UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
10-K
ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(d)
OF
THE SECURITIES EXCHANGE ACT OF 1934
For
the fiscal year ended
August 31, 2016
.TRANSITION
REPORT UNDER SECTION 13 OR 15(d)
OF
THE SECURITIES EXCHANGE ACT OF 1934
For
the transition period from ___________ to ___________
Commission
File Number:
333-200760
CRYPTO-SERVICES,
INC.
(Exact
name of registrant as specified in its charter)
Nevada
|
|
33-0439333
|
(State
or other jurisdiction of
incorporation
or organization)
|
|
(I.R.S. Employer
Identification No.)
|
19F,
Lianhe Tower, 1069 Nanhai Ave,
Nanshan
District, Shenzhen, 518000, China
(Address
of principal executive offices)
(86)
75586961406
(Registrant’s
telephone number, including area code)
Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes [ ] No [X]
Indicate
by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes [ ] No
[X]
Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ]
Indicate
by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive
Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the
preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [X ] No
[ ]
Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter)
is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy
or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. Yes
[X] 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
|
[X]
|
(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 Act). Yes [X] No
[ ]
The
aggregate market value of the Company’s common stock held by non-affiliates computed by reference to the closing bid price
of the Company’s common stock, as of the last business day of the registrant’s most recently completed second fiscal
quarter: $27,497
Indicate
the number of shares outstanding of each of the registrant's classes of common stock, as of the latest practicable date: 7,750,000
shares of common stock, par value $0.001 per share, issued and outstanding as of December 13, 2016.
INDEX
Forward-Looking
Statements
Certain
statements in this Annual Report on Form 10-K constitute “forward-looking statements” made under the “safe harbor”
provisions of the Private Securities Litigation Reform Act of 1995 that are based on current expectations, estimates, forecasts
and assumptions and are subject to risks and uncertainties. Words such as “anticipate,” “assume,” “believe,”
“estimate,” “expect,” “goal,” “intend,” “plan,” “project,”
“seek,” “target,” and variations of such words and similar expressions are intended to identify such forward-looking
statements. All forward-looking statements speak only as of the date on which they are made. Such forward-looking statements are
subject to certain risks, uncertainties and assumptions relating to certain factors that could cause actual results to differ
materially from those anticipated in such statements.
We
cannot predict all of the risks and uncertainties. Accordingly, such information should not be regarded as representations that
the results or conditions described in such statements or that our objectives and plans will be achieved and we do not assume
any responsibility for the accuracy or completeness of any of these forward-looking statements. These forward-looking statements
are found at various places throughout this Annual Report on Form 10-K and include information concerning possible or assumed
future results of our operations, including statements about potential acquisition or merger targets; business strategies; future
cash flows; financing plans; plans and objectives of management; any other statements regarding future acquisitions, future cash
needs, future operations, business plans and future financial results, and any other statements that are not historical facts.
These
forward-looking statements represent our intentions, plans, expectations, assumptions and beliefs about future events and are
subject to risks, uncertainties and other factors. Many of those factors are outside of our control and could cause actual results
to differ materially from the results expressed or implied by those forward-looking statements. In light of these risks, uncertainties
and assumptions, the events described in the forward-looking statements might not occur or might occur to a different extent or
at a different time than we have described. You are cautioned not to place undue reliance on these forward-looking statements,
which speak only as of the date of the Annual Report on Form 10-K. All subsequent written and oral forward-looking statements
concerning other matters addressed in this Annual Report on Form 10-K and attributable to us or any person acting on our behalf
are expressly qualified in their entirety by the cautionary statements contained or referred to in this Annual Report on Form
10-K.
Except
to the extent required by law, we undertake no obligation to update or revise any forward-looking statements, whether as a result
of new information, future events, a change in events, conditions, circumstances or assumptions underlying such statements, or
otherwise.
PART
I
Item
1. Business.
General
As
used in this Annual Report, references to “the Company”, “Crypto-Services”, “we”, “our”,
“ours” and “us” refer to Crypto-Services, Inc., unless otherwise indicated. In addition, references to
our “financial statements” are to our consolidated financial statements except as the context otherwise requires.
We
prepare our financial statements in United States dollars and in accordance with generally accepted accounting principles as applied
in the United States, referred to as U.S. GAAP. In this Annual Report, references to “$” and “dollars”
are to United States dollars.
Overview
Crypto-Services,
Inc. was incorporated in the State of Nevada as a for-profit company on March 21, 2014 and established a fiscal year end of August
31. We are a development-stage Company established to offer an information based website at www.digitalcoindaily.com that would
provide users with up-to-date information on the leading digital currencies. We purchased the URL www.digitalcoindaily.com and
plan to launch a website to provide daily news and updates for users of digital currencies. Some of the information we intend
to provide included: information on the major digital currency exchanges including their current exchange rates, fee structures
and volumes; news on major legal developments surrounding digital currencies, adoption of digital currencies by major retailers
and other institutions and development of new hardware and software targeted at servicing digital currency users. We plan to generate
revenue by advertising and referral fees.
Unfortunately
Employees
The
Company currently has one employee; Xinlong Shen the Company’s President, Secretary and Treasurer. He works full time on
Crypto-Services related matters.
Our
Corporate Information
Our
principal executive office is located at 19F, Lianhe Tower, 1069 Nanhai Ave, Nanshan District, Shenzhen,China
Available
Information
Copies
of our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and other documents that we will
file with or furnish to the SEC will be available free of charge by sending a written request to our Corporate Secretary at our
corporate headquarters. Additionally, the documents we file with the SEC is or will be available free of charge at the SEC’s
Public Reference Room at 100 F Street, NE, Washington D.C. 20549. Other information on the operation of the Public Reference Room
is or will be available by calling the SEC at (800) SEC-0330.
Item
1A. Risk Factors.
Smaller
reporting companies are not required to provide the information required by this item.
Item
1B. Unresolved Staff Comments.
None.
Item
2. Properties.
Our
principal executive office is located at 19F, Lianhe Tower, 1069 Nanhai Ave, Nanshan District, Shenzhen,China.
