UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
10-Q
(Mark
One)
þ QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For
the quarterly period ended September 30, 2015
OR
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For
the transition period from _______________ to _______________
Commission
file number: 000-55231
eBullion, Inc.
(Exact
name of registrant as specified in its charter)
Delaware |
|
46-2323674 |
(State
or other jurisdiction of
Incorporation or Organization) |
|
(I.R.S.
Employer
Identification No.) |
|
|
|
80
Broad Street, 5th Floor
New
York, NY |
|
10004 |
(Address
of principal executive offices) |
|
(Zip
Code) |
(212) 837-7858
(Registrant's
telephone number, including area code)
Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No ☐
Indicate
by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive
Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter)
during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes þ No ☐
Indicate
by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller
reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller
reporting company" in Rule 12b-2 of the Exchange Act.
|
Large accelerated
filer |
☐ |
Accelerated filer |
☐ |
|
Non-accelerated filer |
☐ |
Smaller reporting company |
þ |
|
(Do not check if
smaller reporting company) |
|
|
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No þ
As
of November 16, 2015 there were 512,600,000 shares of Common Stock, $0.0001 par value per share, outstanding.
EBULLION,
INC.
TABLE
OF CONTENTS
| |
| |
Page No. |
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| |
|
| |
PART I—FINANCIAL INFORMATION | |
|
| |
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|
Item 1. | |
Financial Statements | |
1 |
| |
| |
|
| |
Condensed Consolidated Balance Sheets as of September 30, 2015 and March 31, 2015 | |
1 |
| |
| |
|
| |
Unaudited Condensed Consolidated Statements of Comprehensive Income (Loss) for the three and six months ended September 30, 2015 and 2014 | |
2 |
| |
| |
|
| |
Unaudited Condensed Consolidated Statements of Shareholders’ Equity
for the year ended March 31, 2015 and six months ended September 30, 2015 | |
3 |
| |
| |
|
| |
Unaudited Condensed Consolidated Statements of Cash Flows for the six
months ended September 30, 2015 and 2014 | |
4 |
| |
| |
|
| |
Notes to Unaudited Condensed Consolidated Financial Statements | |
5 |
| |
| |
|
Item 2. | |
Management’s Discussion and Analysis of Financial Condition and Results of Operations | |
16 |
| |
| |
|
Item 3. | |
Quantitative and Qualitative Disclosures About Market Risk | |
19 |
| |
| |
|
Item 4. | |
Controls and Procedures | |
20 |
| |
| |
|
| |
PART II—OTHER INFORMATION | |
|
| |
| |
|
Item 1. | |
Legal Proceedings | |
20 |
| |
| |
|
Item 1A. | |
Risk Factors | |
20 |
| |
| |
|
Item 2. | |
Unregistered Sales of Equity Securities and Use of Proceeds | |
21 |
| |
| |
|
Item 3. | |
Defaults Upon Senior Securities | |
21 |
| |
| |
|
Item 4. | |
Mine Safety Disclosures | |
21 |
| |
| |
|
Item 5. | |
Other Information | |
21 |
| |
| |
|
Item 6. | |
Exhibits | |
21 |
FORWARD-LOOKING
STATEMENTS
This
Quarterly Report on Form 10-Q contains forward-looking statements that involve substantial risks and uncertainties. All statements,
other than statements of historical facts, contained in this Quarterly Report on Form 10-Q, including statements regarding
our strategy, future operations, future financial position, future revenues, projected costs, prospects, plans and objectives
of management, are forward looking statements. The words "anticipate," "believe," "estimate," "expect,"
"intend," "may," "plan," "predict," "project," "target," "potential,"
"will," "would," "could," "should," "continue" and similar expressions are intended
to identify forward-looking statements, although not all forward-looking statements contain these identifying words.
Forward-looking
statements are not guarantees of future performance and our actual results could differ materially from the results discussed
in the forward-looking statements. Factors that could cause actual results to differ materially from those in the forward-looking
statements include, but are not limited to, volatility of gold and silver prices, our ability to attract new agents and customers
and retain the agents and customers that we currently have, our ability to protect and maintain our intellectual property, the
ability of our licensors to obtain and maintain patent protection for the technology or products that we license, our reliance
on third-parties, competitive developments, the effect of current and future legislation and regulation and regulatory actions,
as well as other risks described more fully in this Quarterly Report on Form 10-Q.
As
a result of these and other factors, we may not actually achieve the plans, intentions or expectations disclosed in our forward-looking
statements, and you should not place undue reliance on our forward-looking statements. Our forward-looking statements do not reflect
the potential impact of any future acquisitions, mergers, dispositions, joint ventures or investments we may make. We do not assume
any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except
as required by law.
eBullion,
Inc.
Condensed
Consolidated Balance Sheets
As
of September 30 and March 31, 2015
(Expressed
in US dollars)
| |
Unaudited September 30, 2015 | | |
Audited March 31, 2015 | |
ASSETS | |
| | |
| |
Current Assets | |
| | |
| |
Cash | |
$ | 1,445,818 | | |
$ | 2,513,423 | |
Commissions receivable | |
| 40,510 | | |
| 118,298 | |
Deposits and prepaid expenses | |
| 338,035 | | |
| 52,452 | |
Prepaid income taxes | |
| 41,419 | | |
| 41,396 | |
Total current assets | |
| 1,865,782 | | |
| 2,725,569 | |
| |
| | | |
| | |
Noncurrent Assets | |
| | | |
| | |
Deposits and prepaid expenses | |
| 147,398 | | |
| 223,470 | |
Equipment, net | |
| 185,033 | | |
| 225,131 | |
Loan receivable from Global Long | |
| 774,199 | | |
| - | |
Deferred income taxes | |
| 15,828 | | |
| 10,522 | |
Total noncurrent assets | |
| 1,122,458 | | |
| 459,123 | |
| |
| | | |
| | |
Total assets | |
$ | 2,988,240 | | |
$ | 3,184,692 | |
| |
| | | |
| | |
LIABILITIES AND SHAREHOLDERS’ EQUITY | |
| | | |
| | |
Current Liabilities | |
| | | |
| | |
Accounts payable and accrued liabilities | |
$ | 31,784 | | |
| 35,048 | |
Customer deposits | |
| 153,974 | | |
| 92,613 | |
Income taxes | |
| 149,234 | | |
| 145,883 | |
Total current liabilities | |
| 334,992 | | |
| 273,544 | |
| |
| | | |
| | |
Total liabilities | |
| 334,992 | | |
| 273,544 | |
| |
| | | |
| | |
Commitments | |
| | | |
| | |
Shareholders’ Equity | |
| | | |
| | |
Common stock, $0.0001 par value, 1,000,000,000 shares authorized, 512,600,000 shares issued and outstanding (1) | |
| 51,260 | | |
| 51,260 | |
Additional paid in capital (1) | |
| 1,477,404 | | |
| 1,477,404 | |
Retained earnings | |
| 1,123,501 | | |
| 1,383,704 | |
Accumulated other comprehensive income (loss) | |
| 1,083 | | |
| (1,220 | ) |
Total shareholders’ equity | |
| 2,653,248 | | |
| 2,911,148 | |
Total liabilities and shareholders’ equity | |
$ | 2,988,240 | | |
$ | 3,184,692 | |
| (1) | The
capital accounts of the Company have been restated to reflect the 10 for 1 stock split
which was effective in March 2015. See Note 13 for further discussion. |
The
accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
eBulllion, Inc.
Unaudited Condensed Consolidated
Statements of Comprehensive Income (Loss)
Three and Six Months
Ended September 30, 2015 and 2014
(Expressed in US dollars
| |
Six Months Ended | | |
Three Months Ended | |
| |
2015 | | |
2014 | | |
2015 | | |
2014 | |
REVENUES | |
| | |
| | |
| | |
| |
| |
| | |
| | |
| | |
| |
Commission revenue | |
$ | 842,567 | | |
$ | 1,512,236 | | |
$ | 308,419 | | |
$ | 803,613 | |
| |
| | | |
| | | |
| | | |
| | |
EXPENSES | |
| | | |
| | | |
| | | |
| | |
General and administrative | |
| 765,317 | | |
| 813,594 | | |
| 402,090 | | |
| 381,274 | |
Employee compensation and benefits | |
| 328,615 | | |
| 405,894 | | |
| 162,709 | | |
| 199,643 | |
Depreciation | |
| 40,344 | | |
| 40,343 | | |
| 20,172 | | |
| 20,174 | |
Total expenses | |
| 1,134,276 | | |
| 1,259,831 | | |
| 584,971 | | |
| 601,091 | |
| |
| | | |
| | | |
| | | |
| | |
INCOME (LOSS) FROM OPERATIONS | |
| (291,709 | ) | |
| 252,405 | | |
| (276,552 | ) | |
| 202,522 | |
| |
| | | |
| | | |
| | | |
| | |
OTHER INCOME | |
| | | |
| | | |
| | | |
| | |
Rental income | |
| 9,030 | | |
| - | | |
| - | | |
| - | |
Interest income, net | |
| 21,356 | | |
| 2,323 | | |
| 11,645 | | |
| 17 | |
Total other income | |
| 30,386 | | |
| 2,323 | | |
| 11,645 | | |
| 17 | |
| |
| | | |
| | | |
| | | |
| | |
INCOME (LOSS) BEFORE INCOME TAXES | |
| (261,323 | ) | |
| 254,728 | | |
| (264,907 | ) | |
| 202,539 | |
| |
| | | |
| | | |
| | | |
| | |
INCOME TAX PROVISION (BENEFIT) | |
| | | |
| | | |
| | | |
| | |
Current | |
| 4,180 | | |
| 62,621 | | |
| - | | |
| 40,830 | |
Deferred | |
| (5,300 | ) | |
| (5,187 | ) | |
| (2,650 | ) | |
| (2,594 | ) |
Total income tax provision (benefit) | |
| (1,120 | ) | |
| 57,434 | | |
| (2,650 | ) | |
| 38,236 | |
| |
| | | |
| | | |
| | | |
| | |
NET INCOME (LOSS) | |
| (260,203 | ) | |
| 197,294 | | |
| (262,257 | ) | |
| 164,303 | |
| |
| | | |
| | | |
| | | |
| | |
OTHER COMPREHENSIVE INCOME (LOSS) | |
| | | |
| | | |
| | | |
| | |
Foreign currency translation | |
| 2,303 | | |
| (2,399 | ) | |
| 682 | | |
| (2,460 | ) |
COMPREHENSIVE INCOME (LOSS) | |
$ | (257,900 | ) | |
$ | 194,895 | | |
$ | (261,575 | ) | |
$ | 161,843 | |
| |
| | | |
| | | |
| | | |
| | |
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING | |
| | | |
| | | |
| | | |
| | |
Basic and diluted (1) | |
| 512,600,000 | | |
| 512,600,000 | | |
| 512,600,000 | | |
| 512,600,000 | |
| |
| | | |
| | | |
| | | |
| | |
BASIC AND DILUTED EARNINGS (LOSS) PER COMMON SHARE | |
| | | |
| | | |
| | | |
| | |
Basic and diluted earnings (loss) per common share | |
$ | (0.00 | ) | |
$ | 0.00 | | |
$ | (0.00 | ) | |
$ | 0.00 | |
| (1) | The Company’s weighted average common shares outstanding for both basic and diluted earnings
per share have been restated for the effects of the 10 for 1 stock split which was effective in March 2015. See Note 13 for further
discussion. |
The accompanying notes are an integral part
of these unaudited condensed consolidated financial statements.
eBullion, Inc.
Unaudited Condensed Consolidated Statements of Shareholders’ Equity
For the Year Ended March 31, 2015 and Six Months Ended September 30, 2015
(Expressed
in US dollars)
| |
Common Stock | | |
Additional | | |
| | |
Accumulated Other | | |
Total | |
| |
Number of | | |
Par | | |
Paid in | | |
Retained | | |
Comprehensive | | |
Shareholders’ | |
| |
Shares | | |
Value | | |
Capital | | |
Earnings | | |
Income (Loss) | | |
Equity | |
| |
| | |
| | |
| | |
| | |
| | |
| |
BALANCE, March 31, 2014 – Audited (1) | |
| 512,600,000 | | |
$ | 51,260 | | |
$ | 1,477,404 | | |
$ | 846,405 | | |
$ | (1,017 | ) | |
$ | 2,374,052 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Net income | |
| - | | |
| - | | |
| - | | |
| 537,299 | | |
| - | | |
| 537,299 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Foreign currency translation adjustment | |
| - | | |
| - | | |
| - | | |
| - | | |
| (203 | ) | |
| (203 | ) |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
BALANCE, March 31, 2015 - Audited | |
| 512,600,000 | | |
$ | 51,260 | | |
$ | 1,477,404 | | |
$ | 1,383,704 | | |
$ | (1,220 | ) | |
$ | 2,911,148 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Net loss | |
| - | | |
| - | | |
| - | | |
| (260,203 | ) | |
| - | | |
| (260,203 | ) |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Foreign currency translation adjustment | |
| - | | |
| - | | |
| - | | |
| - | | |
| 2,303 | | |
| 2,303 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
BALANCE, September 30, 2015 - Unaudited | |
| 512,600,000 | | |
$ | 51,260 | | |
$ | 1,477,404 | | |
$ | 1,123,501 | | |
$ | 1,083 | | |
$ | 2,653,248 | |
| (1) | The
capital accounts of the Company have been restated to reflect the 10 for 1 stock split
which was effective in March 2015. See Note 13 for further discussion. |
The
accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
eBullion,
Inc.
Unaudited
Condensed Consolidated Statements of Cash Flows
For
the Six Months Ended September 30, 2015 and 2014
(Expressed
in US dollars)
| |
2015 | | |
2014 | |
OPERATING ACTIVITIES: | |
| | |
| |
Net income (loss) | |
$ | (260,203 | ) | |
$ | 197,294 | |
Adjustments to reconcile net income (loss) to net | |
| | | |
| | |
cash provided by (used in) operating activities | |
| | | |
| | |
Depreciation and amortization | |
| 40,344 | | |
| 40,343 | |
Changes in operating assets and liabilities: | |
| | | |
| | |
Commissions receivable | |
| 77,838 | | |
| (46,916 | ) |
Account receivable | |
| - | | |
| (22,705 | ) |
Amount due from shareholder | |
| - | | |
| (29,699 | ) |
Deposits and prepaid expenses | |
| (209,317 | ) | |
| 1,815 | |
Accounts payable and accrued liabilities | |
| (3,466 | ) | |
| (27,081 | ) |
Customer deposits | |
| 61,297 | | |
| 31,065 | |
Income taxes payable | |
| 4,180 | | |
| 62,621 | |
Deferred income taxes | |
| (5,300 | ) | |
| (5,187 | ) |
Net cash provided by (used in) operating activities | |
| (294,627 | ) | |
| 201,550 | |
| |
| | | |
| | |
INVESTING ACTIVITIES: | |
| | | |
| | |
Loan receivable from eBullion Trade | |
| - | | |
| 997,736 | |
Loan receivable from Global Long | |
| (774,042 | ) | |
| - | |
Net cash provided by (used in) investing activities | |
| (774,042 | ) | |
| 997,736 | |
| |
| | | |
| | |
NET INCREASE (DECREASE) IN CASH | |
| (1,068,669 | ) | |
| 1,199,286 | |
EFFECT OF EXCHANGE RATE CHANGES ON CASH | |
| 1,064 | | |
| (2,219 | ) |
Cash, beginning of period | |
| 2,513,423 | | |
| 808,039 | |
Cash, end of period | |
$ | 1,445,818 | | |
$ | 2,005,106 | |
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: | |
| | | |
| | |
Cash paid during the period for income taxes | |
$ | - | | |
$ | - | |
The
accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
eBullion,
Inc. |
Notes
to Unaudited Condensed Consolidated Financial Statements |
For
the Three and Six Months Ended September 30, 2015 and 2014 |
(Expressed
in US Dollars) |
1. |
Nature
of Operations and Basis of Presentation |
eBullion,
Inc. (“eBullion” or “the Company”) was incorporated in Delaware on January 28, 2013. On April 3, 2013,
the Company’s shareholders exchanged 100% of their shares for 100% of the shares of Man Loong Bullion Company Limited (“Man
Loong”) a company which was incorporated in Hong Kong in 1974, and in 2007, was re-registered under Hong Kong law as a limited
liability company. Upon completion of this transaction, Man Loong became a 100% owned subsidiary of eBullion. This transaction
was accounted for as a reverse take-over.
