | 4,500,000 | 90% |
LI DONGXIN | 10,000 | 1,000 | 9,000 | 90% |
LI JIAN HUANG | 51,000 | 5,100 | 45,900 | 90% |
LI JIANMEI | 500 | 50 | 450 | 90% |
LI JIANYUN | 500 | 50 | 450 | 90% |
LI SU GUO | 1,000 | 100 | 900 | 90% |
LI WEI DONG | 10,500 | 1,050 | 9,450 | 90% |
LI WEIHUA | 1,000 | 100 | 900 | 90% |
LI XIA | 800 | 80 | 720 | 90% |
LI YONGJIA | 300,000 | 30,000 | 270,000 | 90% |
20
SELLING SHAREHOLDERS LIST OF AREM PACIFIC CORPORATION | ||||
Selling Shareholders | Shares of Common Stock owned prior to Offering(1) | Maximum Number of Shares of Common Stock to be offered | Shares of Common Stock owned after Offering(2) | Percent of Common Stock owned after Offering(2) |
LI YU PING | 500,000 | 50,000 | 450,000 | 90% |
LIANG HE | 50,000 | 5,000 | 45,000 | 90% |
LIANG MIN ZHAO | 2,200,000 | 220,000 | 1,980,000 | 90% |
LIAO SAIFANG | 2,501,000 | 250,100 | 2,250,900 | 90% |
LIECHTENSTEIN & RODOLFO E DE LIECHTENSTEIN | 3 | 3 | 0 | 0 |
LIENHARD & THOR STEEN INGE NEUMANN DE LIENHARD | 21 | 21 | 0 | 0 |
LIN QING SONG | 500,000 | 50,000 | 450,000 | 90% |
LIN XIAN RONG | 10,000 | 1,000 | 9,000 | 90% |
LINARES RONALD T | 284 | 28 | 256 | 90% |
LINDEL & FEDERICO BEATRIZ MERNES DE LINDEL | 21 | 21 | 0 | 0 |
LITTMAN ERIC P | 1 | 1 | 0 | 0 |
LIU WEI | 266,000 | 26,600 | 239,400 | 90% |
LIU XIYANG | 1,200 | 120 | 1,080 | 90% |
LIU YONG BAO | 10,000 | 1,000 | 9,000 | 90% |
LIU ZHIYI | 100,000 | 10,000 | 90,000 | 90% |
LOPEZ GREGORIA | 3 | 3 | 0 | 0 |
LOVELADY RAY | 3 | 3 | 0 | 0 |
LU YAN ZHEN | 500 | 50 | 450 | 90% |
LURIE TTEE FBO LAURENCE LURIE LAURENCE REVOCABLE LIVING TRUST | 145 | 14 | 131 | 90% |
M A GALES & CO INC | 515,464 | 51,546 | 463,918 | 90% |
MA XIAOJUAN | 10,000 | 1,000 | 9,000 | 90% |
MAIDANA JUAN CARLOS | 65 | 65 | 0 | 0 |
MANDEL & ANDRES V OSCAR O CAMBIASO | 16 | 16 | 0 | 0 |
MAQUEDA & CLAUDIA M GILBERTO O BURGOS | 142 | 14 | 128 | 90% |
MARINO & MANUEL JORGE GLORIA M DE MARINO | 7 | 7 | 0 | 0 |
MARKL & GERARDO LAURA CASTELLUCCIO DE MARKL | 65 | 65 | 0 | 0 |
MARTINITTO & EMILSE DI GIULIANO DE ESTELA MARTINITTO & ROXANA MARTINITTO DE CERVIO | 2 | 2 | 0 | 0 |
MARTINITTO & HEMILSE DI GIULIANO & LEONARDO ESTELA MARTINITTO & ROXANA MARTINITTO | 31 | 31 | 0 | 0 |
MARZULLO JORGE EDUARDO | 11 | 11 | 0 | 0 |
MASSARO MARIA C | 3 | 3 | 0 | 0 |
MASUDA ALEJANDRO | 1 | 1 | 0 | 0 |
MATHEWS REBECCA J | 26 | 26 | 0 | 0 |
MC CUEN & BOB JOAN MC CUEN JT TEN | 3 | 3 | 0 | 0 |
MEEKER INVESTMENTS LTD | 26 | 26 | 0 | 0 |
21
SELLING SHAREHOLDERS LIST OF AREM PACIFIC CORPORATION | ||||
Selling Shareholders | Shares of Common Stock owned prior to Offering(1) | Maximum Number of Shares of Common Stock to be offered | Shares of Common Stock owned after Offering(2) | Percent of Common Stock owned after Offering(2) |
MESSENGER GEORGE | 6 | 6 | 0 | 0 |
METTLER ELECTONICS CORP | 187 | 18 | 169 | 90% |
MI HAIFENG | 1,000 | 100 | 900 | 90% |
MICELI & JORGE O MARIA E POSTEL DE MICELI | 11 | 11 | 0 | 0 |
MIGLIORE & JOAQUIN LUCIA EG RINGUELET DE MIGLIORE | 78 | 78 | 0 | 0 |
MILLER & MARIA DEL CARMEN RATTI & ABEL KOHAN SEBASTIAN KOHAN MILLER | 57 | 57 | 0 | 0 |
MING QIU XUE | 10,000 | 1,000 | 9,000 | 90% |
MOGLIA & ALICIA ALEJANDRO PUENTE | 3 | 3 | 0 | 0 |
MOLINA & ANA P MARIA V MOLINA | 8 | 8 | 0 | 0 |
MOLINA & MARIA V ANA P MOLINA | 13 | 13 | 0 | 0 |
MONEGO MARIA T DEL | 6 | 6 | 0 | 0 |
MORANO & EDGARDO ANA M COSTA | 42 | 42 | 0 | 0 |
MULLER & LUIS ANA MARIA VALLENDOR | 11 | 11 | 0 | 0 |
MUNOZ & RAMON PASCUAL MARGARITA E HEUER DE MUNOZ | 52 | 52 | 0 | 0 |
MUNOZ & RAMON PASCUAL MARGARITA E HEUER DE MUNOZ JT TEN | 2 | 2 | 0 | 0 |
NAGELE & NORMA HILDA ANA ELIZABETH DE NAGELE | 8 | 8 | 0 | 0 |
NAPOLI & MARY ANTHONY NAPOLI | 3 | 3 | 0 | 0 |
NAYLOR LORRAINE | 60,000 | 6,000 | 54,000 | 90% |
NBC EMPLOYEES' STOCK TRUST | 57 | 57 | 0 | 0 |
NEUMANN & WALTER RUTH BEACHER DE NEUMANN | 6 | 6 | 0 | 0 |
NEWMAN MICHELE | 1 | 1 | 0 | 0 |
NG RUI MEI | 71,500 | 7,150 | 64,350 | 90% |
NICASTRO & GUSTAVO M VIVIANA R BALENZUELA | 3 | 3 | 0 | 0 |
NODIFF BARBARA | 2 | 2 | 0 | 0 |
NOSOSHY ISAC | 4 | 4 | 0 | 0 |
NUNEZ & JULIO A LUCILA MILENA CALLERO DE NUNEZ | 336 | 33 | 303 | 90% |
OLASO & EZEQUIEL JAVIER SILVIA LIDIA LUCHESSI | 7 | 7 | 0 | 0 |
OLJENICK & LILIANA ROBERTO SCHAEFER | 13 | 13 | 0 | 0 |
OOI CHAI GEIK | 201,000 | 20,100 | 180,900 | 90% |
OPL CAPITAL LIMITED | 8,000,000 | 800,000 | 7,200,000 | 90% |
OVERSEAS CAPITAL INVESTMENTS INC | 16 | 16 | 0 | 0 |
OXER & EDUARDO ADRIANA B BRESLER | 13 | 13 | 0 | 0 |
PADULA HARRY R | 155 | 15 | 140 | 90% |
PALADINO & MICAELA LUJAN ZULEMA LUCIA PALADINO & DOMINGA FREIGEIRO | 13 | 13 | 0 | 0 |
PALETTE INTERNATIONAL LTD | 1,439 | 143 | 1,296 | 90% |
22
SELLING SHAREHOLDERS LIST OF AREM PACIFIC CORPORATION | ||||
Selling Shareholders | Shares of Common Stock owned prior to Offering(1) | Maximum Number of Shares of Common Stock to be offered | Shares of Common Stock owned after Offering(2) | Percent of Common Stock owned after Offering(2) |
PALLEJA & EZEQUIEL MARIA A L VILAR DE PALLEJA | 8 | 8 | 0 | 0 |
PALLOT JAYNE | 1 | 1 | 0 | 0 |
PARERA & JOSE MIGUEL NORA S FIGOLI DE PARERA | 21 | 21 | 0 | 0 |
PAYTON AND ASSOCIATES PA ESCROW HARRY A | 26 | 26 | 0 | 0 |
PAZ & JUAN CARLOS RAWSON MARIA CRISTINA CUNEO LIBARONA | 21 | 21 | 0 | 0 |
PCURTI DANIEL | 16 | 16 | 0 | 0 |
PEARCE DARREN | 10,500 | 1,050 | 9,450 | 90% |
PEIRANO & MIRTA INES JUAN MARCELO PASCUAL | 3 | 3 | 0 | 0 |
PELAEZ & FERNANDO V CLAUDIO A PARIEWSKI | 16 | 16 | 0 | 0 |
PELOSO & JUAN CARLOS MARIA RESTANO & TOMAS F RESTANO | 11 | 11 | 0 | 0 |
PELOSO & SILVINA JAVIER MARIA IZURIETA | 3 | 3 | 0 | 0 |
PELTZER & ANN CARL PELTZER TBE | 3 | 3 | 0 | 0 |
PENA & FRANSISCO FONTELA ENRIQUE FONTELA | 19 | 19 | 0 | 0 |
PENG SHIQING | 133,000 | 13,300 | 119,700 | 90% |
PERALES ROSA | 13 | 13 | 0 | 0 |
PEREYRA & JUAN CARLOS LILIANA MABEL RODRIGUEZ JT TEN | 3 | 3 | 0 | 0 |
PEREZ & JUSTO SANTIAGO MARIA CRISTNA GATTI DE PEREZ | 3 | 3 | 0 | 0 |
PERGOLA & ELENA E MORTALE DE OSCAR E PERGOLA | 3 | 3 | 0 | 0 |
PERGOLA & ELENA E MORTALE DE OSCAR E PERGOLA JTWROS | 2 | 2 | 0 | 0 |
PERRY SAMUEL FRANCIS | 100,000 | 10,000 | 90,000 | 90% |
PRTRUCELLI FRANCIS D | 4 | 4 | 0 | 0 |
PITA EDGARDO | 6 | 6 | 0 | 0 |
PITA & NESTOR H YOLANDA L BONEDEO DE PITA | 11 | 11 | 0 | 0 |
POLI & PEDRO M MARIE DE URQUIZA DEPOLI JT TEN | 2 | 2 | 0 | 0 |
POLI & PEDRO MIGUEL MARIA DE URQUIZA | 19 | 19 | 0 | 0 |
PONTE & ANABEL M PEDRO G PONTE | 19 | 19 | 0 | 0 |
PORTE HOLDING LIMITED | 82 | 82 | 0 | 0 |
PRATURLON & HORACIO YOLANDA A FIAD JTWROS | 3 | 3 | 0 | 0 |
PROUTY & WILLIAM DENNIS MARIE ELENA PROUTY TEN ENT | 39 | 39 | 0 | 0 |
PUENTE & DOMINGA FELIX JORGE VIOLA DE LA FREIGEIRO & ZULEMA PALADINO | 47 | 47 | 0 | 0 |
PUPI & LUIS MARIA MARIA JOSE CERVIO PINHO | 21 | 21 | 0 | 0 |
QIANG ZHONG WEI | 10,500 | 1,050 | 9,450 | 90% |
23
SELLING SHAREHOLDERS LIST OF AREM PACIFIC CORPORATION | ||||
Selling Shareholders | Shares of Common Stock owned prior to Offering(1) | Maximum Number of Shares of Common Stock to be offered | Shares of Common Stock owned after Offering(2) | Percent of Common Stock owned after Offering(2) |
QIU XIANG | 1,000,000 | 100,000 | 900,000 | 90% |
RAFANELLI & ANTONIO MATILDE N SANCHEZ & LAURA F RAFANELLI | 4 | 4 | 0 | 0 |
RAGGIO & RAUL A MARIA SIRI | 16 | 16 | 0 | 0 |
RAGGIO & RAUL ANGEL MARIA LUISA SIRI DE RAGGIO | 8 | 8 | 0 | 0 |
RAPONI & SUSANA LIA CASTELUCCIO DE LUIS ALBERTO RAPONI | 39 | 39 | 0 | 0 |
RAY TRACY A | 26 | 26 | 0 | 0 |
RECARTE & AMALIA PLAT DE RECARTE & CANDIDO DANIEL H RECARTE | 39 | 39 | 0 | 0 |
RENTSCHLER MARK | 82,475 | 8,247 | 74,228 | 90% |
REYNOSO & REYNOSO & MARTHA JUAN BAUTISTA SARRANIA JUAN BAUTISTA SARRANIA | 3 | 3 | 0 | 0 |
RINALDI & OSVALDO SILVIA L BERTOLO DE RINALDI | 3 | 3 | 0 | 0 |
RIZZO & HUGO J NORMA E MONTANER | 52 | 52 | 0 | 0 |
ROBINSON RHONDA RENEE | 26 | 26 | 0 | 0 |
ROLDAN & JOSUE H RAMON H ROLDAN JTWROS | 1 | 1 | 0 | 0 |
ROMANO & FRANCISCO J MARIA C CONTI TOUTIN | 21 | 21 | 0 | 0 |
ROMANO & VICTOR E MARIA C BOILINI DE ROMANO | 4 | 4 | 0 | 0 |
ROSAUER RODOLFO E | 13 | 13 | 0 | 0 |
ROSENTHAL LEE | 9 | 9 | 0 | 0 |
ROSSI & ANGELA E SANCHEZ & RICARDO J RICARDO R ROSSI | 39 | 39 | 0 | 0 |
RUAN CHANQING | 20,000 | 2,000 | 18,000 | 90% |
RUBINOV DAVID | 516 | 51 | 465 | 90% |
SALEH MOHAMED | 6 | 6 | 0 | 0 |
SALER CAROL | 3 | 3 | 0 | 0 |
SANG NG FOOK | 50,000 | 5,000 | 45,000 | 90% |
SCARPARI LOUIE V | 200,000 | 20,000 | 180,000 | 90% |
SCARPARI ROCCO | 2,530,500 | 253,050 | 2,277,450 | 90% |
SCARPARI SARAFINO | 200,000 | 20,000 | 180,000 | 90% |
SCARPARI VIVIAN | 200,000 | 20,000 | 180,000 | 90% |
SCASTAGNOLA & TAMARA MARCELO FRAYSSINET | 13 | 13 | 0 | 0 |
SCESA & EMILIO MARTA LINDEL DE SCESA | 52 | 52 | 0 | 0 |
SCHAEFER & ROBERTO CECILIA SCHAEFER | 13 | 13 | 0 | 0 |
SCHEUER & MONICA SANTIAGO F RAFFO MAGNASCO | 44 | 44 | 0 | 0 |
SCHMEE & EWALD GERTRAUDE ABICHT DE SCHMEE | 39 | 39 | 0 | 0 |
24
SELLING SHAREHOLDERS LIST OF AREM PACIFIC CORPORATION | ||||
Selling Shareholders | Shares of Common Stock owned prior to Offering(1) | Maximum Number of Shares of Common Stock to be offered | Shares of Common Stock owned after Offering(2) | Percent of Common Stock owned after Offering(2) |
SCHOO & GRACIELA MARIA PIOLA DE SCHOO & MIGEL ANGEL DE SCHOO & MARIA ALEJANDRA SCHOO | 11 | 11 | 0 | 0 |
SCIAN & HILDA T FONTICELLI DE MARIO JORGE SCIAN | 6 | 6 | 0 | 0 |
SCOTT CARLOS E | 17 | 17 | 0 | 0 |
SGRO & SILVIA M AUGUSTO A CONSTANTINO | 8 | 8 | 0 | 0 |
SHA MIN | 40,000 | 4,000 | 36,000 | 90% |
SHEBAR & ELIAS SILVIA CLELIA SLAPAK DE SHEBAR | 91 | 91 | 0 | 0 |
SHI JUAN | 1,000 | 100 | 900 | 90% |
SHI ZHONGHONG | 3,002,500 | 300,250 | 2,702,250 | 90% |
SHORE SCOTT | 12 | 12 | 0 | 0 |
SHORE TERRY | 5 | 5 | 0 | 0 |
SIJNIENSKY & ALBERTO MABEL G DE SIJNIENSKY | 39 | 39 | 0 | 0 |
SILVA & ZELFA VB DA CARLOS G HAGELBERG | 3 | 3 | 0 | 0 |
SILVER JOAN P | 4 | 4 | 0 | 0 |
SINGER TTEE ROBERT E | 15 | 15 | 0 | 0 |
SKOU & BERTEL C ALICIA B SALLAGO | 3 | 3 | 0 | 0 |
SOLOZABAL & CARLOS R CHIAPPE AIDA GC KORODY | 13 | 13 | 0 | 0 |
SOUTHERN CHRISTPHER L | 52 | 52 | 0 | 0 |
SPANIAK ARLETTE | 2,459 | 245 | 2,214 | 90% |
SPANIAK FRANCES | 3 | 3 | 0 | 0 |
SPANIAK SR GARY | 866 | 86 | 780 | 0 |
SPEAR & GARRY R SALLY A SPEAR TEN ENT | 39 | 39 | 0 | 0 |
SPILOTROS DENNIS | 258 | 25 | 233 | 90% |
SPILOTROS DENNIS P | 258 | 25 | 233 | 90% |
SPILOTROS & CONNIE SAL SPILOTROS | 26 | 26 | 0 | 0 |
SPILOTROS & DENNIS P OLIVIA A SPILOTROS TEN ENT | 104 | 10 | 94 | 90% |
STAFFORD BENJAMIN | 26 | 26 | 0 | 0 |
STRANGIO ANGELA | 5,000 | 500 | 4,500 | 90% |
STREET INVESTMENTS LIMITED | 39 | 39 | 0 | 0 |
STRITIKUS JOY H | 516 | 51 | 465 | 90% |
SU YAO | 1,300,500 | 130,050 | 1,170,450 | 90% |
SUI JUNNAN | 100 | 10 | 90 | 90% |
SUIZ CENSUS ARGENTINA SA | 39 | 39 | 0 | 0 |
SUN DAFENG | 1,488,500 | 148,850 | 1,339,650 | 90% |
SUN GUO ZHAO | 50,000 | 5,000 | 45,000 | 90% |
SUN JIANFENG | 14,000 | 1,400 | 12,600 | 90% |
SUN WENWEN | 20,500 | 2,050 | 18,450 | 90% |
SUN XIAOLING | 61,000 | 6,100 | 54,900 | 90% |
25
SELLING SHAREHOLDERS LIST OF AREM PACIFIC CORPORATION | ||||
Selling Shareholders | Shares of Common Stock owned prior to Offering(1) | Maximum Number of Shares of Common Stock to be offered | Shares of Common Stock owned after Offering(2) | Percent of Common Stock owned after Offering(2) |
TAN HAO YAN | 2,521,000 | 252,100 | 2,268,900 | 90% |
TANG XIAOYU | 2,500,000 | 250,000 | 2,250,000 | 90% |
TANG ZHUOZHI | 15,025,000 | 1,502,500 | 13,522,500 | 90% |
TAVERNA FAMILY PTY LTD | 100,000 | 10,000 | 90,000 | 90% |
TECHMATERIAL CORP | 65 | 65 | 0 | 0 |
TECHMATERIAL INC | 65 | 65 | 0 | 0 |
TELCOA INTERNATIONAL CORPORATION | 257 | 25 | 232 | 90% |
TESORIERE & EDUARDO A FLORIANA PLAYUK | 13 | 13 | 0 | 0 |
TESTA & CARLOS A NORMAN DURAN | 4 | 4 | 0 | 0 |
THAW BILL | 9 | 9 | 0 | 0 |
TIANG KHAW PHAIK | 50,000 | 5,000 | 45,000 | 90% |
TING SU GUI | 500,000 | 50,000 | 450,000 | 90% |
TLN INVESTMENT HOLDINGS INC | 40 | 40 | 0 | 0 |
TORRES & GASPAR MARTINEZ VERONICA MARTINEZ GUITART | 31 | 31 | 0 | 0 |
TORRES & GASPAR MARTINEZ VERONICA MARTINEZ GUITART JTWROS | 128 | 12 | 116 | 90% |
TOSELLI MARIA TB DE | 6 | 6 | 0 | 0 |
TRAPP CHARLES P | 1,289 | 128 | 1,161 | 90% |
TRICERRI & TRIMARTA B RICARDO H SANGUINETTI | 11 | 11 | 0 | 0 |
TRIF ROY S | 26 | 26 | 0 | 0 |
UGRIN & HAYDEE N ALDO A UGRIN & JUAN R BOERO | 3 | 3 | 0 | 0 |
USLENGHI & ALBA G DE RICARDO USLENGHI | 6 | 6 | 0 | 0 |
VARAPODIO SANTO ANTONIO | 20,000 | 2,000 | 18,000 | 90% |
VELASQUEZ SANDRA C | 4 | 4 | 0 | 0 |
VENEZIA & ANTONIO M GRACIELA M FRANSOY | 29 | 29 | 0 | 0 |
VENTURA ENRIQUE J | 2 | 2 | 0 | 0 |
VIDAL & MARISA PITZINGER & ALICIA B RODOLFO FIDONE | 52 | 52 | 0 | 0 |
VIOLA JOSE | 3 | 3 | 0 | 0 |
VISCONTI & ALFREDO ISABEL I SILVA DE VISCONTI | 78 | 78 | 0 | 0 |
WAHOO FUNDING INC | 206,186 | 20,618 | 185,568 | 90% |
WALKER SANDRA GAYLE | 26 | 26 | 0 | 0 |
WALLBRECHER MARIA TERESA | 6 | 6 | 0 | 0 |
WANG TAO | 200,100 | 20,010 | 180,090 | 90% |
WAN HANG | 200,000 | 20,000 | 180,000 | 90% |
WARDE FINANCE PTY LTD | 50,000 | 5,000 | 45,000 | 90% |
WEHINGER & WERNER ERIKA SCHMEE | 39 | 39 | 0 | 0 |
WEHNCKE & ELISABET V GERARDO WEHNCKE | 8 | 8 | 0 | 0 |
26
SELLING SHAREHOLDERS LIST OF AREM PACIFIC CORPORATION | ||||
Selling Shareholders | Shares of Common Stock owned prior to Offering(1) | Maximum Number of Shares of Common Stock to be offered | Shares of Common Stock owned after Offering(2) | Percent of Common Stock owned after Offering(2) |
WEHNCKE & GERARDO E ROSA E RODRIGUEZ DE WEHNCKE | 39 | 39 | 0 | 0 |
WEI WEI | 20,000 | 2,000 | 18,000 | 90% |
WEN LIN JIAN | 20,000 | 2,000 | 18,000 | 90% |
WINTER & ENRIQUE ADOLFO F MARIA SCHNEIDER DE WINTER | 13 | 13 | 0 | 0 |
WIRTH & HELENE ENRIQUE WIRTH | 3 | 3 | 0 | 0 |
WOODS & SAMUEL H MARYLOU S WOODS TEN ENT | 282 | 28 | 0 | 0 |
WU YIHUA | 50,000 | 5,000 | 45,000 | 90% |
WU ZI QI | 1,100,000 | 110,000 | 990,000 | 90% |
WUI FOO SUAN | 146,000 | 14,600 | 131,400 | 90% |
XIANRU TIAN | 20,000 | 2,000 | 18,000 | 90% |
XIGUANG REN | 20,000 | 2,000 | 18,000 | 90% |
XIN LIU JIAN | 10,000 | 1,000 | 9,000 | 90% |
XU QIYUAN | 25,000 | 2,500 | 22,500 | 90% |
XU SHULAN | 10,500 | 1,050 | 9,450 | 90% |
XUE YUJIAN | 100,000 | 10,000 | 90,000 | 90% |
YAN CHEN | 46,000 | 4,600 | 41,400 | 90% |
YANG JING | 4,010,000 | 401,000 | 3,609,000 | 90% |
YANG XIANGYANG | 10,000 | 1,000 | 9,000 | 90% |
YANG XIN | 20,000 | 2,000 | 18,000 | 90% |
YANG YU JUN | 10,000 | 1,000 | 9,000 | 90% |
YE LINGYAN | 500 | 50 | 450 | 90% |
YE RACHEL | 3,000 | 300 | 2,700 | 90% |
YEUNG WON POU | 10,000 | 1,000 | 9,000 | 90% |
YEW KIEN CHEONG | 6,000,000 | 600,000 | 5,400,000 | 90% |
YING MI HAI | 5,000 | 500 | 4,500 | 90% |
YING THAM FOONG | 30,000 | 3,000 | 27,000 | 90% |
YIP WENG KAN | 50,000 | 5,000 | 45,000 | 90% |
YONG ZHANG | 10,000 | 1,000 | 9,000 | 90% |
YUAN ZI DAN | 716,567 | 71,656 | 644,911 | 90% |
ZABALETA & CARLOS A JORGE A ZABALETA | 8 | 8 | 0 | 0 |
ZAGAGLIA & HUGO DANIEL GINO ALDO ZAGAGLIA | 13 | 13 | 0 | 0 |
ZAIMAKIS BASILIO SERGIO | 8 | 8 | 0 | 0 |
ZAPIOLA & EDGARDO PAMPLIEGA ERSILIA E ITTIG | 6 | 6 | 0 | 0 |
ZELAYA CAMILLA MOE | 8 | 8 | 0 | 0 |
ZHAN NING | 500 | 50 | 450 | 90% |
27
SELLING SHAREHOLDERS LIST OF AREM PACIFIC CORPORATION | ||||
Selling Shareholders | Shares of Common Stock owned prior to Offering(1) | Maximum Number of Shares of Common Stock to be offered | Shares of Common Stock owned after Offering(2) | Percent of Common Stock owned after Offering(2) |
ZHANG FUXIANG | 20,500 | 2,050 | 18,450 | 90% |
ZHANG MIAN | 2,501,000 | 250,100 | 2,250,900 | 90% |
ZHANG TINGLING | 250 | 25 | 225 | 90% |
ZHANG XIAOYAN | 2,500,000 | 250,000 | 2,250,000 | 90% |
ZHANG YI LING | 500,000 | 50,000 | 450,000 | 90% |
ZHANG ZHIWEI | 1,000 | 100 | 900 | 90% |
ZHAO JIALI | 3,200 | 320 | 2,880 | 90% |
ZHEN YIKO | 330,000 | 33,000 | 297,000 | 90% |
ZHENG LI HUA | 1,052,500 | 105,250 | 947,250 | 90% |
ZHIBIN WANG | 1,000 | 100 | 900 | 90% |
ZHU GUOLIANG | 21,000 | 2,100 | 18,900 | 90% |
ZHU WEI | 500,000 | 50,000 | 450,000 | 90% |
ZHU XINHUA | 33,400 | 3,340 | 30,060 | 90% |
ZHUANG YUEHUI | 10,000 | 1,000 | 9,000 | 90% |
ZILI TAN | 20,000 | 2,000 | 18,000 | 90% |
ZUPPICHINI & ALBERTO C SUSANA C COTO | 6 | 6 | 0 | 0 |
ZYL & RENATA VAN DER JAQUELINE JACOB DE DICHI | 16 | 16 | 0 | 0 |
| 137,411,881 | 13,746,185 | 123,665,696 |
|
(1) Beneficial ownership is determined in accordance with Rule 13d-3 of the Exchange Act. In computing the number of shares beneficially owned by a person and the percentage ownership of that person, securities that are currently convertible or exercisable into shares of our common stock, or convertible or exercisable into common stocks within 60 days of the date hereof are deemed outstanding. Such shares, however, are not deemed outstanding for the purpose of computing the percentage ownership of any other person. Except as indicated in the footnotes to the following table, each shareholder named in the table has sole voting and investment power with respect to the shares set forth opposite such shareholders name. The percentage of beneficial ownership is based on 228,003,081 shares of common stock outstanding as of July 7, 2015. The shares of common stock registered herein are outstanding as of the date of this prospectus.
