UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-K
| x | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the fiscal year ended February 28, 2014
OR
| o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Commission file number 333-173456
JIU FENG INVESTMENT HONG KONG LTD
(Exact name of Registrant as specified in its charter)
Nevada
(State of other jurisdiction of incorporation or organization)
2293 Hong Qiao Rd, Shanghai China, 200336
(Address of principal executive offices, including zip code)
+86 21 64748888
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: Common Stock, $0.001 par value
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o 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 o 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 o
Indicate by check mark whether 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 x NO o
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. x
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 | o | Accelerated filer | o |
| Non-accelerated filer | o | Smaller reporting company | x |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes o No x
The aggregate market value of the 1,920,000 shares of common stock held by non-affiliates as of the last business day of the Company’s second fiscal quarter so there was no aggregate market value of common stock held by non-affiliates.$3,417,600.
As of May 16, 2013,June 19, 2014, there are 6,500,0008,500,000 shares of common stock outstanding.
TABLE OF CONTENTS
| Page Number | |||||
| Special Note Regarding Forward-Looking Statements | 3 | ||||
| PART I | |||||
| Item 1. | Business | ||||
| Item 1A. | Risk Factors | ||||
| Item 1B. | Unresolved Staff Comments | ||||
| Item 2. | Properties | ||||
| Item 3. | Legal Proceedings | ||||
| Item 4. | Mine Safety Disclosures | ||||
| PART II | |||||
| Item 5. | Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities | ||||
| Item 6. | Selected Financial Data | ||||
| Item 7. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | ||||
| Item 7A. | Quantitative and Qualitative Disclosures about Market Risk | ||||
| Item 8. | Financial Statements and Supplementary Data | ||||
| Item 9. | Changes In and Disagreements With Accountants on Accounting and Financial Disclosure | ||||
| PART III | |||||
| Item 10. | Directors, Executive Officers and Corporate Governance | ||||
| Item 11. | Executive Compensation | ||||
| Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters | ||||
| Item 13. | Certain Relationships and Related Transactions, and Director Independence | ||||
| Item 14. | Principal Accounting Fees and Services | ||||
| Item 15. | Exhibits, Financial Statement Schedules | ||||
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FORWARD LOOKING STATEMENTS
This Annual Report contains forward-looking statements. Forward-looking statements are projections of events, revenues, income, future economic performance or management’s plans and objectives for our future operations. In some cases, you can identify forward-looking statements by terminology such as “may”, “should”, “expects”, “plans”, “anticipates”, “believes”, “estimates”, “predicts”, “potential” or “continue” or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks in the section entitled “Risk Factors” and the risks set out below, any of which may cause our or our industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. These risks include, by way of example and not in limitation:
| · | the uncertainty of profitability based upon our history of losses; |
| · | risks related to failure to obtain adequate financing on a timely basis and on acceptable terms to continue as going concern; |
| · | risks related to our international operations and currency exchange fluctuations; and |
| · | other risks and uncertainties related to our business plan and business strategy. |
This list is not an exhaustive list of the factors that may affect any of our forward-looking statements. These and other factors should be considered carefully and readers should not place undue reliance on our forward-looking statements. Forward looking statements are made based on management’s beliefs, estimates and opinions on the date the statements are made and we undertake no obligation to update forward-looking statements if these beliefs, estimates and opinions or other circumstances should change. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.
Our financial statements are stated in United States dollars (US$) and are prepared in accordance with United States Generally Accepted Accounting Principles. All references to “common stock” refer to the common shares in our capital stock.
As used in this annual report, the terms “we”, “us”��us”, “our”, the “Company”, the ‘Registrant”, and “Jiu Feng” mean Jiu Feng Investment Hong Kong, Inc. and its subsidiary, unless otherwise indicated.
Jiu Feng Investment Hong Kong, Inc., (the “Company” also the “Registrant”) was formed on September 29, 2009 under the name Liberty Vision, Inc. On January 27, 2011, the Company formed a wholly owned subsidiary, Jiu Feng Media, Inc., an Ontario, Canada Corporation (“LVMI”). The subsidiary was incorporated to facilitate payroll transactions for the employees.
On January 27, 2013, Jiu Feng Investment Hong Kong Ltd. (the “Company”), issued a press release announcing the change of their ticker symbol from “LBYV” to “JFIL”. On July 24, 2013, the Company changed its business sector to the medical sector. On September 30, 2013, the Company entered into a world-wide five year licensing agreement (the “Agreement”) with BioMark Technologies (Asia) Limited ("BioMark") whereby the Company is licensed to sell, market, and/or distribute certain products pertaining to the health care industry (the “Licensed Products”); and to conduct research and development of BioMark’s cancer detection scanning technology.