The
Company provides trading services for gold and silver trading positions on Man Loong’s proprietary, 24-hour electronic trading
platform, and its telephone transaction system located in Hong Kong. The Company is licensed through the Chinese Gold and Silver
Exchange Society (“CGSE”) a self-regulatory organization located in Hong Kong which acts as an exchange for the trading
of Kilo gold and Loco London gold and silver price indices quoted on the London Metals Exchange.
The
Company is not a counter party for trades entered through its trading platform and telephone transaction system, and instead,
contracts with agents who pay Man Loong a fixed commission on each trade that the Company executes for its agents and their customers.
Basis
of Presentation
The
Company’s unaudited condensed consolidated financial statements are expressed in U.S. Dollars and are presented in accordance
with U.S. GAAP and the rules and regulations of the Securities and Exchange Commission (“SEC”). The Company’s
and Man Loong’s fiscal year end is March 31.
Principles
of Consolidation
The
unaudited condensed consolidated financial statements as of Sept 30, 2015 and March 31, 2015 and for the three and six months
ended September 30, 2015 and 2014, include the accounts of eBullion and its wholly owned subsidiary, Man Loong. All significant
intercompany transactions have been eliminated.
2. |
Summary
of Significant Accounting Policies |
Use
of Estimates
The
preparation of these unaudited condensed consolidated financial statements in conformity with U.S. GAAP 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 unaudited consolidated financial statements and the reported amounts of revenue and expenses
during the reporting period. Changes in these estimates are recorded when known. Significant estimates made by management include:
|
● |
Valuation
of assets and liabilities |
|
● |
Useful
lives of equipment |
|
● |
Accounting
for transactions with variable interest entities |
|
● |
Other
matters that affect the reported amounts and disclosures of contingencies in the consolidated financial statements. |
Actual
results could differ from those estimates.
Reclassifications
Certain
reclassifications have been made to amounts reported in the previous periods to conform to the current presentation. Such reclassifications
had no effect on net income (loss).
eBullion,
Inc. |
Notes
to Unaudited Condensed Consolidated Financial Statements |
For
the Three and Six Months Ended September 30, 2015 and 2014 |
(Expressed
in US Dollars) |
2. |
Summary
of Significant Accounting Policies - continued |
Revenue
Recognition
The
Company recognizes revenue in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification
(“ASC”) Topic 605, Revenue Recognition, which requires that four basic criteria must be met before revenue
can be recognized: (1) persuasive evidence that an arrangement exists; (2) delivery has occurred or services have been rendered;
(3) the fee is fixed and determinable; and (4) collectability is reasonably assured. The Company is not a counter party for trades
executed through its trading platform and telephone transaction system and, instead, recognizes revenue to the extent of the flat-fee
commission it receives on each trade processed for its agents and their customers.
Advertising
Advertising
costs are incurred for the production and communication of advertising, as well as other marketing activities. The Company expenses
the cost of advertising as incurred. The Company did not capitalize any production costs associated with advertising for the three
and six months ended September 30, 2015 and 2014. The total amount charged to advertising expense was $4,696 and $9,173 for the
six months ended September 30, 2015 and 2014, respectively, and $2,818 and $6,540 for the three months ended September 30, 2015
and 2014, respectively.
Cash
and cash equivalents
Cash
and cash equivalents consist primarily of cash on deposit, certificates of deposits, money market accounts, and investment grade
commercial paper that are readily convertible to cash and purchased with original maturities of six months or less. As of September
30, 2015 and March 31, 2015, the Company had no cash equivalents.
Fair
Value of Financial Instruments
ASC
820, “Fair Value Measurements”, defines fair value and establishes a three-level valuation hierarchy for disclosures
of fair value measurement and enhances disclosure requirements for fair value measures. The carrying amounts reported in the balance
sheets for cash, commissions receivable, loan receivable from Global Long, accounts payable and accrued liabilities and customer
deposits qualify as financial instruments and are a reasonable estimate of fair value because of the short period of time between
the origination of such instruments and their expected realization and their current market rate of interest.
The
standard establishes a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest
priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest
priority to unobservable inputs (Level 3 measurement). The three levels of the fair value hierarchy defined by the standard are
as follows:
Level
1 - Quoted prices are available in active markets for identical assets or liabilities as of the reporting date. Active markets
are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information
on an ongoing basis. Level 1 primarily consists of financial instruments such as exchange-traded derivatives, listed equities
and U.S. government treasury securities.
Level
2 - Pricing inputs are other than quoted prices in active markets included in Level 1, which are either directly or indirectly
observable as of the reporting date. Level 2 includes those financial instruments that are valued using models or other valuation
methodologies. These models are primarily industry-standard models that consider various assumptions, including quoted forward
prices for commodities, time value, volatility factors, and current market and contractual prices for the underlying instruments,
as well as other relevant economic measures. Substantially all of these assumptions are observable in the marketplace throughout
the full term of the instrument, can be derived from observable data or are supported by observable levels at which transactions
are executed in the marketplace. Instruments in this category include non-exchange-traded derivatives such as over the counter
forwards, options and repurchase agreements.
Level
3 - Pricing inputs include significant inputs that are generally less observable from objective sources. These inputs may be used
with internally developed methodologies that result in management’s best estimate of fair value from the perspective of
a market participant. Level 3 instruments include those that may be more structured or otherwise tailored to customers’
needs.
eBullion,
Inc. |
Notes
to Unaudited Condensed Consolidated Financial Statements |
For
the Three and Six Months Ended September 30, 2015 and 2014 |
(Expressed
in US Dollars) |
2. |
Summary
of Significant Accounting Policies – continued |
Commissions
Receivable
Commissions
receivable represent commissions to be collected from agents for their customers’ trades executed across Man Loong’s
electronic trade platform and telephone transaction system through the balance sheet date. Commissions receivable are typically
remitted to the Company within 30 days of trade execution. The Company has not historically incurred credit losses on these commissions
receivable. As of September 30, 2015 and March 31, 2015, the Company had no reserve for credit losses nor had it incurred any
bad debts for the three and six months ended September 30, 2015 and 2014.
Deposits
and Prepaid Expenses
The
Company records goods and services paid for but not received until a future date as deposits and prepaid expenses. These primarily
include deposits and prepayments for occupancy related expenses. Deposit or prepaid expenses which will be realized more than
12 months past the balance sheet date are classified as non-current assets in the accompanying consolidated balance sheets.
Equipment
Equipment
is stated at cost. The cost of an asset consists of its purchase price and any directly attributable costs of bringing the asset
to its present working condition and location for its intended use.
Equipment
is depreciated using the straight-line method over the estimated useful lives of the assets as follows:
|
Office equipment | |
5 years |
|
Furniture and fixtures | |
5 years |
|
Computer equipment | |
5 years |
Expenditures
for maintenance and repairs are charged to expense as incurred. Additions, renewals and betterments are capitalized.
Gain
or loss on disposal of equipment is the difference between net sales proceeds and the carrying amount of the relevant assets,
if any, and is recognized as income or loss in the accompanying unaudited condensed consolidated statements of comprehensive income
(loss).
Variable
Interest Entity
A
variable interest entity (“VIE”) is a legal entity, other than an individual, used for business purposes that either
(a) has equity investors that do not provide sufficient financial resources for the entity to support its activities, or (b) the
equity investors lack any one of the following three criteria:
|
● |
The
power to direct activities that most significantly impact the entity’s economic performance |
|
● |
The
obligation to absorb the expected losses of the entity |
|
● |
The
right to receive the expected residual returns. |
A
VIE is required to be consolidated by a reporting entity if it has a controlling financial interest in the VIE. A reporting entity
is deemed to have a controlling financial interest in a VIE if it both has the power to direct the activities that most significantly
impact the VIE’s economic performance and the obligation to absorb the losses or the right to receive economic benefits
from the VIE that could potentially be significant to the VIE.
eBullion,
Inc. |
Notes
to Unaudited Condensed Consolidated Financial Statements |
For
the Three and Six Months Ended September 30, 2015 and 2014 |
(Expressed
in US Dollars) |
2. |
Summary
of Significant Accounting Policies – continued |
Reporting
Currency and Foreign Currency Translation
As
of September 30 and March 31, 2015 and for the three and six months ended September 30, 2015 and 2014, the accounts of the Company
were maintained in their functional currencies, which is the U.S. dollar for eBullion and the Hong Kong dollar ("HK dollar")
for Man Loong. The financial statements of Man Loong have been translated into U.S. dollars which is its reporting currency. All
assets and liabilities of Man Loong are translated at the exchange rate on the balance sheet date, shareholders’ equity
is translated at historical rates and the statements of comprehensive income, and statements of cash flows are translated at the
weighted average exchange rate for the periods. The resulting translation adjustments for the period are reported under other
comprehensive income (loss) and accumulated translation adjustments are reported as a separate component of shareholders’
equity.
Foreign
exchange rates at September 30 and March 31, 2015 and for the three and six months ended September 30, 2015 and 2014 are as follows:
|
|
|
2015 |
|
|
2014 |
|
|
|
|
|
|
|
|
|
|
Year
end March 31, 2015 USD/HKD exchange rate |
|
|
7.7542 |
|
|
|
|
|
|
Period end USD/HKD
exchange rate |
|
|
7.7500 |
|
|
|
7.7632 |
|
|
Average
USD/HKD exchange rate: |
|
|
|
|
|
|
|
|
|
Six
months ended September 30 |
|
|
7.7515 |
|
|
|
7.7517 |
|
|
Three
months ended September 30 |
|
|
7.7513 |
|
|
|
7.7507 |
|
Long-Lived
Assets
The
Company periodically evaluates the carrying value of long-lived assets when events and circumstances warrant such review. The
carrying value of a long-lived assets is considered impaired when the anticipated undiscounted cash flow from such an asset is
separately identifiable and is less than the carrying value. In that event, a loss is recognized in the amount by which the carrying
value exceeds the fair market value of the long-lived asset. The Company has identified no such impairment losses.
Accounts
payable and accrued liabilities
Accounts
payable and accrued liabilities at September 30, 2015 and March 31, 2014 primarily consist of accrued statutory bonus payable
to employees in Hong Kong, audit fees payable to the Company’s auditors and accountants and legal fees payable to the Company’s
legal counsel.
Customer
Deposits
Customer
deposits at September 30, 2015 and March 31, 2015 were accepted pursuant to the Company’s agreements with certain of its
independent agents. Under terms of those agreements, the Company accepts margin deposits for certain of the agents’ customers
who prefer that the Company hold those deposits. If an agent’s customer suffers a trading loss equaling 80% or more of the
customers’ deposit balance, the customer is required to increase the balance of his deposit or the customer’s trading
position is closed and the remaining deposit balance is remitted to the agent in order to fund the customer’s trading losses.
Accordingly,
the Company had no risk of loss related to customer deposits at September 30, 2015 and March 31, 2015.
Accumulated
Other Comprehensive Income (Loss)
The
Company’s accumulated other comprehensive income (loss) as September 30, 2015 and 2014 consist of adjustments resulting
from translating Man Loong’s functional currency, the HK dollar, to its reporting currency, the U.S. dollar.
eBullion,
Inc. |
Notes
to Unaudited Condensed Consolidated Financial Statements |
For
the Three and Six Months Ended September 30, 2015 and 2014 |
(Expressed
in US Dollars) |
2. |
Summary
of Significant Accounting Policies - continued |
Rental
Income
Rental
income consists of rent charged for a portion of Man Loong’s office facility which is leased on a short term lease arrangement.
Agreed rental payments were $11,350 per month from April 1, 2014 until January 1, 2015, when the rent was reduced to $4,514 per
month. The lease arrangement expired on March 31, 2015. Though not subject to a formal lease agreement, in April 2015, Man Loong
extended the lease arrangement for a further 2 months, with agreed rental payments of $4,514 per month. For the six months ended
September 30, 2015 and 2014, Man Loong recognized rental income of $9,030 and $0, respectively, and $0 and $0 for the three months
ended September 30, 2015 and 2014, respectively in the accompanying unaudited condensed consolidated statements of comprehensive
income.
Income
Taxes
The
Company utilizes ASC 740, Income Taxes, which requires the recognition of deferred tax assets and liabilities for the expected
future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred
income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities
and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates applicable to the periods
in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce
deferred tax assets to the amount expected to be realized.
The
Company has adopted the provisions of the interpretation, of ASC 740, Accounting for Uncertainty in Income Taxes. The Company
did not have any material unrecognized tax benefits and there was no effect on its financial condition or results of operations
as a result of implementing the interpretation. The Company files income tax returns in the United States and the Company is subject
to federal income tax examinations for the fiscal years ended March 31, 2015 and 2014. Man Loong files income tax returns in Hong
Kong and is no longer subject to tax examinations by tax authorities for years before 2008. At September 30, 2015, Man Loong had
no uncertain tax positions.
Historically,
we have not provided for U.S. income and foreign withholding taxes on Man Loong’s undistributed earnings, because such earnings
have been retained and reinvested by Man Loong. The Company does not intend to require Man Loong to pay dividends for the foreseeable
future and so additional income taxes and applicable withholding taxes that would result from the repatriation of such earnings
are not practicably determinable.
Earnings
(Loss) per Share
The
Company computes earnings (loss) per share (“EPS”) in accordance with ASC 260, Earnings Per Share. ASC 260
requires companies with complex capital structures to present basic and diluted EPS. Basic EPS is measured as net income divided
by the weighted average common shares outstanding during the period.
Diluted
EPS is similar to basic EPS but presents the dilutive effect on a per share basis of contracts to issue ordinary common shares
(e.g., convertible securities, options and warrants) as if they had been converted at the beginning of the periods presented,
or issuance date, if later. The computation of diluted EPS includes the estimated impact of the exercise of contracts to purchase
common stocks using the treasury stock method and the potential shares of converted common stock associated with the convertible
debt using the if-converted method.
Potential
common shares that have an anti-dilutive effect (i.e., those that increase earnings per share or decrease loss per share) are
excluded from the calculation of diluted EPS.