Item
3. Legal Proceedings.
We
are currently not involved in any litigation that we believe could have a material adverse effect on our financial condition or
results of operations. To our knowledge, there is no action, suit, proceeding, inquiry or investigation before or by any court,
public board, government agency, self-regulatory organization or body pending or, to the knowledge of our executive officers or
any of our subsidiaries, threatened against or affecting our company, our common stock, any of our subsidiaries or any of our
companies or our companies’ subsidiaries’ officers or directors in their capacities as such, in which an adverse decision
could have a material adverse effect.
Item
4. Mine Safety Disclosures.
Not
applicable.
PART
II
Item
5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
There
is no market for our common stock.
Holders
As
of December 13, 2016 there were 26 holders of record of our Common Stock.
Dividend
Policy
We
have not paid cash dividends on our common stock and do not plan to pay such dividends in the foreseeable future. Our board of
directors (the “Board”) will determine our future dividend policy on the basis of many factors, including results
of operations, capital requirements, and general business conditions.
Recent
Sales of Unregistered Securities
In
addition to those sales of unregistered securities previously disclosed in reports filed with the SEC during the fiscal year ended
August 31, 2016, we issued the following securities without registration under the Securities Act of 1933.
On
August 29, 2014, the Company issued 5,000,000 common shares at $0.01 per share for proceeds of $50,000
On
July 29, 2015, the Company issued 1,450,000 common shares at $0.01 per share for proceeds of $14,500.
On
August 18, 2015, the Company issued 1,300,000 common shares at $0.01 per share for proceeds of $13,000.
Outstanding
Equity Awards
There
are no outstanding equity awards.
Equity
Compensation Plan Information
We
currently do not have an equity compensation plan.
Director
Compensation
Our
directors are not compensated for their services. The board has not implemented a plan to award options to our director. There
are no contractual arrangements with any member of the board of directors. We have no director’s service contracts.
Item
6. Selected Financial Data.
Not
applicable to smaller reporting companies.
Item
7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
The
following discussion should be read in conjunction with our audited financial statements and the related notes that appear elsewhere
in this annual report. The following discussion contains forward-looking statements based upon current expectations that involve
risks and uncertainties, such as our plans, objectives, expectations and intentions. Actual results and the timing of events could
differ materially from those anticipated in these forward-looking statements as a result of a number of factors, including those
set forth under the Item 1A. Risk Factors, Cautionary Notice Regarding Forward-Looking Statements and Business sections in this
Form 10-K. We use words such as “anticipate,” “estimate,” “plan,” “project,” “continuing,”
“ongoing,” “expect,” “believe,” “intend,” “may,” “will,”
“should,” “could,” and similar expressions to identify forward-looking statements.
Our
audited financial statements are stated in United States Dollars and are prepared in accordance with United States Generally Accepted
Accounting Principles.
Overview
Crypto-Services,
Inc. was incorporated in the State of Nevada as a for-profit company on March 21, 2014 and established a fiscal year end of August
31. CRYT is a development-stage Company which intended to offer an information based website at www.digitalcoindaily.com that
would provide users with up to date information on the world of digital currencies.
Upon
the consummation of the sale, a change of control occurred with Gordon Hum and Edwin Jong appointing Xinlong Shen as
the designee of the Purchasers to serve as the Company’s Chief Executive Officer, Chief Financial Officer, President,
Secretary, Treasurer and Sole Director of the Company. Mr. Hum and Mr. Jong resigned from all of their positions with the
Company. A Form 8-K was filed with the Securities Commission reflecting this change of officers and directors.
Effective
August 28, 2016, shareholders of Crypto Services, Inc. representing 54.19% of the Company’s issued stock approved changing
the Company’s name from Crypto-Services, Inc., to Fortune Valley Treasures, Inc. The Company filed a Certificate of Amendment
with the State of Nevada on September 21, 2016.
We
have had limited operations and have been issued a “going concern” opinion by our auditor, based upon our reliance
on the sale of our common stock as the sole source of funds for our future operations.
Plan
of Operation
We
are a development stage entity devoting substantially all of our efforts to establishing a new business for which our planned
principal operations have not yet commenced. We believe our current equity at risk is sufficient to finance our current activities.
Our
auditors have issued a going concern opinion on our audited financial statements for the year ended August 31, 2016.This means
that there is substantial doubt that we can continue as an on-going business for the next twelve months unless we obtain additional
capital to pay our bills. This is because we have not generated any revenues and no revenues are anticipated until we launch our
business platform. There is no assurance we will ever reach this point. Accordingly, we must raise cash from other sources. Our
only other source for cash at this time is investments by others or loans from our shareholders or officers. We have no assurances
that such loans will become available upon acceptable terms when the funds are required for our operations.
Results
of Operations
The
following discussion should be read in conjunction with the consolidated financial statements and notes thereto included elsewhere
in this form 10-K.
For
the Fiscal Years Ended August 31, 2016 and August 31, 2015
Revenue
For
the years ended August 31, 2016 and 2015 we generated no revenue.
Operating
Expense
Operating expense decreased to $44,465
for the year ended August 31, 2016 as compared with $45,590 for the year ended August 31, 2015. This decrease is primarily
attributable to the decrease in general and administrative expenses due to accounting, legal and consulting expenses.
Net loss
Net loss decreased to $23,336 for the
year ended August 31, 2016 as compared with $45,590 for the year ended August 31, 2015. The decrease is attributable to a decrease
in operating expenses and gain on waive of liability of approximately $22,254.
Liquidity
and Capital Resources
|
|
For the Years Ended
|
|
|
|
August 31,
|
|
|
|
2016
|
|
|
2015
|
|
Net cash used in operating activities
|
|
$
|
(42,492
|
)
|
|
$
|
(35,008
|
)
|
Net cash used in investing activities
|
|
$
|
-
|
|
|
$
|
-
|
|
Net cash provided by financing activities
|
|
$
|
-
|
|
|
$
|
27,500
|
|
Net
cash used in operations was $42,492 for the fiscal year ended August 31, 2016 compared to $35,008 for the year ended August
31, 2015.
Net
cash used in investing activities was $0 for the fiscal year ended August 31, 2016 and for the year ended August 31, 2015.