(2) Assumes that all securities registered will be sold.
We may require the selling stockholders to suspend the sales of the securities offered by this prospectus upon the occurrence of any event that makes any statement in this prospectus, or the related registration statement, untrue in any material respect, or that requires the changing of the statements in these documents in order to make statements in those documents not misleading. We will file a post-effective amendment to the registration statement to reflect any such material changes to this prospectus.
28
PLAN OF DISTRIBUTION
As of the date of this prospectus, our common stock is listed on the OTCPINK ® tier of OTC Markets under the symbol ARPC, however, due to the limited financial information provided to OTC Markets, it is subject to a warning stop sign signifying no information has been provided to OTC Markets. After the effectiveness of this prospectus, we expect to file the necessary information, including financial information, with the Financial Industry Regulatory Authority and OTC Markets for our common stock to be eligible for trading on the OTCQB® tier of OTC Markets. Until our common stock becomes eligible for trading on the OTCQB, the selling security holders will be offering our shares of common stock at a fixed price of $0.05 per common share After our common stock becomes eligible for trading on the OTC Bulletin Board, the selling security holders may, from time to time, sell all or a portion of the shares of common stock on OTC QB, in privately negotiated transactions or otherwise. After our common stock becomes eligible for trading on the OTCQB, such sales may be at fixed prices prevailing at the time of sale, at prices related to the market prices or at negotiated prices.
After our common stock becomes eligible for trading on the OTCQB, the shares of common stock being offered for resale by this prospectus may be sold by the selling security holders by one or more of the following methods, without limitation:
·
ordinary brokerage transactions and transactions in which the broker solicits purchasers;
·
privately negotiated transactions;
·
market sales (both long and short to the extent permitted under the federal securities laws);
·
at the market to or through market makers or into an existing market for the shares;
·
through transactions in options, swaps or other derivatives (whether exchange listed or otherwise); and
·
a combination of any of the aforementioned methods of sale.
In the event of the transfer by any of the selling security holders of its shares of common stock to any pledgee, donee or other transferee, we will amend this prospectus and the registration statement of which this prospectus forms a part by the filing of a post-effective amendment in order to have the pledgee, donee or other transferee in place of the selling security holder who has transferred his, her or its shares.
In effecting sales, brokers and dealers engaged by the selling security holders may arrange for other brokers or dealers to participate. Brokers or dealers may receive commissions or discounts from a selling security holder or, if any of the broker-dealers act as an agent for the purchaser of such shares, from a purchaser in amounts to be negotiated which are not expected to exceed those customary in the types of transactions involved. Before our common stock becomes eligible for trading on the OTCQB, broker-dealers may agree with a selling security holder to sell a specified number of the shares of common stock at a price per share of $0.05. After our common stock becomes eligible for trading on the OTCQB, broker-dealers may agree with a selling security holder to sell a specified number of the shares of common stock at a stipulated price per share. Such an agreement may also require the broker-dealer to purchase as principal any unsold shares of common stock at the price required to fulfill the broker-dealer commitment to the selling security holder if such broker-dealer is unable to sell the shares on behalf of the selling security holder. Broker-dealers who acquire shares of common stock as principal may thereafter resell the shares of common stock from time to time in transactions which may involve block transactions and sales to and through other broker-dealers, including transactions of the nature described above. After our common stock becomes eligible for trading on the OTC-QB, such sales by a broker-dealer could be at prices and on terms then prevailing at the time of sale, at prices related to the then-current market price or in negotiated transactions. In connection with such re-sales, the broker-dealer may pay to or receive from the purchasers of the shares commissions as described above.
The selling security holders and any broker-dealers or agents that participate with the selling security holders in the sale of the shares of common stock may be deemed to be underwriters within the meaning of the Securities Act in connection with these sales. In that event, any commissions received by the broker-dealers or agents and any profit on the resale of the shares of common stock purchased by them may be deemed to be underwriting commissions or discounts under the Securities Act.
29
From time to time, any of the selling security holders may pledge shares of common stock pursuant to the margin provisions of customer agreements with brokers. Upon a default by a selling security holder, their broker may offer and sell the pledged shares of common stock from time to time. After our common stock becomes eligible for trading on the OTCQB, upon a sale of the shares of common stock, the selling security holders intend to comply with the prospectus delivery requirements under the Securities Act by delivering a prospectus to each purchaser in the transaction. We intend to file any amendments or other necessary documents in compliance with the Securities Act that may be required in the event any of the selling security holders defaults under any customer agreement with brokers.
To the extent required under the Securities Act, a post-effective amendment to this registration statement will be filed disclosing the name of any broker-dealers, the number of shares of common stock involved, the price at which the shares of common stock is to be sold, the commissions paid or discounts or concessions allowed to such broker-dealers, where applicable, that such broker-dealers did not conduct any investigation to verify the information set out or incorporated by reference in this prospectus and other facts material to the transaction.
We and the selling security holders will be subject to applicable provisions of the Exchange Act and the rules and regulations under it, including, without limitation, Rule 10b-5 and, insofar as a selling security holder is a distribution participant and we, under certain circumstances, may be a distribution participant, under Regulation M. All of the foregoing may affect the marketability of the shares of common stock.
All expenses of the registration statement including, but not limited to, legal, accounting, printing and mailing fees are and will be borne by us. Any commissions, discounts or other fees payable to brokers or dealers in connection with any sale of the shares of common stock will be borne by the selling security holders, the purchasers participating in such transaction, or both.
Any shares of common stock covered by this prospectus which qualify for sale pursuant to Rule 144 under the Securities Act, as amended, may be sold under Rule 144 rather than pursuant to this prospectus.
30
DESCRIPTION OF BUSINESS
Company Overview
We were incorporated in the State of Delaware on November 8, 2007 under the name of Aspen Global Corp. On June 10, 2008, we changed our name to Diversified Mortgage Workout Corp. On June 19, 2013, Arem Pacific Corporation, an Arizona corporation (Arem Pacific-Arizona), acquired voting control of the Company (then Diversified Workout Corporation). Subsequently, on August 8, 2013, we acquired all of the issued and outstanding shares of Arem Pacific-Arizona, from its then existing shareholders. In connection with that transaction, we retired and returned to our treasury all of the capital stock acquired by Arem Pacific-Arizona in the July 19, 2013 transaction and we also changed our name in Delaware to Arem Pacific Corp. On July 23, 2013, we effected a 388 for 1 reverse split of our outstanding common stock. On Arem Pacific-Arizona, our wholly owned subsidiary, was incorporated on July 11, 2007.
On June 30, 2012, we entered into an Acquisition Agreement with Sanyi Pty Ltd, an Australian company (Sanyi), whereby Arem-Arizona acquired all of the equity interest in Sanyi. In exchange, the sole owner of Sanyi, Mr. Xin Jin, received 10,000,000 shares of our common stock. We operate two wellness centers in Victoria State, Australia. At our centers, we provide a range of services including acupuncture, physiotherapy and reflexology massage. The locations of our centers are depicted below:
Description of Centers.
One of the centers is located in Chirnside Park Shopping Centre, Chirnside Park (a suburb of Victoria), Australia VIC 3116, and the second is located in Point Cook Shopping Centre, 2 Main St, Point Cook, Victoria, Australia VIC 3030.
The Chirnside Park location consists of approximately 50 square meters and its layout is depicted below:
31
The Chirnside Park location has 1 full time supervisor and 5 full time masseurs.
The Point Cook location consists of approximately 88 square meters and its layout is depicted below:
The Point Cook location has 1 full time supervisor and 5 full time masseurs.
The size of future locations are expected to range between 50 to 100 square meters.
Services Provided at Centers.
The Company provides the following services at its centers:
·
Acupressure/Reflexology,
·
Neck, shoulder, back, legs and full body massages,
·
Foot massages,
·
Cupping, and
·
Deep Tissue and hot oil massage.
The services are provided by skilled practitioners trained in massage therapy, acupressure and cupping. Sessions vary from 15 to 90 minutes and prices vary according to the nature of services and length of session. Our price list is set forth below:
32
Acupressure/Reflexology is considered acupuncture without needles. Similar to acupuncture, strategic body meridians are targeted by the practitioner using pressure from their fingers, elbows or special devices. Acupressure also is component of traditional Chinese medicine. Reflexology is similar to acupressure and targets specific points on the feet and hands which correspond to organs in the body.
Massage Therapy involves the application of soft tissue manipulation techniques to the body designed to reduce muscle tension and increase circulation. There are many variations of massage therapy, including Swedish, deep tissue and hot stone oil, among others. It is believed that massage therapy was practiced in many ancient civilizations, including China, India and Greece.
Cupping involves the warming of glass cups through a flammable substance which eliminates oxygen, thus creating a vacuum. The cup is then placed over a specific area. The lack of oxygen anchors the cup and the suction draws the skin which simulates blood flow to the area. This process is considered the inverse of massage. Cupping is one of the oldest forms of Chinese medicine.
Our Revenue Model
We generate revenues from the following methods:
- Fees for Services we charge fees to our customers dependent on the treatment administered and length of treatment. Computed on an hourly basis, these fees range from $50 to $80 per hour.
Revenues derived from an average customer approximate $34 per visit. At our locations, each masseur averages 5 customers/day (8 hours of operation) or 30 customers/week (6 working days) or 1,500 customers/year (50 weeks). An average of 5 masseurs/location yields approximate sales revenue of $250,000 to $275,000 annualized. Although our average has been 5 customers a day, we believe that each masseur is capable of serving up to 10 customers per day.
Our Masseurs
Each of our locations is staffed with between 5 to 6 masseurs and one supervisor. The supervisor is our most experienced masseur at the location. The supervisor oversees the day to day operations of the center and may serve customers during personnel shortages. Our masseurs are employees and are paid a yearly salary of approximately $49,000 depending on experience. In addition, we are required by law to pay our full and part time employees health insurance which is roughly less than 1% of salary. From time to time, we use independent contractors during personnel shortages and they are paid a portion of the customer fee ranging between 45-55%.
There are no license requirements for masseurs in Australia. Many of our masseurs have received a Certificate IV in Massage Therapy Practice by Melbourne College of Professional Therapists. The remainder of our masseurs has been trained internally by our location supervisor. These trainees undergo a 6 month training program with our supervisor. In addition, we require each masseur to have a first aid certificate, a certificate of insurance, and 2 written character references from the staff of a college or from a member of the Australian Association of Massage Therapists.
Marketing
To date our marketing and promotional activities have been limited. In the past, we have principally relied upon traffic at our mall locations to generate customers. To a lesser extent, periodically we distributed promotional materials to neighborhoods surrounding our two locations. As stated in our Growth Strategy below, we intend increase our marketing and promotional efforts in an effort to drive more traffic to our locations.
Our Growth Strategy
Our growth and expansion strategy for the next 6-12 months will include allocating more capital resources to marketing and promotion of our centers. In addition, we may attempt to acquire additional locations in the Victoria area.
Increase our marketing and promotional efforts. We plan to allocate more capital resources to the marketing and promotion of our existing centers. Beginning in the third calendar quarter of 2015, we plan expend approximately $1,500 per location each quarter in advertising and promotion in an effort to drive more traffic to our locations.
33
Our new marketing initiatives will attempt to take advantage of our location in busy shopping malls and will include the following;
·
During holidays and select weekends throughout the year, we intend to set up displays outside our centers with employees offering various promotions (such as offering free 10 minute massages and providing a refreshing herbal drink or snack to shoppers in the mall).
·
Commencing in third calendar quarter of 2015, we will begin offering 10 minute free massages to senior citizens and to members of social clubs and gyms in connection with various events sponsored by the community. In addition, during that period, we will initiate a referral program offering a 10% discount to existing customer that brings in new clients.
We also intend to improve our communications to our customer base by offering regular email promotions designed to encourage old customers to use our services.
Acquire additional locations. We will seek to acquire additional operating massage locations in Victoria. In order to accomplish this objective, we plan on using a combination of bank debt (or owner financing) and our capital stock to acquire these outlets. Presently, we have not identified any locations for acquisition, nor have we made any arrangements with any bank for acquisition financing. We can not predict if we will be successful in acquiring any additional locations on terms which we might find acceptable or on any terms.
Seasonality
There is no discernible seasonality in our business, although as a percentage of total annual net revenue, we expect the first calendar year quarter is typically the lowest. Revenue and operating income will vary by quarter and are hard to predict from quarter to quarter. In addition, the volatility in the local economy will impact our quarterly revenue and operating income.
Regulatory Matters
We are unaware of and do not anticipate having to expend significant resources to comply with any governmental regulations. We are subject to the laws and regulations of those jurisdictions in which we plan to conduct our wellness operation and sell advertising, which are generally applicable to business operations, such as business licensing requirements, income taxes and payroll taxes. In general, the development and operation of our business is not subject to special regulatory and/or supervisory requirements.
Competition
We plan to compete primarily on the basis of product quality, brand recognition, brand loyalty, service, marketing, advertising and price. We are subject to highly competitive conditions in all aspects of our business. The competitive environment and our competitive position can be significantly influenced by weak economic conditions, erosion of consumer confidence and the competitors introduction of low-priced services.
Employees
As of June 30, 2015, we had approximately 11 full time employees 2 supervisors and 2 officers, including our chairman and chief executive officer. Our employees are not represented by any collective bargaining agreement, and we have never experienced a work stoppage. We believe we have good relations with our employees.
Currently, we have not entered into an employment agreement with any of our officers nor the Chief Executive Officer of Sanyi. The Company presently does not have pension, health, annuity, insurance, stock options, profit sharing or similar benefit plans; however, the Company may adopt plans in the future. Management does not plan to hire additional employees at this time.
Properties
Our corporate offices are located at 47 Mount Pleasant Road, Nunawading, Victoria, Australia at a space owned by Mr. Xin Jin, the President and Chief Executive Officer of Sanyi and our Director. We occupy the space on a month to month basis, rent free. The office space consists of approximately 50 square meters.
34
As of June 30, 2015, the Company has two company owned centers. Relevant information with respect to each of these locations is as follows:
Location | Size of Premises (Sq. Meters) | Lease Term | Commencement Date | Annual Rent |
Chirnside Park | 50 | Month by month | 8/28/2012 | $45,000 |
Point Cook Outlet | 88 | 6 years Renewable for an additional 5 years | 8/28/2008 | $67,000 |
Equipment and Equipment Suppliers
The Companys equipment needs are minimal consisting of massage benches and various office equipment and computers. The Company purchases its equipment from local suppliers on an as needed basis and presently does not believe the loss of any one supplier will have an adverse effect on its business.
LEGAL PROCEEDINGS
There are no pending legal proceedings to which the Company is a party or in which any director, officer or affiliate of the Company, any owner of record or beneficially of more than 5% of any class of voting securities of the Company, or security holder is a party adverse to the Company or has a material interest adverse to the Company.
MARKET FOR SECURITIES AND RELATED STOCKHOLDER MATTERS
Our common stock is trading on the OTCPINK® tier of the OTC Markets Group under the symbol of ARPC, however, we have filed limited information with that market and is the subject of a warning stop sign on such site. Following the effectiveness of the registration statement, we intend to have our shares traded on the OTCQB® tier of the OTC Markets Group, which is an OTC bulletin board. We cannot estimate the time period that will be required for the process.
To qualify for quotation on the OTCQB® tier of the OTC Markets Group, an equity security must have one registered broker-dealer, known as the market maker, willing to list bid or sale quotations and to sponsor the company listing. We do not yet have an agreement with a registered broker-dealer, as the market maker, willing to list bid or sale quotations and to sponsor the Company listing. If the Company meets the qualifications for trading securities on the OTCQB our securities will trade on the OTCQB until a future time, if at all, that we apply and qualify for admission to quotation on the NASDAQ Capital Market. We may not now and it may never qualify for quotation on the OTCQB or be accepted for listing of our securities on the NASDAQ Capital Market.
TRANSFER AGENT
We have retained a transfer agent Interwest Transfer Company, Inc. at 1981 Murray Holladay Road, Suite 100 Salt Lake City, UT 84117, telephone (801) 272-9294. They are responsible for all record-keeping and administrative functions in connection with the shares of our common stock.
HOLDERS
As of July 7, 2015, the Company had 228,003,081 shares of our common stock issued and outstanding held by 541 holders of record.
The Selling Shareholders are offering hereby up to 13,746,185 shares of common stock at fixed price of $0.05 per share.
35
DIVIDEND POLICY
We have not declared or paid dividends on our common stock since our formation, and we do not anticipate paying dividends in the foreseeable future. Declaration or payment of dividends, if any, in the future, will be at the discretion of our Board of Directors and will depend on our then current financial condition, results of operations, capital requirements and other factors deemed relevant by the Board of Directors. There are no contractual restrictions on our ability to declare or pay dividends. See the Risk Factor Relating to Our Common Stock entitled WE DO NOT INTEND TO PAY ANY CASH DIVIDENDS ON OUR COMMON STOCK, OUR STOCKHOLDERS WILL NOT BE ABLE TO RECEIVE A RETURN ON THEIR SHARES UNLESS THEY SELL THEM.
SECURITIES AUTHORIZED UNDER EQUITY COMPENSATION PLANS
We have no equity compensation or stock option plans. We may in the future adopt a stock option plan as our expansion and franchising activities progress.
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
General.