The
Company does not have any securities that may potentially dilute its basic earnings (loss) per share.
On
March 12, 2015, the Company effected a 10 for 1 stock split, whereby it exchanged 10 of its shares for every 1 share issued at
outstanding before the split. Following the share split, the Company has 512,600,000 shares issued and outstanding. All share
and per share amounts for the prior period have been retroactively restated to give effect of the 10 for 1 share split.
Comprehensive
Income (Loss)
Comprehensive income (loss)
is comprised of net income (loss) and other comprehensive income (loss). Other comprehensive income (loss) includes unrealized
gains and losses resulting from translating Man Loong’s functional currency, the HK dollar, to its reporting currency, the
U.S. dollar.
eBullion,
Inc. |
Notes
to Unaudited Condensed Consolidated Financial Statements |
For
the Three and Six Months Ended September 30, 2015 and 2014 |
(Expressed
in US Dollars) |
2. |
Summary
of Significant Accounting Policies - continued |
Recent
Accounting Pronouncements
In
February 2015, the FASB issued ASU 2015-02 Consolidations (Topic 810) Amendments to the Consolidation Analysis. ASU 2015-02
simplifies consolidation accounting for VIEs by placing more emphasis on the risk of loss and simplifying the application of related
party guidance when determining whether a controlling financial interest in a VIE exists. ASU 2015-02 also simplifies consolidation
analysis for public and private companies in several industries that typically make use of limited partnerships. ASU 2015-02 is
effective for years beginning after December 15, 2015 and early adoption is permitted. The adoption of ASU 2015-02 is not expected
to have a material effect on the Company’s unaudited condensed consolidated financial statements.
In
August 2015, the FASB issued ASU 2015-14 Revenue From Contracts With Customers (Topic 606) Deferral of the Effective Date.
ASU 2015-14 defers the effective date of ASU 2014-09, Revenue from Contracts With Customers (Topic 606) to years beginning after
December 31, 2018 and early adoption is permitted. ASU 2014-09 clarifies the principles for revenue recognition and develops common
revenue recognition standards for US GAAP and International Financial Reporting Standards (IFRS). The adoption of ASU 2015-14
and ASU 2014-09 is not expected to have a material effect on the Company’s unaudited condensed consolidated financial statements.
Recent
Accounting Pronouncements, Continued
Other
recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force), the American Institute of Certified
Public Accountants, and the SEC did not or are not believed by management to have a material impact on the Company’s present
or future unaudited condensed consolidated financial statements.
3. |
Deposits
and Prepaid Expenses |
|
|
|
Deposits
and prepaid expenses consisted of the following as of September 30, 2015 and March 31, 2015: |
|
|
|
Unaudited |
|
|
Audited |
|
|
|
|
September 30,
2015 |
|
|
March 31,
2015 |
|
|
Current |
|
|
|
|
|
|
|
Prepaid
rent and occupancy expenses |
|
$ |
338,035 |
|
|
$ |
52,452 |
|
|
|
|
|
|
|
|
|
|
|
|
Noncurrent |
|
|
|
|
|
|
|
|
|
Rent
and occupancy deposits |
|
|
147,398 |
|
|
|
223,470 |
|
|
Total
deposits and prepaid expenses |
|
$ |
485,433 |
|
|
$ |
275,922 |
|
4. |
Loan
receivable from Global Long |
On
April 3, 2015, Man Loong loaned Global Long Inc. Limited (“Global Long”) $774,199 (HKD$6,000,000). Global Long is
registered in Hong Kong and through its subsidiaries in the Peoples Republic of China, is engaged in trading silver contracts
as an electronic trading member of the Guangdong Precious Metal Exchange. The loan bears interest at a 6% annual rate, matures
on its 5th anniversary and is secured by a first right of claim on a bank deposit held by a subsidiary of Global Long. Under terms
of the loan, interest is payable to Man Loong quarterly and Global Long has the right to repay the loan at any time before the
maturity date. Until all principal and accrued interest are repaid on the loan, Global Long may not enter into additional borrowings
without Man Loong’s written permission, and upon certain events of default, the Loan becomes due on demand. The purpose
of the loan was to establish a relationship with Global Long with the intent of becoming their first choice for Global Long’s
customers who wish to trade in gold trading positions through the CGSE.
The
Company determined that the loan to Global Long does not give the Company a variable interest in Global Long and that Global Long
is not a variable interest entity (“VIE”) because Man Loong does not have the power to direct any of the activities
of Global Long that significantly impact its economic performance. Accordingly, the Company has not consolidated Global Long into
its unaudited condensed consolidated financial statements.
eBullion,
Inc. |
Notes
to Unaudited Condensed Consolidated Financial Statements |
For
the Three and Six Months Ended September 30, 2015 and 2014 |
(Expressed
in US Dollars) |
5. |
Loan
receivable from eBullion Trade |
In
July 2013, the Company’s wholly-owned subsidiary Man Loong, loaned eBullion Trade Company Limited (“eBullion Trade”)
$997,049 (RMB 6,100,000). eBullion Trade is a development stage entity pursuing a license in the Peoples’ Republic of China
for the purpose of engaging in trading silver contracts as an electronic trading member of the Guangdong Precious Metal Exchange
(“GPME”).
The
Company determined that the loan to eBullion Trade gave the Company a variable interest in eBullion Trade and that eBullion Trade
was a variable interest entity (“VIE”) because the equity investor of eBullion Trade on the date of the loan lacked
sufficient equity at risk to finance its activities without the loan. However, the Company determined that it was not the primary
beneficiary of the VIE, because Man Loong did not have the power to direct the activities of the VIE that significantly impacted
its economic performance. Accordingly, the Company did not consolidate eBullion Trade into its unaudited condensed consolidated
financial statements.
The
loan was unsecured, bore no interest and matured on April 17, 2014. Under terms of the loan, in the event that eBullion Trade’s
GPME application was approved, it had the option to repay the loan in cash or by transferring 100% of its outstanding stock to
Man Loong.
In
April 2014, eBullion Trade informed Man Loong that it intended to repay the loan in cash in accordance with the terms of the loan
agreement, and the loan was repaid in full on May 2, 2014.
Equipment,
including leasehold improvements, consisted of the following as of September 30, 2015 and March 31, 2015:
|
|
|
Unaudited |
|
|
Audited |
|
|
|
|
September 30,
2015 |
|
|
March 31,
2015 |
|
|
Office
equipment |
|
$ |
305,784 |
|
|
$ |
305,557 |
|
|
Computer equipment |
|
|
41,577 |
|
|
|
41,546 |
|
|
Furniture
and fixtures |
|
|
56,157 |
|
|
|
56,117 |
|
|
|
|
|
403,518 |
|
|
|
403,220 |
|
|
Less:
Accumulated depreciation |
|
|
(218,485 |
) |
|
|
(178,089 |
) |
|
Equipment,
net |
|
$ |
185,033 |
|
|
$ |
225,131 |
|
Depreciation
expense was $40,344 and $40,343 for the six months ended September 30, 2015 and 2014, respectively, and $20,172 and $20,174 for
the three months ended September 30, 2015 and 2014, respectively and was recorded as depreciation expense in the accompanying
unaudited condensed consolidated statements of comprehensive income (loss).
Customer
deposits were $153,974 and $92,613 at September 30, 2015 and March 31, 2015, respectively, and were recorded as a current liability
in the accompanying condensed consolidated balance sheets.
eBullion,
Inc. |
Notes
to Unaudited Condensed Consolidated Financial Statements |
For
the Three and Six Months Ended September 30, 2015 and 2014 |
(Expressed
in US Dollars) |
8. |
General
and Administrative Expenses |
General and administrative expenses consist of the following
for the three and six months ended September 30, 2015 and 2014.
|
| |
Unaudited | | |
Unaudited | | |
Unaudited | | |
Unaudited | |
|
| |
Six months | | |
Six months | | |
Three months | | |
Three months | |
|
| |
2015 | | |
2014 | | |
2015 | | |
2014 | |
|
Marketing expenses | |
$ | 172,108 | | |
$ | 148,532 | | |
$ | 84,758 | | |
$ | 67,584 | |
|
Trading platform rent | |
| 83,465 | | |
| 93,909 | | |
| 39,183 | | |
| 47,562 | |
|
Transportation | |
| 29,803 | | |
| 36,358 | | |
| 12,457 | | |
| 19,040 | |
|
Internet | |
| 8,908 | | |
| 12,214 | | |
| 4,454 | | |
| 6,284 | |
|
Travel and entertainment | |
| 3,852 | | |
| 7,799 | | |
| 701 | | |
| 4,058 | |
|
Computers and software | |
| 16,237 | | |
| 21,612 | | |
| 8,442 | | |
| 7,279 | |
|
Legal and professional | |
| 80,354 | | |
| 122,267 | | |
| 54,088 | | |
| 44,033 | |
|
Licenses | |
| 26,969 | | |
| 1,551 | | |
| 25,073 | | |
| 821 | |
|
Occupancy | |
| 298,774 | | |
| 295,508 | | |
| 149,234 | | |
| 147,961 | |
|
Advertising | |
| 4,696 | | |
| 9,173 | | |
| 2,818 | | |
| 6,540 | |
|
Other taxes | |
| - | | |
| 1,050 | | |
| - | | |
| - | |
|
Other | |
| 40,151 | | |
| 63,621 | | |
| 20,882 | | |
| 30,112 | |
|
Total general and administrative expense | |
$ | 765,317 | | |
$ | 813,594 | | |
$ | 402,090 | | |
$ | 381,274 | |
Income (loss) before income taxes as shown in the accompanying unaudited condensed consolidated statements
of comprehensive income (loss) is summarized below for the three and six months ended September 30, 2015 and 2014.
|
| |
Unaudited | | |
Unaudited | | |
Unaudited | | |
Unaudited | |
|
| |
Six months | | |
Six months | | |
Three months | | |
Three months | |
|
| |
2015 | | |
2014 | | |
2015 | | |
2014 | |
|
United States | |
$ | (26,089 | ) | |
$ | (97,291 | ) | |
$ | (16,445 | ) | |
$ | (31,167 | ) |
|
Hong Kong | |
| (235,234 | ) | |
| 352,019 | | |
| (248,462 | ) | |
| 233,706 | |
|
Income before income taxes | |
$ | (261,323 | ) | |
$ | 254,728 | | |
$ | (264,907 | ) | |
$ | 202,539 | |
eBullion,
Inc. |
Notes
to Unaudited Condensed Consolidated Financial Statements |
For
the Three and Six Months Ended September 30, 2015 and 2014 |
(Expressed
in US Dollars) |
9. |
Income
Taxes, Continued |
The
provision (benefit) for income taxes consists of the following for the three and six months ended September 30, 2015 and 2014:
|
| |
Unaudited | | |
Unaudited | | |
Unaudited | | |
Unaudited | |
|
| |
Six months | | |
Six months | | |
Three months | | |
Three months | |
|
| |
2015 | | |
2014 | | |
2015 | | |
2014 | |
|
Current: | |
| | |
| | |
| | |
| |
|
United States | |
$ | - | | |
$ | - | | |
$ | - | | |
$ | - | |
|
Hong Kong | |
| 4,180 | | |
| 62,621 | | |
| - | | |
| 40,830 | |
|
Total current provision | |
| 4,180 | | |
| 62,621 | | |
| - | | |
| 40,830 | |
|
| |
| | | |
| | | |
| | | |
| | |
|
Deferred: | |
| | | |
| | | |
| | | |
| | |
|
United States | |
| - | | |
| - | | |
| - | | |
| - | |
|
Hong Kong | |
| (5,300 | ) | |
| (5,187 | ) | |
| (2,650 | ) | |
| (2,594 | ) |
|
Total deferred benefit | |
| (5,300 | ) | |
| (5,187 | ) | |
| (2,650 | ) | |
| (2,594 | ) |
|
| |
| | | |
| | | |
| | | |
| | |
|
Total income tax provision | |
$ | (1,120 | ) | |
$ | 57,434 | | |
$ | (2,650 | ) | |
$ | 38,236 | |
The
reconciliation of the income tax provision to the amount computed by applying the U.S. statutory federal income tax rate to income
(loss) before income taxes is as follows:
|
| |
Unaudited | | |
Unaudited | | |
Unaudited | | |
Unaudited | |
|
| |
Six months | | |
Six months | | |
Three months | | |
Three months | |
|
| |
2015 | | |
2014 | | |
2015 | | |
2014 | |
|
Income tax provision (benefit) at the U.S. statutory tax rate | |
$ | (88,850 | ) | |
$ | 86,608 | | |
$ | (90,068 | ) | |
$ | 68,863 | |
|
Valuation allowance on U.S. net operating loss carryforwards | |
| 8,870 | | |
| 33,079 | | |
| 5,591 | | |
| 10,597 | |
|
Impact of foreign operations | |
| 78,860 | | |
| (61,603 | ) | |
| 81,827 | | |
| (40,899 | ) |
|
Other | |
| - | | |
| (650 | ) | |
| - | | |
| (325 | ) |
|
Income tax provision (benefit) | |
$ | (1,120 | ) | |
$ | 57,434 | | |
$ | (2,650 | ) | |
$ | 38,236 | |
At September 30, 2015, the
Company had U.S. net operating loss carryforwards which expire in 2035. Based on the available evidence, it is uncertain whether
future U.S. taxable income will be sufficient to offset the estimated net loss carryforwards, accordingly, the Company has recorded
a valuation allowance against all of the net operating loss carryforwards as of September 30 2015.
At September 30 and March
31, 2015, the Company’s and Man Loong’s differences between the book and tax basis of equipment gave rise to deferred
income tax assets of $15,282 and $10,522, respectively which are recorded as noncurrent in the accompanying condensed consolidated
balance sheets. The Company had no other differences between the book and tax basis of assets and liabilities as of September
30 and March 31, 2015.
As
a result of the implementation of ASC 740, Accounting for Income Taxes, the Company recognized no material adjustment to
unrecognized tax benefits. The Company will continue to classify income tax penalties and interest, if any, as part of interest
and other expenses in the accompanying unaudited condensed consolidated statements of comprehensive income. The Company has incurred
no interest or penalties during the three and six months ended September 30, 2015 and 2014.
eBullion,
Inc. |
Notes
to Unaudited Condensed Consolidated Financial Statements |
For
the Three and Six Months Ended September 30, 2015 and 2014 |
(Expressed
in US Dollars) |
10. |
Earnings
(Loss) Per Share |
Earnings
(loss) per share (“EPS”) information for the three and six months ended September 30, 2015 and 2014 was determined
by dividing net income (loss) for the period by the weighted average number of both basic and diluted shares of common stock and
common stock equivalents outstanding.