Cash
flows provided by financing activities for the fiscal year ended August 31, 2016 were $0 compared to $27,500 for the year
ended August 31, 2015.
We
have substantial capital resource requirements and have incurred significant losses since inception. As of August 31, 2016, we
had $0 in cash. Based upon our current business plans, we will need considerable cash investments to be successful. Such capital
requirements are in excess of what we have in available cash and what we currently have commitment for. Therefore, we do not have
enough available cash to meet our obligations over the next twelve (12) months.
Related
Party Transactions
Since
inception, we have conducted transactions with directors and director related entities. These transactions included the following:
During the fiscal year of 2016, the Company
was indebted to the Prior President of the Company in the amount of $1,741, which is non-interest bearing, unsecured, and due
on demand.
On August 8, 2016, the former President,
Gordon Hum confirmed that there were no trade payables, accrued expenses, liabilities, taxes, obligations or commitments prior
to August 8, 2016 ,which would be required to accrue or be reflected in in the financial statements. Additionally, he confirmed
that he has waived any and all such liabilities as of August 8, 2016.
As
of August 31, 2016, the Company was indebted to the current CEO, Xinlong Shen, in the amount of $3,000, which is non-interest
bearing, unsecured, and due on demand.
Lily Chen, friend of Xinlong Shen,
provided non-compensated book keeping and financial reporting services from August, 2016 to December, 2016.
Effective
August 31, 2016 the Company agreed to assign and transfer all of its existing assets and liabilities to former Company president
Gordon Hum. In consideration for the assignment of the Company’s assets and liabilities, Mr. Hum agreed to retire any and
all shares of preferred stock of the Company for return to treasury. Pursuant to the assignment of the assets and liabilities
to Gordon Hum, the Company agreed to deliver to Mr. Hum any documentary evidence of the full and unrestricted title to the assets
and liabilities, and such other documents as may be required under applicable law or reasonably requested by Mr. Hum. Effective
October 18, 2016, the Company delivered to Mr. Hum the required documentary evidence of the full and unrestricted title to the
assets and liabilities and Mr. Hum delivered to the Company the full documentary evidence of the retirement of the Preferred Stock
to treasury.
Going
Concern Qualification
We did not generate any revenue for the fiscal
year ended August 31, 2016 or the period ended August 31, 2015 and have incurred significant losses and cash used in operations,
and such losses and use of cash are expected to continue. During the period ended August 31, 2016, the Company has an accumulated
deficit of $69,167. Our Independent Registered Public Accounting Firm has included a "Going Concern Qualification"
in their report for the year ended August 31, 2016 and the period from inception through August 31, 2015. In addition, we have
negative working capital. The foregoing raises substantial doubt about the Company's ability to continue as a going concern. Management's
plans include seeking additional capital or debt financing. There is no guarantee that additional capital or debt financing will
be available when and to the extent required, or that if available, it will be on terms acceptable to us. The consolidated financial
statements do not include any adjustments that might result from the outcome of this uncertainty. The "Going Concern Qualification"
might make it substantially more difficult to raise capital.
We
do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial
condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital
resources.
Item
8. Financial Statements and Supplementary Data.
Crypto-Services,
Inc.
INDEX
TO INTERIM FINANCIAL STATEMENTS
August
31, 2016
TABLE
OF CONTENTS
REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To
the Board of Directors and Stockholders’ of
Crypto
Services, Inc.
Shenzhen,
China
We
have audited the accompanying balance sheets of Crypto Services, Inc. (the “Company”) as of August 31, 2016 and 2015,
and the related statements of operations, changes in stockholders’ equity and cash flows for the years ended August 31,
2016 and 2015. These financial statements are the responsibility of the Company’s management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We
conducted our audits in accordance with standards of the Public Company Accounting Oversight Board (United States). Those standards
require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material
misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial
reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s
internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred
to above present fairly, in all material respects, the financial position of Crypto Services, Inc. as of August 31, 2016
and 2015, and the results of its operations and its cash flows for the years then ended, in conformity with accounting
principles generally accepted in the United States of America.
The accompanying financial statements have
been prepared assuming the Company will continue as a going concern, which contemplates continuity of business, realization of
assets, and liquidation of liabilities in the ordinary course of business. As discussed in Note 2 to the financial statements,
the Company has suffered recurring losses from operations raises substantial doubt about the Company’s ability
to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of
this uncertainty.
/s/
Malone Bailey, LLP
www.malonebailey.com
Houston,
Texas
December
13, 2016
Crypto-Services,
Inc.
Balance
Sheets
|
|
August
31, 2016
|
|
|
August
31, 2015
|
|
|
|
|
|
|
|
|
Current Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
|
|
$
|
-
|
|
|
$
|
42,492
|
|
Prepaid Expense
|
|
|
11,333
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
Total Current Assets
|
|
$
|
11,333
|
|
|
$
|
42,492
|
|
|
|
|
|
|
|
|
|
|
Total Assets
|
|
$
|
11,333
|
|
|
$
|
42,492
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accrued liabilities
|
|
$
|
-
|
|
|
$
|
10,582
|
|
Due to related party-Gorden Hum
|
|
|
-
|
|
|
|
-
|
|
Due to related party-Xinlong Shen
|
|
|
3000
|
|
|
|
241
|
|
|
|
|
|
|
|
|
|
|
Total Current Liabilities
|
|
|
3000
|
|
|
|
10,823
|
|
|
|
|
|
|
|
|
|
|
Total Liabilities
|
|
$
|
3000
|
|
|
$
|
10,823
|
|
|
|
|
|
|
|
|
|
|
Stockholders’ Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock Authorized: 7,750,000 common shares issued and outstanding as of August 31, 2016 and 2015
|
|
|
7,750
|
|
|
|
7,750
|
|
|
|
|
|
|
|
|
|
|
Additional paid-in capital
|
|
|
69,750
|
|
|
|
69,750
|
|
|
|
|
|
|
|
|
|
|
Accumulated deficit
|
|
|
(69,167
|
)
|
|
|
(45,831
|
)
|
|
|
|
|
|
|
|
|
|
Total Stockholders’ Equity
|
|
|
8,333
|
|
|
|
31,669
|
|
|
|
|
|
|
|
|
|
|
Total Liabilities and Stockholders’ Equity
|
|
$
|
11,333
|
|
|
$
|
42,492
|
|
The
accompanying notes are an integral part of these audited financial statements
Crypto-Services,
Inc.