The following discussion and analysis of the results of operations and financial condition of the Company for Nine months Ended March 31, 2015 Compared to Nine months Ended March 31, 2014 and for the Fiscal Years ended June 30, 2014 and 2013, respectively, should be read in conjunction with the notes to the financial statements that are included elsewhere herein. The consolidated financial statements presented herein (and to which this discussion relates) reflect the results of operations of Arem Pacific-Delaware, and its subsidiaries, Arem Pacific-Arizona and variable interest entity, Dwarf Technology. Our discussion includes forward-looking statements based upon current expectations that involve risks and uncertainties, such as our plans, objectives, expectations and intentions. Actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of a number of factors. We use words such as anticipate, estimate, plan, project, continuing, ongoing, expect, believe, intend, may, will, should, could, and similar expressions to identify forward-looking statements. We undertake no obligation to revise or update any forward-looking statements in order to reflect any event or circumstance that may arise after the date of this report, except as required by law. Readers are urged to carefully review and consider the various disclosures made throughout the entirety of this quarterly report, which are designed to advise interested parties of the risks and factors that may affect our business, financial condition, results of operations and prospects.
COMPANY OVERVIEW
We were incorporated in the State of Delaware on November 8, 2007 under the name of Aspen Global Corp. On June 10, 2008, we changed our name to Diversified Mortgage Workout Corp. On June 19, 2013, Arem Pacific Corporation, an Arizona corporation (Arem Pacific-Arizona), acquired voting control of the Company (then Diversified Workout Corporation). Subsequently, on August 8, 2013, we acquired all of the issued and outstanding shares of Arem Pacific-Arizona, from its then existing shareholders. In connection with that transaction, we retired and returned to our treasury all of the capital stock acquired by Arem Pacific-Arizona in the July 19, 2013 transaction and we also changed our name in Delaware to Arem Pacific Corp. On July 23, 2013, we effected a 388 for 1 reverse split of our outstanding common stock. Arem Pacific-Arizona, our wholly owned subsidiary, was incorporated on July 11, 2007.
In addition, on June 30, 2012, pursuant to an Acquisition Agreement with Sanyi Pty Ltd, an Australian company, Arem-Arizona acquired all of the equity interest in that company. In exchange, the sole owner of Sanyi Pty Ltd, Mr. Xin Jin, received 10,000,000 shares of our common stock. The shares were issued on August 30, 2013. We operate two wellness centers in Victoria State, Australia. At our centers, we provide a range of services, including acupressure/reflexology, massage and cupping.
36
Our financial statements are prepared in US Dollars and in accordance with accounting principles generally accepted in the United States. See " Foreign Currency Translation" below for information concerning the exchange rates at the Australian Dollar ("AUD") translated into US Dollars ("USD") at various pertinent dates and for pertinent periods.
Results of Operations (Unaudited) for the Nine Months Ended March 31, 2015 Compared to Nine Months Ended March 31, 2014.
The following table sets forth key components of the results of operations for the nine month periods ended March 31, 2015 and 2014. The discussion following the table addresses these results.
|
| March 31, 2015 |
|
| March 31, 2014 | |||
Revenues |
| $ | 381,993 |
|
| $ | 387,631 |
|
|
|
|
|
|
|
|
|
|
Operating Expenses |
|
|
|
|
|
|
|
|
Payroll and related expense |
|
| (253,701) |
|
|
| (216,578) |
|
Occupancy expense |
|
| (90,341) |
|
|
| (90,846) |
|
Depreciation expense |
|
| (13,730) |
|
|
| (10,515) |
|
Marketing expenses |
|
| (67,302) |
|
|
| - |
|
General and administrative expense |
|
| (34,660) |
|
|
| (26,142) |
|
Total operating expenses |
|
| (459,734) |
|
|
| (344,081) |
|
Income (Loss) from Operations |
|
| (77,741) |
|
|
| 43,550 |
|
|
|
|
|
|
|
|
|
|
Other Income (Expense): |
|
|
|
|
|
|
|
|
Loss on asset disposal |
|
| - |
|
|
| (54,366) |
|
Interest income |
|
| 1,083 |
|
|
| 518 |
|
Interest charge |
|
| - |
|
|
| (161) |
|
Total other income (expense) |
|
| 1,083 |
|
|
| (54,009) |
|
|
|
|
|
|
|
|
|
|
Loss before income tax expense |
|
| (76,658) |
|
|
| (10,298) |
|
Income tax expense |
|
| - |
|
|
| - |
|
Loss after income tax expense |
|
| (76,658) |
|
|
| (10,298) |
|
|
|
|
|
|
|
|
|
|
Foreign currency exchange adjustment |
|
| 35,759 |
|
|
| (16,588) |
|
|
|
|
|
|
|
|
|
|
Total Comprehensive Loss |
| $ | (40,899) |
|
| $ | (26,886) |
|
Revenues
Revenues for nine month period ended March 31, 2015 was $381,993 compared with $387,631 for the comparable period in 2014. The slight decrease for current period is due to the opening of a new competitor at our Point Cook location which occurred in January 2015. In addition, the Company closed a location in Plenty Valley, Victoria during May 2013, and the closure had a slight impact on reduction of revenues for the current period.
Operating Expenses
Payroll and related expenses for the current nine month period was $253,701 compared with $216,578 for the prior nine month period. The increase of $37,123 or 17.25% from the prior period is due to a slight increase in pay rates including the percentage of compulsory superannuation guarantee.
Depreciation expense was $13,730 for the current nine month period compared with $10,515 for the prior nine month period. The increase for current year is due to computer equipment purchases and leasehold improvements made during the current period.
37
General and administrative expense was $34,660 for the current nine month period compared with $26,142 for the prior nine month period. General and administrative represents utilities, supplies and miscellaneous expenses. The increase is mainly due to professional fees paid for the review of financial statements.
Other Income
Total other income (expense) was $1,083 for the current nine month period compared with $(53,848) for the prior nine month period. Substantially all of the difference is due to a loss on asset disposal charge in the amount of $54,366 attributable to the closure of one of our locations which occurred in the prior period.
Income/Loss from Operations
Loss from operations for the current nine month period is $76,658 compared with a loss of $10,298 due to reasons discussed above.
Foreign currency exchange adjustment was $35,759 for the current nine month period compared with $(16,588) for the prior nine month period. This adjustment is a result of unrealized profit or loss on conversion to U.S. dollars of assets and liabilities that are accounted for in Australian Dollars.
Total Comprehensive Income/Loss
Total Comprehensive Loss for the current nine month period is $40,899 compared with a Total Comprehensive Loss of $26,886 due to reasons discussed above.
LIQUIDITY AND CAPITAL RESOURCES
At March 31, 2015, we had working capital deficit of $143,753 compared with a working capital deficit of $201,032 for March 31, 2014. The improvement in working capital is a result a reduction a withholding payable to the Australian Tax office due to the timing of payment made, as well as a reduction in borrowings from related party.
Our primary uses of cash have been for operations. The main sources of cash have been from operational revenues. The following trends are reasonably likely to result in a material decrease in our liquidity over the near to long term:
·
Addition of administrative and marketing personnel as the business grows,
·
Development of a Company website,
·
Increases in advertising and marketing in order to attempt to generate more revenues, and
·
The cost of being a public company.
The Company currently generates its cash flow through operations which it believes will be sufficient to sustain the current level of operations for at least the next twelve months. During the nine month period ended March 31, 2015, the Companys cash flow from operations was reduced due to loss from operations.
38
Results of Operations (Audited) for the Year ended June 30, 2014 Compared to the Year ended June 30, 2013.
The following table sets forth key components of the Companys results of operations for the periods indicated in dollars. The discussion following the table addresses these results.
|
| June 30, 2014 |
|
| June 30, 2013 | ||
Revenues |
| $ | 501,948 |
|
| $ | 628,033 |
|
|
|
|
|
|
|
|
Operating Expenses |
|
|
|
|
|
|
|
Payroll and related expense |
|
| (354,489) |
|
|
| (359,815) |
Occupancy expense |
|
| (122,283) |
|
|
| (197,331) |
Depreciation expense |
|
| (15,790) |
|
|
| (24,848) |
General and administrative expense |
|
| (46,553) |
|
|
| (47,166) |
Total operating expenses |
|
| (539,115) |
|
|
| (629,160) |
Income (Loss) from Operations |
|
| (37,167) |
|
|
| (1,127) |
|
|
|
|
|
|
|
|
Other Income (Expense): |
|
|
|
|
|
|
|
Loss on asset disposal |
|
| (54,366) |
|
|
| - |
Interest income |
|
| 2,127 |
|
|
| 2,946 |
Interest charge |
|
| (163) |
|
|
| (4,969) |
Total other expense |
|
| (52,402) |
|
|
| (2,023) |
Loss before income tax expense |
|
| (89,659) |
|
|
| (3,150) |
|
|
|
|
|
|
|
|
Income tax expense |
|
| - |
|
|
| (2,471) |
Loss after income tax expense |
|
| (89,659) |
|
|
| (5,621) |
|
|
|
|
|
|
|
|
Foreign currency exchange adjustment |
|
| (3,324) |
|
|
| 17,729 |
|
|
|
|
|
|
|
|
Total Comprehensive Income |
| $ | (92,893) |
|
| $ | 12,108 |
Revenues
Revenues for fiscal year ended June 30, 2014 was $501,948 compared with $628,033 for fiscal year ended June 30, 2013. The decrease of $126,085 for current year is principally due to loss of revenues from the closure of a location in Plenty Valley, Victoria, which occurred in May 2013.
Operating Expenses
Payroll and related expenses was $354,489 for the current fiscal year compared with $359,815 for the prior fiscal year. Payroll and related expenses were relatively flat for both periods due to the same headcount during the two periods.
Depreciation expense was $15,790 for the current fiscal year compared with $24,848 for the prior fiscal year. The decrease of $9,058 for current year is due to write off of the assets of our closed location.
General and administrative expense was $46,553 for the current fiscal year compared with $47,166 for the prior fiscal year. General and administrative is comprised of utilities, supplies and miscellaneous expenses. The slight decrease in general and administrative expenses for current year is due to reduction in expenses due to the closure of the Plenty Valley location.
Other Income
Total other expense was $52,402 for the current year end period compared with $2,023 for the prior year end period. Substantially all of the difference is due a loss on asset disposal charge in the amount of $54,366 attributable to the closure of the Plenty Valley location which occurred in May 2013.
Loss from Operations
Loss from operations for the current year end is $89,659 compared with a loss of $3,150 due to reasons discussed above.
39
Foreign currency exchange adjustment was $(3,324) in fiscal year end 2014 compared with $17,729 for the prior fiscal year end. This adjustment is a result of unrealized profit or loss on conversion to U.S. dollars of assets and liabilities that are accounted for in Australian Dollars.
Total Comprehensive Income/Loss
Total Comprehensive Income for the current nine month period is $92,893 compared with a Total Comprehensive Income of $12,108 due to reasons discussed above
LIQUIDITY AND CAPITAL RESOURCES
At June 30, 2014, we had working capital deficit of $201,032 compared with working capital deficit of $181,013 for the prior year end. The decrease in working capital is principally a result a reduction in current assets and an increase in accrued and other liabilities. For the 2013 annual period, current assets included approximately $7,000 for an income tax refund that was paid during the 2013 period. We did not have a similar we receivable during the 2014 annual period. In addition, we incurred a $15,000 charge attributable to audit expenses during the 2014 annual period and we did not have a similar charge during the prior annual period.
Our primary uses of cash have been for operations. The main sources of cash have been from operational revenues. The following trends are reasonably likely to result in a material decrease in our liquidity over the near to long term:
·
Addition of administrative and marketing personnel as the business grows,
·
Development of a Company website,
·
Increases in advertising and marketing in order to attempt to generate more revenues, and
·
The cost of being a public company.
The Company currently generates its cash flow through operations which it believes will be sufficient to sustain the current level of operations for at least the next twelve months. During fiscal year 2014, the Companys cash flow from operations was negatively impacted slightly by competition from another operator that opened a facility near of our Point Cook location in January 2014.
Summary of Significant Accounting Policies
The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America and are presented in US dollars. The Companys fiscal year-end is June 30.
Use of Estimates and Assumptions
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. Actual results could differ from those estimates.
Foreign Currency Translation
The functional currency of our foreign subsidiary is its local currency. Assets and liabilities of the foreign subsidiary are translated into US dollars at period-end exchange rates, stockholders equity is translated at the historical rates and the consolidated statement of operations and cash flows are translated at average exchange rates during the reporting periods. Resulting translation adjustments are recorded in accumulated other comprehensive income, a separate component of stockholders equity. A component of accumulated other comprehensive income will be released into income when the Company executes a partial or complete sale of an investment in a foreign subsidiary or a group of assets of a foreign subsidiary considered a business and/or when the Company no longer holds a controlling financial interest in a foreign subsidiary or group of assets of a foreign subsidiary considered a business.
Transactions denominated in currencies other than the local currency are recorded based on exchange rates at the time such transactions arise. Subsequent changes in exchange rates result in foreign currency transaction gains and losses that are reflected in results of operations as unrealized (based on period end translation) and realized (upon settlement of the transactions) and reported under other general expenses in the consolidated statement of operations.
40
Fair Value of Financial Instrument
The Company's financial instruments exposed to concentrations of credit risk consist primarily of cash and cash equivalents. Cash and cash equivalents are held in several Australian bank accounts and time deposit accounts. The Company regularly assesses the level of credit risk we are exposed to and whether there are better ways of managing credit risk. The Company invests its cash and cash equivalents with reputable financial institutions. The Company has not incurred any losses related to these deposits.
Income Taxes
Potential benefits of income tax losses are not recognized in the accounts until realization is more likely than not. The Company has adopted ASC 740-10-50 Accounting for Income Taxes as of its inception. Pursuant to the standard, the Company is required to compute tax asset benefits for initial years of operating losses carried forward.
Basic and Diluted Net Income (Loss) Per Share
The Company computes net income (loss) per share in accordance with ASC 260-10-4-5, Earnings per Share. The standard requires presentation of both basic and diluted earnings per share (EPS) on the face of the income statement. Basic EPS is computed by dividing net income (loss) available to common shareholders (numerator) by the weighted average number of common shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period including stock options, using the treasury stock method, and convertible preferred stock, using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential common shares if their effect is anti-dilutive.
Recent Accounting Pronouncements
In February 2013, the FASB issued Accounting Standards Update ("ASU") No. 2013-02 which requires additional disclosures regarding the reporting of reclassifications out of accumulated other comprehensive income. ASU No. 2013-02 requires an entity to present, either on the face of the statement where net income is presented or in the notes, significant amounts reclassified out of accumulated other comprehensive income by the respective line items of net income, but only if the amount reclassified is required under GAAP to be reclassified to net income in its entirety in the same reporting period. This guidance is effective for reporting periods beginning after December 15, 2012. The Company adopted this guidance effective July 1, 2013. The Company's adoption of this standard did not have a significant impact on its consolidated financial statements.
In March 2013, the FASB issued ASU No. 2013-05, which permits an entity to release cumulative translation adjustments into net income when a reporting entity (parent) ceases to have a controlling financial interest in a subsidiary or group of assets that is a business within a foreign entity. Accordingly, the cumulative translation adjustment should be released into net income only if the sale or transfer results in the complete or substantially complete liquidation of a foreign subsidiary or foreign group of assets comprising a business. The Company's adoption of this standard did not have a significant impact on its consolidated financial statements.
In May 2014, the FASB issued ASU 2014-09, which establishes a comprehensive new revenue recognition standard designed to depict the transfer of goods or services to a customer in an amount that reflects the consideration the entity expects to receive in exchange for those goods or services. In doing so, companies may need to use more judgment and make more estimates than under current revenue recognition guidance. The ASU allows for the use of either the full or modified retrospective transition method, and the standard will be effective for us in the first quarter of our fiscal year 2018; early adoption is not permitted. The Company is currently evaluating which transition approach to use and the impact of the adoption of this standard on its consolidated financial statements.
There are no new significant accounting standards applicable to the Company that have been issued but not yet adopted by the Company as of June 30, 2015.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES
None
41
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
The following table sets forth the name, age, and position of sole executive officers and directors. Executive officers are elected annually by our Board of Directors. Each executive officer holds his office until he resigns, is removed by the Board, or his successor is elected and qualified. Directors are elected annually by our stockholders at the annual meeting. Each director holds his office until his successor is elected and qualified or his earlier resignation or removal.
NAME |
| AGE |
| POSITION |
Thomas Tang |
| 50 |
| Chief Executive Officer and President |
Rocco Scarpari |
| 65 |
| Chairman |
Allan Qiu |
| 29 |
| Chief Financial Officer and Director |
Nancy Yang |
| 32 |
| Secretary/Chief Marketing Officer and Director |
Xin Jin |
| 36 |
| Vice President/Director of Business Development |
Dr. Thomas Tang has been our President since 2008 and has been Chief Executive Officer since August 2014. He is a medical doctor licensed to practice in Australia. Dr. Tang graduated from Chinese Medical University, Guangzhou, China. In addition, since 2009, he has assisted in capital raising for a number of Chinese corporations and has substantial experience in international trade with China. Dr. Tang brings a wide range of business experience to our board of directors.
Rocco Scarpari has been our Chairman of the Board (a non officer position) since 2008. For the past 15 years, Mr. Scarpari has been the owner and operator of a small vineyard and orchard located in Mooroopna North, Victoria, Australia. Mr. Scarpari brings a wide range of business experience to our board of directors.
Mr. Allan Qiu has been our Chief Financial Officer and a Director since January 2014. From 2011 to 2014, he was Chief Financial Officer of Arem Marketing Corp., an affiliated Australian company. From 2009 to 2011, he was the personal assistant of the President of the Company. He graduated with a Masters in Marketing from Melbourne University. Mr. Qui brings to our Board of Directors knowledge of financial management.
Ms. Nancy Yang has been our Secretary and a Director since January 2014. From 2010 to the present, she has been Chief Marketing Director of the Company. From 2008 to 2009, she was a Visa and Evidencing Officer for the Chinese Embassy in Melbourne, Australia. She graduated with double Masters in Commerce and Business/ Information Technology from RMIT University, Australia. Ms. Yang brings to our Board of Directors several years of management, administration and quality control.
Mr. Xin Jin has been our Vice President/Director of Business Development since June 2013. From 2005 to 2013, he was sole officer and owner of Sanyi Group Pty Ltd. Mr. Jim received Bachelor of Commerce from Shandong University, China and Diploma of Accounting from Deakin University, Australia. He is directly responsible for managing the Companys physiotherapy wellness business.
Family Relationships
There are no family relationships among our directors or officers.
Involvement in Legal Proceedings
To the best of our knowledge, none of our directors or executive officers, during the past ten years, has been convicted in a criminal proceeding, excluding traffic violations or similar misdemeanors, or has been a party to any judicial or administrative proceeding during the past five years that resulted in a judgment, decree or final order enjoining the person from future violations of, or prohibiting activities subject to, federal or state securities laws, or a finding of any violation of federal or state securities laws, except for matters that were dismissed without sanction or settlement. Except as set forth in our discussion below in Certain Relationships and Related Transactions, none of our directors, director nominees or executive officers has been involved in any transactions with us or any of our directors, executive officers, affiliates or associates which are required to be disclosed pursuant to the rules and regulations of the Securities and Exchange Commission.
42
Director Independence
Our Board of Directors is currently composed of three members, whom do not qualify as an independent director in accordance with the published listing requirements of the NASDAQ Global Market (the Company has no plans to list on the NASDAQ Global Market). The NASDAQ independence definition includes a series of objective tests, such as that the directors are not, and have not been for at least three years, one of our employees and that neither the Director, nor any of their family members have engaged in various types of business dealings with us. In addition, our board of directors has not made a subjective determination as to our director that no relationship exist which, in the opinion of our board of directors, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director, though such subjective determination is required by the NASDAQ rules. Had our board of directors made these determinations, our board of directors would have reviewed and discussed information provided by our director and us with regard to our directors business and personal activities and relationships as they may relate to us and our management.
Code of Ethics
We currently do not have a code of ethics that applies to our officers, employees and directors, including our Chief Executive Officer and Chief Financial Officer; however, we intend to adopt one in the near future.
Conflicts of Interest
Since we do not have an audit or compensation committee comprised of independent directors, the functions that would have been performed by such committees are performed by our directors. The Board of Directors has not established an audit committee and does not have an audit committee financial expert, nor has the Board established a nominating committee. The Board is of the opinion that such committees are not necessary since the Company is an early stage company, and to date, such directors have been performing the functions of such committees. Thus, there is a potential conflict of interest in that our Directors and Officers have the authority to determine issues concerning management compensation, nominations, and audit issues that may affect management decisions.
Other than as described above, we are not aware of any other conflicts of interest of our executive Officers and Directors.
Involvement in Certain Legal Proceedings
There are no legal proceedings that have occurred since our incorporation concerning our Director, or control persons which involved a criminal conviction, a criminal proceeding, an administrative or civil proceeding limiting ones participation in the securities or banking industries, or a finding of securities or commodities law violations.
Our Officers and Directors have not received monetary compensation since our inception to the date of this prospectus. We currently do not pay any compensation to our Directors serving on our Board of Directors.
43
EXECUTIVE COMPENSATION
The following table sets forth information concerning all cash and non-cash compensation awarded to, earned by or paid to the named persons for services rendered in all capacities during the noted periods. No other executive officer received total annual salary and bonus compensation in excess of $100,000.
Name and Principal |
|
|
| Salary |
|
| Bonus |
| Stock Awards |
| Option Awards |
| All Other Compen- sation |
| Total |
Position |
| Year |
| ($) |
|
| ($) |
| ($) |
| ($) |
| ($) |
| ($) |
Thomas Tang (1) |
| 2015 |
| 0 |
|
| 0 |
| $3,281 |
| 0 |
| 0 |
| $3,281 |
President, and |
| 2014 |
| 0 |
|
| 0 |
| $---- |
| 0 |
| 0 |
| $---- |
Chief Executive Officer |
| 2013 |
| 0 |
|
| 0 |
| $---- |
| 0 |
| 0 |
| $---- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Xin Jin (2) |
| 2015 |
| 0 |
|
| 0 |
| $8,531 |
| 0 |
| 0 |
| $8,531 |
Vice President |
| 2014 |
| 0 |
|
| 0 |
| $3,754 |
| 0 |
| 0 |
| $3,754 |
|
| 2013 |
| 0 |
|
| 0 |
| $---- |
| 0 |
| 0 |
| $---- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rocco Scarpari (3) |
| 2015 |
| 0 |
|
| 0 |
| $2,756 |
| 0 |
| 0 |
| $2,756 |
Chairman of Board |
| 2014 |
| 0 |
|
| 0 |
| $696 |
| 0 |
| 0 |
| $696 |
|
| 2013 |
| 0 |
|
| 0 |
| $---- |
| 0 |
| 0 |
| $---- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nancy Yang (4) |
| 2015 |
| 0 |
|
| 0 |
| $2,625 |
| 0 |
| 0 |
| $2,625 |
Secretary and Director |
| 2014 |
| 0 |
|
| 0 |
| $2,638 |
| 0 |
| 0 |
| $2,638 |
|
| 2013 |
| 0 |
|
| 0 |
| $---- |
| 0 |
| 0 |
| $---- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allan Qiu (5) |
| 2015 |
| 0 |
|
| 0 |
| $1,040 |
| 0 |
| 0 |
| $1,040 |
Chief Financial Officer |
| 2014 |
| 0 |
|
| 0 |
| $262 |
| 0 |
| 0 |
| $262 |
(1)
Mr. Tang received 2,500,000 shares of common stock during fiscal year 2015. The shares were valued at $0.0013 per share.