As of and for the three and
six months ending September 30, 2015 and 2014, the Company did not have any securities that may potentially dilute basic earnings
(loss) per share. Therefore basic and diluted earnings (loss) per share for the respective years are the same.
|
| |
Unaudited | | |
Unaudited | | |
Unaudited | | |
Unaudited | |
|
| |
Six months | | |
Six months | | |
Three months | | |
Three months | |
|
| |
2015 | | |
2014 | | |
2015 | | |
2014 | |
|
Numerator | |
| | | |
| | | |
| | | |
| | |
|
Net income (loss) attributable to common shareholders | |
$ | (260,203 | ) | |
$ | 197,294 | | |
$ | (262,257 | ) | |
$ | 164,303 | |
|
| |
| | | |
| | | |
| | | |
| | |
|
Denominator | |
| | | |
| | | |
| | | |
| | |
|
Weighted average shares of common stock (basic and diluted) | |
| 51,260,000 | | |
| 51,260,000 | | |
| 51,260,000 | | |
| 51,260,000 | |
|
| |
| | | |
| | | |
| | | |
| | |
|
Basic and diluted earnings (loss) per share | |
$ | (0.00 | ) | |
$ | 0.00 | | |
$ | (0.00 | ) | |
$ | 0.00 | |
11. |
Related
Party Transactions and Balances |
The
Company engaged in related party transactions with certain shareholders, and a company under common control as described below.
On
May 27, 2011, the Company entered into an agreement with a company under common control, True Technology Company Limited (“True
Technology”), under which True Technology hosts the Company’s servers and provides a connection between the customer’s
servers and the internet using True Technology’s public network connections. The fee for these services was $12,894 per
month through April 2013 when the fee was reduced to $3,868 per month and is recorded as trading platform rent expense as a component
of general and administrative expenses. Included in general and administrative expenses in the accompanying unaudited condensed
consolidated statements of comprehensive income (loss) for the six months ended September 30, 2015 and 2014, are rental fees which
were paid to True Technology of $23,221 and $23,224 respectively. Rental fees paid to True Technology for the three months ended
September 30, 2015 and 2014 were $11,611 and $11,612 respectively.
Included
in employee compensation and benefits in the accompanying unaudited condensed consolidated statements of comprehensive income
for the six months ending September 30, 2015 and 2014, are salaries and director compensation of $15,841 and $23,220 respectively,
which were paid to two of the Company’s directors and shareholders. Compensation and benefits paid to these shareholders
for the three months ended September 30, 2015 and 2014 were $7,740 and $11,612 respectively.
eBullion,
Inc. |
Notes
to Unaudited Condensed Consolidated Financial Statements |
For
the Three and Six Months Ended September 30, 2015 and 2014 |
(Expressed
in US Dollars) |
The
Company leases office space under non-cancellable operating lease agreements that expire on various dates through 2019.
In
December 2012, the Company entered into a lease agreement on approximately 10,000 square feet of office space which replaced its
previous office facilities. The Company occupied the space in January 2013. Under terms of the lease, the Company paid approximately
$192,000 in lease deposits and was committed to lease and management fee payments of approximately $46,647 per month for 29 months.
In
September 2015, the Company entered into a new lease agreement on approximately 5,500 square feet of office space which will replace
its previous office facilities. The Company will occupy the space in December 2015. Under terms of the lease, the Company paid
approximately $147,397 in lease deposits and is committed to lease and management fee payments of approximately $27,209 per month
for 35 months.
On
May 27, 2011, the Company entered into an agreement with True Technology, a company under common control under which True Technology
hosts the Company’s servers and provides a connection between the customer’s servers and the internet using True Technology’s
public network connections. The fees paid to True Technology are approximately $12,894 per month for 12 months after which the
fees were reduced to $3,868 per month for 24 months. Subsequent to year end, the trading platform lease with True Technology was
renewed for 2 years with monthly payment of approximately $3,868 until March 31, 2017.
Future
annual minimum lease payments, including maintenance and management fees, for non-cancellable operating leases and trading platform
fees, are as follows:
Years
ending September 30,
|
2016 | |
$ | 422,714 | |
|
2017 | |
| 349,408 | |
|
2018 | |
| 326,203 | |
|
2019 | |
| 13,592 | |
|
| |
$ | 1,111,916 | |
On
April 3, 2013, the Company issued 507,600,000 of its common stock as founder shares in exchange for 100% of Man Loong’s
outstanding shares to complete the Merger.
Subsequent
to the Merger, the Company issued 5,000,000 shares of common stock, with par value $0.0001 to various investors for total cash
proceeds of $240,044.
On
March 12, 2015, eBullion increased the number of its authorized shares from 500,000,000 to 1,000,000,000. The par value of the
Company’s shares remained unchanged at $.0001. The Company also effected a 10 for 1 stock split, whereby it exchanged 10
of its shares for every 1 share issued at outstanding before the split. Following the share split, the Company has 512,600,000
shares issued and outstanding. All share and per share amounts for the prior period have been retroactively restated to give effect
of the 10 for 1 share split.
ITEM 2. |
MANAGEMENT'S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. |
You
should read the following discussion and analysis of our financial condition and results of operations together with our financial
statements and related notes appearing elsewhere in this quarterly report. The following discussion contains forward-looking statements
that involve risks and uncertainties. Our actual results and the timing of certain events could differ materially from those anticipated
in these forward-looking statements as a result of certain factors, including those discussed below and elsewhere in this quarterly
report. This discussion should be read in conjunction with the accompanying unaudited condensed consolidated financial statements
and the audited consolidated financial statements and notes thereto for the fiscal year ended March 31, 2015, found in our Annual
Report on Form 10-K. This discussion may contain forward-looking statements that involve risks and uncertainties. See “Forward-Looking
Statements.”
OVERVIEW
On
April 3, 2013, we entered into a Contribution Agreement with the shareholders of Man Loong, whereby we acquired 100% of the issued
and outstanding capital stock of Man Loong from its stockholders, in exchange for 507,600,000 newly issued shares of our common
stock, with a par value of $0.0001. After the transaction, Man Loong became our wholly owned subsidiary.
This
share exchange transaction (the “Merger”) was accounted for as a recapitalization whereby Man Loong was the acquirer
for financial reporting purposes and eBullion was the acquired company. Consequently, the assets and liabilities and
the operations that are reflected in the historical financial statements prior to the Merger were those of Man Loong and were
recorded at the historical cost basis. The consolidated financial statements after completion of the Merger include
the assets and liabilities of eBullion and Man Loong, historical operations of Man Loong and operations of eBullion from the closing
date of the Merger. Common stock and the corresponding capital amounts of the Company pre-merger have been retroactively
restated as capital stock shares reflecting the exchange ratio in the Merger. In conjunction with the Merger, Man Loong
received no cash and assumed no liabilities of eBullion.
In
March 2015, we increased the number of our authorized shares from 500,000,000 to 1,000,000,000. The par value of our shares remained
unchanged at $.0001. We also effected a 10 for 1 stock split, whereby we exchanged 10 of our shares for every 1 share issued at
outstanding before the split. Following the share split, we have 512,600,000 shares issued and outstanding. All share and per
share amounts for the prior year have been retroactively restated to give effect of the 10 for 1 share split.
Since
April 3, 2013, through our subsidiary, Man Loong, we have been engaged in the precious metals trading business, facilitating the
execution of gold and silver price contracts for customers of its agents via an electronic trading platform which we license from
an affiliated company, True Technology. In facilitating trades of these price contracts, Man Loong acts in its capacity as an
officially designated electronics trading member of the Chinese Gold and Silver Exchange Society, or the “CGSE”, in
Hong Kong. Man Loong holds a Type AA License which it uses to engage in the electronic trading of Kilo Gold and Loco London Gold
and Silver. The electronic trading platform that Man Loong licenses from True Technology provides its agents’ customers
with CGSE price quotations on gold and silver price contracts, on a Loco London basis, as well as information updates on the gold
and silver market, based on an evaluation of third-party market pricing sources such as Reuters or Bloomberg. Man Loong’s
agents’ customer base is located primarily in China where it works through independent agents, and in Hong Kong where it
has one office and maintains its trading platforms. Man Loong has 3 agents in Hong Kong which cover three main geographic areas,
including Hong Kong Island, Kowloon and the New Territories. In mainland China, Man Loong has 10 agents located in Shanghai and
Guangdong and Fujian provinces. Each of our agents in Hong Kong have between 100 and 150 customers and our agents in China each
have between 100 and 600 customers.
Man
Loong’s membership in the CGSE allows it to facilitate trades on behalf of nonmembers who execute trades to buy and/or sell
gold and/or silver price contracts without it being required to become a counterparty to the trade or to purchase or sell any
gold or silver being traded as a principal. Man Loong facilitates the trades that are placed using its electronic trading platform.
Man Loong provides agents and their customers with access to its electronic trading platform which has a direct connection to
the CGSE. Man Loong enters into an agency agreement with each agent for which it facilitates trades pursuant to which the agent
agrees to pay a commission to Man Loong for each trade that Man Loong facilitates and the agent agrees to take all responsibility
for trade losses. The agents often use Man Loong’s offices and conference rooms as a physical place to meet with customers
and Man Loong provides a dedicated investment center where agents and their customers can access the electronic trading platform
to place and process contract orders for gold, and silver and obtain up-to-date market data, trade reports and gain/ loss reports
to assist them in evaluating their portfolio and effecting contract trades.
Man
Loong provides its agents and their customers, with access to its electronic trading platform to place and process price contract
orders for gold and silver, which price contracts do not involve the physical transfer or delivery of any actual gold, silver
or other precious metals. The electronic trading platform also provides an agent’s customers with up-to-date market
data, trade reports and gain/ loss reports to assist them in evaluating their portfolio and effecting price contract trades. Man
Loong’s agents assume all of the portfolio trading risk of their price contract orders. Man Loong merely supplies
the trading platform that processes the trade as a member of the CGSE and receives a commission. The electronic trading platform
communicates and confirms all of the trades that are placed by Man Loong to the CGSE and the CGSE, through the electronic trading
platform, provides both the customers of the agents and the agents with confirmation codes which confirm execution of the trades
placed through the electronic platform.
Man
Loong receives a brokerage commission per trade ranging from $20 to $40 regardless of the purchase price paid or received for
the gold or silver traded and the agent assumes the sole responsibility for settlement of the purchase price of the gold or silver
traded and for any resulting gain or loss recognized on those trades.
All
of our revenue has been derived by Man Loong from the commission it receives on each trade executed through its electronic trade
platform or telephone transaction system. Man Loong calculates and charges the agents account a flat fee of between
$20 - $40 when each trade is closed and invoices those agents for their commission at the end of each month. Payment terms for
commissions are net 30 days. The typical fee is $40 per trade; however, for agents whose customers execute a large
number of trades, Man Loong will discount the fee to as low as $20 per trade. Man Loong evaluates its commission fee
on an annual basis and adjusts it accordingly based upon its operational costs, which include the fees to run its electronic trading
platform, the fees associated with the maintenance of its office, the fees that are charged by the CGSE and its employee costs.
Man
Loong is not a counterparty in the trades executed by our agents’ customers on our trading platforms, instead it charges
a commission which ranges from $20 to $40 for each completed trade. Man Loong’s revenue is dependent upon the amount of
commission it generates which in turn is dependent upon the number of agents it has and trade volume as opposed to the price of
the commodities. Man Loong’s revenues increase as it adds new contracted agents and as those agents increase the number
of their customers. If Man Loong has fewer agents, its revenue will suffer. In addition, past trends indicate that at times of
price volatility in the prices of gold and silver, Man Loong’s agents’ customers tend to increase the number of trades
that they execute across Man Loong’s trading platforms and in times of low gold and silver price volatility Man Loong’s
agents’ customers decrease the number of trades. The number of agents was substantially unchanged during the three and six
months ended September 30, 2015 and 2014, however, the number of agent customers decreased by 2 during the three months ended
September 30, 2015 and those 2 customers historically accounted for more than 10% of commission revenue. Additionally, the
price of gold remained in its current trading range of approximately $1,200 per ounce and the price of silver remained in its
current trading range of approximately $15 per ounce. For the three and six months ended September 30, 2015, revenues decreased
by $495,194 or 61.6%, and $669,669 or 44.3%, respectively, as compared to the three and months ended September 30, 2014. We believe
that revenues decreased primarily because of the continued lack of volatility in gold and silver prices. A decrease in the number
of agents and their customers or the continued lack of volatility in gold prices in the future could result in declines in trade
revenue compared to past results.
Our
principal offices are located at 80 Broad Street, New York, New York 10004, (212) 837-7858. Man Loong currently has one
office in Hong Kong. Man Loong’s principal executive offices are located at 8/F, Tower 5, China Hong Kong City,
33 Canton Road, Tsim Sha Tsui, Hong Kong. The telephone number at Man Loong’s principal executive office is +852-2155-3999.
All of Man Loong’s transactions and the technologies, including the servers that carry out these transactions, are all processed
and located in Hong Kong.
Our
Corporate History and Background
We
were incorporated under the laws of the State of Delaware on January 28, 2013. We were initially formed to develop software for
use in on-line trading of gold and silver contracts. Since the acquisition of Man Loong, our business development focus has been,
and we expect will continue to be, solely on increasing Man Loong’s market share for the on-line trading of gold and silver
contracts within the Hong Kong market while developing a business model for the on-line trading of gold and silver contracts by
Man Loong in the People’s Republic of China.
Results
of Operations for the Three Months Ended September 30, 2015 and 2014
Man
Loong’s revenue was $308,419 and $803,613 for the quarters ended September 30, 2015 and 2014, respectively, a decrease of
$495,194 or 61.6%. All of Man Loong's revenue was derived from commissions on trades placed through its trading
platform and telephone transaction system. During the three months ended September 30, 2015 and 2014, the number of
agents remained constant, however the number of agent customers decreased by 2 during the three months ended September 30, 2015
and those 2 customers historically accounted for more than 10% of commission revenue. We believe that the lack of volatility in
gold and silver prices during the three months ended September 30, 2015, was the primary cause of the decrease in revenue from
the prior quarter. The lack of volatility in gold and silver prices and decreases in the number of agents and their customers
could continue to result in less trade revenue as it has in the past.
Total
expenses were $584,971 for the quarter ended September 30, 2015 as compared to $601,091 for the quarter ended September 30, 2014,
a decrease of $16,120 or 2.7%. Approximately 69% of our total expenses for the quarter ended September 30, 2015 were
attributed to general and administrative expenses compared to 63% for the quarter ended September 30, 2014. Man Loong’s
largest general and administrative expense historically has been its marketing expense, which includes payment made to agents
for their provision of sales, marketing and customer support services. Marketing expense was $84,758 or 14% of Man
Loong’s total expenses for the quarter ended September 30, 2015 and $67,584 or 11% of Man Loong’s total expenses for
the quarter ended September 30, 2014. The increase in marketing expenses in the quarter ended September 30, 2015 as compared to
the prior year was the result of Man Loong increasing headcount and expanding its marketing effort to attract new agents and customers. Man
Loong’s other large expenses were (i) its trading platform hosting and rent which was $39,183 or 7% of its total expenses
for the quarter ended September 30, 2015 and $47,562 or 8% of its total expenses for the quarter ended September 30, 2014, (ii)
its legal and professional expense which was $54,088 or 9% of its total expenses for the quarter ended September 30, 2015 and
$44,033 or 7% of its total expenses for the quarter ended September 30, 2014 and (iii) its occupancy costs for the rent and management
fee paid for its offices which was $149,234 or 26% of Man Loong’s total expenses for the quarter ended September 30, 2015
and $147,961 or 25% of its total expenses for the quarter ended September 30, 2014. For the quarters ended September 30, 2015
and 2014, employee compensation and benefits was $162,709 and $199,643 or 28% and 33% of Man Loong’s total expenses for
the quarters ended September 30, 2015 and 2014, respectively.