Statement
of Operations
|
|
For the year
ended
August 31, 2016
|
|
|
For the year
ended
August 31, 2015
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
-
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General and administrative expenses
|
|
|
44,465
|
|
|
|
45,590
|
|
|
|
|
|
|
|
|
|
|
Total Operating Expenses
|
|
|
44,465
|
|
|
|
45,590
|
|
|
|
|
|
|
|
|
|
|
Other Income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain from waive of liabilities
|
|
|
21,129
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
Total Other Income
|
|
|
21,129
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
Net Loss
|
|
$
|
(23,336
|
)
|
|
$
|
(45,590
|
)
|
|
|
|
|
|
|
|
|
|
Net Loss Per Share – Basic and Diluted
|
|
$
|
(0.01
|
)
|
|
$
|
(0.01
|
)
|
|
|
|
|
|
|
|
|
|
Weighted Average Shares Outstanding
|
|
|
7,750,000
|
|
|
|
5,177,397
|
|
The
accompanying notes are an integral part of these audited financial statements
Crypto-Services,
Inc.
Statement
of Changes in Stockholders’ Equity
|
|
|
|
|
Additional
|
|
|
|
|
|
|
|
|
|
Common Stock
|
|
|
Paid-in
|
|
|
Accumulated
|
|
|
|
|
|
|
Shares
|
|
|
Amount
|
|
|
Capital
|
|
|
Deficit
|
|
|
Total
|
|
Balance-August 31, 2014
|
|
5,000,000
|
|
|
5,000
|
|
|
45,000
|
|
|
(241
|
)
|
|
49,759
|
|
Common stock issued for cash
|
|
2,750,000
|
|
|
2,750
|
|
|
24,750
|
|
|
-
|
|
|
27,500
|
|
Net loss for the year
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(45,590
|
)
|
|
(45,590
|
)
|
Balance – August 31, 2015
|
|
|
7,750,000
|
|
|
|
7,750
|
|
|
|
69,750
|
|
|
|
(45,831
|
)
|
|
|
31,669
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss for the year
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(23,336
|
)
|
|
|
(23,336
|
)
|
Balance – August 31, 2016
|
|
|
7,750,000
|
|
|
$
|
7,750
|
|
|
$
|
69,750
|
|
|
$
|
(69,167
|
)
|
|
$
|
8,333
|
|
Crypto-Services,
Inc.
Statement
of Cash Flows
|
|
For the year
ended
August 31, 2016
|
|
|
For the year
ended
August 31, 2015
|
|
|
|
|
|
|
|
|
Cash Flows From Operating Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(23,336
|
)
|
|
$
|
(45,590
|
)
|
Adjustments to reconcile net loss to net cash used in operating activities:
|
|
|
|
|
|
|
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
Gain on waive of liabilities
|
|
|
(21,820
|
)
|
|
|
|
|
Prepaid expenses
|
|
|
(8,333
|
)
|
|
|
|
|
Accounts payable
|
|
|
11,579
|
|
|
|
|
|
Accrued expenses
|
|
|
(582
|
)
|
|
|
10,582
|
|
|
|
|
|
|
|
|
|
|
Net
Cash Used In Operating Activities
|
|
|
(42,492
|
)
|
|
|
(35,008
|
)
|
|
|
|
|
|
|
|
|
|
Cash
Flows From Financing Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from issuance of common stock
|
|
|
-
|
|
|
|
27,500
|
|
|
|
|
|
|
|
|
|
|
Net Cash Provided By Financing Activities
|
|
|
-
|
|
|
|
27,500
|
|
|
|
|
|
|
|
|
|
|
Net Decrease in cash
|
|
|
(42,492
|
)
|
|
|
(7,508
|
)
|
|
|
|
|
|
|
|
|
|
Cash and Cash Equivalents at Beginning of Period
|
|
|
42,492
|
|
|
|
50,000
|
|
|
|
|
|
|
|
|
|
|
Cash and Cash Equivalents at End of Period
|
|
$
|
-
|
|
|
$
|
42,492
|
|
|
|
|
|
|
|
|
|
|
Non-Cash Transactions
|
|
|
|
|
|
|
|
|
Due to related party-Xinlong Shen
|
|
|
3,000
|
|
|
|
|
|
Due to related party-Gordon Hum
|
|
|
1,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental Disclosures of Cash Flow Information:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest paid
|
|
$
|
-
|
|
|
$
|
-
|
|
Income taxes paid
|
|
$
|
-
|
|
|
$
|
-
|
|
The
accompanying notes are an integral part of these audited financial statements
Crypto-Services,
Inc.
Notes
to Financial Statements
August
31, 2016
1.
Nature of Operations
Crypto-Services, Inc. was incorporated
in the State of Nevada as a for-profit company on March 21, 2014 and established a fiscal year end of August 31. CRYT is a development-stage
Company which intended to offer an information based website at www.digitalcoindaily.com that would provide users with up to date
information on the world of digital currencies.
Upon the consummation of the sale, a change of control
occurred with Gordon Hum and Edwin Jong appointing Xinlong Shen as the designee of the Purchasers to serve as the Company’s
Chief Executive Officer, Chief Financial Officer, President, Secretary, Treasurer and Sole Director of the Company. Mr. Hum and
Mr. Jong resigned from all of their positions with the Company. A Form 8-K was filed with the Securities Commission reflecting
this change of officers and directors.
Effective August 28, 2016, shareholders of Crypto-Services, Inc. representing 54.19% of the Company’s
issued stock approved changing the Company’s name from Crypto-Services, Inc., to Fortune Valley Treasures, Inc. The Company
filed a Certificate of Amendment with the State of Nevada on September 21, 2016. However, the name change is subject to the approval
of Financial Industry Regulatory Authority (FINRA). Thus, the Company currently is still using Crypto-Services, Inc. as its company
name.