Description of Business
The Company develops and markets medical products under license from BioMark. The products currently marketed include Bone-Induction Artificial Bone (BIAB) products and Vacuum Sealing Drainage (VSD) products. The Company is also licensed to conduct research and development of BioMark’s cancer detection scanning technology. In the event that the research and development of BioMark’s cancer detection scanning technology provides marketable technology, the Company shall have the right of first refusal to a central hub for peoplelicense to market, sell and small businesses to identify projects, investments and general information on programs designed to reduce pollution, as well as other “green” projects and technologies. The Company’s green operations are initially focused on Asia, where pollution levels are rapidly increasing.distribute such cancer detection scanning technology.
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| Name | Description |
| VSD 1 | Negative pressure drainage special bolster |
| VSD 2 | Negative pressure drainage special bolster |
| VSD 3 | Medical Operation Film |
| VSD 4 | Medical Operation Film |
| VSD 5 | Negative pressure drainage device |
| VSD 6 | Negative pressure drainage device |
| Bone induction Artificial bone A1 | Bone induction to tissue regeneration membrane |
| Artificial bone A1 | Artificial bone to tissue regeneration membrane |
| Bone induction Artificial bone A2 | Bone induction to albumin layer |
| Artificial bone A2 | Artificial bone to collagen layer |
| Bone induction Artificial bone A3 | Bone induction to regeneration microporous membrane |
| Artificial bone A3 | Artificial bone to regeneration microporous membrane |
| Bone induction Artificial bone A4 | Bone induction to microporous albumin layer |
| Artificial bone A4 | Artificial bone to microporous albumin layer |
| Xishu Qing | Gynecological antibacterial care dressing |
| Microcyn Skin and Wound Hydrogel | Gel dressing |
| Incision protection sleeve | Incision protection sleeve |
| Kangfu Shengyuan | Collagen antimicrobial dressing |
BIAB has completed over 200 animal tests, 5000 clinical trail tests, and was approved by the State Food and Drug Administration of China (“SFDA”) in 2006. The BIAB won the second prize of 2007 China National Natural Science. VSD also has been approved by SFDA in 2006.
BIAB is a bionic porous repairing bone material which is made of calcium phosphate through a special process. Its composition and structure is similar with the natural mineral of human bone, which stands for its predominant biocompatibility, biological activity and biological safety. It helps to absorb human self’s BMP growth factor; it also regulates gene function to induct bone regeneration, shorter the convalescence, and meet the target of repairing bone defect permanently. The advanced artificial bone is used: (i) in repairing traumatic bone defects; (ii) in repairing bone defect after complete removal of bone tissue as required in the treatment of certain diseases including bone tumor, bone tuberculosis, chronic osteomyelitis, osteofibrous dysplasia, delayed union, nonunion, and false joint fracture; (iii) for treatment of bone loss or bone defects caused by congenital malformation; (iv) as a filling material for spinal fusion, joint fusion, and orthopedic bone grafting; and (v) as a filling material for bone grafting fusion and decompressive laminectomy.
Product Characteristics:
The BIAB provides three-dimensional support structure and the physical and chemical composition which is similar to the body's natural bone mineral. They reassembled in human body’s environment. It can help our customers ensure that their websitelead the fibrous tissue and bone marrow stromal stem cells to grow into the porous of the material, thus obtains the essential multipotent mesenchymal cells for bone formation and provide the growth support of cells.
The human body fluid contains BMP and other growth factors, but the content is as intuitivetoo low, and easyis not enough to use as possible for their visitors. Areas we consult on include designcause induction phenomena happen. The specific composition and layout, information architecture, easestructure of navigation, functionality, accessibility, contentBIAB provides the growth factor with binding sites. The material implanted could selectively enrich and search engine optimization requirements.adsorb the bone growth factors in the blood and fluid of human body. The implantation of growth factor in the microenvironment will induce mesenchymal cells to the osteoblasts differentiation and new bone growth threshold. Under the synergistic effect of bone induction of signaling molecules and biological environment, BIAB can promote bone gene up-regulation, enhance down-stream gene function, and regulate cell movement in the direction of bone differentiation.
As the cells and nutrients transfer through the porous structure, the BMP growth factors cause the formation and maturation of new bone within the Bone-induction artificial bone. The implanted materials are thus gradually replaced with new bone, and the new bone finishes growth and ossification.