Net loss was $262,257 for the quarter ended September 30, 2015, compared to net income of $164,303 for the quarter
ended September 30, 2014 a decrease of $426,560 or 260%. The decrease in net income was primarily the result of Man
Loong’s decrease in revenue while its, marketing, occupancy and legal and professional expenses increased as a percentage
of revenue, offset in part by a decrease in employee compensation and trade platform rent expense as a percentage of revenue for
the quarter ended September 30, 2015 as compared to the quarter ended September 30, 2014.
Results
of Operations for the Six Months Ended September 30, 2015 and 2014
Man
Loong’s revenue was $842,567 and $1,512,236 for the six months ended September 30, 2015 and 2014, respectively, a decrease
of $669,669 or 44.3%. All of Man Loong's revenue was derived from commissions on trades placed through its trading
platform and telephone transaction system. During the six months ended September 30, 2015 and 2014, the number of
agents remained constant, however the number of agent customers decreased by 2 during the three months ended September 30, 2015
and those 2 customers historically accounted for more than 10% of commission revenue. We believe that the lack of volatility in
gold and silver prices during the six months ended September 30, 2015, was the primary cause for the decrease in revenue from
the prior year. The lack of volatility in gold and silver prices and decreases in the number of agents and their customers could
continue to result in less trade revenue as it has in the past.
Total
expenses were $1,134,276 for the six months ended September 30, 2015 as compared to $1,259,831 for the six months ended September
30, 2014, a decrease of $125,555 or 10%. Approximately 67% of our total expenses for the six months ended September
30, 2015 were attributed to general and administrative expenses compared to 65% for the six months ended September 30, 2014. Man
Loong’s largest general and administrative expense historically has been its marketing expense, which includes payment made
to agents for their provision of sales, marketing and customer support services. Marketing expense was $172,108 or
15% of Man Loong’s total expenses for the six months ended September 30, 2015 and $148,532 or 12% of Man Loong’s total
expenses for the six months ended September 30, 2014. The increase in marketing expenses in the six months ended September 30,
2015 as compared to the prior year was the result of Man Loong increasing headcount and expanding its marketing effort to attract
new agents and customers. Man Loong’s other large expenses were (i) its trading platform hosting and rent which
was $83,465 or 7% of its total expenses for the six months ended September 30, 2015 and $93,909 or 7% of its total expenses for
the six months ended September 30, 2014 (ii) its legal and professional expense which was $80,534 or 7% of its total expenses
for the six months ended September 30, 2015, and $122,267 or 10% of its total expenses for the six months ended September 30,
2014, and (iii) its occupancy costs for the rent and management fee paid for its offices which was $298,774 or 26% of Man Loong’s
total expenses for the six months ended September 30, 2015 and $295,508 or 23% of its total expenses for the six months ended
September 30, 2014. For the six months ended September 30, 2015 and 2014, employee compensation and benefits was $328,615 and
$405,894 or 29% and 32% of Man Loong’s total expenses for the six months ended September 30, 2015 and 2014, respectively.
Net loss was $260,203 for the six months ended September 30, 2015, compared to net income of $197,294 for the six
months ended September 30, 2014 a decrease of $457,497 or 232%. The decrease in net income was primarily the result
of Man Loong’s decrease in revenue while its, occupancy and marketing expenses increased as a percentage of revenue, offset
in part by a decrease in employee compensation and legal and professional expense as a percentage of revenue for the six months
ended September 30, 2015 as compared to the six months ended September 30, 2014.
LIQUIDITY
To
date, eBullion has funded its operations from cash flows generated from operations. As of September 30, 2015 eBullion had cash
totaling $1,445,818, total assets of $2,988,240, total liabilities of $334,992 and working capital of $1,530,790. Net cash used
in operations for the six months ended September 30, 2015 was $294,627 as compared to net cash provided by operations of $201,550
for the six months ended September 30, 2014. The increase in net cash used in operations for the six months ended September 30,
2015 included a decrease in net income of $457,497, an increase in deposits and prepaid expenses of $209,317, a decrease in accounts
payable and accrued liabilities of $3,466 and an increase in deferred income taxes of $5,300, offset by a decrease in commissions
receivable of $77,838, an increase in customer deposits of $61,297, and an increase in income taxes payable of $4,180. Net cash
used in investing activities was $774,042 for the six months ended September 30, 2015 compared to net cash provided by investing
activities for the six months ended September 30, 2014 of $997,736. The increase in net cash used in investing activities for
the six months ended September 30, 2015 was primarily because Man Loong loaned $774,199 to Global Long Limited Inc. (“Global
Long”) during the six months ended September 30, 2015 while the loan receivable from eBullion Trade was repaid in the six
months ended September 30, 2014. Global Long is registered in Hong Kong and through its subsidiaries in the Peoples Republic of
China, is engaged in trading silver contracts as an electronic trading member of the Guangdong Precious Metal Exchange. The loan
bears interest at a 6% annual rate, matures on its 5th anniversary and is secured by a first right of claim on a bank deposit
held by a subsidiary of Global Long. Under terms of the loan, interest is payable to Man Loong quarterly and Global Long has the
right to repay the loan at any time before the maturity date. Until all principal and accrued interest are repaid on the loan,
Global Long may not enter into additional borrowings without Man Loong’s written permission, and upon certain events of
default, the Loan becomes due on demand. The purpose of the loan was to establish a relationship with Global Long with the intent
of becoming the first choice for Global Long’s customers who wish to trade in gold trading positions through the CGSE. Net
cash provided by (used in) financing activities was $0 and $0 for the six months ended September 30, 2015 and 2014, respectively.
As
of September 30, 2015 and for the six months then ended, Man Loong’s customer deposits increased from $92,613 at March 31,
2015 to $153,974 at September 30, 2015, an increase of $61,361 or 66.2%. Man Loong has been working with its agents and their
customers to reduce the number of customers who hold the minimum deposit required to secure the customer’s account from
trading losses with Man Loong instead of with the customer’s agent. However, Man Loong will continue to offer
this service to customers who request it, and expects the number of customers who hold minimum deposit funds in its accounts to
increase in the future if that service is requested by Man Loong’s agents and their customers.
As
of September 30, 2015 and for the six months then ended, Man Loong’s commission receivables decreased from $118,298 at March
31, 2015 to $40,510 at September 30, 2015, a decrease of $77,788 or 65.8%. Commissions receivable represent commissions to
be collected from agents for their customers’ trades executed across Man Loong’s electronic trade platform and telephone
transaction system. Commissions receivable are typically remitted to Man Loong within 30 days of trade execution. We have not
historically incurred credit losses on these commissions receivable, and we continue working with our agents to improve the payment
times of commissions accrued but unpaid at the end of each month. As of September 30, and March 31, 2015, we had no reserve for
credit losses nor had we incurred any bad debts for the three and six months ended September 30, 2015 and 2014.
As
of September 30, 2015 and for the six months then ended, Man Loong’s deposits and prepaid expenses increased from $275,922
at March 31, 2015 to $485,433 at September 30, 2015, an increase of $209,511 or 75.9%. Deposits and prepaid expenses .consist
primarily of prepaid rent and occupancy expenses on Man Loong’s principal offices in Hong Kong. On September 15, 2015, Man
Loong entered into a lease agreement on new office space to replace its existing offices which required Man Loong to pay an additional
deposit. When Man Loong occupies the new offices, the rent and occupancy deposits related to the former offices of approximately
$275,922 will be refunded to Man Loong.
No
dividends were declared or paid in the six months ended September 30, 2015 and 2014 and none are expected to be paid for the foreseeable
future.
Commitments
eBullion is
committed to paying a monthly fee of approximately $3,868 until March 31, 2017 to, True Technology Limited for hosting services
and use of the trading platform that is the cornerstone of its business. True Technology is a company owned by Messrs.
Choi and Wong, Man Loong’s CEO and a director, respectively. Additionally, in December 2012, Man Loong entered into a lease
for its principal office space, which lease expires in December 2015 and requires monthly payments of approximately $47,236. In
September 2015, Man Loong entered into a lease for replacement office space which requires monthly payments of approximately $27,209,
a decrease of $20,027 per month. The new lease expires in October 2018.
OFF-BALANCE
SHEET ARRANGEMENTS
We
did not have during the periods presented, and we do not currently have, any off-balance sheet arrangements, as defined under
Securities and Exchange Commission rules.
ITEM 3. |
QUANTITATIVE
AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. |
Not applicable
to smaller reporting companies.
ITEM 4. |
CONTROLS AND
PROCEDURES. |
a) Evaluation
of disclosure controls and procedures
Pursuant
to Rule 13a-15(b) under the Securities Exchange Act of 1934 (“Exchange Act”), the Company carried out an evaluation,
with the participation of the Company’s management, including the Company’s Chief Executive Officer (“CEO”)
and Chief Financial Officer (“CFO”), of the effectiveness of the Company’s disclosure controls and procedures
(as defined under Rule 13a-15(e) under the Exchange Act) as of the end of the period covered by this report. Based upon that evaluation,
the Company’s CEO and CFO concluded that the Company’s disclosure controls and procedures are ineffective as of September
30, 2015 to ensure that information required to be disclosed by the Company in the reports that the Company files or submits under
the Exchange Act, is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules
and forms, and that such information is accumulated and communicated to the Company’s management, including the Company’s
CEO and CFO, as appropriate, to allow timely decisions regarding required disclosure. Subject to receipt of additional financing
or revenue generated from operations, the Company intends to retain additional individuals to remedy the ineffective controls.
(b)
Changes in Internal Control over Financial Reporting
There
has been no change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange
Act) that occurred during our fiscal quarter ended September 30, 2015, that has materially affected, or is reasonably likely to
materially affect, our internal control over financial reporting.
PART
II—OTHER INFORMATION
ITEM 1. |
LEGAL PROCEEDINGS. |
None.
The
following information updates, and should be read in conjunction with, information disclosed in Part I, Item 1A “Risk Factors”
of our Annual Report on Form 10-K for the year ended March 31, 2015 which was filed with the Securities and Exchange Commission
on June 26, 2015. There have been no material changes from the risk factors disclosed in our Annual Report on Form 10-K for the
year ended March 31, 2015 other than as set forth below:
RISKS
RELATED TO OUR BUSINESS
Our
revenue is dependent upon Man Loong’s ability to attract and retain the agents with whom its customers have accounts.
Our
revenue is dependent upon Man Loong’s ability to retain and attract agents. Man Loong’s customer base is
primarily comprised of agents who have been retained by individual customers who trade in gold and silver price contracts. Although
Man Loong offers products and tailored services designed to educate, support and retain its agents, its efforts to attract new
agents, and those agents’ ability to attract new customers or reduce the attrition rate of its existing agents and their
customers may not be successful. If Man Loong is unable to maintain or increase its agent retention rates or generate a substantial
number of new agents in a cost-effective manner, its business, financial condition and results of operations and cash flows would
likely be adversely affected. The number of agents remained constant during the three and six months ended September
30, 2015 compared to the three and six months ended September 30, 2014, however for the three months ended September 30, 2015,
the number of agent customers decreased by 2, and those 2 customers historically accounted for more than 10% of commission revenue.
For the three and six months ended September 30, 2015, revenues decreased by $495,194 or 61.6%, and $669,669 or 44.3%, respectively,
as compared to the three and months ended September 30, 2014. Although Man Loong has spent significant financial resources on
support services for agents and their customers, and marketing and related expenses and plans to continue to do so, these efforts
may not be cost-effective at attracting new agents and customers. In particular, we believe that costs for customer support services
and rates for desirable advertising and marketing placements, including online, search engine, print and television advertising,
are likely to increase in the foreseeable future, and Man Loong may be disadvantaged relative to its larger competitors in its
ability to expand or maintain its customer support capabilities, and advertising and marketing commitments.
Man
Loong currently has 3 agents in Hong Kong which cover three main geographic areas, including Hong Kong Island, Kowloon and the
New Territories. In mainland China, Man Loong has 10 agents located in Shanghai and Guangdong and Fujian provinces. Each
of Man Loong’s agents in Hong Kong have between 100 – 150 customers and its agents in China each have between 100
and 600 customers.
If
Man Loong were to fail to comply with the requirements of the CGSE, Man Loong could lose its ability to process client trades,
which would have an adverse material effect on our revenues, financial condition and cash flows.
Man
Loong must comply with the minimum working capital and other requirements of the CGSE to continue our present business operations
as an officially designated electronics trading member of the CGSE, a self-regulatory organization registered in Hong Kong.
If we were to fall out of compliance with the CGSE’s requirements for its members, Man Loong could lose its ability to facilitate
any trades of gold or silver for customers of its agents, and potentially lose its membership in the CGSE, all of which would
have an adverse material effect on our revenues, financial condition and cash flows. The constitution of the CGSE requires its
members to have a minimum working capital, defined as cash plus precious metals, of approximately $193,000 and minimum assets
of $643,000. The CGSE also requires its members to submit a quarterly liquidity capital report, in order to ensure that the bank
balances exceed or equal the balance of customer deposits, as well as comply with a code of conduct which is established by CGSE.
As of September 30 and March 31, 2015, Man Loong had $1.45 million and $2.51 million in cash, respectively, and $2.99 million
and $3.18 million, respectively, in total assets, respectively. We were in compliance with these requirements as of
September 30 and March 31, 2015.
ITEM 2. |
UNREGISTERED
SALES OF EQUITY SECURITIES AND USE OF PROCEEDS. |
RECENT
SALES OF UNREGISTERED SECURITIES
There have
been no recent sales of unregistered securities.
PURCHASE
OF EQUITY SECURITIES
None.
ITEM 3. |
DEFAULTS UPON
SENIOR SECURITIES |
Not Applicable.
ITEM 4. |
MINE SAFETY DISCLOSURES |
Not Applicable.
ITEM 5. |
OTHER INFORMATION. |
None.
The
exhibits filed as part of this Quarterly Report on Form 10-Q are set forth on the Exhibit Index, which Exhibit Index
is incorporated herein by reference.
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
|
EBULLION, INC. |
|
|
|
Date:
November 16, 2015 |
By: |
/s/ KEE
YUEN CHOI |
|
|
Kee Yuen Choi |
|
|
President and Chief Executive
Officer |
|
|
(Principal executive officer) |
|
|
|
Date:
November 16, 2015 |
By: |
/s/ CHUI
CHUI LI |
|
|
Chui Chui Li |
|
|
Chief Financial Officer |
|
|
(Principal financial and
accounting officer) |
EXHIBIT
INDEX
Exhibit No. | |
Description |
10.1 | |
Lease Agreement dated September 15, 2015 |
31.1* | |
Certification of Chief Executive Officer pursuant to Rules 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
31.2* | |
Certification of Chief Financial Officer pursuant to Rules 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
32.1* | |
Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
32.2* | |
Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
101.INS* | |
XBRL Instance Document† |
101.SCH* | |
XBRL Taxonomy Extension Schema Document† |
101.CAL* | |
XBRL Taxonomy Extension Calculation Linkbase Document† |
101.DEF* | |
XBRL Taxonomy Extension Definition Linkbase Document† |
101.LAB* | |
XBRL Taxonomy Extension Label Linkbase Document† |
101.PRE* | |
XBRL Taxonomy Extension Presentation Linkbase Document† |
23
Exhibit 10.1
LD-AG-001-NL
OFFICE
OFFER
QEEER
TO LEASE
Print
Date: 15 Sep 2015 |
To: |
Sino
Real Estate Agency Limited
信和地產代理有限公司
12/F.