2.
Going Concern
These
financial statements have been prepared on a going concern basis, which implies the Company will continue to realize it assets
and discharge its liabilities in the normal course of business. During the year ended August 31, 2016, the Company has
recurring losses and negative cash flows from operation. The Company intends to enter the business of providing information
about the use of Bitcoin and other digital currencies through a website that aggregates news and current trading data about digital
currencies. The continuation of the Company as a going concern is dependent upon the continued financial support from its shareholders,
the ability of the Company to obtain necessary equity financing to continue operations, and the attainment of profitable operations.
These factors raise substantial doubt regarding the Company’s ability to continue as a going concern. These financial statements
do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities
that might be necessary should the Company be unable to continue as a going concern.
3.
Summary of Significant Accounting Policies
a)
Basis of Presentation
These
financial statements and notes are presented in accordance with accounting principles generally accepted in the United States.
The Company’s fiscal year end is August 31.
b)
Use of Estimates
The
preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities
at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual
results could differ from those estimates. The Company regularly evaluates estimates and assumptions related to deferred income tax asset valuation allowances. The Company bases its estimates and
assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances,
the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of
costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ
materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates
and the actual results, future results of operations will be affected.
c)
Cash and Cash Equivalents
The
Company considers all highly liquid instruments with a maturity of three months or less at the time of issuance to be cash equivalents.
d)
Financial Instruments
The fair values of financial instruments
which include cash and prepaid expense were estimated to approximate their carrying values due to the immediate or relatively
short maturity of these instruments.
Transactions involving related
parties cannot be presumed to be carried out on an arm's-length basis, as the requisite conditions of competitive, freemarket
dealings may not exist. Representations about transactions with related parties, if made, shall not imply that the related party
transactions were consummated on terms equivalent to those that prevail in arm's-length transactions unless such representations
can be substantiated. It is not, however, practical to determine the fair value of amounts due from/to related parties due to
their related party nature.
The
Company’s operations and financing activities are conducted primarily in United States dollars, and as a result the Company
is not subject to significant exposure to market risks from changes in foreign currency rates. Management has determined that
the Company is not exposed to significant credit risk.
3.
Summary of Significant Accounting Policies (continued)
e)
Loss per Share
The
Company computes net loss per share in accordance with ASC 740 “
Earnings per Share
”. ASC 260 requires presentation
of both basic and diluted earnings per share (“EPS”) on the face of the income statement. Basic EPS is computed by
dividing net income (loss) available to common shareholders by the weighted average number of common shares outstanding during
the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period including stock options,
using the treasury stock method, and convertible preferred stock, using the if-converted method. In computing diluted EPS, the
average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock
options or warrants. Diluted EPS excludes all dilutive potential common shares if their effect is anti-dilutive.
f)
Income Taxes
The
Company accounts for income taxes using the asset and liability approach. Deferred tax assets and liabilities are recognized for
the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and
liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected
to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect
on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment
date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amounts expected to be realized
g)
Recent Accounting Pronouncements
The
Company does not expect the adoption of any other recently issued accounting pronouncements to have a significant effect on its
financial statements.
h)
Related parties
The
Company follows ASC 850, Related Party Disclosures, for the identification of related parties and disclosure of related party
transactions.
4.
Related Party Transactions
|
a)
|
As
of August 8, 2016, the former President, Gordon Hum confirmed that there were no trade payables, accrued expenses, liabilities,
taxes, obligations or commitments prior to August 8, 2016 ,which would be required to accrue or be reflected in in the financial
statements. Additionally, he confirmed that he has waived any and all such liabilities as of August 8, 2016.
|
|
|
|
|
b)
|
As of August 31, 2016, the Company was indebted
to the current CEO, Xinlong Shen, in the amount of $3,000, which is non-interest bearing, unsecured, and due on demand.
|
|
|
|
|
c)
|
Lily
Chen, friend of Xinlong Shen provided non-compensated book keeping and financial
reporting services from August, 2016 to December, 2016.
|
5.
Common Stock
a)
On August 29, 2014, the Company issued 5,000,000 common shares at $0.01 per share for proceeds of $50,000.
b)
On July 29, 2015, the Company issued 1,450,000 common shares at $0.01 per share for proceeds of $14,500.
c)
On August 18, 2015, the Company issued 1,300,000 common shares at $0.01 per share for proceeds of $13,000.
6.
Income Taxes
Potential
benefits of income tax losses are not recognized in the accounts until realization is more likely than not. The Company has incurred
a net operating loss of $44,464 which expires beginning in 2034. The Company has adopted ASC 740, “
Accounting
for
Income Taxes
“, as of its inception. Pursuant to ASC 740, the Company is required to compute tax asset benefits for
non-capital losses carried forward. The potential benefit of the net operating loss has not been recognized in these financial
statements because the Company cannot be assured it is more likely than not it will utilize the loss carried forward in future
years.
The
income tax benefit differs from the amount computed by applying the federal income tax rate of 34% to net loss before income taxes.
Significant
components of the Company’s deferred tax assets and liabilities as at August 31, 2016 and 2015, after applying enacted corporate
income tax rates, are as follows:
|
|
2016
|
|
|
2015
|
|
|
|
$
|
|
|
$
|
|
Deferred income tax asset
|
|
|
|
|
|
|
|
|
Net operating loss carried forward
|
|
|
23,
517
|
|
|
|
15,583
|
|
Valuation allowance
|
|
|
(23,517
|
)
|
|
|
(15,583
|
)
|
|
|
|
|
|
|
|
|
|
Net deferred income tax asset
|
|
|
-
|
|
|
|
-
|
|
Item
9. Changes In and Disagreements with Accountants on Accounting and Financial Disclosure.
None
Item
9A. Controls and Procedures.