(2)
Mr. Jin received 6,500,000 and 2,860,000 shares of common stock during fiscal year 2015 and 2014 respectively. The shares were valued at $0.0013 per share.
(3)
Mr Scarpari received 2,100,000 and 530,000 shares of common stock during fiscal year 2015 and 2014 respectively. The shares were valued at $0.0013 per share.
(4)
Ms Yang received 2,000,000 and 2,010,000 shares of common stock during fiscal year 2015 and 2014 respectively. The shares were valued at $0.0013 per share.
(5)
Mr. Qiu became Chief Financial Officer in January 2014. For fiscal years 2015 and 2014, Mr. Qiu received 800,000 and 200,000 shares of common stock respectively. The shares were valued at $0.0013 per share.
Employment Agreements
The Company does not have any employment or other compensation agreement with its executive officers. Moreover, there are no agreements or understandings for any of our executive officers or directors to resign at the request of another person and no officer or director is acting on behalf of nor will any of them act at the direction of any other person.
Grants of Plan-Based Awards
No plan-based awards were granted to any of our named executive officers during the fiscal year ended December 31, 2014.
Outstanding Equity Awards at Fiscal Year End
No unexercised options or warrants were held by any of our named executive officers at December 31, 2014. No equity awards were made during the fiscal year ended December 31, 2014.
Option Exercises and Stock Vested
No option to purchase our capital stock was exercised by any of our named executive officers, nor was any restricted stock held by such executive officers vested during the fiscal year ended December 31, 2014.
44
Pension Benefits
No named executive officers received or held pension benefits during the fiscal year ended December 31, 2014.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information, as of the date hereof, with respect to the beneficial ownership of the outstanding common stock by (i) any holder of more than five percent (5%); (ii) each of our executive officers and directors; and (iii) our directors and executive officers as a group. Except as otherwise indicated, each of the stockholders listed below has sole voting and investment power over the shares beneficially owned. The information is based on 228,003,081 shares of common stock issued and outstanding as of this date.
Name and Address of |
| Amount and Nature of |
| Percent of |
Beneficial Owner |
| Beneficial Ownership(1) |
| Class |
Officers and Directors | ||||
Thomas Tang(2) Chief Executive Officer, President and Chairman |
| 60,579,700 |
| 26.6% |
Rocco Scarpari(2) Chairman of Board |
| 2,630,500 |
| 1.2% |
Nancy Yang(2) Secretary and Director |
| 4,010,000 |
| 1.8% |
Allan Qui(2) Chief Financial Officer and Director |
| 1,000,000 |
| <1% |
Xin Jin Vice President |
| 19,410,000 |
| 8.6% |
All officers and directors as a group (5 persons) |
| 87,630,200 |
| 38.4% |
|
|
|
|
|
5% or greater shareholders | ||||
Chi Yuen (George) Leong(3) |
| 29,495,000 |
| 12.9% |
|
|
|
|
|
|
|
|
|
|
(1)
Beneficial Ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect to securities. Each of the beneficial owners listed above has ownership of and voting power and investment power with respect to our Common stock or Preferred Shares. For each beneficial owner above, any options exercisable within 60 days have been included in the denominator.
(2)
The address of each shareholder is the address of the Company.
(3)
The address of the shareholder is 803/483 Swanston Street, Melbourne, Victoria, Australia. Mr. Leong was a former Chief Executive Officer of the Company and retired in such capacity on August 16, 2014.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
During fiscal years 2015, 2014 and 2013, the Company made the following stock issuances to its officers and/or directors and greater than 10% holders;
2015
During fiscal year 2015, we issued (i) 2,500,000 shares of our common stock to our Chairman, Thomas Tang, (ii) 6,500,000 to our Vice President, Xin Jin, (iii) 2,100,000 shares of our common stock to Rocco Scarpari, our Chairman, (iv) 800,000 shares of our common stock to Mr. Allan Qiu, our Chief Financial Officer, (v) 2,500,000 shares of our common stock to Mr. George Leong, our former Chief Executive Officer, and (vi) 2,000,000 shares of our common stock to Nancy Yang, our secretary and Director. The shares were valued at $0.0013 per share.
45
2014
During fiscal year 2014,, we issued (i) 2,860,000 shares of common stock to our Vice President, Mr. Xin Jin, (ii) 200,000 shares of common stock to Mr. Allan Qiu, and (iii) 530,000 shares to Mr. Rocco Scarpari, our Chairman of the Board. The shares were valued at $0.0013 per share.
Other than stated above, none of the following persons has any direct or indirect material interest in any transaction to which we are a party since the beginning of fiscal year 2014 or in any proposed transaction to which we are proposed to be a party which in either case exceeds $120,000 (or 1% of the average of the Companys assets for the past 2 fiscal years):
·
Any of our directors or officers;
·
Any proposed nominee for election as our director;
·
Any person who beneficially owns or directly or indirectly, shares carrying more than 10% of the voting rights attached to our shares;
·
Any relative or spouse of any of the foregoing persons, or any relative of such spouse, who has the same house as such person or who is a director or officer of any parent or subsidiary of our company.
DESCRIPTION OF SECURITIES
Authorized Capital Stock
Our authorized capital stock consists of 500,000,000 shares of common stock, par value $0.000001 per share, and 10,000,000 shares of preferred stock, $0.000001 per share. As of July 7, 2015, there were 228,003,081 shares of our common stock issued and outstanding that was held by 541 stockholders of record and no shares of preferred stock issued and outstanding.
Common Stock
The holders of our common stock have equal ratable rights to dividends from funds legally available if and when declared by our board of directors and are entitled to share ratably in all of our assets available for distribution to holders of common stock upon liquidation, dissolution or winding up of our affairs. Our common stock does not provide the right to a preemptive, subscription or conversion rights and there are no redemption or sinking fund provisions or rights. Our common stock holders are entitled to one non-cumulative vote per share on all matters on which shareholders may vote.
We refer you to our Articles of Incorporation, Bylaws and the applicable statutes of the state of Delaware for a more complete description of the rights and liabilities of holders of our securities. All material terms of our common stock have been addressed in this section.
Holders of shares of our common stock do not have cumulative voting rights, which means that the holders of more than 50% of the outstanding shares, voting for the election of directors, can elect all of the directors to be elected, if they so choose, and, in that event, the holders of the remaining shares will not be able to elect any of our directors.
Preferred Stock
We are also authorized to issue 10,000,000 shares which have been established as the Series A Preferred Stock. Holders of our Series A Preferred Stock have 1,000 for 1 vote per share. No shares of our Preferred Stock are issued and outstanding. The ability of directors, without security holder approval, to issue shares of our Series A Preferred Stock could be used as an anti-takeover measure. Anti-takeover measures may result in you receiving less compensation for your stock.
46
Dividend Policy
It is unlikely that we will declare or pay cash dividends in the foreseeable future. We intend to retain earnings, if any, to expand our operations. To date, we have paid no dividends on our shares of common stock and have no present intention of paying any dividends on our shares of common stock in the foreseeable future. The payment by us of dividends on the shares of common stock in the future, if any, rests solely within the discretion of our board of directors and will depend upon, among other things, our earnings, capital requirements and financial condition, as well as other factors deemed relevant by our board of directors.
Equity Compensation Plan Information
We have no plans for establishing an equity compensation plan, but reserve the right to do so in the future.
Warrants and Options
There are no outstanding warrants or options to purchase our securities.
Anti-Takeover Provisions
Our articles of incorporation contain provisions that might have an anti-takeover effect. These provisions, which are summarized below, may have the effect of delaying, deterring or preventing a change in control of our company. They could also impede a transaction in which our stockholders might receive a premium over the then-current market price of our common stock and our stockholders ability to approve transactions that they consider to be in their best interests.
Our articles of incorporation permit our board of directors to issue preferred stock. We could authorize the issuance of a series of preferred stock which would grant to holders preferred rights to our assets upon liquidation, the right to receive dividend coupons before dividends would be declared to holders of shares of our existing preferred stock and our existing preferred stock and common stock. Our current stockholders have no redemption rights. In addition, as we have a large number of authorized but unissued shares, our board of directors could issue large blocks of voting stock to fend off unwanted tender offers or hostile takeovers without further stockholder approval.
Delaware Law Anti Takeover Provision
Section 203 of the Delaware General Corporation Law prevents some Delaware corporations from engaging, under some circumstances, in a business combination, which includes a merger or sale of at least 10% of the corporations assets with any interested stockholder, meaning a stockholder who, together with affiliates and associates, owns or, within three years prior to the determination of interested stockholder status, did own 15% or more of the corporations outstanding voting stock, unless:
·
the transaction is approved by the board of directors prior to the time that the interested stockholder became an interested stockholder;
·
upon consummation of the transaction which resulted in the stockholders becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, excluding stock owned by directors who are also officers of the corporation; or
·
subsequent to such time that the stockholder became an interested stockholder the business combination is approved by the board of directors and authorized at an annual or special meeting of stockholders by at least two-thirds of the outstanding voting stock which is not owned by the interested stockholder.
A Delaware corporation may opt out of these provisions with an express provision in its original certificate of incorporation or an express provision in its certificate of incorporation or bylaws resulting from a stockholders amendment approved by at least a majority of the outstanding voting shares. We have opted out of these provisions.
Transfer Agent
The transfer agent for our common stock is Interwest Stock Transfer, Inc., 1981 Murray Holladay Road, Suite 100, Salt Lake City, UT 84117, telephone: 801-272-9294.
47
SHARES ELIGIBLE FOR FUTURE SALE
Immediately after the effectiveness of this registration statement, we will have 13,858,392 shares of common will be freely tradable without restriction or further registration under the Securities Act, except for any shares purchased by one of our affiliates within the meaning of Rule 144 under the Securities Act. The remaining 214,144,689 shares, including 84,999,700 shares held by our insiders, are restricted securities under Rule 144, in that they were issued in private transactions not involving a public offering.
Rule 144
Pursuant to Rule 144, a person who has beneficially owned restricted shares of our common stock or warrants for at least six months would be entitled to sell his, her or its securities provided that (i) such person is not deemed to have been one of our affiliates at the time of, or at any time during the three months preceding, a sale and (ii) we are subject to the Exchange Act periodic reporting requirements for at least three months before the sale and have filed all required reports under Section 13 or 15(d) of the Exchange Act during the 12 months (or such shorter period as we were required to file reports) preceding the sale. However, Rule 144 is not available for the resale of securities initially issued by shell companies (other than business combination related shell companies) or issuers that have been at any time previously a shell company. Rule 144 does include an important exception to this prohibition if the following conditions are met:
·
the issuer of the securities that was formerly a shell company has ceased to be a shell company;
·
the issuer of the securities is subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act;
·
the issuer of the securities has filed all Exchange Act reports and material required to be filed, as applicable, during the preceding 12 months (or such shorter period that the issuer was required to file such reports and materials), other than Form 8-K reports; and
·
at least one year has elapsed from the time that the issuer filed current Form 10 type information with the SEC reflecting its status as an entity that is not a shell company.
As a result, the holders of the restricted shares will be able to sell their shares, pursuant to Rule 144 one year after the date of this registration statement. However, if they remain one of our affiliates, they will only be permitted to sell a number of securities that does not exceed the greater of:
·
1% of the total number of shares of common stock then outstanding, which will equal 65,625 shares immediately after this offering (or 75,234 shares if the underwriters overallotment option is exercised in full); or
·
the average weekly reported trading volume of the common stock during the four calendar weeks preceding the filing of a notice on Form 144 with respect to the sale.
Sales by our affiliates under Rule 144 would also be limited by manner of sale provisions and notice requirements and to the availability of current public information about us.
LEGAL MATTERS
The validity of the common stock offered by this prospectus will be passed upon for us by Daniel H. Luciano, Esq., 242A West Valley Brook Road, Califon, New Jersey 07830.
EXPERTS
SWHC Australia, an independent registered public accounting firm, audited our financial statements for the years ended June 30, 2014 and 2013, as set forth in report appearing herein. We have included our financial statements in this prospectus and elsewhere in the registration statement in reliance on the reports of SWHC Australia given on their authority as experts in accounting and auditing.
48
DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION FOR SECURITIES LIABILITIES
Our Bylaws and Certificate of Incorporation, subject to the provisions of Delaware Law, contain provisions which allow the corporation to indemnify any person against liabilities and other expenses incurred as the result of defending or administering any pending or anticipated legal issue in connection with service to us if it is determined that person acted in good faith and in a manner which he reasonably believed was in the best interest of the corporation. Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to our directors, officers and controlling persons, 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.
WHERE YOU CAN FIND MORE INFORMATION
We hereby file with the Commission a Registration Statement on Form S-1, under the Securities Act of 1933 with respect to the securities offered by this prospectus. This prospectus, which forms a part of the registration statement, does not contain all the information set forth in the registration statement, as permitted by the rules and regulations of the Commission. For further information with respect to us and the securities offered by this prospectus, reference is made to the registration statement. We do not file reports with the Securities and Exchange Commission, and we will not otherwise be subject to the proxy rules. The registration statement and other information may be read and copied at the Commissions Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. The public may obtain information on the operation of the Public Reference Room by calling the Commission at 1-800-SEC-0330. The Commission maintains a web site at http://www.sec.gov that contains reports and other information regarding issuers that file electronically with the Commission.
49
Independent Auditors Report
F-3
Consolidated Balance Sheets
F-5
Consolidated Statement of Operations
F-6
Consolidated Statement of Changes in Stockholders Equity
F-7
Consolidated Statements of Cash Flows
F-8
Notes to Consolidated Statements
F-9
Condensed Consolidated Balance Sheets for the nine months ended March 31, 2015 (unaudited)
F-23
Condensed Consolidated Statement of Operations for the nine months ended March 31, 2015(unaudited)
F-24
Condensed Consolidated Statement of Changes in Stockholders Deficit for the nine months ended
March 31, 2015(unaudited)
F-25
Condensed Consolidated Statements of Cash Flows for the nine months ended March 31, 2015(unaudited)
F-26
Notes to Condensed Unaudited Consolidated Statements
F-27
F-1
AREM PACIFIC CORPORATION
(FORMERLY DIVERSIFIED MORTGAGE WORKOUT CORPORATION)
CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIODS ENDED JUNE 30, 2014 AND 2013
F-2
INDEPENDENT AUDITORS REPORT
To the Board of Directors and Stockholders of
Arem Pacific Corporation
Delaware, Ohio
Report on the Consolidated Financial Statements
We have audited the accompanying consolidated financial statements of Arem Pacific Corporation and its subsidiaries, which comprise the consolidated balance sheets as of June 30, 2014 and 2013, and the consolidated statement of operations, consolidated statement of changes in stockholders equity, and consolidated statement of cash flows for the years then ended, and the related notes to the consolidated financial statements.
Managements Responsibility for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.
Auditors Responsibility
Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance with auditing standards, generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditors judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entitys preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entitys internal control. Accordingly, we express no such opinion.
An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
F-3
Opinion
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Arem Pacific Corporation and its subsidiaries as of June 30, 2014 and 2013, and the results of their operations and their cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.
/s/ SWHC Australia
SWHC Australia
Melbourne, Australia
August 28, 2015
F-4
AREM PACIFIC CORPORATION
Consolidated Balance Sheets
June 30, 2014 and 2013
Note | 2014 |
| 2013 | |
|
|
|
|
|
Assets |
|
|
|
|
Cash and cash equivalents | 4 | $29,673 |
| $27,446 |
Other assets | 5 | 39,497 |
| 35,845 |
Other receivable | 6 | 25,041 |
| 39,027 |
Total current assets |
| 94,211 |
| 102,318 |
|
|
|
|
|
Property, plant and equipment, net of accumulated depreciation | 7 | 140,472 |
| 189,795 |
Total assets |
| $234,683 |
| $292,113 |
Liabilities and Stockholders (Deficit)/Equity |
|
|
|
|
Liabilities |
|
|
|
|
Payroll taxes |
| $50,468 |
| $42,200 |
Accrued and other liabilities | 8 | 21,198 |
| 9,279 |
Borrowings | 9 | 223,577 |
| 231,852 |
Total current liabilities |
| 295,243 |
| 283,331 |
Total liabilities |
| 295,243 |
| 283,331 |
Stockholders (Deficit)/Equity |
|
|
|
|
Common stock |
| 117 |
| 116 |
Additional paid in capital | 10 | 23,550 |
| - |
Other comprehensive earnings | 11 | 14,405 |
| 17,729 |
Accumulated losses |
| (98,632) |
| (9,063) |
Total stockholders (deficit)/equity |
| (60,560) |
| 8,782 |
|
|
|
|
|
Total liabilities and stockholders (deficit)/equity |
| $234,683 |
| $292,113 |
|
|
|
|
|
The accompanying notes are an integral part of these consolidated financial statements.
F-5
AREM PACIFIC CORPORATION
Consolidated Statement of Operations
For the years ended June 30, 2014 and 2013
| Note | 2014 |
| 2013 |
Revenue |
| $501,948 |
| $628,033 |
|
|
|
|
|
Operating expenses |
|
|
|
|
Payroll and employee related expense |
| 354,489 |
| 359,815 |
Occupancy expenses |
| 122,283 |
| 197,331 |
Depreciation expense |
| 15,790 |
| 24,848 |
General and administrative expenses |
| 46,553 |
| 47,166 |
Total operating expenses |
| 539,115 |
| 629,160 |
|
|
|
|
|
Loss from operations |
| (37,167) |
| (1,127) |
|
|
|
|
|
Other income/(expenses) |
|
|
|
|
Loss on assets disposal | 7 | (54,366) |
| - |
Interest income |
| 2,127 |
| 2,946 |
Interest charge |
| (163) |
| (4,969) |
Total other expenses |
| (52,402) |
| (2,023) |
|
|
|
|
|
Loss from continuing operations before income tax expenses |
| (89,569) |
| (3,150) |
|
|
|
|
|
Income tax expense | 12 | - |
| 2,471 |
|
|
|
|
|
Loss after income tax expense for the year |
| (89,569) |
| (5,621) |
Other comprehensive (loss)/income |
|
|
|
|
Exchange differences arising on translation of foreign operations |
| (3,324) |
| 17,729 |
Other comprehensive (loss)/income |
| (3,324) |
| 17,729 |
|
|
|
|
|
Total comprehensive (loss)/income for the year |
| ($92,893) |
| $12,108 |
|
|
|
|
|
Net (loss)/income per share from net (loss)/income |
|
|
|
|
Basic and diluted |
| - |
| - |
|
|
|
|
|
Weighted average number of common stock outstanding |
|
|
|
|
Basic and diluted |
| 118,124,339 |
| 107,328,150 |
|
|
|
|
|
The accompanying notes are an integral part of these consolidated financial statements.
F-6
AREM PACIFIC CORPORATION
Consolidated Statement of Changes in Stockholders Equity
For the years ended June 30, 2014 and 2013
| Common Stock |
|
|
|
|
|
|
|
| |
| Shares | Amount |
| Additional Paid in Capital |
| Other Comprehensive Earnings |
| Accumulated Losses |
| Total (Deficit)/ Equity |
|
|
|
|
|
|
|
|
|
|
|
Balance at June 30, 2012 | 107,328,150 | $116 |
| - |
| - |
| ($3,442) |
| ($3,326) |
|
|
|
|
|
|
|
|
|
|
|
Loss after income tax expense for the year | - | - |
| - |
| - |
| (5,621) |
| (5,621) |
Other comprehensive income | - | - |
| - |
| 17,729 |
| - |
| 17,729 |
Total comprehensive income for the year | - | - |
| - |
| 17,729 |
| (5,621) |
| 12,108 |
|
|
|
|
|
|
|
|
|
|
|
Balance at June 30, 2013 | 107,328,150 | 116 |
| - |
| 17,729 |
| (9,063) |
| 8,782 |
|
|
|
|
|
|
|
|
|
|
|
Share issued | 17,943,020 | - |
| 23,550 |
| - |
| - |
| 23,550 |
|
|
|
|
|
|
|
|
|
|
|
Loss after income tax expense for the year | - | - |
| - |
| - |
| (89,569) |
| (89,569) |
Other comprehensive loss | - | - |
| - |
| (3,324) |
| - |
| (3,324) |
Total comprehensive loss for the year | - | - |
| - |
| (3,324) |
| (89,569) |
| (92,893) |
|
|
|
|
|
|
|
|
|
|
|
Recapitalization August 8, 2013 | 869,194 | 1 |
| - |
| - |
| - |
| 1 |
|
|
|
|
|
|
|
|
|
|
|
Balance at June 30, 2014 | 126,140,364 | $117 |
| $23,550 |
| $14,405 |
| ($98,632) |
| ($60,560) |
The accompanying notes are an integral part of these consolidated financial statements.
F-7
AREM PACIFIC CORPORATION
Consolidated Statement of Cash Flows
For the years ended June 30, 2014 and 2013
F-8
AREM PACIFIC CORPORATION
Notes to Consolidated Statements
1.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
1.1
Nature of Operations
Diversified Mortgage Workout Corporation was formed on June 10, 2008 and was initially a development stage corporation registered in Delaware targeting acquisition in the real estate industry. On August 8, 2013 Diversified Mortgage Workout Corporation acquired Arem Pacific Corporation, an Arizona company, and subsequently changed its name to Arem Pacific Corporation (a Delaware corporation) (the Company). The acquisition of Arem Pacific Corporation (Arizona) was accounted for as a reverse acquisition.
After the completion of the reverse acquisition Arem Pacific Corporation (Delaware) changed the focus of its business to holistic health services and conducts its operations of two outlets in Australia (Victoria) through Arem Pacific Corporation (Arizona) and its wholly owned subsidiary Sanyi Group Pty Ltd, an Australia operation, which was acquired by Arem Pacific Corporation (Arizona) on June 30, 2012.
Unless the context indicates otherwise, the term Group as used herein includes Arem Pacific Corporation (Delaware), Arem Pacific Corporation (Arizona) and Sanyi Group Pty Ltd.
1.2
Reverse Acquisition
A reverse acquisition occurs when the acquirer is the entity whose equity interests have been acquired and the issuing entity is the acquiree. Although legally the issuing entity is regarded as the parent and the private entity is regarded as the subsidiary, the legal subsidiary is the acquirer if it has the power to govern the financial and operating policies of the legal parent so as to obtain benefits from its activities.