Tsim Sha Tsui Centre,
Salisbury
Road, Tsim Sha Tsui East,
Kowloon
(Agent
for the Landlord - Ref.: N150700163)
Contact
Person : Timothy Ting/Tiffany Fong
Tel
No. : 2735 103.2/2735 1013
Fax
No. : Nil |
Dear Sirs,
I/We, the
intended tenant hereby offer to rent the premises described below from the Landlord, on the following principal terms and conditions:
1. |
(i) |
Name
of Landlord |
Wide
Harvest investment Limited
廣滔投資有限公司 |
|
|
|
|
|
(ii) |
Registercd
office/principal place of business in Hong Kong of the Landlord |
11-12/F.,
Tsim Sha Tsui Centre.
Salisbury
Road,
Tsim
Sha Tsui,
Kowloon |
|
|
|
|
2. |
(i) |
Name
of Tenant |
MAN
Loong BULLion COMPANY LIMITED
萬隆金銀業有限公司 |
|
|
|
|
|
(ii) |
Certificate
of Incorporation No. |
1186382
|
|
|
|
|
|
(iii) |
Business
Registration No. of the Tenant |
386991.36 |
|
|
|
|
|
(iv) |
Registered
office/principal place of business in Hong Kong/address of the Tenant |
8/F
TOWER 5
CHINA
HONG KONG CITY
33
CANTON RD
TSIM
SHA TSUI KLN. Hong Kong |
|
|
|
|
|
(v) |
e-Billing
Email Address |
Nil |
|
|
|
|
|
(vi) |
Contact
Person |
Mr.
Francisco M Xavier |
|
|
|
|
|
|
Tel
No. |
31874428 |
|
|
|
|
|
|
Fax
No. |
Nil |
|
|
|
|
|
|
Email
Address |
franciscogmanloong.com |
|
|
|
|
|
|
Correspondence
Address |
8/F
TOWER 5
CHINA
HONG KONG CITY
33
CANTON RD
TSIM
SHA TSUI KLN, HONG KONG |
Address |
: |
25/F., Jardine House, 1 Connaught Place, Central, Hong Kong |
|
|
|
Contact
Person |
: |
Ms
Yan Man |
|
|
|
|
|
Contact
Tel. No. |
: |
2847
7824 |
|
|
|
|
|
Personal
Guarantee Preparation and Administration Cost |
: |
N/A |
|
|
|
|
|
User |
: |
For use only by the Tenant as office premises and for no other purpose whatsoever. The Landlord gives no warranty as to the suitability or fitness of the Premises for thesaid user. |
|
|
|
Handover
Condition |
: |
Bare
shell |
|
|
|
|
|
Rent
Free Period(s) |
: |
Sixteen (16) days from 16 Oct 2015 To 31 Oct 2015 (both days inclusive) |
|
|
|
|
|
Thirty (30) days from 01 Nov 2015 to 30 Nov 2015 (both days inclusive) |
|
|
|
Payments
upon commencement of the Tenancy Agreement or handover (whichever is the earlier) |
: |
Period
|
|
|
|
|
|
(i) Rent |
: |
01 Dec 2015. To
31 Dec 2015 |
HK$171,000.00 |
|
|
|
|
(ii)
Management fee and air-conditioning charge (if any) |
: |
16
Oct 2015 to 30 Nov 2015 |
HK$60,443.52 |
|
|
|
|
(iii)
Cleaning Service Charges |
: |
|
N/A |
|
|
|
|
(iv)
Government Rates |
: |
16
Oct 2015 to 31 Dec 2015 |
HK$18,705.98 |
|
|
|
|
(v)
Government Rent |
: |
|
N/A |
|
|
|
|
(vi)
Balance of Deposit |
: |
|
HK$873,268.00 |
|
|
|
|
(vii)
Temporary electricity charge (non-refundable) |
: |
|
HK$5,402.00 |
|
|
|
|
(viii)
Vetting Charget non-refundable) |
: |
|
HK$8,103.00 |
|
|
|
|
(ix)
The debris removal cost (non-refundable) |
: |
|
N/A |
|
|
|
|
(x)
Fitting out deposit (refundable subject to Clause 12 of Part II, Schedule I of this offer) |
: |
|
HK$5,402.00 |
|
|
|
|
(xi)
Tenancy Preparation and Administration Cost |
: |
|
N/A |
|
|
|
|
(xii)
Stamp Duty |
: |
|
N/A |
|
|
Total: |
HK$1,142,324.50 |
|
|
|
|
|
: |
As
set out in Schedule I hereto |
|
|
: |
As
set out in Schedule II hereto |
|
18.Standard
Terms & Conditions forming an
integral
part of this offer
19.Special
Conditions forming an integral
part of
this offer, if any
20. Landlord’s
Provision,if any
Remark :N/A
-------------------------------------------------------------------------------**********-----------------------------------------------------------------------------------
Together
with this offer,I/we enclose my/our initial deposit and advance payment in cheque. Subject as aforesaid,this sum shall be returned
to me/us in full,but without interest, if my/our offer is not accepted by the Landlord in the manner hereinafter appearing within
14 days from the date hereof.
Yours
faithfully, |
|
Offer
Accepted by : |
|
|
|
|
|
|
Duty
authorized person for and on behalf of |
|
Sino
Real Estate Agency Linited |
MAN
LOONG BULLION COMPANY LIMITED |
|
信和地產代理有限公司 |
萬隆金銀業有限公司 |
|
as
agent for the Landlord |
Name:
HKID Card
No. /Passport No. and place of its issuance :
LD-AG-001-NL
SCHEDULE
I
PART
I
General
Terms & Conditions
1. Rent
(i) |
The
monthly rent shall be payable monthly in advance on the 1" day of each calendar month without any deduction, counterclaim
or set off. |
(ii) |
The
rent is exclusive of rates and government rent, management fee and air-conditioning charge (if any), cleaning service charges
(if any) and all Tenant's expenses and outgoings of a non-capital or recurring nature. |
2. Government
Rates
The
amount of Government Rates is subject to revision from time to time as advised by the Government and is payable by the Tenant
in advance on the first day of the months of January, April, July and October.
3. Government
Rent
The
amount of Government Rent is subject to revision from time to time as advised by the Government and is payable by the Tenant in
advance on the first day of the months of January, April, July and October.
4. Deposit
(i) |
The
amount of security deposit shall be equivalent to the specified multiple of monthly rent management fee and air-conditioning
charge (if any), cleaning service charges (if any), and rates and government Rent . From time to time, the deposit may be
adjusted by the Landlord to accord with any increase of the monthly rent, management fee and air-conditioning charge (if any),
cleaning service charges (if any), or rates and government rent. |
(ii) |
The
deposit shall be retained by the Landlord throughout the Term without payment of interest to the Tenant and the Tenant hereby
specifically authorises the Landlord (but without prejudice to any other Landlord' s right or remedy) to deduct and apply
the deposit in payment of and/or call the bank guarantee (if any) in order to pay (i) the amount of any rent, rates, government
rent, management fee and air-conditioning charge (if any) and cleaning service charges (if any) and other charges payable
he reunder by the Tenant; and (ii) any costs, expenses, loss or damage sustained by the Landlord as the result of any of non-observance
or non-performance by the Tenant of any of the covenants, agreements, stipulations, obligations or conditions he rein contained. |
(iii) |
Subject
as aforesaid the deposit shall be refunded to the Tenant by the Landlord without interest within forty five (45) days after
(i) the expiration or Sooner determination of this Agreement and delivery of vacant possession to the Landlord and (ii) settlement
of the last outstanding claim by the Landlord against the Tenant for any arrears of rent and other payments or charges payable
hereunder and for breach of any terms and conditions here in contained by the Tenant. |
LD-AG-001-NL
5. Stamp
Duty
Stamp
duty and registration fees (if any) shall be borne by the parties here to in equal shares.
6. User
The user
of the Premises is restricted to the purpose as office premises only and for no other purpose whatsoever.
The Landlord
gives no warranty as to the suitability or fitness of the Premises for the said user.
7. Tenancy
Agreement
(i) |
While
the Tenancy Agreement shall contain the terms herein, it shall otherwise be on the terms and conditions contained in the Landlord's
standard form of Office Tenancy Agreement ("Tenancy Agreement"). |
(ii) |
The
Tenant understands that prior to the signing of the Tenancy Agreement, the Tenant should seek independent legal advice to
advise the Tenant thereon and satisfy himself as to the terms and conditions thereof. |
(iii) |
If
this offer is accepted, the Tenant shall execute the Tenancy Agreement in accordance with the terms of a notice in writing
from the Landlord or the Landlord's solicitor. |
(iv) |
In
the event that the Landlord has furnished us with the Tenancy Agreement, the Tenant confirms and acknowledges that the Tenant
fully and thoroughly understands the terms and conditions of the Tenancy Agreement and confirm that they form an integral
part of this offer. |
(v) |
The
Tenant agrees, without prejudice to the Landlord's rights herein, that: |
|
(a) |
The
Premises including the keys will not be handed over to the Tenant unless and until the Tenancy Agreement has been duly signed
or executed; and |
|
(b) |
All
the payments due and payable to the Landlord have been made; and |
|
(c) |
The
commencement date of the Term of the Tenancy Agreement shall nonetheless remain as set out in this offer. |
(vi) |
Unless
the Tenant shall have engaged a separate firm of solicitors to act on its behalf, the Tenant is required to attend either
of the following offices (as the case maybe) for signing the Tenancy Agreement: |
|
(a) |
office
of the Landlord' s solicitors as specified herein; or |
|
(b) |
office
of Sino Real Estate Agency Limited (信和地產代理有限公司) if the
name of the Landlord' s solicitors is not provided herein. |
LD-AG-001
-NL
8. Entire
Offer
(i) |
This
Offer together with the Guarantee (if any) supersedes any and all previous offers between the parties hereto, and constitutes
the entire offer. |
(ii) |
Any
representation, warranty, statement or offer, whether oral or in writing, heretofore made relating to any of the matters referred
to herein are hereby expressly denied, negated and excluded, unless agreed or confirmed by the parties in writing. |
(iii) |
In
the event of any inconsistency between the terms of this Offer and the terms of any document referred to herein (including
Appendices attached hereto), the terms of this Offer shall prevail. |
9. Delivery
of the Premises
Subject
to the Tenant’ s duly signing or executing the Tenancy Agreement and the Tenant’ s making payment of all sums required,
the Landlord will deliver vacant possession of the Premises to the Tenant in such condition as set out herein.
10. Rent
Free Period
The
granting of rent free period(s) sha)] be subject to the Tenant' s due observance and performance of all the conditions contained
herein and in the Tenancy Agreement. -
Notwihstanding
any rent free period granted to the Tenant, the Tenant acknowledges that the Tenant is still obliged to pay the management fee
and air-conditioning charge (if any), cleaning Service charges (if any), rates and government rent and all other Tenant’
s outgoings payable by he Tenant he hereunder.
11. Payments
The
Tenant agrees that before the Tenant take possession of the Premises or the commencement date of the Tenancy Agreement (whichever
is earlier), The Tenant shall pay to the Landlord all he payments as set out herein.
12. Personal
Guarantee
Where the Tenant is required
to provide personal guarantee as specified herein, this tenancy shall be conditional upon such specified person(s) having executed
a deed of guarantee and indemnity in a form to be prescribed by the Landlord to guarantee
(i) |
The
due punctual and diligent performance of the Tenant of all its obligations under this tenancy and to indemnify the Landlord
against any claim of any nature whatsoever arising out of the use and occupation by the Tenant of the Premises; and |
(ii) |
Tenant's
prompt delivery of vacant possession of the Premises upon the expiration or sooner determination of the tenancy in accordance
with the terms of the Tenancy Agreement and to indemnify the Landlord for all loss and damage arising from the Tenant's breach. |
LD-AG-001-NL
The Tenant
shall bear all costs and expenses (including legal costs of the Landlord’ s Solicitors and administrative costs of the Landlord)
for the preparation, approval and completion of the deed of guarantee.
13. Validity
of Offer
In
consideration of the Landlord' s agreeing to consider this offer, the Tenant hereby warrants, confirms and undertakes to the Landlord
that:
(i) |
This
offer is unconditional and shall remain open for acceptance by the Landlord in its current form for a period of 14 days from
the date hereof. |
(ii) |
Within
this period, the Tenant will neither revoke, withdraw nor amend this offer. |
(iii) |
If
within this period, and for any reason whatever the Tenant purport S to revoke Withdraw or amend this offer, then the Tenant
agrees and declares that the Landlord may retain for its own use absolutely the money the Tenant now enclose in respect of
the initial deposit, as an agreed recompense for, and pre-estimate of, the loss or damage the Landlord would suffer as a result
of the breach of my/our warranty and undertaking, |
(iv) |
Should
the Landlord not accept this offer within the said period, this offer shall be deemed to have been withdrawn and the Landlord
shall return the initial deposit to the Tenant without interest and neither party shall have any claim against the other. |
14. Acceptance
of Offer
Notwithstanding anything to the contrary contained
herein or otherwise, the Tenant acknowledges and declares that
(i) |
There
shall be no binding agreement for the grant of a tenancy between the parties unless and until, and within 14 days from the
date hereof, the Landlord has signified its acceptance of this offer in writing, whereupon there shall be a binding agreement
between the parties. |
(ii) |
Such
binding agreement shall continue in full force and effect until Superseded by the formal Tenancy Agreement. |
(iii) |
Until
the Landlord has accepted this offer in the prescribed manner, it shall be under no obligation whatsoever to enter into any
form of agreement with the Tenant in relation to the Premises. |
(iv) |
The
Landlord' s acceptance of this offer shall be evidenced by its returning to the Tenant within 14 days from the date of its
acceptance, a signed and dated copy of this offer. |
LD-AG-001-NL
15. Failure
to execute Tenancy Agreement
Following
the Landlord's acceptance of this offer, should the Tenant fail to execute the formal Tenancy Agreement in accordance with a notice
in writing from the Landlord or its solicitors, the Landlord may stamp this offer, thereby deeming the Tenancy Agreement to have
been signed and to be enforceable against the parties; and/or if the Tenant still fails to execute the formal Tenancy Agreement
within one month from the Term Commencement Date as specified he rein (whether formerly demanded by the Landlord or not), the
Landlord may terminate the agreement by giving not less than seven (7) days written notice to the Tenant.
Upon the
expiry of the period of notice specified in the aforementioned notice, the agreement shall immediately cease and be determined
whereupon the initial deposit shall be forfeited to the Landlord absolutely, as and for liquidated damages and not as a penalty,
but without prejudice to any other right or remedy, and the Landlord will be entitled to let the Premises on such terms as it
sees fit.
If the agreement
has been registered at the Land Registry, the Landlord may register a memorandum of termination, signed for and on its behalf
alone, which shall be conclusive evidence of the fact that the agreement has been terminated.