Evaluation
of Disclosure Controls and Procedures
Our
management is responsible for establishing and maintaining disclosure controls and procedures that are designed to ensure that
information required to be disclosed in our reports under the Securities Exchange Act of 1934 (the “Exchange Act”)
is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC, and that
such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial
Officer, as appropriate, to allow timely decisions regarding required disclosure based closely on the definition of “disclosure
controls and procedures” in Rule 15d-15(e) under the Exchange Act. In designing and evaluating the disclosure controls and
procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only
reasonable assurance of achieving the desired control objectives, and management necessarily was required to apply its judgment
in evaluating the cost-benefit relationship of possible controls and procedures.
At
the end of the period covered by this Annual Report, we conducted an evaluation, under the supervision and with the participation
of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation
of our disclosure controls and procedures. Based upon the foregoing, our Chief Executive Officer and Chief Financial Officer concluded
that, as of August 31, 2016, the disclosure controls and procedures of our Company were not effective to ensure that the information
required to be disclosed in our Exchange Act reports was recorded, processed, summarized and reported on a timely basis.
The
Company is undertaking to improve its internal control over financial reporting and improve its disclosure controls and procedures.
As of August 31, 2016, we had identified the following material weaknesses which still exist through the date of this report:
As
of August 31, 2016 and as of the date of this report, we did not maintain effective controls over the control environment. Specifically,
the Board does not currently have a director who qualifies as an audit committee financial expert as defined in Item 407(d)(5)(ii)
of Regulation S-K. The Company does not have sufficient written policies and procedures for accounting and financial reporting
with respect to the requirements and application of both US GAAP and SEC guidelines. The Company also lacks accounting personnel
with technical knowledge in certain debt and equity transactions. Additionally, because of the size of the Company’s administrative
staff, controls related to the segregation of certain duties have not been developed and the Company has not been able to adhere
to them. Since these entity level programs have a pervasive effect across the organization, management has determined that these
circumstances constitute a material weakness.
Management’s
Report on Internal Control over Financial Reporting
Our
management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is
defined in Exchange Act Rule 13a-15(f). The design of any system of controls is based in part upon certain assumptions about the
likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all
potential future conditions, regardless of how remote. All internal control systems, no matter how well designed, have inherent
limitations. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because
of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Therefore, even those
systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.
We
carried out an evaluation, under the supervision and with the participation of our Chief Executive Officer and Chief Financial
Officer, of the effectiveness of our internal controls over financial reporting as of August 31, 2016. Based on this assessment,
management believes that, as of August 31, 2016, we did not maintain effective controls over the financial reporting control environment.
Specifically, the Board does not currently have a director who qualifies as an audit committee financial expert as defined in
Item 407(d)(5)(ii) of Regulation S-K. Further, because of the limited size of its administrative support staff, and due to the
financial constraints on the Company, management has not been able to develop or implement controls related to the segregation
of duties for purposes of financial reporting. The Company also lacks accounting personnel with technical knowledge in certain
debt and equity transactions. Because of these material weaknesses, management has concluded that we did not maintain effective
internal control over financial reporting as of August 31, 2016, based on the criteria established in the “Internal Integrated
Framework” issued by COSO.
No
Attestation Report by Independent Registered Accountant
The
effectiveness of our internal control over financial reporting as of August 31, 2016 has not been audited by our independent registered
public accounting firm by virtue of our exemption from such requirement as a smaller reporting company.
Changes
in Internal Controls over Financial Reporting
There
were no changes in internal controls over financial reporting that occurred during the period covered by this report, which have
materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.
Item
9B. Other Information.
None.
PART
III
Item
10. Directors, Executive Officers, and Corporate Governance
The
following is a list of our directors and executive officers. All directors serve one-year terms or until each of their successors
is duly qualified and elected. The officers are elected by our Board.
Name
|
|
Position
Held with Our Company
|
|
Age
|
|
Date
First
Elected or Appointed
|
Xinlong
Shen
|
|
President, Chief Executive Officer, Chief Financial
Officer, Secretary, Treasurer, and Director
|
|
35
|
|
August 3, 2016
|
Business
Experience
The
following is a brief account of the education and business experience of our directors and executive officers during at least
the past five years, indicating their principal occupations and employment during the period, and the name and principal business
of the organization in which such occupations or employment were carried on.
Xinlong
Shen, President, Chief Executive Officer, Chief Financial Officer, Secretary, Treasurer, and Director
Xinlong
Shen, age 35, has more than 10-year experience in electronic appliances trading and marketing field in several China-based
enterprises. He graduated in 2003 from Xidian University in China with a bachelor degree in management and major in business administration.
In
July 2003, Mr. Shen started his first career as Overseas Sales in Shenzhen Yu Ou Electronics Co., Ltd., which produces and sells
consumer electronics such as DVD and MP3 players. In August 2005, he worked as an Overseas Trade Manager in Shenzhen Richtec Industry
Co., Ltd., which is a high-tech corporation and a global exporter and manufacturer specializing in developing, producing and marketing
home theater systems, iPod/Mp3/mobile speakers and car speakers. In January 2008, he worked as an Overseas Trade Manager in Shenzhen
Zhongmeipeng Industry Co., Ltd., which is an integrated trading company producing industrial products and consumer electronics.
As Overseas Trade Manager in these two firms, Mr. Shen was responsible for leading the marketing team to conduct overseas marketing
for the company’s products.
From
December 2013 to September 2014, Mr. Shen served as Vice President in Shenzhen Boao Asset Management Consulting Service Co., Ltd.,
which is a financial consulting firm providing professional financial services including asset management and financial planning
services to clients. In order to solve clients’ financial issues, he was dedicated to offer comprehensive, integrated and
tailor-made in-depth financial advisory services.
From
September 2014 to present, Mr. Shen has served as Chairman of the Board in Qianhai Shenzhen Xinzilong Media Co., Ltd., which specializes
in production of film, video and media and entertainment programs. In addition, the Company manages various events ranging from
cultural activities to conferences and exhibitions and provides advisory services. Mr. Shen is responsible for managing media
production and sales and marketing. Moreover, he gives professional advice to clients related to branding, marketing and advertising.
Since
November 2014, Mr. Shen has served as Vice Chairman in Chinacom Investment Association, which was mutually found by Chinese merchants
and entrepreneurs. It aims at providing integrated information platform service to facilitate communication between association
members and government departments and bilateral and multilateral trade and investment activities.