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| 1. | Optimizes bone conduction performance |
| 2. | Precise osteo-induction |
| 3. | Rapid bone formation |
| 4. | Suitable biodegradation absorption and ossification |
| Category | Advantage and Disadvantage |
| Autogenous bone graft material | ·Bone conduction and bone induction property ·None immunological rejection ·May damage healthy tissue, cause secondary vulnus to patients ·Source of bone is limited; operation lasts longer, higher risk of intra-operative bleeding and infection ·May cause injury and pain around the bone |
| Allogenic bone transplantation material and Xenogeneic bone transplantation material | ·Only bone conduction property, no bone induction property ·Limit Source ·Potential of immunological rejection and spreading underlying diseases ·May cause over reaction with large numbers of applications |
| Traditional artificial synthetic material | ·Good biocompatibility and bone conduction property ·No bone induction; absorptivity does not match the speed of bone growth ·Only for filing material, not for bone tissue regeneration |
| External growth factor and bone matrix removal protein | ·Bone induction ·External source ·No mechanical strength, need support material in practices ·Potential risk of immunological rejection and spreading underlying diseases ·High requirements for storage and transportation ·Not fully mature technology |
| BioMark’s Bone-induction artificial bone | ·Both bone conduction and safe bone induction properties ·Replicates normal process of osteogenesis and bone formation ·Sufficient and safe sources ·Avoids immunological rejection and spreading underlying diseases, is an ideal material for bone repairing |
Comparison with similar paid search programs available). Search advertisements are targeted to match key search terms (called keywords) entered on search engines. We help our clients manage their search campaigns by:products
| Bone induction | |||
HA 、 Silicate | + | - | - |
ß-TCP 、 Caso4 | + | Too fast | - |
| Allogeneic bone | - | + | - |
| Allogeneic bone + BMP/DBM | ? | + | + |
| BioMark’s Bone-induction artificial bone | + | Moderate | + |
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| 1. | Good treatment effect. VSD allows an individualized complete treatment plan, which fully ensures the effect of clinical treatment. VSD basically eliminates adverse events such as clinical wound blowing and drainage tube blocking, leading to excellent treatment reliability; |
| 2. | Easy to operate. Using VSD is as simple as changing a fresh dressing for the wound; the material does not adhere with the wound, which avoids secondary vulnus; |
| 3. | Large range of indications; innovation of operation, especially for large size wound treatments. |
Comparison with previous technology
| Category | Using Method | Requirements for the surrounding skin | Product properties | Clinical effect | Adverse events happening % | Indication |
| Old technology | ·Need certain conditions, experience and technology. ·Difficult to seal the wound; ·operation time long; ·huge nursing work | High | Single function; cannot clean the wound | Common | Drainage tube blocking >70% Wound blowing 100% Material becomes dry and hard >90% | Suitable for in- patients |
BioMark’s VSD technology | ·No certain conditions, experience and technology required. ·Easy to seal the wound; ·operation time low; ·small nursing work | No special requirements. | Functions of wound cleaning and vacuuming | Good | All very seldom | Suitable for out-patient and in-patient |
Comparison with other products
| Category | Working principals | Using method | Products properties | Clinical Effect | Adverse events happening % |
BioMark’s VSD Products | Cleaning the wound through the inlay drainage tube which transmits the vacuum | Easy | Functions of wound cleaning and vacuuming | Good | Very seldom |
| Other VSD/ VAC with suckers | ·Drainage tube is connected with the foam material through the suckers. ·Transmitting Vacuum effect is poor; ·Draining effect is poor. ·Potential problem for drainage tube blocking. | ·Need open the sealing membrane to clean the suckers. ·Hard to use the suckers since the different sizes of wound. | Single function | Poor | Very high, Drainage tube blocking happens up to 70% after a 3-days usage |
III. Cancer Detection Scanning Technology
The Company is also licensed to conduct research and development of BioMark’s cancer detection scanning technology. The technology uses biomarkers for the early detection of cancers. In the event that the company’s presence on Facebook reflectsresearch and development of BioMark’s cancer detection scanning technology provides marketable technology, the lookCompany shall have the right of first refusal to a license to market, sell and feel of the company's brand and website.