LD-AG-001-NL
PART II
Other Terms & Conditions
1. |
The
Tenant shall pay rent, management fee, air-conditioning charge (if any), cleaning Service charges (if any) on or before the
first day of each and every calendar month. |
2. |
The
Tenant shall pay rates, government rent as assessed by the Government. Rates and government rent shall be paid quarterly in
advance on the first day of the months of January, April, July and October. |
3. |
Without
prejudice to the right of the Landlord to exercise any other right or remedy (including the right of re-entry) under this
Offer, in the event of default in payment of Rent and/or any charges payable hereunder or any part thereof on its due date,
the Tenant shall further pay to the Landlord on demand interest on the amount in arrears at the rate of 1.5% per month calculated
from the date on which the same became due for payment until the date of payment as liquidated damages and not as penalty. |
4. |
(i)
The Tenant shall keep the interior of the Premises and all the Landlord's fixtures and additions in good, clean, tenantable
and proper repair condition and shall yield upthe same at the expiration or sooner determination of this tenancy in such repair
and the like condition Provided That |
|
(a) |
The
Landlord may at its discretion require the Tenant and the Tenant shall, upon such request and at its own cost, remove or do
away with all or any of the a} terations, fixtures or additions to the Premises or any part(s) thereof (irrespective of whether
the same was made by the Tenant or not or whether with or without the Landlord s consent) and make good and repair in a proper
and workmanlike manner any damage to the Premises as a result thereof before delivering up the Premises to the Landlord in
accordance with the conditions and requirements as set out in the Landlord' s Reinstatement Guide/Guidelines (which may be
amended from time to time) to the satisfaction of the Landlord. The Landlord has the right to waive or vary any of the conditions
or requirements in the said Reinstatement Guide/Guidelines in writing. |
|
(b) |
Notwithstanding
anything to the contrary contained in other provisions of this offer and/or the subsequent Tenancy Agreement, the Tenant agrees
and declares that upon yielding up the Premises to the Landlord according to the above provisions, the door at the entrance
of the Premises shall be of a fire-rated type and firerated damper(s) for air ducts connecting to common corridor shall be
installed in the Premises in compliance with the then applicable statutory fire safety requirements irrespective of whether
such fire- rated entrance door and/or damper(s) were provided by the Landlord at the commencement of the Term. The Tenant
shall, if so requested by the Landlord, produce to the Landlord at the time of yielding up the Premises a certificate and
test report from the contractor confirming that the quality of the fire-rated door meets with the statutory requirements. |
|
(c) |
Should
the Tenant fail to comply with Sub-clauses (a) or (b) above, the Landlord shall be entitled to remove the said alterations,
fixtures or additions and reinstate the Premises (and/or to replace the entrance door by fire-rated one and/or install the
fire-rated damper(s)) at the sole expense of the Tenant and to recover such cost from the Tenant by action or by deduction
from the deposit paid by the Tenant under this agreement. |
LD-AG-001-NL
|
(ii) |
Immediately
prior to delivery or redelivery to the Landlord of the fan coil units or similar indoor parts of the air-conditioning units
within the Premises and all airconditioning units serving the Premises exclusively (whether they are of Split-type or window
type, whether they are situated inside or outside the Premises and whether they belong to the Tenant or the Landlord or any
other person or corporation, the Tenant shall employ at its own expenses a cleaning contractor approved by the Landlord to
carry out a final cleaning (with the application of chemical) to such units and shall produce to the Landlord upon its request
the receipt of the contractor' s charges for such cleaning. Should the Tenant fail to carry out the cleaning work, the Landlord
shall be entitled to carry out the same at the expense of the Tenant and to recover such cost from the Tenant by action or
by deduction from the deposit paid by the Tenant under this Agreement. |
|
|
|
|
(iii) |
For
the avoidance of doubt, the Tenant shall not be entitled to any delay, extension or postponement of the delivery of possession
of the Premises to the Landlord in case the day on which the expiration or termination falls on a Sunday or public holiday. |
5. |
The
Tenant shall permit the Landlord and its agents with or without workmen or others and with or without appliances at all reasonable
time upon reasonable notice to enter upon the Premises to view the condition thereof and (i) to carry out necessary repair
and maintenance work to the Landlord's fixtures and fittings therein; or (ii) to carry out Other work for compliance with
any law, rule, regulation or any requirement or notice or order of any Government department or competent authority; or (iii)
for any reasons whatsoever for which entry is considered necessary by the Landlord. |
6. |
The
Tenant shal not use the Premises for any purpose other than as specified herein. |
7. |
The
Tenant shall not transfer, assign, underlet, license, share or otherwise part with the possession of the Premises or any part
thereof either by way of sub-letting, lending sharing or any other means whereby any person not a party to this offer and/or
the subsequent Tenancy Agreement obtains the use or possession of the Premises or any part thereof. |
8. |
The
Tenant shall indemnify the Landlord against all liabilities, claims, demands, actions, proceedings, damages, losses, costs
and expenses (arising directly or indirectly) from or incidental to (i) the fitting out, use or occupation of the Premises,
(ii) the execution, existence or removal of alterations, additions or repairs to the Premises, (iii) any noncompliance by
the Tenant with its obligations under this offer and/or the Subsequent Tenancy Agreement, or (iv) any other act, default,
neglect or omission by the Tenant, its employees, contractors, servants, agents, licensees, visitors tors or invitees. |
9. |
(i) |
The
Tenant shall design, fit out, lay out, decorate or furnish the Premises in a way not to diminish the function, increase the
operative costs or in any way affect or tamper with the operation of any services, decorations or facilities of the Building. |
|
(ii) |
Detailed
plans for internal partitioning and/or decoration works, including but not limited to electrical and mechanical layouts shall
be submitted to the Landlord for approval before commencement of any works. The Landlord or his authorized agents shall have
the absolute discretion in granting or refusing such approval. The approval to be granted shall be subject to such condition
as the Landlord or his authorized agent may think fit. The Landlord may use and provide to any subsequent user(s) or occupier(s)
of the Premises or any other person(s) for use of the plans for the purposes of reinstatement, additions, decoration, repair
or maintenance of the Premises or any parts thereof. The Tenant shall employ at the Tenant’ s expenses only Such contractors
approved by the Landlord to examine all the electrical and mechanical Works in the Premises at least once a year or at such
intervals as directed by the Landlord or the Building Manager and shall provide all relevant certificates and reports rendered
by the approved contractors to the Landlord or the Building Manager as soon as the electrical and mechanical works are completed,
renewed or examined. Electrical and mechanical works includes but not confined to electrical, plumbing, building automation,
fire fighting installations, fuel gas system, ventilation System and hazardous gas/materials detectors. |
LD-AG-001-NL
|
(iii) |
(a) |
Should
the Tenant require to install and/or replace any door(s), partition wall (s) or construction element(s) ( "Fire Rated
Elements” ) of the Premises that require fire resistance rating under any applicable laws, rules and regulations, the
Fire Rated Elements must be of fire-rated type and comply with such laws, rules and regulations and Landlord' s requirements.
The Tenant shall within 14 days after completion of the installation and/or replacement work provide to the Landlord a certificate
and test report from the contractor confirming that quality of the Fire Rated Elements meets with the statutory requirements
at time of the installation/replacement. |
|
|
|
|
|
|
(b) |
If
the Tenant fails to provide the certificate and test report from the contractor as required under sub-clause (iii) (a) above,
the deposit for fitting out work shall not be returned to the Tenant until the failure has been rectified. Without prejudice
to the aforesaid and any other rights or remedies that the Landlord may have, the Landlord, its servants, contractors or agents
shall also be entitled and/or are hereby authorized or deemed to have been authorized by the Tenant, after the aforesaid failure
of the Tenant, to demolish the Fire Rated Elements or any of them already installed and/or replaced by the Tenant or its contractor
and to replace them or any of them by other door(s), wall (s) and/or construction element(s) (as the case may be) chosen by
any of them at their own choice but at the costs of the Tenant and without incurring any liability to the Tenant. The Landlord
shall be entitled to deduct all costs incurred by it for the demolishing and replacement of the Fire Rated Elements as provided
before in this clause from the deposit for fitting out work. The Tenant shall pay to the Landlord immediately upon demand
any deficiency of the costs, if any, after deduction of the deposit. |
|
(iv) |
The
Tenant shall take at its own expenses adequate and proper measures to avoid or prevent or minimize the risk of any loss or
damage to property or injury or death to person in connection with operation of its business in the Premises ( "Preventive
Measures" ). The Preventive Measures shall include but not limited to provision or installation of hazardous gas/materials
detectors, ventilation system, fire fighting system and slip proof installations and equipments and such other measures as
the Landlord or the Building Manager may in its absolute discretion think necessary for the avoidance, prevention or minimization
as aforesaid. |
|
|
|
|
(v) |
The
Tenant shall permit and accompany the Landlord, its agents or the Building Manager at all reasonable times to enter the Premises
and view the state and condition of the electrical and mechanical works and the Preventive Measures. Should any defect or
want of repair be found on the electrical and mechanical works or the Preventive Measures or any part thereof, the Tenant
shall make arrangement to remedy the same forthwith upon request by the Landlord, its agents or the Building Manager. The
Landlord, its agents or the Building Manager shall not by virtue of exercise of its right provided under this sub-clause incur
any liability whatsoever over the electrical and mechanical works or the Preventive Measures and shall not be liable for any
defect or irregularity thereof which shall be the sole responsibility of the Tenant. |
LD-AG-001-NL
10. |
The
Tenant shall not make any alterations or additions to any fixtures or fittings or electrical wi ring or electrical/mechanical
instal lations or fi re-prevention system or airconditioning system or plumbing and drainage system or building services system
without the prior Written consent of the Landlord and to use the Landlord's approved contractor for carrying out and installing
mechanical and electrical engineering work at the Tenant’ s sole costs and expenses. |
11. |
The
Tenant shall be responsible for the cost of the installation of sub-main cable to and all other alteration works at the Premises. |
12. |
Prior
to carrying out any fitting out or other works to the Premises, the Tenant shall take out adequate insurance to cover all
risks for the fit out work and pay to the Building Manager a vetting charge for his checking and approving the fit out plans
and inspection of the fit out works, and a refundable deposit as security for any damage to the Building caused as a result
of the Tenant's fit out works and the removal of any debris and for compliance of all fitting out requirements whether under
this Agreement or the Tenant’ s Fitting-Out Guide. |
13. |
The
Tenant shall remove at the Tenant's own expense all debris and rubbish resulting from such fitting out work to the location
designated by the Landlord or the Building Manager or their authorised agents in an orderly and proper manner. |
14. |
The
Tenant shall pay temporary electricity charge and debris removal charges to the Building Manager as required. |
15. |
The
Tenant shall keep the Premises including all windows at all times in a clean and sanitary state and condition to the satisfaction
of the Landlord. For the avoidance of doubt, the above obligation of the Tenant shall cover any toilet, open space, open seating
area, garden, car parking space and any other kinds of spaces or areas within or included in the Premises or designated for
the use of the Tenant and the fittings and installations the rein. If, in the opinion of the Landlord, the Tenant fails to
keep the Premises in the aforesaid condition, the Landlord shall have the right (but not oblige) to enter the Premises and
arrange cleaning or other work to be carried out to the Premises which the Landlord in its absolute discretion consider necessary
to maintain the Premises in such condition and the Tenant shall pay to the Landlord all costs incurred therefor. |
16. |
(i) Each party
shall take every reasonable precaution to ensure that its agents, officers or employees and in addition, in case of the Tenant,
its contractors, Solicitors and other professional advisers do not :- |
|
(a) |
disclose any
term of this offer and/or the Subsequent Tenancy Agreement ; or |
LD-AG-001-NL
|
(b) |
disclose
or use any information acquired in connection with this offer and/or the subsequent Tenancy Agreement or acquired in connection
with the negotiations leading up to it save when necessary for the performance of that party' S obligations under this offer
and/or the subsequent Tenancy Agreement or as the other party may first agree in writing. |
|
|
|
|
(ii) |
This
clause shall not operate so as to prevent a disclosure which is made: - |
(a)
to a public authority under compulsion of law;
(b)
to a court of law in Hong Kong Special Administrative Region or elsewhere or otherwise in any legal proceeding;
(c)
to the auditors of , or any lawyer or professional person being under a duty of confidentiality in acting for that party, or when
advising a party as to the performance of its obligations under or in connection with this offer and/or the Subsequent Tenancy
Agreement; -
(d)
to banks and/or financial institutions for the purposes of the Landlord' s raising and/or arranging finance and/or refinancing,
whether in connection with the Premises, the development in which the Premises are situated or otherwise; -
(e)
in connection with the fulfillment of any rules, regulations or other requirements of any stock exchange or any relevant regulatory
authority for any purpose whatsoever;
(f)
in connection with any sale, assignment, transfer or other disposal of the Premises, the Building and/or development in which
the Premises are situated or any part thereof or any interest the rein and/or of the shares and/or business of the Landlord, or
the discussion or negotiation thereof;
(g)
for the purposes of rental collection and/or property management.
17. |
The
Landlord reserves the right to change the user or trade-mix of any part of the Building for any other purposes (including
but not limited to restaurant and/or retail purposes), renovate or refurbish the shopping arcade (if any) or office area (if
any) or any part or any area of the Building, to change, alter, amend, vary, add to, re-construct, re-designate, re-partition
or re-locate the layout of the shopping arcade (if any) or office area (if any) or any part or any area of the Building including
but not limited to the external walls, advertising space(s), entrance, lobbies, staircases, landings, passages, corridors,
toilets, lifts and escalators and/or to erect, affix, install, remove, maintain, renew or paint on or to such parts of the
exterior of the Building and/or the Premises (including but not limited to the walls and windows) flags, poles, banners, posters,
decorations, chimneys, sunshades, sculptures, signs, Stickers, signboards, advertisements (illuminated or otherwise), broadcasting
device or structures (with Sound system or otherwise), marketing or promotional materials and to carry out Works and inspection
in connection therewith. The Tenant shall not be entitled to object to the change or any works as aforesaid and shall have
no right of action or claim for compensation whatsoever in connection therewith. |
|
|
18. |
Unless
the context otherwise requires, words herein importing a gender shall include all other genders and words he rein in the singular
shall include the plural and vice versa. |
LD-AG-001-NL
19. |
(i) |
Any
notice required to be served hereunder shall be sufficiently served on the Tenant if delivered to it by post or facsimile
or email or left addressed to it at the Premises or at its last known address in Hong Kong Special Administrative Region and
shall be sufficiently served on the Landlord if sent to it by post or delivered to it at the address given here in or any
other address which the Landlord may notify to the Tenant from time to time. A notice sent by post shall be deemed to have
been given one (1) business day after the date of posting. |
|
(ii) |
The
Tenant agrees and confirms that the email address provided herein is for the purpose of receiving notices served under this
offer and/or the Subsequent Tenancy Agreement by email. |
|
The
Tenant understands and acknowledges that (i) the Landlord may, but is not obliged to and without limiting the kind of notices
sent by the Landlord to the Tenant through email,Send notices or advices for payment of any rent, other charges and/or additional
outgoings with interest thereon (if any) payable under this agreement or for other related purposes to the Tenant through
the email address provided above or to the Landlord in writing from time to time; and (ii) irrespective of whether any such
notice or advice for payment has been sent to the Tenant by the Landlord or not, payments shall be in arrears if not made
on the date and in manner as provided in this offer and/or the subsequent Tenancy Agreement and the Landlord is not in any
way liable to the Tenant or any other persons for any delay or failure in giving the aforesaid notice or advice. |
20. |
The
Tenant shall not employ any person or firm to provide security service to the Premises except person or firm approved by the
Landlord or the Building Manager. Such security Service shall be obtained at the sole expense of the Tenant. |
21. |
A
written notice served by the Landlord on the Tenant or left at the Premises, to the effect that the Landlord thereby exercises
the power of re-entry, shall be a full and sufficient exercise of such power without actual entry on the part of the Landlord. |
22. |
In
addition to rent, any amounts falling due under this Offer may be recovered by distress as rent in arrears. For the purposes
of Part III of the Landlord and Tenant (Consolidation) Ordinance (Cap. 7) and of this agreement, the rent payable in respect
of the Premises and other amounts recoverable by distress as rent in arrears shall be and be deemed to be in arrears (whether
formally demand or not) if not paid in advance at the times and in the manner hereinbefore provided for payment thereof. All
costs and expenses of and incidental to distraint shall be paid by the Tenant on a full indemnity basis and shall be recoverable
from it as a debt. |
23. |
If
the Tenant has failed to observe or perform any covenants, agreements, Stipulations, terms or conditions of this Agreement,
the Landlord and/or the Building Manager has the right to withhold the service or facility provided by the Landlord and/or
the Building Manager under this Agreement without incurring any liability to the Tenant for any loss or damage suffered by
the Tenant as a result thereof. The aforesaid right shall be exercisable by the Landlord and Building Manager notwithstanding
anything to the contrary contained in this Agreement and without prejudice to any other rights and remedies that the Landlord
and/or the Building Manager may have. |
LD-AG-001-NL
24. |
The
Tenant shall not affix, erect, attach, exhibit, display or permit or suffer so to be
done upon any part within or on the exterior or at the show windows (if any) of the Premises
or to or through any windows thereof any writing, sign, decoration, signboard or other
device (whether illuminated or not) which may be visible from outside the Premises except
with prior approval of the Landlord or the Building Manager. The Tenant shall remove
any of the aforesaid displays notwithstanding that prior approval has been obtained from
the Landlord and/or the Building Manager if, at any time during the Term, it is in the
opinion of the Landlord that the aforesaid displays or any of them does not appear in
a manner (whether of design, quality, type or otherwise) keeping with first class commercial
premises then the Tenant shall, at his sole cost, replace the same with such appropriate
displays approved by and to the satisfaction of the Landlord and/or the Building Manager.