Committees
of the Board of Directors
We
presently do not have an audit committee, nominating committee, compensation committee, or other committee or committees performing
similar functions, as our management believe that until this point it has been premature at the early stage of our management
and business development to form an audit, compensation or other committees.
Code
of Ethics
The
Board does not have a formal Code of Conduct and Ethics.
Shareholder
Communications
Although
we do not have a formal policy regarding communications with the Board, shareholders may communicate with the Board by writing
to us at 19F, Lianhe Tower, 1069 Nanhai Ave, Nanshan District, Shenzhen, , China. Shareholders who would like their submission
directed to a member of the Board may so specify, and the communication will be forwarded, as appropriate.
Board
Diversity
While
we do not have a formal policy on diversity, our Board considers diversity to include the skill set, background, reputation, type
and length of business experience of our Board members as well as a particular nominee’s contributions to that mix. Our
Board believes that diversity brings a variety of ideas, judgments and considerations that benefit Crypto and our shareholders.
Although there are many other factors, the Board seeks individuals with experience in business, financial and scientific research
and development.
Board
Assessment of Risk
Our
risk management function is overseen by our Board. Our management keeps our Board apprised of material risks and provides our
directors access to all information necessary for them to understand and evaluate how these risks interrelate, how they affect
Crypto, and how management addresses those risks. Mr. Shen, our Chief Executive Officer works closely together with the Board
once material risks are identified on how to best address such risk. Presently, the primary risks affecting Crypto is the lack
of working capital, the inability to generate sufficient revenues so that we have positive cash flow from operations. The Board
focuses on these key risks at each meeting and actively interfaces with management on seeking solutions.
Item
11. Executive Compensation.
Termination
Provisions
The
Company has not entered into employment agreements with any of its directors or officers.
Summary
Compensation Table
The
following table sets forth the compensation paid or accrued by us to our Chief Executive Officer, Chief Financial Officer and
each of our other officers for the year ended August 31, 2016 and the period ended August 31, 2015.
Name and Principal Position
|
|
|
Year
|
|
|
|
Salary
($)
|
|
|
|
All Other
Compensation
($)
|
|
|
|
Total
($)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gordon Hum (1)
President and Chief Executive Officer
|
|
|
2014
2015
2016
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Edwin Jong (2
Vice-President and Director
|
|
|
2014
2015
2016
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Xinlong
Shen (3)
President, CEO, Secretary, CFO, Director
|
|
|
2016
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
(1)
|
Gordon Hum ceased to be an officer or director
on August 3, 2016.
|
|
|
|
|
(2)
|
Edwin Jong ceased to be an officer or director
on August 3, 2016
|
|
|
|
|
(3)
|
Xinlong
Shen was appointed as President, CEO, Secretary, CFO and director on August 3,
2016.
|
We
have not paid any salaries to date. We do not anticipate beginning to pay salaries until we have adequate funds to do so. There
are no other stock option plans, retirement, pension, or profit sharing plans for the benefit of our officers and director other
than as described herein.
Outstanding
Equity Awards
There
are no outstanding equity awards.
Equity
Compensation Plan Information
We
currently do not have an equity compensation plan.
Director
Compensation
We
do not pay our directors any money and we have no plans to pay our directors any money in the future.
Section
16(a) Beneficial Ownership Reporting Compliance
Under
the securities laws of the United States, our directors, executive (and certain other) officers, and any persons holding ten percent
or more of our Common Stock must report on their ownership of the Common Stock and any changes in that ownership to the Commission.
Specific due dates for these reports have been established. During the fiscal year ended August 31, 2016, we believe that all
reports required to be filed by Section 16(a) were filed on a timely basis.
Item
12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The
following table sets forth the number of shares of our voting stock beneficially owned, as of December 9, 2016 by (i) those persons
Crypto-Services to be owners of more than 5% of the Company’s common stock, (ii) each director, (iii) our Named Executive
Officer, and (iv) all executive officers and directors known by as a group:
Name and Address of
Beneficial Owner
|
|
Title of Class
|
|
Amount and Nature of
Beneficial Ownership
|
|
|
Percentage of Class
(1)
|
|
Gordon Hum (1)
|
|
Common Stock
|
|
|
N/A
|
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
Edwin Jong (2)
|
|
Common Stock
|
|
|
N/A
|
|
|
|
0
|
|
Xinlong Shen
|
|
|
|
|
1,090,000
Direct
|
|
|
|
14.06
|
%
|
Directors and Executive Officers As A Group (1 person)
|
|
Common Stock
|
|
|
1,090,000
|
|
|
|
14.06
|
%
|
1.
Gordon Hum resigned as an officer and director on August 3, 2016.
2.
Edwin Jong resigned as an officer and director on August 3, 2016.
3.
Xinlong Shen was appointed as an officer and director on August 3, 2016.
Applicable
percentages are based on 7,750,000 shares outstanding, adjusted as required by rules of the SEC. Beneficial ownership is determined
under the rules of the SEC and generally includes voting or investment power with respect to securities. Shares of common stock
subject to options, warrants and convertible notes currently exercisable or convertible, or exercisable or convertible within
60 days are deemed outstanding for computing the percentage of the person holding such securities but are not deemed outstanding
for computing the percentage of any other person. Unless otherwise indicated in the footnotes to this table, Crypto-Services believes
that each of the shareholders named in the table has sole voting and investment power with respect to the shares of common stock
indicated as beneficially owned by them.