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Poor prognosis associated with late diagnosis = large tumor size
The graph above indicates the current limit of clinical detection for most tumors. A good 70% of the natural history of the tumor has already existed by time it is detected.
| · | The leading cause of premature mortality |
| · | 1 in 3 individuals will develop cancer |
| · | 70% of those will die as a result of the disease |
| · | 7.6 million deaths a year or 20,000 per day |
| · | Poor prognosis due to poor therapy and, poor detection |
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| CANCER SITE | NEW CASES |
| Lung and Bronchus | 1.6 million |
| Colon and Rectum | 1.12 million |
| Stomach | 1.1 million |
| Esophagus | 0.56 million |
| Liver | 0.7 million |
| Breast | 1.3 million |
| Prostrate | 0.8 million |
| Cervix | 0.6 million |
| · | 750,000 cases of breast, lung and prostate cancer diagnosed annually in the U.S. alone. |
| · | Those who are most aware of the dangers of specific cancers are also those most able and likely to pay for early screening, detection and treatment. |
| · | High awareness of these diseases among health care professionals and among the general population. |
| · | Cancer has become one of the most significant causes of morbidity and mortality in the world, and recently overtook heart disease as the leading cause of death for Americans. |
| · | Close to 20 million people in Europe and the U.S. live with cancer today and approximately 2.6 million new cases are diagnosed each year. |
| · | The number of new cases diagnosed each year is increasing mainly as a result of demographics, because most types of solid cancer are typically diseases of the elderly. |
| · | More than 6 million people around the world die of cancer every year, and one of two men and one of three women will develop cancer in their lifetimes. The overall annual costs associated with malignancies currently amount to $107 billion (Source: Biomarkers in Oncology, June 29, 2004). |
Characteristics of an Ideal Cancer Biomarker
| · | Can be detected in the early stages of disease |
| · | Accurately detected |
| · | Highly specific |
| · | Detected with high sensitivity |
| · | Low cost |
| · | Reliable |
| · | Non-invasive method |
| · | Early disease identification |
| · | Identification of potential drug targets |
| · | Predicting the response of patients to treatments |
| · | Personalized medicine |
| · | Rapid rise in specific cancers - breast, lung, and prostate cancer cases in U.S. have doubled over past 20 years |
| · | Currently, diagnostic findings influence 60–70% of healthcare decision-making (source: Lewin Grp) |
| · | More health services delivered out of hospital — need for technology that is portable and compact |
| · | Increased popularity of wellness centers throughout the world — interest and demand for preventative medicine |
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| · | Worldwide market for diagnostics was estimated to be $28.6 billion in 2005. U.S. accounted for $11.2 billion. |
| · | Diagnostic testing in hospitals accounts for 60% of revenue from diagnostics; reference labs account for 32% |
| · | Low compliance with diagnostic-based quality measures was linked to up to 34,000 avoidable deaths and $900 million in avoidable healthcare costs in the U.S., according to the National Committee for Quality Assurance |
Intellectual Property
BioMark holds the following patents and patent applications relating to products licensed by the Company:
| Patent Name | Type | Number | Status |
| BONE INDUCTION ARTIFICIAL BONE | Patent for utility models (China) | ZL201220149510.1 | Issued |
| BONE INDUCTION ARTIFICIAL BONE | Patent for utility models (China) | ZL201220180329.7 | Issued |
| BONE INDUCTION ARTIFICIAL BONE | Patent for utility models (China) | ZL201220180328.2 | Issued |
| BONE INDUCTION ARTIFICIAL BONE | Patent for utility models (China) | ZL201220149212.2 | Issued |
| TESTING METHOD FOR THE LOW CONCENTRATION ACETYLIZED ADMANTADINE. | Patent (China) | ZL200910050662.9 | Issued |
| ONE METHOD FOR TESTING THE ACTIVITY OF SPERMIDINE / SPERMINE N1- ACETYL TRANSFERASE. | Patent Application (China) | ZL201110145069.X | Pending |
| THE FORMULA, USING METHOD AND APPLICATION FOR A FILM COATING WHICH CONTAINS CALCIUM CARBONATE. | Patent Application (China) | ZL201110168565.7 | Pending |
| ONE TYPE OF PATCH FOR PREVENTING SKETCH MARKS. | Patent Application (China) | ZL201410039948.8 | Pending |
MONOCLONAL ANTIBODY FOR ACETYLAMANTADINE | Canadian Patent Application | 2,835,506 | Pending |
| Chinese Patent Application | 201280024582.6 | Pending | |
| European Patent Application | 12782078.5 | Pending | |
| U.S. Patent Application | 14/116,743 | Pending | |
METHOD FOR ASSAYING THE ACTIVITY OF SPERMIDINE/SPERMINE N1-ACETYLTRANSFERASE | PCT Patent Application (Canada) | PCT/CA2012/050828 | Pending |
DETECTION AND QUANTIFICATION OF ACETYLAMANTADINE IN URINE SAMPLES | PCT Patent Application (Canada) | PCT/CA2014/050273 | Pending |
| IMMUNOLOGICAL ASSAY TO DETECT AND QUANTIFY ACETYLAMANTADINE IN A PATIENT | U.S. Provisional Patent Application ** | 61/871,642 | Pending |
SPERMIDINE/SPERMINE N1-ACETYLTRANSFERASE SUBSTRATES AS ANTI-CANCER DRUG COMPOUNDS | PCT Patent Application (Canada) | PCT/CA2013/050873 | Pending |
SPERMIDINE/SPERMINE N1-ACETYLTRANSFERASE ANTIBODIES AS ANTI-CANCER DRUG COMPOUNDS | PCT Patent Application (Canada) | PCT/CA2014/050059 | Pending |
** U.S. Provisional patent applications are not aware of any environmental lawsexamined for patentability and become abandoned not later than 12 months after their filing date. Within the 12 month period that have been enacted, northe provisional patent applications are we aware of any such laws being contemplated foreffective, corresponding utility patent applications must be filed in order to preserve the future, that impact issues specific to our business. early filing date established by the provisional application.