In a reverse acquisition involving only the exchange of equity, the fair value of the equity of the accounting acquiree may be used to measure consideration transferred if the value of the accounting acquirees equity interests are more reliably measurable than the value of the accounting acquirers equity interest.
On August 8, 2013, pursuant to the terms of a Stock Exchange Agreement, Diversified Mortgage Workout Corporation acquired all of the issued and outstanding shares of common stock of Arem Pacific Corporation, an Arizona company, in exchange for the issuance of 107,328,150 newly issued shares of Diversified Mortgage Workout Corporation common stock to the shareholders of Arem Pacific Corporation (Arizona). This acquisition resulted in Arem Pacific Corporation (Arizona) becoming a wholly-owned subsidiary of Diversified Mortgage Workout Corporation. Subsequent to the acquisition, Diversified Mortgage Workout Corporation changed its name to Arem Pacific Corporation. This transaction is reflected as a recapitalization, and its accounted for as a change in capital structure. Accordingly, the accounting for the acquisition is identical to that resulting from a reverse acquisition. Under reverse acquisition accounting, the comparative historical financial statements of the Company as the legal acquirer are those of the accounting acquirer, Arem Pacific Corporation (Arizona). The accompanying financial statements reflect the recapitalization of the stockholders equity as if the transactions occurred as of the beginning of the first period presented. Thus, the shares of common stock issued to the former Arem Pacific Corporation (Arizona) stockholders are deemed to be outstanding for all periods reported prior to the date of the reverse acquisition.
F-9
AREM PACIFIC CORPORATION
Notes to Consolidated Statements
1.3
Basis of Accounting
The accompanying financial statements include the accounts of Arem Pacific Corporation (Arizona) and its wholly owned subsidiary Sanyi Group Pty Ltd which is a company domiciled in Australia. These financial statements have been prepared in accordance with the accounting principles generally accepted in the United States (GAAP) and Regulation S-X published by the US Securities and Exchange Commission (the SEC). All intercompany accounts and transactions have been eliminated. Certain prior year amounts have been reclassified to conform to the current year presentation. Such reclassifications had no effect on the prior year net income, accumulated deficit, net assets, or total shareholders' deficit or equity. The Company has evaluated events or transactions through the date of issuance of this report in conjunction with the preparation of these consolidated financial statements. All amounts presented are in US dollars, unless otherwise noted.
The financial statements, except for cash flow information, have been prepared on an accruals basis and are based on historical costs, modified, where applicable, by the measurement at fair value of selected non-current assets, financial assets and financial liabilities. The amounts presented in the financial statements have been rounded to the nearest dollar.
1.4
Going Concern Basis
The financial statements have been prepared on the going concern basis, which assumes continuity of normal business activities and the realisation of assets and the settlement of liabilities in the ordinary course of business.
At June 30, 2014 the Company had a current asset deficiency of $201,032 and a net asset deficiency of $60,560 (2013 current asset deficiency of $181,013 and surplus of assets of $8,782). The Company reported an after tax loss of $89,569 for the year (2013 after tax loss: $5,621).
Despite the current asset and net asset deficiency, the Company has prepared the financial statements on a going concern basis that contemplates the continuity of normal business activity, realisation of assets and settlement of liabilities at the amounts recorded in the financial statements in the ordinary course of business.
The Company believes that there are reasonable grounds to support the fact that it will be able to pay its debts as and when they become due and payable. In forming this opinion, the Company has considered the following factors:
(i)
As at June 30, 2014, $223,577 of the borrowings was owed to Xin Jin, a significant shareholder and an officer of the Company and the Director of its wholly owned subsidiary Sanyi Group Pty Ltd.
(ii)
The Directors of the Company have received a Letter of Support from Xin Jin, in which he offers to provide continuing financial support to Sanyi Group Pty Ltd to enable it to meet its liabilities as and when they become due and payable for a period of not less than twelve months from the date of the financial statements. The loan of $223,577 as at June 30, 2014 to Sanyi Group Pty Ltd will not be called upon without giving at least 13 months notice.
(iii)
The Company has been able to generate positive cash flows from operating activities for the past two years ended June 30, 2014.
If the Company is unable to continue as a going concern it may be required to realise its assets and extinguish its liabilities other than in the ordinary course of business at amounts different from those stated in the financial statements.
F-10
AREM PACIFIC CORPORATION
Notes to Consolidated Statements
The financial statements do not include adjustments relating to the recoverability and classification of recorded asset amounts or to the amounts and classification of liabilities that might be necessary should the company not continue as a going concern.
1.5
Use of Estimates
The preparation of consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
1.6
Foreign Currency Translation
The functional currency of our foreign subsidiary is its local currency. Assets and liabilities of the foreign subsidiary are translated into US dollars at period-end exchange rates, stockholders equity is translated at the historical rates and the consolidated statement of operations and cash flows are translated at average exchange rates during the reporting periods. Resulting translation adjustments are recorded in accumulated other comprehensive income, a separate component of stockholders equity. A component of accumulated other comprehensive income will be released into income when the Company executes a partial or complete sale of an investment in a foreign subsidiary or a group of assets of a foreign subsidiary considered a business and/or when the Company no longer holds a controlling financial interest in a foreign subsidiary or group of assets of a foreign subsidiary considered a business.
Transactions denominated in currencies other than the local currency are recorded based on exchange rates at the time such transactions arise. Subsequent changes in exchange rates result in foreign currency transaction gains and losses that are reflected in results of operations as unrealized (based on period end translation) and realized (upon settlement of the transactions) and reported under other general expenses in the consolidated statement of operations.
1.7
Cash and Cash Equivalents and Concentration of Credit Risk
The Company considers all highly liquid short term investments with original maturities of three months or less at the date of acquisition to be cash equivalents. The carrying value of cash and cash equivalents approximates fair value due to the short term nature of these instruments.
The Company's financial instruments exposed to concentrations of credit risk consist primarily of cash and cash equivalents. Cash and cash equivalents are held in several Australian bank accounts and time deposit accounts. The Company regularly assesses the level of credit risk we are exposed to and whether there are better ways of managing credit risk. The Company invests its cash and cash equivalents with reputable financial institutions. The Company has not incurred any losses related to these deposits.
1.8
Accounts Receivable
The collectability of accounts receivable is continuously monitored and analysed based upon historical experience. The use of judgment is required to establish a provision for allowance for doubtful accounts for specific customer collection issues identified. The allowance for doubtful accounts was $0 as of Jun 30, 2014 and 2013 respectively.
F-11
AREM PACIFIC CORPORATION
Notes to Consolidated Statements
1.9
Property and Equipment
Property and equipment are recorded at cost. Costs of renewal and improvements that substantially extend the useful lives of assets are capitalised. Maintenance and repair costs are expensed when incurred. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets, which range from two to ten years.
Derecognition
An item of plant and equipment is derecognised upon disposal or when no further economic benefits are expected from its use or disposal.
1.10
Leases
Leases of fixed assets, where substantially all the risks and benefits incidental to the ownership of the asset but not the legal ownership are transferred to entities in the consolidated group, are classified as finance leases.
Finance leases are capitalised by recognising an asset and a liability at the lower of the amounts equal to the fair value of the leased property or the present value of the minimum lease payments, including any guaranteed residual values. Lease payments are allocated between the reduction of the lease liability and the lease interest expense for the period.
Leased assets are depreciated on a straight-line basis over the shorter of their estimated useful lives or the lease term.
Lease payments for operating leases, where substantially all the risks and benefits remain with the lessor, are recognised as expenses on a straight-line basis over the lease term.
1.11
Payables
Payables are carried at amortised cost and, due to their short-term nature, they are not discounted. They represent liabilities for goods and services provided to the Group prior to the end of the financial year that are unpaid and arise when the Group becomes obliged to make future payments in respect of the purchase of these goods and services. The amounts are unsecured and are usually paid within 30 days of recognition.
1.12
Provisions
Provisions are recognised when the Group has a legal or constructive obligation, as a result of past events, for which it is probable that an outflow of economic benefits will result and that outflow can be reliably measured. Provisions are measured using the best estimate of the amounts required to settle the obligation at the end of the reporting period.
1.13
Loans and Borrowings
All loans and borrowings are initially recognised at cost, being the fair value of the consideration received net of issue costs associated with the borrowing.
F-12
AREM PACIFIC CORPORATION
Notes to Consolidated Statements
After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the effective interest method. Amortised cost is calculated by taking into account any issue costs, and any discount or premium on settlement.
The Companys current liabilities include a loan from a shareholder which are not interest bearing. The shareholder has agreed that the loan to the Company will not be recalled without giving at least 13 months notice from the date the Directors adopt the annual financial statements.
Loans are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the reporting date.
1.14
Revenue Recognition
Revenue is measured at the fair value of the consideration received or receivable after taking into account any discounts.
The Company derives revenue primarily through the provision of therapeutic health services from its Oriental Holistic Health Centres. Revenue is recognized when persuasive evidence of an arrangement exists, the services have been rendered to customers, the pricing is fixed or determinable and collection is reasonably assured. This is generally based on the completion of services provided to the customers at the Oriental Holistic Health Centres and settlement of the transactions either by cash or credit card payments.
Interest revenue is recognised using the effective interest method, which for floating rate financial assets is the rate inherent in the instrument. Dividend revenue is recognised when the right to receive a dividend has been established.
All revenue is stated net of the amount of goods and services tax.
1.15
Income Tax
Taxes payable is based on taxable profit for the year which excludes items of income or expense that are taxable or deductible in other years. Taxable profit also excludes items that are never taxable or deductible. Companys liability for current tax is calculated using tax rates that have been enacted or substantively enacted as of the balance sheet date.
Deferred income tax expense is calculated using the liability method in accordance with ASC 740 Income Taxes. Deferred tax assets and liabilities are classified as non-current in the balance sheet and are measured based on the difference between the carrying value of assets and liabilities for financial reporting and their tax basis when such differences are considered temporary in nature. Temporary differences related to intercompany profits are deferred using the buyers tax rate. Deferred tax assets are reviewed for recoverability every balance sheet date, and the amount probable of recovery is recognised.
Deferred income tax expense represents the change in deferred tax asset and liability balances during the year except for the deferred tax related to items recognised in other comprehensive income or resulting from a business combination or disposal. Changes resulting from amendments and revisions in tax laws and tax rates are recognised when the new tax laws or rates become effective or are substantively enacted. Uncertain tax positions are recognised in the financial statements based on managements expectations.
F-13
AREM PACIFIC CORPORATION
Notes to Consolidated Statements
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities, when they related to income taxes levied by the same taxation authority, and when the Group intends to settle its current tax assets and liabilities on a net basis.
Deferred taxes are not provided on undistributed earnings of subsidiaries when the timing of the reversal of this temporary difference is controlled by Company and is not expected to happen in the foreseeable future. This is applicable for the majority of Companys subsidiaries.
1.16
Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not recoverable from the Australian Taxation Office (ATO).
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST recoverable from, or payable to, the ATO is included with other receivables or payables in the statement of financial position.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities, which are recoverable from or payable to the ATO, are presented as operating cash flows included in receipts from customers or payments to suppliers.
1.17
Earnings (Loss) per Common Share
Basic earnings (loss) per common share is computed by dividing income or losses available to common shareholders by the weighted average number of common shares outstanding for the period. Diluted earnings (loss) per common share is computed similar to basic net income or losses per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if all the potential common shares, warrants and stock options had been issued and of the additional common shares were dilutive. Diluted earnings (loss) per common share is based on the assumption that all dilutive convertible shares and stock options were converted or exercised. Dilution is computed by applying the treasury stock method for the outstanding options and the if-converted method for the outstanding convertible preferred shares. Under the treasury stock method, options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period. Under if converted method, convertible outstanding instruments are assumed to be converted into common stock at the beginning of the period (or at the time of issuance, if later).
1.18
Accumulated Other Comprehensive Income (Loss)
Comprehensive income (loss) is presented net of applicable income taxes in the accompanying consolidated statements of stockholders' equity and comprehensive income (loss). Other comprehensive income (loss) is comprised of revenues, expenses, gains, and losses that under GAAP are reported as separate components of stockholders' equity instead of net income (loss).
F-14
AREM PACIFIC CORPORATION
Notes to Consolidated Statements
1.19
Recently Issued Accounting Standards
In February 2013, the FASB issued Accounting Standards Update ("ASU") No. 2013-02 which requires additional disclosures regarding the reporting of reclassifications out of accumulated other comprehensive income. ASU No. 2013-02 requires an entity to present, either on the face of the statement where net income is presented or in the notes, significant amounts reclassified out of accumulated other comprehensive income by the respective line items of net income, but only if the amount reclassified is required under GAAP to be reclassified to net income in its entirety in the same reporting period. This guidance is effective for reporting periods beginning after December 15, 2012. The Company adopted this guidance effective July 1, 2013. The Company's adoption of this standard did not have a significant impact on its consolidated financial statements.
In March 2013, the FASB issued ASU No. 2013-05, which permits an entity to release cumulative translation adjustments into net income when a reporting entity (parent) ceases to have a controlling financial interest in a subsidiary or group of assets that is a business within a foreign entity. Accordingly, the cumulative translation adjustment should be released into net income only if the sale or transfer results in the complete or substantially complete liquidation of a foreign subsidiary or foreign group of assets comprising a business. The Company's adoption of this standard did not have a significant impact on its consolidated financial statements.
In May 2014, the FASB issued ASU 2014-09, which establishes a comprehensive new revenue recognition standard designed to depict the transfer of goods or services to a customer in an amount that reflects the consideration the entity expects to receive in exchange for those goods or services. In doing so, companies may need to use more judgment and make more estimates than under current revenue recognition guidance. The ASU allows for the use of either the full or modified retrospective transition method, and the standard will be effective for us in the first quarter of our fiscal year 2018; early adoption is not permitted. The Company is currently evaluating which transition approach to use and the impact of the adoption of this standard on its consolidated financial statements.
There are no new significant accounting standards applicable to the Company that have been issued but not yet adopted by the Company as of June 30, 2014.
2.
Critical Accounting Estimates and Judgements
The Directors evaluate estimates and judgements incorporated into the financial statements based on historical knowledge and best available current information. Estimates assume a reasonable expectation of future events and are based on current trends and economic data, obtained both externally and within the Company.
Key Estimates
(i)
Useful lives
The Company determines the estimated useful lives and related depreciation and amortisation charges for its property, plant and equipment and finite life intangible assets. The useful lives could change significantly as a result of technical innovations or some other event. The depreciation and amortisation charge will increase where the useful lives are less than previously estimated lives, or technically obsolete or non-strategic assets that have been abandoned or sold will be written off or written down.
F-15
AREM PACIFIC CORPORATION
Notes to Consolidated Statements
(ii)
Income tax
The Company is subject to income taxes in the jurisdictions in which it operates. Significant judgement is required in determining the provision for income tax. There are many transactions and calculations undertaken during the ordinary course of business for which the ultimate tax determination is uncertain. The Company recognises liabilities for anticipated tax audit issues based on the Company's current understanding of the tax law. Where the final tax outcome of these matters is different from the carrying amounts, such differences will impact the current and deferred tax provisions in the period in which such determination is made.
Key Judgements
(i)
Provision for impairment of receivables
The provision for impairment of receivables assessment requires a degree of estimation and judgement. The level of provision is assessed by taking into account the recent sales experience, the ageing of receivables, historical collection rates and specific knowledge of the individual debtors financial position.
(ii)
Impairment
The Company assessed that no indicators of impairment existed at the reporting date and as such no impairment testing was performed.
(iii)
Fair value measure of shares issued
The calculation of the fair value of shares issued requires significant estimate to be made in regards to several variables. The estimations made are subject to variability that may alter the overall fair value determined.
3.
Segment Information
The consolidated entity operates predominantly in one industry and one geographical segment, those being oriental holistic health services and Australia, respectively.
4.
Cash and Cash Equivalents
Cash at the end of the financial year end periods as shown in the statement of cash flows is reconciled to items in the balance sheets as follows:
| 2014 | 2013 |
Cash at bank | $22,480 | $21,043 |
Petty Cash | 7,193 | 6,403 |
| $29,673 | $27,446 |
F-16
AREM PACIFIC CORPORATION
Notes to Consolidated Statements
5.
Other Assets
| 2014 | 2013 |
Current |
|
|
Deposits paid | $39,497 | $35,845 |
6.
Other Receivable
| 2014 | 2013 |
Current |
|
|
Prepayment | $6,157 | $19 |
Refundable from the Australian Taxation Office | 18,884 | 39,008 |
| $25,041 | $39,027 |
7.
Property, Plant and Equipment
| Furniture and fittings | Office equipment | Computers | Motor vehicles | Plant and equipment | Lease Improvements | Total |
At cost |
|
|
|
|
|
|
|
Balance at July 1, 2012 | $3,223 | $898 | - | $83,060 | $20,989 | $251,360 | $359,530 |
Additions | - | - | - | - | - | - | - |
Disposals | - | - | - | - | - | - | - |
Balance at June 30, 2013 | 3,223 | 898 | - | 83,060 | 20,989 | 251,360 | 359,530 |
Additions | - | - | 12,939 | - | - | 7,894 | 20,833 |
Disposals | - | - | - | - | (857) | (91,192) | (92,049) |
Balance at June 30, 2014 | 3,223 | 898 | 12,939 | 83,060 | 20,132 | 168,062 | 288,314 |
|
|
|
|
|
|
|
|
Accumulated depreciation and amortization |
|
|
|
|
|
|
|
Balance at July 1, 2012 | (1,411) | (848) | - | (44,202) | (8,684) | (89,742) | (144,887) |
Depreciation expense | (242) | (19) | - | (5,586) | (2,745) | (16,256) | (24,848) |
Disposals | - | - | - | - | - | - | - |
Balance at June 30, 2013 | (1,653) | (867) | - | (49,788) | (11,429) | (105,998) | (169,735) |
Depreciation expense | (186) | (10) | (1,573) | (4,229) | (1,666) | (8,126) | (15,790) |
Disposals | - | - | - | - | 437 | 37,246 | 37,683 |
Balance at June 30, 2014 | ($1,839) | ($877) | ($1,573) | ($54,017) | ($12,658) | ($76,878) | ($147,842) |
|
|
|
|
|
|
|
|
Net book value |
|
|
|
|
|
|
|
As at June 30, 2013 | $1,570 | $31 | - | $33,272 | $9,560 | $145,362 | $189,795 |
As at June 30, 2014 | $1,384 | $21 | $11,366 | $29,043 | $7,474 | $91,184 | $140,472 |
F-17
AREM PACIFIC CORPORATION
Notes to Consolidated Statements
8.
Accrued and Other Liabilities
| 2014 | 2013 |
Current |
|
|
Payroll liabilities | $13,317 | $4 |
Other payables | 7,881 | 9,275 |
| $21,198 | $9,279 |
9.
Borrowings
| 2014 | 2013 |
Current |
|
|
Lease liability | - | $5,224 |
Loan from related party | 223,577 | 226,628 |
| $223,577 | $231,852 |
Included in the loan balance above is an unsecured loan from Xin Jin, a significant shareholder and an officer of the Company and the Director of its wholly owned subsidiary Sanyi Group Pty Ltd. The loan bears nil interest per annum.
10.
Common Stock
During the year ended 30 June 2014, the Company has issued 17,943,020 shares of the Company stock for $23,550 to individual investors. Shares are measured at fair value at the grant dates. The fair value at grant date is determined using managements estimate and fair value measurement process.
11.
Other Comprehensive Earnings
| 2014 | 2013 |
Foreign currency translation reserve | $14,405 | $17,729 |
F-18
AREM PACIFIC CORPORATION
Notes to Consolidated Statements
12.
Income Tax Expense
| 2014 | 2013 |
(a) The components of tax (expense)/income comprise: |
|
|
Current tax |
|
|
- Australia | - | $2,471 |
- US | - | - |
Total | - | $2,471 |
|
|
|
Deferred tax |
|
|
- Australia | - | - |
- US | - | - |
Total | - | - |
|
|
|
(b) The prima facie tax on profit from ordinary activities before income tax is reconciled to income tax as follows: |
|
|
Loss from continuing operations before income tax expense |
|
|
- Australia | ($89,569) | ($3,150) |
- US | - | - |
Total | ($89,569) | ($3,150) |
|
|
|
Income tax credit at statutory rate: |
|
|
- Australia | ($26,871) | ($945) |
- US | - | - |
Total | (26,871) | (945) |
|
|
|
Add: |
|
|
Tax effect of: |
|
|
Amounts which are not deductible in calculating taxable income | - | $2,471 |
Tax losses not recognised as deferred tax assets | 26,871 | 945 |
Consolidated income tax expense | - | $2,471 |
F-19
AREM PACIFIC CORPORATION
Notes to Consolidated Statements
13.
Auditors Remuneration
| 2014 | 2013 |
Auditor of the Company |
|
|
Audit of the financial report | $9,187 | $10,271 |
Non audit services | 4,593 | - |
| $13,780 | $10,271 |
The auditor of the company is SWHC Australia.
14.
Capital and Leasing Commitments
There was no capital expenditure at June 30, 2014.
The following table summarizes the Companys future minimum leasing commitments under non-cancellable operating leases at June 30, 2014:
| Total |
Amounts payable in fiscal year |
|
2015 | $67,795 |
2016 | 71,212 |
2017 | 74,716 |
2018 | 78,481 |
2019 | 82,405 |
2020 | 11,623 |
| $386,231 |
15.
Contingencies
From time to time, the Company is involved in routine litigation that arises in the ordinary course of business. There are no pending significant legal proceedings to which the Company is a party for which management believes the ultimate outcome would have a material adverse effect on the Companys financial position.
16.
Related Party Transactions
(a)
Parent entity
The ultimate parent entity which exercises control over the Group is Arem Pacific Corporation (Delaware).
F-20
AREM PACIFIC CORPORATION
Notes to Consolidated Statements
(b)
Subsidiary
Upon closing of the reverse acquisition on August 8, 2013, Arem Pacific Corporation (Arizona) became a wholly owned subsidiary of Arem Pacific Corporation (a Delaware company, formerly Diversified Mortgage Workout Corporation).
Sanyi Group Pty Ltd is a wholly owned subsidiary of Arem Pacific Corporation (Arizona) which is incorporated in Australia.
(c)
Outstanding balances with related parties
The following balances are outstanding at reporting date in relation to transactions with related parties:
| 2014 | 2013 |
Loan from related party | $223,577 | $226,628 |
Included in the loan balance above is an unsecured loan from Xin Jin, a significant shareholder and an officer of the Company and the Director of its wholly owned subsidiary Sanyi Group Pty Ltd.
17.
Events After the Reporting Period
During the period between July 1, 2014 and the date of these financial statements, the Company issued a total of 100,332,717 shares of common stock.
Apart from the matter mentioned above, there has not arisen in the interval between the end of the financial period and the date of these financial statements any other item, transaction or event of a material and unusual nature likely, in the opinion of the Directors of the Company, to affect significantly the operation of the Company, the results of those operations, or the state of affairs of the Company, in future financial years.