Item
13. Certain Relationships and Related Transactions, and Director Independence.
Certain
Relationships and Related Transactions
Other
than as disclosed below, there has been no transaction, since our inception on March 21, 2014, or currently proposed transaction,
in which we were or are to be a participant and the amount involved exceeds the lesser of $120,000 or one percent of our total
assets at year-end for the last completed fiscal year, and in which any of the following persons had or will have a direct or
indirect material interest:
|
(i)
|
Any director or executive officer of our company;
|
|
|
|
|
(ii)
|
Any person who beneficially owns, directly
or indirectly, shares carrying more than 5% of the voting rights attached to our outstanding shares of common stock;
|
|
|
|
|
(iii)
|
Any of our promoters and control persons;
and
|
|
|
|
|
(iv)
|
Any member of the immediate family (including
spouse, parents, children, siblings and in- laws) of any of the foregoing persons.
|
On
August 7, 2014 we issued 3,500,000 shares of our common stock to our director Gordon Hum at a price of $0.01. On August 8, 2014
we issued 1,500,000 shares of our common stock to Edwin Jong at a price of $0.01 per share. The shares were issued to both subscribers
pursuant to Section 4(2) of the Securities Act of 1933 and/or Regulation S of the Securities Act of 1933 on the basis that the
subscribers represented to us that they were not a “U.S. Person” as such term is defined in Regulation S.
As
of August 8, 2016, the former President, Gordon Hum confirmed that there were no trade payables, accrued expenses, liabilities,
taxes, obligations or commitments prior to August 8, 2016 ,which would be required to accrue or be reflected in in the financial
statements. Additionally, he confirmed that he has waived any and all such liabilities as of August 8, 2016.
The
amount due to prior CEO, Mr. Gordon Hum was $1,741, which was waived on August 8, 2016 by Mr. Hum.
As
of August 31, 2016, the Company was indebted to the current CEO, Xinlong Shen, in the amount of $3,000, which is non-interest
bearing, unsecured, and due on demand.
Effective
August 31, 2016 the Company agreed to assign and transfer all of its existing assets and liabilities to former Company president
Gordon Hum. In consideration for the assignment of the Company’s assets and liabilities, Mr. Hum agreed to retire any and
all shares of preferred stock of the Company for return to treasury. Pursuant to the assignment of the assets and liabilities
to Gordon Hum, the Company agreed to deliver to Mr. Hum any documentary evidence of the full and unrestricted title to the assets
and liabilities, and such other documents as may be required under applicable law or reasonably requested by Mr. Hum. Effective
October 18, 2016, the Company delivered to Mr. Hum the required documentary evidence of the full and unrestricted title to the
assets and liabilities and Mr. Hum delivered to the Company the full documentary evidence of the retirement of the Preferred Stock
to treasury.
Item
14. Principal Accounting Fees and Services.
The
Company’s board of directors reviews and approves audit and permissible non-audit services performed by its independent
registered public accounting firm, as well as the fees charged for such services. In its review of non-audit service and its appointment
of Malone Bailey, LLP as our independent registered public accounting firm, the board considered whether the provision of such
services is compatible with maintaining independence. All of the services provided and fees charged by Malone Bailey, LLP in 2016
and 2015 were approved by the board of directors. The following table shows the fees for the years ended August 31, 2016 and 2015:
|
|
2016
|
|
|
2015
|
|
Audit Fees (1)
|
|
$
|
11,000
|
|
|
$
|
9,000
|
|
Audit Related Fees (2)
|
|
$
|
-
|
|
|
$
|
-
|
|
Tax Fees (3)
|
|
$
|
-
|
|
|
$
|
-
|
|
All Other Fees
|
|
$
|
-
|
|
|
$
|
-
|
|
Total
|
|
$
|
11,000
|
|
|
$
|
9,000
|
|
|
(1)
|
Audit fees – these fees relate to the
audit of our annual consolidated financial statements and the review of our interim quarterly consolidated financial statements.
|
|
|
|
|
(2)
|
Audit related fees – these fees relate
primarily to the auditors’ review of our registration statements and audit related consulting.
|
|
|
|
|
(3)
|
Tax fees – no fees of this sort
were billed by Malone Bailey, LLP, our principal accountant during 2016 and 2015.
|
All
Other Fees
We
did not incur any other fees related to services rendered by our independent registered public accounting firm for the fiscal
year ended August 31, 2016 and the period ended August 31, 2015.
The
SEC requires that before our independent registered public accounting firm is engaged by us to render any auditing or permitted
non-audit related service, the engagement be either: (i) approved by our audit committee or (ii) entered into pursuant to pre-approval
policies and procedures established by the audit committee, provided that the policies and procedures are detailed as to the particular
service, the audit committee is informed of each service, and such policies and procedures do not include delegation of the audit
committee’s responsibilities to management.
We
do not have an audit committee. Our Board pre-approves all services provided by our independent registered public accounting firm.
All of the above services and fees during 2016 and 2015 were reviewed and approved by our Board of Directors either before or
after the respective services were rendered.
PART
IV
Item
15. Exhibits
Exhibit
Number
|
|
Description
|
|
|
|
3.1
|
|
Articles of Incorporation,
incorporated by reference to Exhibit 3.1 to the Company’s Registration Statement on Form S-1, as amended; filed with
the SEC on December 5, 2014.
|
|
|
|
3.2
|
|
Bylaws, incorporated
by reference to Exhibit 3.2 to the Company’s Registration Statement on Form S-1, as amended; filed with the SEC on December
5, 2014
|
|
|
|
31.1*
|
|
Certifications of
the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
|
|
32.1+
|
|
Certification 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. LAB
|
|
XBRL Taxonomy Extension
Label Linkbase Document.
|
101. PRE
|
|
XBRL Taxonomy Extension
Presentation Linkbase Document.
|
101. DEF
|
|
XBRL Taxonomy Extension
Definition Linkbase Document.
|
*
|
Filed herewith
|
+
|
In accordance with
the SEC Release 33-8238, deemed being furnished and not filed.
|
SIGNATURES
Pursuant
to the requirements of Section 13 or 15(d) 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.
|
CRYPTO-SERVICES,
INC.
|
|
|
|
Date:
December 13, 2016
|
By:
|
/s/
Xinlong Shen
|
|
|
Xinlong
Shen
Chief
Executive Officer and Chief Financial Officer
(Principal
Executive Officer and Principal Financial Officer)
|
Pursuant
to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of
the registrant and in the capacities and on the dates indicated.
Name
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/
Xinlong Shen
|
|
Chief Executive Officer and
|
|
December
13, 2016
|
Xinlong Shen
|
|
Director (Principal Executive Officer)
|
|
|
|
|
|
|
|
|
|
Director
|
|
December
13, 2016
|
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