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Employees
Our officers and directors are responsible for planning, developing and operational duties, and will continue to do so throughout the early stages of our growth. We expect to hire approximately 5 full time employees during the next twelve months.
Reports to Securities Holders
We provide an annual report that includes audited financial information to our shareholders. We will make our financial information equally available to any interested parties or investors through compliance with the disclosure rules for a small business issuer under the Securities Exchange Act of 1934. We are subject to disclosure filing requirements including filing Form 10K annually and Form 10Q quarterly. In addition, we will file Form 8K and other proxy and information statements from time to time as required. We do not intend to voluntarily file the above reports in the event that our obligation to file such reports is suspended under the Exchange Act. The public may read and copy any materials that we file with the Securities and Exchange Commission, ("SEC"), at the SEC's Public Reference Room at 100 F Street NE, Washington, DC 20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC maintains an Internet site (http://www.sec.gov) that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC.
We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.
There are no unresolved comments from the SEC.
The Company does not hold ownership or leasehold interest in any property.
Currently, the Company is not involved in any pending litigation or legal proceeding.
Not applicable.
Market Information
Our common stock is currently quoted on the OTC Bulletin Board under the symbol “JFIL”. Because we are quoted on the OTC Bulletin Board, our securities may be less liquid, receive less coverage by security analysts and news media, and generate lower prices than might otherwise be obtained if they were listed on a national securities exchange.
| Fiscal Quarter | High Bid | Low Bid | ||||||
| 2014 | ||||||||
Fourth Quarter 12-01-13 to 2-28-14 | $ | 3.00 | $ | 1.70 | ||||
Third Quarter 09-01-13 to 11-30-13 | $ | 1.60 | $ | 1.55 | ||||
Second Quarter 06-01-13 to 8-31-13 | $ | 1.78 | $ | 1.40 | ||||
First Quarter 03-01-13 to 05-31-13 | $ | 1.50 | $ | 1.20 | ||||
| Fiscal Quarter | High Bid | Low Bid | ||||||
| 2013 | ||||||||
Fourth Quarter 12-01-12 to 2-28-13 | $ | n/a | $ | n/a | ||||
Third Quarter 09-01-12 to 11-30-12 | $ | n/a | $ | n/a | ||||
Second Quarter 06-01-12 to 8-31-12 | $ | n/a | $ | n/a | ||||
First Quarter 03-01-12 to 05-31-12 | $ | n/a | $ | n/a | ||||
Holders.
As of February 29, 2013,28, 2014, there were 7377 total record holders of 6,500,0008,500,000 shares of the Company's common stock.
Dividends.
The Company has not paid any cash dividends to date and does not anticipate or contemplate paying dividends in the foreseeable future. It is the present intention of management to utilize all available funds for the development of the Company's business.
Securities Authorized for Issuance Under Equity Compensation Plans
None.
Recent sales of unregistered securities.
There were no sales of unregistered securities during the yearyears ended February 29,28, 2014 and 2013.
Issuer Purchases of Equity Securities
We did not repurchase any of our equity securities during the years ended February 29, 201228, 2014 and February 28, 2011.2013.
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We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.
The following discussion should be read in conjunction with our audited financial statements and notes thereto included herein. In connection with, and because we desire to take advantage of, the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, we caution readers regarding certain forward looking statements in the following discussion and elsewhere in this report and in any other statement made by, or on our behalf, whether or not in future filings with the Securities and Exchange Commission. Forward-looking statements are statements not based on historical information and which relate to future operations, strategies, financial results or other developments. Forward looking statements are necessarily based upon estimates and assumptions that are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond our control and many of which, with respect to future business decisions, are subject to change. These uncertainties and contingencies can affect actual results and could cause actual results to differ materially from those expressed in any forward looking statements made by, or our behalf. We disclaim any obligation to update forward-looking statements.