F-21
AREM PACIFIC CORPORATION
(FORMERLY DIVERSIFIED MORTGAGE WORKOUT CORPORATION)
CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED MARCH 31 2015
F-22
AREM PACIFIC CORPORATION
Condensed Consolidated Balance Sheets
|
| At March 31, |
| At June 30, |
| Note | 2015 |
| 2014 |
|
| (unaudited) |
| (audited) |
Assets |
|
|
|
|
Cash and cash equivalents | 4 | $30,975 |
| $29,673 |
Other assets | 5 | 32,009 |
| 39,497 |
Other receivable | 6 | 21,233 |
| 25,041 |
Total current assets |
| 84,217 |
| 94,211 |
|
|
|
|
|
Property, plant and equipment, net of accumulated depreciation | 7 | 126,742 |
| 140,472 |
Total assets |
| $210,959 |
| $234,683 |
Liabilities and Stockholders Deficit |
|
|
|
|
Liabilities |
|
|
|
|
Payroll taxes |
| $28,597 |
| $50,468 |
Accrued and other liabilities | 8 | 32,968 |
| 21,198 |
Borrowings related party | 9 | 166,405 |
| 223,577 |
Total current liabilities |
| 227,970 |
| 295,243 |
Total liabilities |
| 227,970 |
| 295,243 |
Stockholders Deficit |
|
|
|
|
Common stock |
| 117 |
| 117 |
Additional paid in capital | 10 | 107,998 |
| 23,550 |
Other Comprehensive earnings | 11 | 50,164 |
| 14,405 |
Accumulated losses |
| (175,290) |
| (98,632) |
Total stockholders deficit |
| (17,011) |
| (60,560) |
|
|
|
|
|
Total liabilities and stockholders deficit |
| $210,959 |
| $234,683 |
|
|
|
|
|
The accompanying notes are an integral part of these condensed unaudited consolidated financial statements.
F-23
AREM PACIFIC CORPORATION
Condensed Consolidated Statement of Operations
For the nine months ended March 31, 2015 and 2104
|
| 9 months ended March 31, | ||
| Note | 2015 |
| 2014 |
|
| (unaudited) |
| (unaudited) |
Revenue | $381,993 |
| $387,631 | |
|
|
|
|
|
Operating expenses |
|
|
|
|
Payroll and employee related expense |
| 253,701 |
| 216,578 |
Occupancy expenses |
| 90,341 |
| 90,846 |
Depreciation expense |
| 13,730 |
| 10,515 |
Marketing expenses |
| 67,302 |
| - |
General and administrative expenses |
| 34,660 |
| 26,142 |
Total operating expenses |
| 459,734 |
| 344,081 |
|
|
|
|
|
(Loss)/income from operations |
| (77,741) |
| 43,550 |
|
|
|
|
|
Other income/(expenses) |
|
|
|
|
Loss on assets disposal |
| - |
| (54,366) |
Interest income |
| 1,083 |
| 518 |
Total other income/ (expenses) |
| 1,083 |
| (53,848) |
|
|
|
|
|
Loss from continuing operations before income tax expenses |
| (76,658) |
| (10,298) |
|
|
|
|
|
Income tax expense | 12 | - |
| - |
|
|
|
|
|
Loss after income tax expense for the period |
| (76,658) |
| (10,298) |
Other comprehensive income/(loss) |
|
|
|
|
Exchange differences arising on translation of foreign operations |
| 35,759 |
| (16,588) |
Other comprehensive income/(loss) |
| 35,759 |
| (16,588) |
|
|
|
|
|
Total comprehensive loss for the period |
| ($40,899) |
| ($26,886) |
|
|
|
|
|
Net income/(loss) per share from net income/(loss) |
|
|
|
|
Basic and diluted |
| - |
| - |
Weighted average number of common stock outstanding |
|
|
|
|
Basic and diluted |
| 148,724,434 |
| 91,661,112 |
The accompanying notes are an integral part of these condensed unaudited consolidated financial statements.
F-24
AREM PACIFIC CORPORATION
Condensed Consolidated Statement of Changes in Stockholders Deficit
For the nine months ended March 31, 2015
| Common Stock |
|
|
|
|
|
|
|
| |
| Shares | Amount |
| Additional Paid in Capital |
| Other Comprehensive Earnings |
| Accumulated Losses |
| Total Deficit |
|
|
|
|
|
|
|
|
|
|
|
Balance at June 30, 2014 | 126,140,364 | $117 |
| $23,550 |
| $ 14,405 |
| ($98,632) |
| ($60,560) |
|
|
|
|
|
|
|
|
|
|
|
Share issued | 64,341,717 | - |
| 84,448 |
| - |
| - |
| 84,448 |
|
|
|
|
|
|
|
|
|
|
|
Loss after income tax expense for the period (unaudited) | - | - |
| - |
| - |
| (76,658) |
| (76,658) |
Other comprehensive income (unaudited) | - | - |
| - |
| 35,759 |
| - |
| 35,759 |
Total comprehensive loss for the period (unaudited) | - | - |
| - |
| 35,759 |
| (76,658) |
| (40,899) |
|
|
|
|
|
|
|
|
|
|
|
Balance at March 31, 2015 | 190,482,081 | $117 |
| $107,998 |
| $50,164 |
| ($175,290) |
| ($17,011) |
The accompanying notes are an integral part of these condensed unaudited consolidated financial statements.
F-25
AREM PACIFIC CORPORATION
Condensed Consolidated Statement of Cash Flows
For the nine months ended March 31, 2015 and 2014
| 9 months ended March 31, |
| ||
| 2015 |
| 2014 |
|
| (unaudited) |
| (unaudited) |
|
Cash flows from operating activities: |
|
|
|
|
Net loss | ($76,658) |
| ($10,298) |
|
Adjustments to reconcile net income/ (loss) to net cash provided by operating activities: |
|
|
|
|
Depreciation | 13,730 |
| 10,515 |
|
Loss on assets disposal | - |
| 54,366 |
|
Net changes in operating assets and liabilities |
|
|
|
|
Decrease in other receivable | 3,808 |
| 12,031 |
|
Increase/(decrease) in other payable and accrued liabilities | (10,101) |
| 13,825 |
|
Net cash (used in)/provided by operating activities | (69,221) |
| 80,439 |
|
Cash flows from investing activities |
|
|
|
|
Acquisition of property, plant and equipment | - |
| (12,939) |
|
Net cash used in investing activities | - |
| (12,939) |
|
Cash flows from financing activities |
|
|
|
|
Proceed from issuance of stock | 84,448 |
| - |
|
Debt repayments | (16,601) |
| (38,392) |
|
Lease repayments | - |
| (5,224) |
|
Bank guarantee | - |
| (2,818) |
|
Net cash provided by/(used in) financing activities | 67,847 |
| (46,434) |
|
Effect of exchange rate changes on cash and cash equivalents | 2,676 |
| 150 |
|
Net increase in cash and cash equivalents | 1,302 |
| 21,216 |
|
Cash and cash equivalents at the beginning of period | 29,673 |
| 27,446 |
|
Cash and cash equivalents at the end of period | $30,975 |
| $48,662 |
|
|
|
|
|
|
The accompanying notes are an integral part of these condensed unaudited consolidated financial statements. |
|
F-26
AREM PACIFIC CORPORATION
Notes to Condensed Unaudited Consolidated Statements
1.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
1.1
Nature of Operations
Diversified Mortgage Workout Corporation was formed on June 10, 2008 and was initially a development stage corporation registered in Delaware targeting acquisition in the real estate industry. On August 8, 2013 Diversified Mortgage Workout Corporation acquired Arem Pacific Corporation, an Arizona company, and subsequently changed its name to Arem Pacific Corporation (a Delaware corporation) (the Company). The acquisition of Arem Pacific Corporation (Arizona) was accounted for as a reverse acquisition.
After the completion of the reverse acquisition Arem Pacific Corporation (Delaware) changed the focus of its business to holistic health services and conducts its operations of two outlets in Australia (Victoria) through Arem Pacific Corporation (Arizona) and its wholly owned subsidiary Sanyi Group Pty Ltd, an Australia operation, which was acquired by Arem Pacific Corporation (Arizona) on June 30, 2012.
Unless the context indicates otherwise, the term Group as used herein includes Arem Pacific Corporation (Delaware), Arem Pacific Corporation (Arizona) and Sanyi Group Pty Ltd.
1.2
Reverse Acquisition
A reverse acquisition occurs when the acquirer is the entity whose equity interests have been acquired and the issuing entity is the acquiree. Although legally the issuing entity is regarded as the parent and the private entity is regarded as the subsidiary, the legal subsidiary is the acquirer if it has the power to govern the financial and operating policies of the legal parent so as to obtain benefits from its activities.
In a reverse acquisition involving only the exchange of equity, the fair value of the equity of the accounting acquiree may be used to measure consideration transferred if the value of the accounting acquirees equity interests are more reliably measurable than the value of the accounting acquirers equity interest.
On August 8, 2013, pursuant to the terms of a Stock Exchange Agreement, Diversified Mortgage Workout Corporation acquired all of the issued and outstanding shares of common stock of Arem Pacific Corporation, an Arizona company, in exchange for the issuance of 107,328,150 newly issued shares of Diversified Mortgage Workout Corporation common stock to the shareholders of Arem Pacific Corporation (Arizona). This acquisition resulted in Arem Pacific Corporation (Arizona) becoming a wholly-owned subsidiary of Diversified Mortgage Workout Corporation. Subsequent to the acquisition, Diversified Mortgage Workout Corporation changed its name to Arem Pacific Corporation. This transaction is reflected as a recapitalization, and its accounted for as a change in capital structure. Accordingly, the accounting for the acquisition is identical to that resulting from a reverse acquisition. Under reverse acquisition accounting, the comparative historical financial statements of the Company as the legal acquirer are those of the accounting acquirer, Arem Pacific Corporation (Arizona). The accompanying financial statements reflect the recapitalization of the stockholders equity as if the transactions occurred as of the beginning of the first period presented. Thus, the shares of common stock issued to the former Arem Pacific Corporation (Arizona) stockholders are deemed to be outstanding for all periods reported prior to the date of the reverse acquisition.
F-27
AREM PACIFIC CORPORATION
Notes to Condensed Unaudited Consolidated Statements
1.3
Basis of Accounting
The accompanying financial statements include the accounts of Arem Pacific Corporation (Arizona) and its wholly owned subsidiary Sanyi Group Pty Ltd which is a company domiciled in Australia. These financial statements have been prepared in accordance with the accounting principles generally accepted in the United States (GAAP) and Regulation S-X published by the US Securities and Exchange Commission (the SEC). All intercompany accounts and transactions have been eliminated. Certain prior period amounts have been reclassified to conform to the current period presentation. Such reclassifications had no effect on the prior period net income, accumulated deficit, net assets, or total shareholders' deficit. The Company has evaluated events or transactions through the date of issuance of this report in conjunction with the preparation of these consolidated financial statements. All amounts presented are in US dollars, unless otherwise noted.
The financial statements, except for cash flow information, have been prepared on an accruals basis and are based on historical costs, modified, where applicable, by the measurement at fair value of selected non-current assets, financial assets and financial liabilities. The amounts presented in the financial statements have been rounded to the nearest dollar.
1.4
Going Concern Basis
The financial statements have been prepared on the going concern basis, which assumes continuity of normal business activities and the realisation of assets and the settlement of liabilities in the ordinary course of business.
At March 31, 2015 the Company had a current asset deficiency of $143,753 and a net asset deficiency of $17,011 (June 30, 2014 current asset deficiency of $201,032 and net asset deficiency of $60,560). The Company reported an after tax loss of $76,658 for the nine months ended March 31, 2015 (31 March 2014 loss: $10,298).
Despite the current asset and net asset deficiency, the Company has prepared the financial statements on a going concern basis that contemplates the continuity of normal business activity, realisation of assets and settlement of liabilities at the amounts recorded in the financial statements in the ordinary course of business.
The Company believes that there are reasonable grounds to support the fact that it will be able to pay its debts as and when they become due and payable. In forming this opinion, the Company has considered the following factors:
(i)
As at March 31, 2015, $166,405 of the borrowings was owed to Xin Jin, a significant shareholder and an officer of the Company and the Director of its wholly owned subsidiary Sanyi Group Pty Ltd.
(ii)
The Directors of the Company have received a Letter of Support from Xin Jin, in which he offers to provide continuing financial support to Sanyi Group Pty Ltd to enable it to meet its liabilities as and when they become due and payable for a period of not less than twelve months from the date of the financial statements. The loan of $166,405 as at March 31, 2015 to Sanyi Group Pty Ltd will not be called upon without giving at least 13 months notice.
(iii)
The Company has been able to generate positive cash flows from operating activities for the nine months ended March 31, 2015 and March 31, 2014.
If the Company is unable to continue as a going concern it may be required to realise its assets and extinguish its liabilities other than in the ordinary course of business at amounts different from those stated in the financial statements.
F-28
AREM PACIFIC CORPORATION
Notes to Condensed Unaudited Consolidated Statements
The financial statements do not include adjustments relating to the recoverability and classification of recorded asset amounts or to the amounts and classification of liabilities that might be necessary should the company not continue as a going concern.
1.5
Use of Estimates
The preparation of consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
1.6
Foreign Currency Translation
The functional currency of our foreign subsidiary is its local currency. Assets and liabilities of the foreign subsidiary are translated into US dollars at period-end exchange rates, stockholders equity is translated at the historical rates and the consolidated statement of operations and cash flows are translated at average exchange rates during the reporting periods. Resulting translation adjustments are recorded in accumulated other comprehensive income, a separate component of stockholders equity. A component of accumulated other comprehensive income will be released into income when the Company executes a partial or complete sale of an investment in a foreign subsidiary or a group of assets of a foreign subsidiary considered a business and/or when the Company no longer holds a controlling financial interest in a foreign subsidiary or group of assets of a foreign subsidiary considered a business.
Transactions denominated in currencies other than the local currency are recorded based on exchange rates at the time such transactions arise. Subsequent changes in exchange rates result in foreign currency transaction gains and losses that are reflected in results of operations as unrealized (based on period end translation) and realized (upon settlement of the transactions) and reported under other general expenses in the consolidated statement of operations.
1.7
Cash and Cash Equivalents and Concentration of Credit Risk
The Company considers all highly liquid short term investments with original maturities of three months or less at the date of acquisition to be cash equivalents. The carrying value of cash and cash equivalents approximates fair value due to the short term nature of these instruments.
The Company's financial instruments exposed to concentrations of credit risk consist primarily of cash and cash equivalents. Cash and cash equivalents are held in several Australian bank accounts and time deposit accounts. The Company regularly assesses the level of credit risk we are exposed to and whether there are better ways of managing credit risk. The Company invests its cash and cash equivalents with reputable financial institutions. The Company has not incurred any losses related to these deposits.
1.8
Accounts Receivable
The collectability of accounts receivable is continuously monitored and analysed based upon historical experience. The use of judgment is required to establish a provision for allowance for doubtful accounts for specific customer collection issues identified. The allowance for doubtful accounts was $0 as of March 31, 2015 and June 30, 2014 respectively.
F-29
AREM PACIFIC CORPORATION
Notes to Condensed Unaudited Consolidated Statements
1.9
Property and Equipment
Property and equipment are recorded at cost. Costs of renewal and improvements that substantially extend the useful lives of assets are capitalised. Maintenance and repair costs are expensed when incurred. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets, which range from two to ten years.
Derecognition
An item of plant and equipment is derecognised upon disposal or when no further economic benefits are expected from its use or disposal.
1.10
Leases
Leases of fixed assets, where substantially all the risks and benefits incidental to the ownership of the asset but not the legal ownership are transferred to entities in the consolidated group, are classified as finance leases.
Finance leases are capitalised by recognising an asset and a liability at the lower of the amounts equal to the fair value of the leased property or the present value of the minimum lease payments, including any guaranteed residual values. Lease payments are allocated between the reduction of the lease liability and the lease interest expense for the period.
Leased assets are depreciated on a straight-line basis over the shorter of their estimated useful lives or the lease term.
Lease payments for operating leases, where substantially all the risks and benefits remain with the lessor, are recognised as expenses on a straight-line basis over the lease term.
1.11
Payables
Payables are carried at amortised cost and, due to their short-term nature, they are not discounted. They represent liabilities for goods and services provided to the Group prior to the end of the financial period that are unpaid and arise when the Group becomes obliged to make future payments in respect of the purchase of these goods and services. The amounts are unsecured and are usually paid within 30 days of recognition.
1.12
Provisions
Provisions are recognised when the Group has a legal or constructive obligation, as a result of past events, for which it is probable that an outflow of economic benefits will result and that outflow can be reliably measured. Provisions are measured using the best estimate of the amounts required to settle the obligation at the end of the reporting period.
1.13
Loans and Borrowings
All loans and borrowings are initially recognised at cost, being the fair value of the consideration received net of issue costs associated with the borrowing.
F-30
AREM PACIFIC CORPORATION
Notes to Condensed Unaudited Consolidated Statements
After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the effective interest method. Amortised cost is calculated by taking into account any issue costs, and any discount or premium on settlement.
The Companys current liabilities include a loan from a shareholder which are not interest bearing. The shareholder has agreed that the loan to the Company will not be recalled without giving at least 13 months notice from the date the Directors adopt the annual financial statements.
Loans are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the reporting date.
1.14
Revenue Recognition
Revenue is measured at the fair value of the consideration received or receivable after taking into account any discounts.
The Company derives revenue primarily through the provision of therapeutic health services from its Oriental Holistic Health Centres. Revenue is recognized when persuasive evidence of an arrangement exists, the services have been rendered to customers, the pricing is fixed or determinable and collection is reasonably assured. This is generally based on the completion of services provided to the customers at the Oriental Holistic Health Centres and settlement of the transactions either by cash or credit card payments.
Interest revenue is recognised using the effective interest method, which for floating rate financial assets is the rate inherent in the instrument. Dividend revenue is recognised when the right to receive a dividend has been established.
All revenue is stated net of the amount of goods and services tax.
1.15
Income Tax
Taxes payable is based on taxable profit for the period which excludes items of income or expense that are taxable or deductible in other periods. Taxable profit also excludes items that are never taxable or deductible. Companys liability for current tax is calculated using tax rates that have been enacted or substantively enacted as of the balance sheet date.
Deferred income tax expense is calculated using the liability method in accordance with ASC 740 Income Taxes. Deferred tax assets and liabilities are classified as non-current in the balance sheet and are measured based on the difference between the carrying value of assets and liabilities for financial reporting and their tax basis when such differences are considered temporary in nature. Temporary differences related to intercompany profits are deferred using the buyers tax rate. Deferred tax assets are reviewed for recoverability every balance sheet date, and the amount probable of recovery is recognised.
Deferred income tax expense represents the change in deferred tax asset and liability balances during the period except for the deferred tax related to items recognised in other comprehensive income or resulting from a business combination or disposal. Changes resulting from amendments and revisions in tax laws and tax rates are recognised when the new tax laws or rates become effective or are substantively enacted. Uncertain tax positions are recognised in the financial statements based on managements expectations.
F-31
AREM PACIFIC CORPORATION
Notes to Condensed Unaudited Consolidated Statements
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities, when they related to income taxes levied by the same taxation authority, and when the Group intends to settle its current tax assets and liabilities on a net basis.
Deferred taxes are not provided on undistributed earnings of subsidiaries when the timing of the reversal of this temporary difference is controlled by Company and is not expected to happen in the foreseeable future. This is applicable for the majority of Companys subsidiaries.
1.16
Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not recoverable from the Australian Taxation Office (ATO).
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST recoverable from, or payable to, the ATO is included with other receivables or payables in the statement of financial position.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities, which are recoverable from or payable to the ATO, are presented as operating cash flows included in receipts from customers or payments to suppliers.
1.17
Earnings (Loss) per Common Share
Basic earnings (loss) per common share is computed by dividing income or losses available to common shareholders by the weighted average number of common shares outstanding for the period. Diluted earnings (loss) per common share is computed similar to basic net income or losses per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if all the potential common shares, warrants and stock options had been issued and of the additional common shares were dilutive. Diluted earnings (loss) per common share is based on the assumption that all dilutive convertible shares and stock options were converted or exercised. Dilution is computed by applying the treasury stock method for the outstanding options and the if-converted method for the outstanding convertible preferred shares. Under the treasury stock method, options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period. Under if converted method, convertible outstanding instruments are assumed to be converted into common stock at the beginning of the period (or at the time of issuance, if later).
1.18
Accumulated Other Comprehensive Income (Loss)
Comprehensive income (loss) is presented net of applicable income taxes in the accompanying consolidated statements of stockholders' equity and comprehensive income (loss). Other comprehensive income (loss) is comprised of revenues, expenses, gains, and losses that under GAAP are reported as separate components of stockholders' equity instead of net income (loss).
1.19
Recently Issued Accounting Standards
In February 2013, the FASB issued Accounting Standards Update ("ASU") No. 2013-02 which requires additional disclosures regarding the reporting of reclassifications out of accumulated other comprehensive income. ASU No. 2013-02 requires an entity to present, either on the face of the statement where net income is presented or in the notes, significant amounts reclassified out of accumulated other comprehensive income by the respective line items of net income, but only if the amount reclassified is required under GAAP to be reclassified to net income in its entirety in the same reporting period. This guidance is effective for reporting periods beginning after December 15, 2012. The Company adopted this guidance effective July 1, 2013. The Company's adoption of this standard did not have a significant impact on its consolidated financial statements.
F-32
AREM PACIFIC CORPORATION
Notes to Condensed Unaudited Consolidated Statements
In March 2013, the FASB issued ASU No. 2013-05, which permits an entity to release cumulative translation adjustments into net income when a reporting entity (parent) ceases to have a controlling financial interest in a subsidiary or group of assets that is a business within a foreign entity. Accordingly, the cumulative translation adjustment should be released into net income only if the sale or transfer results in the complete or substantially complete liquidation of a foreign subsidiary or foreign group of assets comprising a business. The Company's adoption of this standard did not have a significant impact on its consolidated financial statements.
In May 2014, the FASB issued ASU 2014-09, which establishes a comprehensive new revenue recognition standard designed to depict the transfer of goods or services to a customer in an amount that reflects the consideration the entity expects to receive in exchange for those goods or services. In doing so, companies may need to use more judgment and make more estimates than under current revenue recognition guidance. The ASU allows for the use of either the full or modified retrospective transition method, and the standard will be effective for us in the first quarter of our fiscal year 2018; early adoption is not permitted. The Company is currently evaluating which transition approach to use and the impact of the adoption of this standard on its consolidated financial statements.
There are no new significant accounting standards applicable to the Company that have been issued but not yet adopted by the Company as of June 30, 2014.
2.
Critical Accounting Estimates and Judgements
The Directors evaluate estimates and judgements incorporated into the financial statements based on historical knowledge and best available current information. Estimates assume a reasonable expectation of future events and are based on current trends and economic data, obtained both externally and within the Company.