|
25. |
(i) |
The
Tenant shall not install, affix, put up or display or permit or suffer to be installed, affixed, put up or displayed at, on
or upon the Premises and/or any part of the Building, any artwork, exhibits, display, articles or materials ( "the Displays"
) any content of which has not been first approved by the Landlord or is or is considered in its absolute discretion by the
Landlord (whose decision is final and conclusive) to be: |
|
|
|
|
|
(a)
illegal, immoral or prohibited by the Government of Hong Kong Special Administrative
Region;
(b)
in breach of any applicable legislation or regulations from time to time in force in Hong Kong Special Administrative Region;
(c)
obscene, indecent, objectionable, defamatory, discriminatory or offensive to the general public or any person(s);
(d)
promoting or advertising the business of any direct competitors of the Landlord or Sing Group;
(e)
adversely affecting the image of reputation or prestige of the Landlord or Sino Group or the Building; or
(f)
otherwise inappropriate or considered by the Landlord to be inappropriate to be displayed at the Premi ses and for the Building.
|
|
(ii) |
The
Tenant shall be wholly responsible for the contents of the Displays and shall indemnify the Landiord against any claim, liability,
cost, expense, loss or damage arising from or in connection with the contents of the Displays or any part of them or any breach
of the Tenant of this clause. |
|
(iii) |
If
the Landlord is of the opinion that the contents of the Displays or any part thereof is of any kind referred to in clause
25(i) above, the Tenant must remove or demolish the same immediately at its sole cost. For the avoidance of doubt, the Landlord
is entitled (but not obliged) to remove or demolish the Displays or such part thereof at any time without incurring any liability
to the Tenant. All expenses for the removal and demolition shall be borne and paid by the Tenant and the Landlord shall not
be liable to the Tenant or any other party whomsoever for any claim, loss or damage whatsoever caused to the Displays arising
from such removal and demolition. |
SCHEDULE
II
Special
Conditions
1.
Management Fee and Air-Conditioning Charge
(i) If
the normal air-conditioning supply hours are specified hereinbefore, air-conditioning charge shall be payable by the Tenant. The
management fee and air-conditioning charge (if any) shall be subject to revision from time to time during the Term as determined
by the Building Manager and is payable monthly in advance on the first day of each calendar month. The normal air-conditioning
Supply hours are subject to revision from time to time by the Landlord or the Building Manager at its sole discretion by giving
to the Tenant not less than one month's prior notice in writing in that behalf.
(ii) If
the management fee and air-conditioning charge (if any) shall be in arrears for more than fifteen (15) days, without prejudice
to any right of action or any remedy of the Landlord for the recovery thereof, from the Tenant, the Landlord shall be thereafter
at its discretion entitled to Suspend or discontinue the provision of any management or air-conditioning supply services including
any cleaning service to the Premises if it is included in the management service until such default or breach has been rectified
and the Landlord shall not incur any liability to the Tenant for any loss, or damage suffered by the Tenant as a result thereof.
2.
Cleaning Service Charges
(i)
In the event that the Tes2nt is liable to pay monthly cleaning service charges hereunder,
(a)
the Tenant has agreed to engage Best Result Environmental Services Limited ("Best Result"), a cleaning contractor approved
by the Landlord, to provide internal cleaning services ("cleaning Services") to the Premises throughout the Term at
the Tenant's cost which is subject to adjustment to be made by Best Result and is payable is advaňce and in the same manner
as the management fee and air-conditioning charge (if any) are payable under this agreement. The scope of the cleaning services
will be available upon request be ng made to Best Result either directly or through the Landlord. The cleaning service charges
will be collected by the Landlord as agent for and on behalf of Best Result, in the same way and manner as the management fee
and air-conditioning charge (if any) are collected.
(b)
if the cleaning service charges shall be in arrears for more than fifteen (15) days, the Landlord shall notify Best Result who
may thereafter at its discretion suspend or discontinue the provision of cleaning services to the Premises until such default
or breach has been rectified. Without prejudice to any right to recover the outstanding sum(s) from the Tenant by the Landlord
or Best Result, the Landlord shall not incur any liability to the Tenant for any loss or damage suffered by the Tenant as a result
thereof.
(ii)
The Tenant shall not employ any person or firm (other than its own staff) to carry out internal cleaning of the Premises save
with prior approval of the Landlord or the Building Manager and the Tenant shall pay all charges there for.
3.
Legal Costs
The
Landlord's solicitors' legal costs (calculated at full scale), disbursements and other legal expenses in connection with the preparation
and signing of the Tenancy Agreement and its counterpart shall be borne by the Landlord and the Tenant in equal shares. Should
the Tenant engage a separate firm of Solicitors to act on its behalf then each party shall pay its own solicitors' costs.
4.
Sales and Redevelopment
(i)
Notwithstanding any provision to the contrary contained in this offer and/or the subsequent Tenancy Agreement, if at any time
during the term the Landlord shall decide to redevelop, renovate, refurbish or redesign the Building or any part thereof (which
decision shall be sufficiently evidenced by a certified true copy of the relevant Board Resolution of the Landlord) or shall sell,
assign or enter into any agreement for the sale or assignment of the whole or any part of the Building which includes the Premises,
the Landlord shall be entitled to give not less than six (6) calendar months' notice in writing to the Tenant to determine this
offer and/or the subsequent Tenancy Agreement and at the expiry of such notice everything herein contained shall cease and be
void and the Tenant shall immediately deliver up vacant possession of the Premises to the Landlord.
(ii)
The Tenant shall not be entitled to claim against the Landlord for any compensation for the loss of goodwill or business, damages
or any costs and expenses incurred by the Tenant whatsoever but any such termination shall be without prejudice to the rights
and remedies of either party against the other in respect of any antecedent claim or breach of any terms or stipulations contained
in this agreement.
(iii)
The expression "Landlord" in this clause shall include the Landlord's successors in title and this clause shall enure
for the benefit of the Landlord's successors in title.
(iv)
It is also agreed and declared that notwithstanding any other provision(s) in this agreement and notwithstanding any law to the
contrary, the Tenant's option right(s) (if any) shall be extinguished and determined upon the service of the said notice of termination,
irrespective of whether such rights shall have been exercised by the Tenant or not.
(v)
The Tenant shall not be entitled to any claim against the Landlord for any damages of compensation or any relief against the extinguishment
and determination of its option right (S).
5.
Vacant Possession
(i)
The Tenant is fully aware of the fact that the Premises is at present let to an existing tenant,
(ii)
The Tenant agrees that if the landlord shall for whatever reason fail to obtain vacant possession of the Premises on or before
16 October 2015, the date of commencement of the said term and for the de very of vacant possess son of the Premises by the Landlord
to the Tenant shall be postponed.
(iii)
In such an event, the Tenant will not be compensated in anyway by the Landlord save that the Tenant's obligations to pay rent
and to perform and observe the other terms and conditions of this Agreement (save and except the payment of deposit) shall not
arise until vacant possession of the Premises is delivered to the Tenant.
ANNEXURE
Landlord’s
Provisions
Save the
items enlisted here below, the premises shall be handed over to the Tenant in a ‘bare shell’ condition.
1. Landlord
shall install ceiling tiles and ceiling grids at Landlord’ s standard in one-off basis after the lease commencement date.
2. Landlord
shall supply and deliver 130 nos. recessed light fixture (material only) at Landlord’ s standard in one-off basis for Tenant’
s own installation
3. Landlord
shall supply and deliver 260 nos. fluorescent tube (material only) at Landlord’ s standard in one-off basis for Tenant’
s own installation.
4. Landlord
shall install two numbers of single leaf fire rated wooden door at Landlord’ s standard.
5. Landlord
shall install a double leaf fire rated glass door at Landlord’ s standard.
Upon sonner
determination or expiration of the Lease, Landlord reserver the right to demand Tenant to demolish the premises to Landlord’
s bare shell standard, repair or reinstate wholly or partially of it.
![](http://www.sec.gov/Archives/edgar/data/1573766/000121390015008620/image_001.jpg)
EXHIBIT
31.1
CERTIFICATION
OF PRINCIPAL EXECUTIVE OFFICER
PURSUANT
TO RULE 13a-14 OR RULE 15d-14 OF THE SECURITIES EXCHANGE ACT OF 1934,
AS
ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Kee Yuen
Choi, certify that:
1. |
I
have reviewed this quarterly report on Form 10-Q of eBullion, Inc.; |
|
|
2. |
Based
on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect
to the period covered by this report; |
|
|
3. |
Based
on my knowledge, the financial statements, and other financial information included in this report, fairly present in all
material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods
presented in this report; |
|
|
4. |
The
registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as
defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
|
|
|
a) |
Designed
such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision,
to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made
known to us by others within those entities, particularly during the period in which this report is being prepared; |
|
|
|
|
b) |
Designed
such internal control over financial reporting, or caused such internal control over financial reporting to be designed under
our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally accepted accounting principles; |
|
|
|
|
c) |
Evaluated
the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions
about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based
on such evaluation; and |
|
|
|
|
d) |
Disclosed
in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s
most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially
affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;
and |
|
|
|
5. |
The
registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control
over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors
(or persons performing the equivalent functions): |
|
|
|
|
a) |
All
significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which
are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial
information; and |
|
|
|
|
b) |
Any
fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s
internal control over financial reporting. |
Date:
November 16, 2015 |
By: |
/s/ Kee
Yuen Choi |
|
Name: |
Kee Yuen Choi |
|
Title: |
President and Chief Executive Officer |
|
|
(Principal Executive
Officer) |
EXHIBIT
31.2
CERTIFICATION
OF PRINCIPAL EXECUTIVE OFFICER
PURSUANT
TO RULE 13a-14 OR RULE 15d-14 OF THE SECURITIES EXCHANGE ACT OF 1934,
AS
ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Chui
Chui Li, certify that:
1. |
I
have reviewed this quarterly report on Form 10-Q of eBullion, Inc.; |
|
|
2. |
Based
on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect
to the period covered by this report; |
|
|
3. |
Based
on my knowledge, the financial statements, and other financial information included in this report, fairly present in all
material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods
presented in this report; |
|
|
4. |
The
registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as
defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
|
|
|
|
a) |
Designed
such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision,
to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made
known to us by others within those entities, particularly during the period in which this report is being prepared; |
|
|
|
|
b) |
Designed
such internal control over financial reporting, or caused such internal control over financial reporting to be designed under
our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally accepted accounting principles; |
|
|
|
|
c) |
Evaluated
the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions
about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based
on such evaluation; and |
|
|
|
|
d) |
Disclosed
in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s
most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially
affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;
and |
|
|
|
5. |
The
registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control
over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors
(or persons performing the equivalent functions): |
|
|
|
|
a) |
All significant
deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably
likely to adversely affect the registrant’s ability to record, process, summarize and report financial information;
and |
|
|
|
|
b) |
Any fraud,
whether or not material, that involves management or other employees who have a significant role in the registrant’s
internal control over financial reporting. |
Date:
November 16, 2015 |
By: |
/s/ Chui
Chui Li |
|
Name: |
Chui Chui Li |
|
Title: |
Chief Financial Officer |
|
|
(Principal Financial
Officer) |
EXHIBIT
32.1
CERTIFICATION PRINCIPAL
EXECUTIVE OFFICER
PURSUANT
TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
SECTION
906 OF THE SARBANES-OXLEY ACT OF 2002
Pursuant
to 18 U.S.C. § 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned officer of eBullion, Inc.
(the “Registrant”) hereby certifies, to such officer’s knowledge, that:
(1) |
the
accompanying Quarterly Report on Form 10-Q of the Registrant for the quarter ended September 30, 2015 (the “Report”)
fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934,
as amended; and |
|
|
(2) |
the
information contained in the Report fairly presents, in all material respects, the financial condition and results of operations
of the Registrant. |
Date:
November 16, 2015 |
By: |
/s/ Kee
Yuen Choi |
|
|
Name:Kee Yuen
Choi |
|
|
Title: President
and Chief Executive Officer |
|
|
(Principal Executive
Officer) |
EXHIBIT
32.2
CERTIFICATION PRINCIPAL
EXECUTIVE OFFICER
PURSUANT
TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
SECTION
906 OF THE SARBANES-OXLEY ACT OF 2002
Pursuant
to 18 U.S.C. § 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned officer of eBullion, Inc.
(the “Registrant”) hereby certifies, to such officer’s knowledge, that:
(1) |
the accompanying
Quarterly Report on Form 10-Q of the Registrant for the quarter ended September 30, 2015 (the “Report”) fully
complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934, as
amended; and |
|
|
(2) |
the information
contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the
Registrant. |
Date:
November 16, 2015 |
By: |
/s/ Chui
Chui Li |
|
|
Name: Chui Chui
Li |
|
|
Title: Chief Financial
Officer |
|
|
(Principal Financial
Officer) |
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