Results of Operations
Revenue
During the years ended February 28, 20132014 and February 29, 2012,28, 2013, the Company realized a loss from continuing operations totaling $115,903 and $0, respectively, and a loss from discontinued operations of $115,903 and $133,346, respectively.recognized no revenue.
Operating Costs and Expenses
The major components of our operating expenses for the year ended February 28, 20132014 are outlined in the table below:
Year Ended February 28, 2013 | ||||
| Payroll expenses | $ | 0 | ||
| Officer compensation | $ | 93,500 | ||
| Consulting | $ | 54,091 | ||
| Other | $ | 23,597 | ||
| Legal – Organization costs | $ | 15,620 | ||
| Depreciation | $ | 528 | ||
| Rent | $ | 10,809 | ||
Year Ended February 28, 2014 | ||||
| Officers compensation | $ | 195,000 | ||
| Consulting | 112,404 | |||
| Other | 6,328 | |||
| Professional Fees | 22,517 | |||
| Total operating expenses | $ | 336,249 | ||
The increase in our operating costs for the year ended February 28, 2013 compared2014 to $336,249 from the $93,939 we incurred in the year ended 2012,February 28, 2013, was due to the increase in our corporate activities, increase inspecifically officers compensation, expenses related to implementation of our business plan and increase in professionalconsulting fees associated with our reporting obligations under the Securities Exchange Act.
On April 17, 2013, the Company entered into Employment Agreements with its president, Ms. Yan Li, and its secretary and treasurer, Mr. Robert Ireland. Ms. Yan’s agreement is retroactively effective as of December 4, 2012, for a term of 36 months (measured from December 4, 2012). Pursuant to the agreement, Ms. Li shall receive an annual salary of $78,000, and shall act as the company’s CEO.Mr. Ireland’s agreement is retroactively effective as of December 4, 2012, for a term of 36 months (measured from December 4, 2012). Pursuant to the agreement, Mr. Ireland shall receive an annual salary of $78,000, and shall act as the company’s Secretary and Treasurer. As at February 28, 2014 a total of $195,000 had been accrued as compensation payable to Ms. Li and Mr. Ireland.
During the year ended February 28, 2013, we incurred $51,711 in professional fees. These fees consisted of accounting and audit fees of $11,070, legal fees of $15,620,and transfer agent fees of $25,021. The legal fees were incurred by the company in relation to filing2014, consulting expenses included 1,500,000 shares of our Registration Statement on the Form S-1. During the year ended February 29, 2012, we incurred $14,963 in professional fees, consistingcommon stock, valued at $75,000, issued to three of accounting and audit fees of $9,000, legal fees of $4,200, and transfer agent fees of $1,763.our advisors.
Other expenses represent bank charges, filing fees, office and travel expenses. The increase in these costs was attributable to implementation of our business plan and general corporate activities.
During the years ended February 28, 2013 and February 29, 2012, the company incurred depreciation expense of $528 and $703, respectively, associated with computer equipment purchased by the company in prior periods. In addition to operating expenses the company incurred $183 in foreign currency transaction gain during the year ended February 28, 2013,2014, we incurred $22,517 in professional fees. These fees consisted of accounting audit, legal, and $2,166 in foreign currency transaction loss during the year ended February 29, 2012.transfer agent fees.
Loss from Continuing Operations
During the years ended February 28, 2014 and February 28, 2013, the Company realized losses from continuing operations totaling $336,249 and $93,988, respectively, due to the factors discussed above.
Discontinued Operations
On December 5, 2012 the Company disposed of its subsidiary corporation to a shareholder for a nominal sum, as well as other management operations at which time it discontinued its web development and marketing business. The loss on discontinued operations in fiscal year 2013 was $115,903, including a gain on disposal of $2,430.
Net Loss
During the years ended February 28, 2014 and February 28, 2013, the Company realized a net loss of $336,249 and $209,891, respectively due to the factors discussed above.
Liquidity and Capital Resources
Year Ended February 28, 2014 | Year Ended February 28, 2013 | |||||||
| Current Assets | $ | 4,986 | $ | 5,000 | ||||
| Current Liabilities | $ | 290,068 | $ | 23,833 | ||||
| Working Capital Deficit | $ | (285,082 | ) | $ | (18,833 | ) | ||
As at February 28, 2014 the Company had current assets, comprising of cash, of $4,986 and current liabilities of $290,068 resulting in a working capital deficit of $285,082. The Company currently has no profitable trading activities and has an accumulated deficit of $662,068 as at February 28, 2014.