Key Estimates
(i)
Useful lives
The Company determines the estimated useful lives and related depreciation and amortisation charges for its property, plant and equipment and finite life intangible assets. The useful lives could change significantly as a result of technical innovations or some other event. The depreciation and amortisation charge will increase where the useful lives are less than previously estimated lives, or technically obsolete or non-strategic assets that have been abandoned or sold will be written off or written down.
(ii)
Income tax
The Company is subject to income taxes in the jurisdictions in which it operates. Significant judgement is required in determining the provision for income tax. There are many transactions and calculations undertaken during the ordinary course of business for which the ultimate tax determination is uncertain. The Company recognises liabilities for anticipated tax audit issues based on the Company's current understanding of the tax law. Where the final tax outcome of these matters is different from the carrying amounts, such differences will impact the current and deferred tax provisions in the period in which such determination is made.
F-33
AREM PACIFIC CORPORATION
Notes to Condensed Unaudited Consolidated Statements
(iii)
Fair value measure of shares issued
The calculation of the fair value of shares issued requires significant estimate to be made in regards to several variables. The estimations made are subject to variability that may alter the overall fair value determined.
Key Judgements
(i)
Provision for impairment of receivables
The provision for impairment of receivables assessment requires a degree of estimation and judgement. The level of provision is assessed by taking into account the recent sales experience, the ageing of receivables, historical collection rates and specific knowledge of the individual debtors financial position.
(ii)
Impairment
The Company assessed that no indicators of impairment existed at the reporting date and as such no impairment testing was performed.
3.
Segment Information
The consolidated entity operates predominantly in one industry and one geographical segment, those being oriental holistic health services and Australia, respectively.
4.
Cash and Cash Equivalents
Cash at the end of the financial periods as shown in the statement of cash flows is reconciled to items in the balance sheets as follows:
| March 31, 2015 | June 30, 2014 |
Cash at bank | $28,176 | $22,480 |
Petty Cash | 2,799 | 7,193 |
| $30,975 | $29,673 |
5.
Other Assets
| March 31, 2015 | June 30, 2014 |
Current |
|
|
Deposits paid | $32,009 | $39,497 |
6.
Other Receivable
| March 31, 2015 | June 30, 2014 |
Current |
|
|
Prepayment | $5,641 | $6,157 |
Refundable from the Australian Taxation Office | 15,592 | 18,884 |
| $21,233 | $25,041 |
F-34
AREM PACIFIC CORPORATION
Notes to Condensed Unaudited Consolidated Statements
7.
Property, Plant and Equipment
| Furniture and fittings | Office equipment | Computers | Motor vehicles | Plant and equipment | Lease Improvements | Total |
At cost |
|
|
|
|
|
|
|
Balance at July 1, 2014 | $3,223 | $898 | $12,939 | $83,060 | $20,132 | $168,062 | $288,314 |
Additions | - | - | - | - | - | - | - |
Disposals | - | - | - | - | - | - | - |
Balance at March 31, 2015 | 3,223 | 898 | 12,939 | 83,060 | 20,132 | 168,062 | 288,314 |
|
|
|
|
|
|
|
|
Accumulated depreciation and amortization |
|
|
|
|
|
|
|
Balance at July 1, 2014 | (1,839) | (877) | (1,573) | (54,017) | (12,658) | (76,878) | (147,842) |
Depreciation expense | (113) | (5) | (3,865) | (2,502) | (903) | (6,342) | (13,730) |
Disposals | - | - | - | - | - | - | - |
Balance at March 31, 2015 | ($1,952) | ($882) | ($5,438) | ($56,519) | ($13,561) | ($83,220) | ($161,572) |
|
|
|
|
|
|
|
|
Net book value |
|
|
|
|
|
|
|
As at June 30, 2014 | $1,384 | $21 | $11,366 | $29,043 | $7,474 | $91,184 | $140,472 |
As at March 31, 2015 | $1,271 | $16 | $7,501 | $26,541 | $6,571 | $84,842 | $126,742 |
8.
Accrued and Other Liabilities
| March 31, 2015 | June 30, 2014 |
Current |
|
|
Payroll liabilities | $18,100 | $13,317 |
Other payables | 14,868 | 7,881 |
| $32,968 | $21,198 |
9.
Borrowings
| March 31, 2015 | June 30, 2014 |
Current |
|
|
Loan from related party | $166,405 | $223,577 |
Included in the loan balance above is an unsecured loan from Xin Jin, a significant shareholder and an officer of the Company and the Director of its wholly owned subsidiary Sanyi Group Pty Ltd. The loan bears nil interest per annum.
10.
Common Stock
During the nine months period ended 31 March 2015, the Company has issued 64,341,717 shares of the Company stock for $84,448 to individual investors. Shares are measured at fair value at the grant dates. The fair value at grant date is determined using managements estimate and fair value measurement process.
F-35
AREM PACIFIC CORPORATION
Notes to Condensed Unaudited Consolidated Statements
11.
Other Comprehensive Earnings
| March 31, 2015 | June 30, 2014 |
Foreign currency translation reserve | $50,164 | $14,405 |
12.
Income Tax Expense
F-36
AREM PACIFIC CORPORATION
Notes to Condensed Unaudited Consolidated Statements
13.
Capital and Leasing Commitments
There was no capital expenditure at March 31, 2015.
The following table summarizes the Companys future minimum leasing commitments under non-cancellable operating leases at March 31, 2015:
| Total |
Amounts payable in fiscal year |
|
2015 | $16,875 |
2016 | 71,212 |
2017 | 74,716 |
2018 | 78,481 |
2019 | 82,405 |
2020 | 11,623 |
| $335,312 |
14.
Contingencies
From time to time, the Company is involved in routine litigation that arises in the ordinary course of business. There are no pending significant legal proceedings to which the Company is a party for which management believes the ultimate outcome would have a material adverse effect on the Companys financial position.
15.
Related Party Transactions
(a)
Parent entity
The ultimate parent entity which exercises control over the Group is Arem Pacific Corporation.
(b)
Subsidiary
Upon closing of the reverse acquisition on August 8, 2013, Arem Pacific Corporation (Arizona) became a wholly owned subsidiary of Arem Pacific Corporation (a Delaware company, formerly Diversified Mortgage Workout Corporation).
Sanyi Group Pty Ltd is a wholly owned subsidiary of Arem Pacific Corporation (Arizona) which is incorporated in Australia.
(c)
Outstanding balances with related parties
The following balances are outstanding at reporting date in relation to transactions with related parties:
| March 31, 2015 | June 30, 2014 |
Loan from related party | $ 166,405 | $ 223,577 |
Included in the loan balance above is an unsecured loan from Xin Jin, a significant shareholder and an officer of the Company and the Director of its wholly owned subsidiary Sanyi Group Pty Ltd.
F-37
AREM PACIFIC CORPORATION
Notes to Condensed Unaudited Consolidated Statements
16.
Events After the Reporting Period
On June 9, 2015, the Company issued a total of 35,991,000 shares of common stock.
Apart from the matter mentioned above, there has not arisen in the interval between the end of the financial period and the date of these financial statements any other item, transaction or event of a material and unusual nature likely, in the opinion of the Directors of the Company, to affect significantly the operation of the Company, the results of those operations, or the state of affairs of the Company, in future financial years.
F-38
PART II - INFORMATION NOT REQUIRED IN PROSPECTUS
Item 13. Other Expenses of Issuance and Distribution
The following table sets forth the estimated expenses in connection with the issuance and distribution of the securities being registered hereby. All such expenses will be borne by the Company; none shall be borne by any selling security holders.
Item | Amount ($) |
SEC Registration Fee | 79.82 |
Transfer Agent Fees | 1,000.00 |
Legal Fees | 20,000.00 |
Accounting Fees | 10,000.00 |
EDGAR Format | 1,000.00 |
Miscellaneous | 1,000.00 |
TOTAL | 33,079.82 |
Item 14. Indemnification of Directors and Officers
Section 145 of the Delaware General Corporation Law, or DGCL, provides that a corporation may indemnify directors and officers as well as other employees and individuals against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement in connection with any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, in which such person is made a party by reason of the fact that the person is or was a director, officer, employee or agent of the corporation (other than an action by or in the right of the corporation - a "derivative action"), if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the corporation and, with respect to any criminal action or proceeding, had no reasonable cause to believe such person's conduct was unlawful. A similar standard is applicable in the case of derivative actions, except that indemnification only extends to expenses (including attorneys' fees) incurred in connection with the defense or settlement of such action, and the statute requires court approval before there can be any indemnification where the person seeking indemnification has been found liable to the corporation. The statute provides that it is not exclusive of other indemnification that may be granted by a corporation's by-laws, disinterested director vote, stockholder vote, agreement or otherwise.
Pursuant to Article XI of our original Articles of Incorporation, we are authorized to provide indemnification of (and advancement of expenses to) directors, officers, employees and agents if such person acted in good faith and in a manner reasonably believed to be in the best interests of the company. (and any other persons to which Delaware law permits us to provide indemnification) through bylaw provisions, agreements with such agents or other persons, vote of stockholders or disinterested directors or otherwise, in excess of the indemnification and advancement otherwise permitted by Section 145 of the DGCL, subject only to limits created by applicable Delaware law (statutory or non-statutory), with respect to action for breach of duty to us, our stockholders and others. The termination of such action, including if by convictions, shall not in and of itself create a presumption that such party did not act in good faith. The rights conferred on any person by this section shall not be exclusive of any other rights which such person may have or hereafter acquire under any by-law, agreement, vote of the stockholders or disinterested directors or otherwise.
Pursuant to Article V of our Bylaws, the Company shall, to the maximum extent permitted by the DGCL shall indemnify any officer and director who was or is a party to any threaten, pending, or completed action, whether criminal or civil, administrative or investigative by reason of the fact that he is or was a direction or officer of the Company, against expenses (including attorneys' fees), judgments, fines, and amounts paid in settlement actually and reasonably incurred in connection with any threatened, pending or completed action, suit, or proceeding in which such person was or is a party or is threatened to be made a party by reason of the fact that such person is or was a director or officer of the Company, provided that such party acted in good faith and in the manner reasonably believed to be in the best interest of the Company. .Such benefit shall inure to the heirs, executors and administrators of any officer and director. The rights conferred on any person by the Bylaws shall not be exclusive of any other rights which such person may have or hereafter acquire under any law, agreement,
1
vote of the stockholders or otherwise. Any repeal or modification of this section of the Bylaws, to the extent permitted by law, shall not adversely affect any right or protection hereunder of any person in respect of any act or omission occurring prior to the time of such repeal or modification.
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers or persons controlling us pursuant to the foregoing provisions, we have been informed that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is theretofore unenforceable.
Item 15. Recent Sales of Unregistered Securities
On June 9, 2015, the Company issued a total of 35,991,000 shares of common stock to 41 persons. This issuance includes 2,500,000 shares issued to the Companys chairman. The offer and sale of the securities was effected under Regulation S promulgated under the Securities Act, as amended, as each such shareholder is a non-US Person, was not acquiring the shares on behalf of a US Person, and will not sell the shares unless pursuant to a registration statement or an available exemption.
On May 1, 2015, the Company issued a total of 1,000,000 shares of common stock to MIG Network International SDN BHD. The offer and sale of the securities was effected under Regulation S promulgated under the Securities Act, as amended, as each such shareholder is a non-US Person, was not acquiring the shares on behalf of a US Person, and will not sell the shares unless pursuant to a registration statement or an available exemption.
On March 18, 2015, the Company issued a total of 25,512,707 shares of common stock to 18. The offer and sale of the securities was effected under Regulation S promulgated under the Securities Act, as amended, as each such shareholder is a non-US Person, was not acquiring the shares on behalf of a US Person, and will not sell the shares unless pursuant to a registration statement or an available exemption.
On December 18, 2014, the Company issued a total of 22,618,933 shares of common stock to 36 persons. The offer and sale of the securities was effected under Regulation S promulgated under the Securities Act, as amended, as each such shareholder is a non-US Person, was not acquiring the shares on behalf of a US Person, and will not sell the shares unless pursuant to a registration statement or an available exemption.
On October 8, 2014, the Company issued a total of 8,000,000 shares of common stock to OPL Capital Limited. The offer and sale of the securities was effected under Regulation S promulgated under the Securities Act, as amended, as each such shareholder is a non-US Person, was not acquiring the shares on behalf of a US Person, and will not sell the shares unless pursuant to a registration statement or an available exemption.
On July 14, 2014, the Company issued a total of 8,170,000 shares of common stock to 24 persons. The offer and sale of the securities was effected under Regulation S promulgated under the Securities Act, as amended, as each such shareholder is a non-US Person, was not acquiring the shares on behalf of a US Person, and will not sell the shares unless pursuant to a registration statement or an available exemption.
On January 10, 2014, the Company issued a total of 460,000 shares of common stock to 16 persons. The offer and sale of the securities was effected under Regulation S promulgated under the Securities Act, as amended, as each such shareholder is a non-US Person, was not acquiring the shares on behalf of a US Person, and will not sell the shares unless pursuant to a registration statement or an available exemption.
On September 30, 2013, December 20, 2013 and March 28, 2014, the Company issued 1,000,000, 4,000,000 and 3,000,000 shares of common stock, respectively to a consultant of the Company. The offer and sale of the securities was effected in reliance on Section 4(a)(2) of the Securities Act, as amended, because the consultant has pre-existing relationship with the officers of the Company and had access to all company information. In addition, the shares of common stock received were issued as restricted securities and all certificates issued contained a legend stating the shares have not been registered under the Securities Act and setting forth or referring to the restrictions on transferability and the sale of the shares under the Securities Act.
2
On August 8, 2013, the Company completed a Share Exchange Agreement with Arem Pacific Corporation, an Arizona corporation (Arem-Arizona), pursuant to which each shareholder of Arem Arizona exchange their shares in Arem Arizona for common stock in the Company. Pursuant to that transaction, we issued 107,328,150 shares of common stock to 60 shareholders of Arem Arizona. The offer and sale of the securities was effected under Regulation S promulgated under the Securities Act, as amended, as each such shareholder is a non-US Person, was not acquiring the shares on behalf of a US Person, and will not sell the shares unless pursuant to a registration statement or an available exemption.
Item 16. Undertakings
The undersigned Registrant hereby undertakes:
(1)
To file, during any period in which offers or sales of securities are being made, a post-effective amendment to this registration statement to:
(i)
Include any prospectus required by Section 10(a)(3) of the Securities Act of 1933;
(ii)
To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) (§230.424(b) of this chapter) if, in the aggregate, the changes in volume and price represent no more than 20% change in the maximum aggregate offering price set forth in the Calculation of Registration Fee table in the effective registration statement.
(iii)
To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement;
(2)
That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
(3)
To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
(4)
That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser: If the registrant is subject to Rule 430C, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use.
(5)
That, for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities: The undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:
(i)
Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424;
(ii)
Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant;
3
(iii)
The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or our securities provided by or on behalf of the undersigned registrant; and
(iv)
Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.
Insofar as indemnification for liabilities arising under the Securities Act of 1933 (the Act) may be permitted to our directors, officers and controlling persons pursuant to the provisions above, or otherwise, we have been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act, and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities, other than the payment by us of expenses incurred or paid by one of our directors, officers, or controlling persons in the successful defense of any action, suit or proceeding, 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 counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification is against public policy as expressed in the Securities Act, and we will be governed by the final adjudication of such issue.
Item 17. Exhibits.
Exhibit | Description |
3.1(a) | |
3.1(b) | Articles of Incorporation of Arem Pacific Corporation, an Arizona corporation (1) |
3.1(c) | |
3.2(a) | |
5.1 | Opinion of Daniel H Luciano, Esq. (2) |
10.1 | |
10.2 | |
23.1 | Consent of Attorney Daniel H Luciano (2) |
23.2 |
__________________________________________________________
(1) Filed herewith.
(2) Filed by Amendment.
4
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-1 and has authorized this registration statement to be signed on its behalf by the undersigned, in the Melbourne, Victoria, Australia, on the 23rd day of September, 2015.
Arem Pacific Corporation
(Registrant)
By: /s/ Thomas Tang
Name: Thomas Tang
Title: President and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Daniel H Luciano, as his true and lawful attorney-in-fact and agent with full power of substitution and re-substitution, for him and in his name, place and stead, in any and all capacities, to sign any or all amendments (including post-effective amendments) to this Registration Statement on Form S-1 of Arem Pacific Corporation, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, grant unto said attorney-in-fact and agent, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the foregoing, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent, or his substitutes, may lawfully do or cause to be done by virtue hereof.
In accordance with the requirements of the Securities Act of 1933, this registration statement was signed by the following persons in the capacities and on the dates stated.
Signature: | /s/ Thomas Tang |
| /s/ Allan Qiu |
| Thomas Tang |
| Allan Qiu |
Title: | President and Chief Executive Officer |
| Chief Financial Officer and Director |
Date: September 23, 2015
5
EXHIBIT INDEX
Exhibit | Description |
3.1(a) | |
3.1(b) | Articles of Incorporation of Arem Pacific Corporation, an Arizona corporation (1) |
3.1(c) | |
3.2(a) | |
5.1 | Opinion of Daniel H Luciano, Esq. (2) |
10.1 | |
10.2 | |
23.1 | Consent of Attorney Daniel H Luciano (2) |
23.2 |
__________________________________________________________
(1) Filed herewith.
(2) Filed by Amendment.
6
Exhibit 10.1
THE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE ACT) AND, MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO A U.S. PERSON AS DEFINED IN REGULATION S UNDER THE ACT (REGULATION S) UNLESS THE SECURITIES ARE REGISTERED IN THE UNITED STATES OR AN EXEMPTION UNDER THE ACT IS AVAILABLE. IN ADDITION, HEDGING TRANSACTIONS INVOLVING THE SECURITIES OFFERED HEREBY ARE PROHIBITED UNLESS IN COMPLIANCE WITH THE ACT.
STOCK EXCHANGE AGREEMENT
This Agreement ("Agreement") is made and entered into this the 8th day of August 2013, but effective as of the Closing Date (as defined herein) by and among Arem Pacific Corporation f/k/a Diversified Mortgage Workout Corporation, a Delaware corporation (the "Purchaser"), and Arem Pacific Corporation, an Arizona corporation (the "Acquired Corporation") and all of the shareholders of the Acquired Corporation identified on Exhibit 1.03 hereto (the "Shareholders").
* W I T N E S S E T H *
WHEREAS, Purchaser desires to acquire all of the issued and outstanding shares of capital stock of the Acquired Corporation from the Shareholders in exchange for a like amount of shares of Purchaser, and, similarly, the Shareholders desire to acquire certain of the shares of common stock of Purchaser in exchange for all of their shares of common stock of the Acquired Corporation, all in a transaction that qualifies under Section 354 and 368(a)(1)(b) of the Internal Revenue Code of 1986, as amended,
NOW THEREFORE, in consideration of the mutual covenants, terms and conditions contained herein, the parties do hereby covenant, warrant and agree as follows:
ARTICLE I
EXCHANGE OF STOCK
1.01. Capital Stock and Shareholders of Acquired Corporation. The issued and outstanding capital stock of the Acquired Corporation consists of 116,328,150 share of common stock, no par value. The number of authorized shares of common stock of the Acquired Corporation consists of 300,000,000 shares of common stock, no par value.
1.02. Purchaser Shares. In consideration of the mutual terms, covenants and conditions contained herein, Purchaser hereby assigns, transfers and conveys to each Shareholder that number of shares of common stock, $.00001 par value, of Purchaser set opposite each Shareholders name on Exhibit 1.02 (the "Purchaser Shares"). The Purchaser Shares will be delivered to each Shareholder within ten (10) days from Closing (as defined herein).
1.03. Seller Shares. Each Shareholder, individually but not jointly, and the Acquired Corporation hereby represent and warrant to the Purchaser that the share ownership (which includes common stock and preferred stock) of the Acquired Corporation set opposite each Shareholders name on Exhibit 1.03 (each a Seller Share) is true and correct. Each Shareholder further represents and warrants that, except for the respective Seller Shares, no warrants, options, or other rights to the capital stock of the Acquired Corporation are held by such Shareholder. Concurrent with the execution hereof and subject to the mutual terms, covenants and conditions hereof including the receipt by each Shareholder of his respective Acquired Shares, each Shareholder hereby assigns, transfers and conveys to Purchaser all of his right, title and interest in and to all capital stock or other rights to capital stock of the Acquired Corporation held by such Shareholder, which includes the respective Seller Shares. It is understood that each Shareholder will use its best efforts to deliver to Purchaser stock certificates representing each respective Seller Shares. The failure of the Shareholder to deliver the respective stock certificate shall not affect the validity of the transaction, rather, this instrument effectively transfers and assigns the Seller Shares of each Shareholder to the Purchaser.
1.04. Additional Undertakings. Concurrent with the execution hereof and from time to time thereafter, the parties hereto shall execute such additional instruments and take such additional action as such other party(ies) make reasonably request in order to effectuate the purpose and intent of this Agreement.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF PURCHASER
As of the date hereof and at Closing, Purchaser does hereby represent and warrant to the Acquired Corporation as follows:
(i) Purchaser is a corporation duly organized, validly existing and is in good standing under the laws of the Delaware and in other jurisdictions where it conducts business, has full corporate power and authority to execute and deliver this Agreement and has no subsidiaries. This Agreement when executed and delivered will be valid and binding obligations of Purchaser, enforceable against Purchaser. The sale of the Stock is not and will not be subject to any preemptive rights or rights of first refusal that have not been properly waived or complied with,
(ii) the authorized capital stock of Purchaser consists of 500,000,000 shares of common stock, $0.00001 par value, of which there were 952,453 shares issued and outstanding as of the date hereof, and 10,000,000 shares of preferred stock, $0.00001 par value, of which there were 10,000,000 shares issued and outstanding as of the date hereof. All outstanding shares of the Companys common stock are duly authorized, validly issued, fully paid and nonassessable, were issued in compliance with applicable securities laws, and are not subject to preemptive rights created by statute, the Certificate of Incorporation or Bylaws of the Company or any agreement or document to which the Company is a party or by which it is bound. In addition, (a)
2
there are no warrants, rights, options, conversion privileges, stock purchase plans or other agreements or undertakings which obligates Purchaser now or upon the occurrence of some future event to issue additional shares of capital stock, (b) there are no restrictions on the transfer of shares of capital stock of Purchaser other than those imposed by relevant state and federal securities laws, and (c) no holder of any security of Purchaser is entitled to any preemptive or similar statutory or contractual rights, either arising pursuant to an agreement or instrument to which Purchaser is a party or which are otherwise binding on Purchaser. The Purchaser Shares are free and clear of any mortgage, lien, pledge, or other encumbrance and are duly authorized, validly issued, fully paid and non-assessable shares of capital stock of Purchaser.
(iii). The execution, delivery and performance of and compliance with this Agreement, and the transfer and sale of the Stock by Purchaser, will not; violate any law, rule, regulation, order, or decree of any governmental authority to which Purchaser is subject, nor result in a material breach of any contract to which such Purchaser is bound and to which the Purchaser Shares is subject, nor result in a violation or breach by Purchaser of any judgment, order, writ, injunction or decree issued against or imposed upon such Purchaser, nor result in a material breach or default under (or an event that, with giving of notice or passage of time or both, would constitute a breach of or default under), or termination of, or accelerate the performance required by, nor result in the creation or imposition of, any material security interest, lien, charge or other encumbrance upon the Purchaser Shares under any contract, instrument or agreement to which such Purchaser is a party or by which such Purchaser is bound, and nor result in any material violation, or be in conflict with or constitute a default under any organizational documents, by-laws or other corporate documents of Purchaser.
(iv) Purchaser is acquiring the Seller Shares for investment purposes and not with a view to any resale or distribution thereof. Purchaser represents that the Seller Shares is being acquired in a transaction which is exempt from the registration requirements of the Securities Act of 1933, as amended (the "Act"), and that it understands that the Seller Shares must be held indefinitely, unless subsequently registered under the Act or unless an exemption from registration is available, including Rule 144 under the Act, and that it must, accordingly, bear the economic risk of its investment for an indefinite period of time,
(vi) none of the warranties and representations made by Purchaser herein or in the Exhibits or other documents related hereto, nor the financial statements furnished by Purchaser nor any certificate or memorandum furnished or to be furnished by Purchaser, contains or will contain any untrue statement of material fact or omits or will omit to state any material fact necessary in order to make the statements contained herein or therein not misleading, and all representations and warranties of Purchaser contained herein are true and correct,
(vii) the Purchaser Shares are free and clear of all liens, claims, pledges, and other encumbrances of any nature; the Purchaser Shares are not subject to any contact, agreement, arrangement or understanding, written or otherwise, which would adversely affect or otherwise prohibit or limit the acquisition of the Purchaser Shares by the Shareholders, and
3
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE ACQUIRED
CORPORATION AND THE SHAREHOLDERS
As of the date hereof and at Closing, the Acquired Corporation and each Shareholder do hereby represent and warrant to Purchaser as follows:
(i) the Acquired Corporation is a corporation duly organized, validly existing and is good standing under the laws of the State of Arizona and in other jurisdictions where it conducts business, has full corporate power and authority to execute and deliver this Agreement and has one subsidiary,
(ii) the authorized capital stock of the Acquired Corporation consists of 300,000,000 shares of common stock, no par value, of which 116,328,150 shares of common stock are issued and outstanding as set forth on Exhibit 1.03.
(iii) There are no warrants, rights, options, conversion privileges, stock purchase plans or other agreements or undertakings which obligates the Acquired Corporation now or upon the occurrence of some future event to issue additional shares of capital stock, (b) there are no restrictions on the transfer of shares of capital stock of the Acquired Corporation other than those imposed by relevant state and federal securities laws, and (c) no holder of any security of the Acquired Corporation is entitled to any preemptive or similar statutory or contractual rights, either arising pursuant to an agreement or instrument to which the Acquired Corporation is a party or which are otherwise binding on the Acquired Corporation. The Seller Shares are free and clear of any mortgage, lien, pledge, or other encumbrance and are duly authorized, validly issued, fully paid and non-assessable shares of capital stock of the Acquired Corporation,
(iv) neither the execution and delivery of this Agreement by the Acquired Corporation or the Shareholders, nor the consummation of the transactions set forth herein or contemplated hereby will conflict with or result in any violation of or constitute a breach of or a default under the Certificate of Incorporation or By Laws of the Acquired Corporation or under any contract, instrument, agreement, understanding, mortgage, indenture, lease, insurance policy, permit, concession, grant, franchise, license, judgment, order, decree, statute, law, ordinance, rule or regulation applicable to or to which the Acquired Corporation is a party, nor will it give rise to any right of acceleration in the time for performance or any obligation of the Acquired Corporation under any contact or instrument, nor will it result in the creation of any lien, charge, encumbrance of any asset of the Acquired Corporation,
(v) the Shareholders are acquiring the Purchaser Stock for investment purposes and not with a view to any resale or distribution thereof. The Shareholders represent that the Purchaser Stock is being acquired in a transaction which is exempt from the registration requirements of the Securities Act of 1933, as amended (the "Act"), and that they understand that the Purchaser Stock must be held indefinitely, unless subsequently registered under the Act or unless an exemption from registration is available, including Rule 144 under the Act, and that they must, accordingly, bear the economic risk of its investment for an indefinite period of time,
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(vi) each respective Seller Share is free and clear of all liens, claims, pledges, and other encumbrances of any nature; to the best of each Shareholders knowledge, each respective Seller Share is not subject to any contact, agreement, arrangement, or understanding, written or otherwise, which would adversely affect or otherwise prohibit or limit the acquisition of the Seller Shares by the Purchaser,
(vii)
The undersigned is not a "US Person" which is defined below:
(a) Any natural person resident in the United States;
(b) Any partnership or corporation organized or incorporated under the laws of the United States;
(c) Any estate of which any executor or administrator is a US person;
(d) Any trust of which any trustee is a US person;
(e) Any agency or branch of a foreign entity located in the United States;
(f) Any non-discretionary account or similar account (other than an estate or trust) held by a dealer or other fiduciary for the benefit or account of a US person;
(g) Any discretionary account or similar account (other than an estate or trust) held by a dealer or other fiduciary organized, incorporated, or (if an individual) resident of the United States; and
(h) Any partnership or corporation if (i) organized or incorporated under the laws of any foreign jurisdiction and (ii) formed by a US person principally for the purpose of investing in securities not registered under the Act, unless it is organized or incorporated, and owned, by accredited investors (as defined in Rule 501(a) of Regulation D promulgated under the Act) who are not natural persons, estates or trusts.
"United States" means the United States of America, its territories and possessions, any State of the United States, and the District of Columbia,
(viii)
He/she/it is not purchasing or acquiring the Purchaser Shares for the benefit of any US Person, and
(ix)
He/she/it will not resell the Purchaser Shares except in accordance with the provisions of Regulation S (Rule 901 through 905 and Preliminary Notes), pursuant to a registration under the Act, or pursuant to an available exemption from registration; and agrees not to engage in hedging transaction with regard to such securities unless in compliance with the Act.
ARTICLE VI
CLOSING OF TRANSACTION
6.01. Closing of Transaction. The closing of the transaction contemplated by this Agreement ("Closing") will occur at such time as all parties to this Agreement shall have executed this Agreement (Closing Date).
6.02. Conditions of Closing; Delivery of Documents. The closing of this transaction shall be subject to the following conditions:
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(i). All representations and warranties made by Purchaser herein shall be true and accurate as of the Closing as though such representations and warranties were then made in exactly the same language by such parties regardless of knowledge or lack thereof by such parties or changes beyond their control,
(ii). All representations and warranties made by Acquired Corporation herein shall be true and accurate as of the Closing as though such representations and warranties were then made in exactly the same language by such parties regardless of knowledge or lack thereof by such parties or changes beyond their control, and
(iii). The delivery by the Acquired Corporation to the Purchaser all of the books and records of the Purchaser, including without limitation, and its corporate governance materials (articles of incorporation, by-laws and resolutions and minutes of shareholder and board meetings, stock and warrant ledgers.
6.03. Termination of Agreement. In the event the parties are unable to effect a Closing of the transactions contemplated herein on or before the Closing Date, then in such event; this Agreement shall be deemed null and void and no party will have any claims or recourse against the other party.
ARTICLE VII
ENTIRE AGREEMENT, MODIFICATION, WAIVER AND HEADINGS
7.01. Entire Agreement; Modification. This Agreement constitutes the entire agreement between the parties hereto pertaining to the subject matter herein and supersedes all prior and contemporaneous agreements, understandings, negotiations and discussions among the parties, written or otherwise. No supplement, modification or waiver or termination of this Agreement shall be binding unless executed in writing by the party to be bound thereby. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provision hereof (whether or not similar), nor shall such waiver constitute a continuing waiver unless otherwise expressly provided.
7.02. Headings. Section captions or headings are included herein for convenience purposes only and are not to be construed as an accurate description of the contents therein.
7.03. Incorporation by Reference. All exhibits, schedules and documents referred to in this Agreement are incorporated herein for all purposes.
7.04. Multiple Counterpart Execution; Governing Law. This Agreement may be executed in multiple counterparts, which each counterpart constituting a binding agreement between the signatory parties, and with all such counterparts constituting an integrated document. This Agreement shall be construed and governed by the laws of the State of Arizona. PDF or other electronic copies shall be presumptively valid.
6
7.05. Binding Effect. The terms and provisions herein shall be binding on and inure to the benefit or the parties hereto, and their respective transferees, successors and assigns.
7.06. Survival of Representations and Warranties. All representations, warranties, and covenants made by the parties herein shall survive the execution of this Agreement and shall be forever enforceable.
7.07. Severability. If any provision of this Agreement is invalid, illegal or enforceable, the balance of this Agreement shall remain in effect, and if any provision is inapplicable to any person or circumstance, it shall nevertheless remain applicable to all other persons and circumstances.
****
7
IN WITNESS WHEREOF, the parties have caused this Agreement to be effective all as of the date set forth above.
PURCHASER
Arem Pacific Corporation f/k/a
Diversified Mortgage Workout Corporation
_______________________
Thomas Tang
President
ACQUIRED CORPORATION
Arem Pacific Corporation
_______________________
Thomas Tang
President
8
Signature Page for Shareholders
SHAREHOLDERS
__________________
Date: August __, 2013
Signature
__________________
Print Name
_________________
Print Title, if any
9
EXHIBIT 1.02 |
|
|
|
Shareholder Name | Purchaser Shares to be Received |
Lan Cai | 1,500 |
Qinming Chen | 1,000 |
Yingshi Chen | 25,000 |
Tong Hee Choon | 500 |
Jian Guo | 1,000 |
Hongming He | 500 |
Lizhen Hong | 500 |
Lie Hong | 1,000 |
Xiuli Hong | 500 |
Yuming Hong | 1,000 |
Shi Hui | 1,000 |
Jin Jian Ji | 40,000 |
Mingjiang Jin | 5,000 |
Xin Jin | 10,050,000 |
Chi Yuen Leong | 27,995,000 |
Wei Li Leong | 1,000 |
Jianhuang Li | 1,000 |
Jianmei Li | 500 |
Jianyun Li | 500 |
Su Guo Li | 1,000 |
Weidong Li | 500 |
WeiHua Li | 1,000 |
Saifang Liao | 1,000 |
Meili Lin | 500 |
Qing Song Lin | 500,000 |
Wei Liu | 266,000 |
Yong Bao Liu | 10,000 |
Yan Zhen Lu | 500 |
Qiu Xue Ming | 10,000 |
Chai Geik Ooi | 1,000 |
Darren Pearce | 500 |
Rocco Scarpari | 500 |
Juan Shi | 1,000 |
Zhonghong Shi | 2,002,500 |
Yao Su | 100,500 |
Junnan Sui | 100 |
Dafeng Sun | 1,388,500 |
Jianfeng Sun | 14,000 |
Wenwen Sun | 500 |
Xiaoling Sun | 1,000 |
Haoyan Tan | 1,000 |
ZhuoFan Tang | 57,354,700 |
ZhuoFan Tang | 8,725,000 |
Zhuozhi Tang | 5,025,000 |
Tao Wang | 200,100 |
Wei Wei | 20,000 |
Zhong Weiqiang | 500 |
Tian Xianru | 20,000 |
Qiyuan Xu | 25,000 |
Shulan Xu | 500 |
Jing Yang | 2,010,000 |
Lingyan Ye | 500 |
Rachel Ye | 3,000 |
Zhang Yong | 10,000 |
Ning Zhan | 500 |
Fuxiang Zhang | 500 |
Mian Zhang | 1,000 |
Tingling Zhang | 250 |
Lihua Zheng | 2,500 |
Guoliang Zhu | 1,000 |
11
EXHIBIT 1.03 |
|
|
|
Shareholder of Acquired Corporation | Seller Shares Surrendered to Purchaser |
Lan Cai | 1,500 |
Qinming Chen | 1,000 |
Yingshi Chen | 25,000 |
Tong Hee Choon | 500 |
Jian Guo | 1,000 |
Hongming He | 500 |
Lizhen Hong | 500 |
Lie Hong | 1,000 |
Xiuli Hong | 500 |
Yuming Hong | 1,000 |
Shi Hui | 1,000 |
Jin Jian Ji | 40,000 |
Mingjiang Jin | 5,000 |
Xin Jin | 10,050,000 |
Chi Yuen Leong | 27,995,000 |
Wei Li Leong | 1,000 |
Jianhuang Li | 1,000 |
Jianmei Li | 500 |
Jianyun Li | 500 |
Su Guo Li | 1,000 |
Weidong Li | 500 |
WeiHua Li | 1,000 |
Saifang Liao | 1,000 |
Meili Lin | 500 |
Qing Song Lin | 500,000 |
Wei Liu | 266,000 |
Yong Bao Liu | 10,000 |
Yan Zhen Lu | 500 |
Qiu Xue Ming | 10,000 |
Chai Geik Ooi | 1,000 |
Darren Pearce | 500 |
Rocco Scarpari | 500 |
Juan Shi | 1,000 |
Zhonghong Shi | 2,002,500 |
Yao Su | 100,500 |
Junnan Sui | 100 |
Dafeng Sun | 1,388,500 |
Jianfeng Sun | 14,000 |
Wenwen Sun | 500 |
Xiaoling Sun | 1,000 |
Haoyan Tan | 1,000 |
ZhuoFan Tang | 57,354,700 |
ZhuoFan Tang | 8,725,000 |
Zhuozhi Tang | 5,025,000 |
Tao Wang | 200,100 |
Wei Wei | 20,000 |
Zhong Weiqiang | 500 |
Tian Xianru | 20,000 |
Qiyuan Xu | 25,000 |
Shulan Xu | 500 |
Jing Yang | 2,010,000 |
Lingyan Ye | 500 |
Rachel Ye | 3,000 |
Zhang Yong | 10,000 |
Ning Zhan | 500 |
Fuxiang Zhang | 500 |
Mian Zhang | 1,000 |
Tingling Zhang | 250 |
Lihua Zheng | 2,500 |
Guoliang Zhu | 1,000 |
Wei Zhu | 500,000 |
13
Exhibit 10.2
BUSINESS ACQUISITION AGREEMENT
THIS AGREEMENT (the "Agreement") is made as of Jun 30, 2012, by AREM Pacific Corporation, a corporation incorporated in Arizona USA ("Buyer" or "AREM"), and Mr. Xin Jin of Sanyi Group Pty Ltd, a company incorporated in Victoria, Australia (the "Sellers") The "Company" for sale is: Sanyi Group Pty Ltd ABN: 40116432510 and health therapy outlet(s) operated by Mr. Xin Jin subsequently under whatever name (Sanyi Group).
RECITALS:
A. Sellers own 100% control of Sanyi Group. There are no other stocks outstanding of the Company;
B. Sellers want to sell and Buyer wants to buy 100% of the common stock in the Sanyi Group;
C. After the sale, Sellers agree to relinquish and the Buyer agrees to gain control of the Sanyi Group's board (the "Board");
NOW, THEREFORE, in consideration of the mutual covenants, agreements, representations and warranties contained in this Agreement, the parties hereto agree as follows:
SECTION 1. Purchase Price
1.1 The purchase price shall be 10,000,000 new common shares of AREM issued to Sellers.
1.2 Sellers shall warrant that the existing shares will be the only stock issued; there will be no other stocks issued or pledged to any party at the time of exchange;
1.3 Delivery of Shares. On the Closing Date, Sellers shall deliver a board resolution to Buyer to authenticate the transaction and relinquish all the ownership and control of the Sanyi Group to Buyer.
SECTION 2. REPRESENTATIONS AND WARRANTIES OF SELLER
Seller herebv represents and warrants to Buyer as follows:
2.1 Authorization, the Sellers, have all corporate right, power and authority to enter into this Agreement and to consummate the transactions contemplated hereby. This Agreement has been duly executed and delivered by the parties and constitutes a legal, valid and binding agreement and enforceable against the defending party in accordance with its terms, subject to laws of general application relating to bankruptcy, insolvency and the relief of debtors and rules of law governing specific performance, injunctive relief or other equitable remedies.
2.2 Sellers warrant to Buyer the Company does not owe any money to any third party on the date of closing and Sellers agree to pay any legitimate creditor claims against the Sanyi Group within one year of closing.
SECTION 3 REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer hereby represents and warrants to Sellers as follows:
3.1 Authority
Buyer has all right, power and authority to enter into this Agreement and to consummate the transactions contemplated hereby. This Agreement has been duly executed and delivered by the Seller and constitutes a legal, valid and binding obligation of the Buyer.
3.2 Investigation
Buyer has had a reasonable opportunity to ask questions relating to and otherwise discuss the terms and conditions of the information set forth in this agreement.
SECTION 4. COVENANTS
4.1 Further Assurances.
The parties shall execute such documents and other papers and take such further actions as may be reasonably required or desirable to carry out the provisions hereof and the transactions contemplated hereby. Each such party shall use its best efforts to fulfil or obtain the fulfilment of the conditions to the Closing, including, without limitation, the execution and delivery of any documents or other papers, the execution and delivery of which are necessary or appropriate to the Closing.
4.2 Confidentiality.
In the event the transactions contemplated by this Agreement are not consummated, parties agree to keep confidential any information disclosed to each other in connection therewith for a period of one year from the date hereof; provided, however, such obligation shall not apply to information which:
SECTION 5. SURVIVAL OF REPRESENTATIONS AND WARRANTIES
Notwithstanding any right of either party to investigate the affairs of the other party and its shareholders, each party has the right to rely fully upon representations, warranties, covenants and agreements of the other party and its shareholders contained in this Agreement or in any document delivered to one by the other or any of their representatives, in connection with the transactions contemplated by this Agreement. All such representations, warranties, covenants and agreements shall survive the execution and delivery hereof and the Closing hereunder for one year following the Closing Date.
SECTION 6. INDEMNIFICATION
Buyer agrees to indemnify and hold harmless Sellers, its officers, directors and principal shareholders, and Sellers agree to indemnify and hold harmless Buyer, its officers, directors and principal shareholders, at all times against and in respect of any liability,' damage, or deficiency, all actions, suits, proceedings, demands, assessments, judgments, costs and expenses, including attorneys' fees, incident to any of the foregoing, resulting from any material misrepresentation made by any indemnifying party to an indemnified party, and indemnifying party's breach of a
covenant or warranty or an indemnifying party's nonfulfillment of any agreement hereunder, or from any material misrepresentation or omission from any certificate, financial statement or tax return furnished or to be furnished hereunder.
SECTION 7. DOCUMENTS AT CLOSING AND THE CLOSING
7.1 Documents at Closing.
At the Closing Date, the following transactions shall occur, all of such transactions being deemed to occur simultaneously:
(a) Sellers will deliver, or will cause to be delivered, to Buyer the following:
(i) A board resolution executed by sellers' board indicating 100% of the Company's common stock shall be issued to Buyer for a total consideration of 10,000,000 of newly issued common shares of AREM.
7.2 Closing Date
The Closing shall take place at the time or place as may be agreed upon by the parties hereto ("Closing Date"), but in no event shall the Closing Date be later than Apr 16, 2012, unless agreed upon by the parties in writing. At the Initial Closing, the parties shall provide each other with such documents as may be necessary.
SECTION 8. MISCELLANEOUS
8.1 Waivers
The waiver of a breach of this Agreement or the failure of any party hereto to exercise any right under this Agreement shall in no way constitute waiver as to future breach whether similar or dissimilar in nature or as to the exercise of any further right under this Agreement.
8.2 Amendment
This Agreement may be amended or modified only by an instrument of equal formality signed by the parties or the duly authorized representatives of the respective parties.
8.3 Assignment
This Agreement is not assignable except by operation of law.
8.4 Notice
Until otherwise specified in writing, the mailing addresses and fax numbers of the parties of this Agreement shall be as follows:
This agreement shall supersede all the previous agreements, verbal or written.
If to Sellers:
47 Mt Pleasant Rd, Vic 3131, Australia
Tel: 0424158008
Fax: 03 98771178
Attn: Andrew Jin
If to Buyer:
8040 E. Morgan Trail, Unit 18, Scottsdale, AZ 85258 USA
Fax: 480-966-0808
Phone: 480-966-2020
Attn: Thomas Tang
Any notice or statement given under this Agreement shall be deemed to have been given if sent by registered mail addressed to the other party at the address indicated above or at such other address which shall have been furnished in writing to the addressor.
8.5 Governing Law
This Agreement shall be construed, and the legal relations between the parties determined, in accordance with the laws of the State of Arizona, thereby precluding any choice of law rules which may direct the application of the laws of any other jurisdiction.
8.6 Publicity
No publicity release or announcement concerning this Agreement or the transactions contemplated hereby shall be issued by either party hereto at any time from the signing hereof without advance approval in writing of the form and substance by the other party.
8.7 Entire Agreement
This Agreement (including the Exhibits and Schedules to be attached hereto) and the collateral agreements executed in connection with the consummation of the transactions contemplated herein contain the entire agreement among the parties with respect to the exchange and issuance of the Shares and related transactions, and supersede all prior agreements, written or oral, with respect thereto.
8.8 Headings
The headings in this Agreement are for reference purposes only and shall not in any way affect the meaning or interpretation of this Agreement.
8.9 Severability of Provisions
In the' event that any provision of this Agreement becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable or void, this Agreement shall continue in full force and effect without said provision; provided that no such severability shall be effective if it materially changes the economic impact of this Agreement on any party.
9.1 Counterparts
This Agreement may be executed in any number of counterparts, each of which when so executed, shall constitute an original copy hereof, but all of which together shall consider but one and the same document.
9.2 Binding Effect
This Agreement shall be binding upon the parties hereto and inure to the benefit of the parties, their respective heirs, administrators, executors, successors and assigns.
9.3 Termination
This Agreement may be terminated by mutual agreement by the either party if the Closing Date does not occur by Jun 30, 2012.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date first above written.
Sanyi Group Pty Ltd
By:
Name:
Title: Director
AREM Pacific Corporation
By:
Name: Thomas Tang
Title; President and Director
Exhibit 23.2
Consent of Independent Registered Public Accounting Firm
We consent to the reference to our firm under the caption Experts and to the use of our report dated August 28, 2015 related to the consolidated balance sheets of Arem Pacific Corporation as of June 30, 2014 and 2013, and the related consolidated statements of operations, changes in stockholders equity, and cash flows for the years then ended, included in the Registration Statement (Form S-1) and related Prospectus of Arem Pacific Corporation for the registration of its shares of its common stock.
/s/ SWHC Australia
SWHC Australia
Melbourne, Australia
September 23, 2015
1
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