In the audited financial statements for the fiscal years ended February 28, 2014 and 2013, the Reports of the Independent Registered Public Accounting Firms include an explanatory paragraph that describes substantial doubt about our ability to continue as a going concern.
| Working Capital | Year Ended February 28, 2013 | Year Ended February 29, 2012 | ||||||
| Current Assets | $ | 5,000 | $ | 59,956 | ||||
| Current Liabilities | $ | 23,833 | $ | 61,499 | ||||
| Working Capital | $ | (18,833 | ) | $ | (1,543 | ) | ||
This raises substantial doubt about the Company’s ability to continue as a going concern.
The Company may raise additional capital through the sale of its equity securities, offering of debt securities, or through borrowings from financial institutions or related parties. By doing so, the Company hopes to generate sufficient capital to execute its business plan. Management believes that actions presently being taken to obtain additional funding provide the opportunity for the Company to continue as a going concern. There is no guarantee the Company will be successful in achieving these objectives.
The financial statements have been prepared on a going concern basis which assumes the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future.
Cash Flows
The table below, for the periods indicated, provides selected cash flow information:
Year Ended February 28, 2013 | Year Ended February 29, 2012 | Year Ended February 28, 2014 | Year Ended February 28, 2013 | |||||||||||||
| Cash provided by (used in) operating activities | $ | (76,654 | ) | $ | (86,084 | ) | $ | (66,249 | ) | $ | (99,026 | ) | ||||
| Cash used in investing activities | $ | - | $ | (- | ) | |||||||||||
| Cash provided by (used in) investing activities | $ | - | $ | - | ||||||||||||
| Cash provided by financing activities | $ | 32,573 | $ | 50,500 | $ | 66,235 | $ | 54,945 | ||||||||
| Net increase (decrease) in cash | $ | (44,081 | ) | $ | (35,584 | ) | $ | (14 | ) | $ | (44,081 | ) | ||||
13
During the yearsyear ended February 28, 2013 and February 29, 2012 were generated by the web development revenue stream.
During the year ended February 28, 2014 we incurred a net loss of $336,249 which was partially reduced for cash flow purposes by $75,000 in non-cash expenses related to the issuance of 1,010,000 shares of common stock at $0.05 per share during the year ended February 29, 2012. for services and by an increase of $195,000 in accrued officer compensation.
During the year ended February 28, 2013 we issued 1,510,000incurred a net loss of $209,891 which was partially reduced for cash flow purposes by $75,500 in non-cash expenses related to the issuance of shares of common stock at $0.001 per share for services rendered totaling $75,500. We had no other sources of cash inflow during the reporting periods.
We did not generate or use any cash from investing activities during the years ended February 28, 20132014 and February 29, 2012.2013.
Cash Flows from Financing Activities
During the twelve months ended February 28, 2014 we received $71, 235 by way of $32,573 forloan from a related party and paid $5,000 in deferred financing costs.
During the yeartwelve months ended February 28, 2013 was due towe received $22,372 by way of loan from a related party and $32,573 by way of capital contributionscontribution from an officer of the Company. Cash flows from financing activities of $50,500 for the year ended February 29, 2012 was due to 1,010,000 shares of common stock issued for cash at $0.05 per share.
We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to stockholders.
We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.
JIU FENG INVESTMENTINVESTMENTS HONG KONG LTD.
Index to Audited Financial Statements
For the Twelve Months Ended February 28, 2014 and 2013
| Contents | Page (s) | |||
| Report of Independent Registered Public Accounting Firm | F-1 | |||
| F-2 | ||||
| F-3 | ||||
| F-4 | ||||
| F-5 | ||||
| F-6 | ||||
| Notes to the Audited Financial Statements | F-7 | |||
15
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Board of Directors
Jiu Feng Investment Hong Kong Ltd.
(formerly Liberty Vision, Inc.)
2293 Hong Qiao Road
Shanghai, China, 200336
We have audited the accompanying balance sheet of Jiu Feng Investment Hong Kong Ltd. as of February 28, 2014 and the related statement of operations, changes in stockholders' deficit and cash flows for the year then ended. 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 audit. The financial statements as of February 28, 2013 and for the year then ended were audited by another auditor who expressed an unqualified opinion on May 1, 2013.
We conducted our audit in accordance with the 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 audit 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 also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides 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 Jiu Feng Investment Hong Kong Ltd.as of February 28, 2014, and the results of its operations and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America.
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3 to the financial statements the Company has suffered losses from operations and currently does not have sufficient available funding to fully implement its business plan. These factors raise substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 3. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
| Arvada, Colorado |  |
| June 19, 2014 | Cutler & Co., LLC |
Certified Public Accountant
2851 South Parker Road, Suite 720
Aurora, Colorado 80014
Telephone (303)306-1967
Fax (303)306-1944
Board of Directors
Jiu Feng Investment Hong Kong Ltd.
(formerly Liberty Vision, Inc.)
Shanghai, China
I have audited the accompanying balance sheetssheet of Jiu Feng Investment Hong Kong Ltd. as of February 28, 2013 and February 29, 2012 and the related statements of operations, stockholders' equity and cash flows for the yearsyear then ended. These financial statements are the responsibility of the Company's management. My responsibility is to express an opinion on these financial statements based on my audit.
I conducted my audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that I plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. 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. I believe that my audit provides a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Jiu Feng Investment Hong Kong Ltd. as of February 28, 2013 and February 29, 2012, and the results of its operations and its cash flows for the yearsyear then ended in conformity with accounting principles generally accepted in the United States of America.
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 53 to the financial statements the Company has suffered a loss from operations and has negative working capital and a stockholders’ deficit that raise substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 5.3. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
| Aurora, Colorado | Ronald R. Chadwick, P.C. | ||
| May 1, 2013 | RONALD R. CHADWICK, P.C. |
| ASSETS | ||||||||
| February 28, | February 29, | |||||||
| 2013 | 2012 | |||||||
| Current Assets: | ||||||||
| Cash | $ | 5,000 | $ | 49,081 | ||||
| Accounts receivable | - | 9,251 | ||||||
| Prepaid expenses | - | 1,624 | ||||||
| Total current assets | 5,000 | 59,956 | ||||||
| Computer equipment, net | - | 2,815 | ||||||
| Total Assets | $ | 5,000 | $ | 62,771 | ||||
| LIABILITIES AND STOCKHOLDER'S EQUITY (DEFICIT) | ||||||||
| Current Liabilities: | ||||||||
| Accounts payable and accrued liabilities | $ | 1,461 | $ | 6,965 | ||||
| Accounts payable - related party | 22,372 | 48,000 | ||||||
| Payroll taxes payable | - | 5,010 | ||||||
| Income taxes payable | - | 1,524 | ||||||
| Total current liabilities | 23,833 | 61,499 | ||||||
| Total Liabilities | 23,833 | 61,499 | ||||||
| Stockholders' Equity (Deficit): | ||||||||
| Common stock, par value $0.001 per share, 75,000,000 shares authorized; | ||||||||
| 6,500,000 (2013) and 4,990,000 (2012) shares issued and outstanding | 6,500 | 4,990 | ||||||
| Additional paid-in capital | 300,486 | 112,210 | ||||||
| Accumulated deficit | (325,819 | ) | (115,928 | ) | ||||
| Total stockholders' equity (deficit) | (18,833 | ) | 1,272 | |||||
| Total Liabilities and Stockholder's Equity (Deficit) | $ | 5,000 | $ | 62,771 | ||||
F-2
| ( |
| Year Ended | Year Ended | |||||||
| Feb. 28, 2013 | Feb. 29, 2012 | |||||||
| Revenues, net | $ | - | $ | - | ||||
| Cost of revenues | - | |||||||
| Gross profit | - | - | ||||||
| Operating expenses: | ||||||||
| Amortization & depreciation | - | - | ||||||
| General and administrative | 93,939 | - | ||||||
| 93,939 | - | |||||||
| Gain (loss) from operations | (93,939 | ) | - | |||||
| Other income (expense): | ||||||||
| Foreign curency translation | (49 | ) | - | |||||
| (49 | ) | - | ||||||
| Income (loss) from continuing operations | ||||||||
| before provision for income taxes | (93,988 | ) | - | |||||
| Provision for income tax | - | - | ||||||
| Income (loss) from continuing operations | (93,988 | ) | - | |||||
| Discontinued operations: | ||||||||
| Income (loss) from discontinued operations | ||||||||
(including gain on disposal of $2,430) - net of tax | (115,903 | ) | (133,346 | ) | ||||
| Net income (loss) | $ | (209,891 | ) | $ | (133,346 | ) | ||
| Net income (loss) per share | ||||||||
| (Basic and fully diluted): | ||||||||
| Continuing operations | $ | (0 | ) | $ | - | |||
| Discontinued operations | (0 | ) | (0 | ) | ||||
| Total operations | $ | (0 | ) | $ | (0 | ) | ||
Weighted average number of common shares outstanding | 5,365,833 | 4,141,896 | ||||||
| February 28, | February 28, | |||||||
| 2014 | 2013 | |||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash | $ | 4,986 | $ | 5,000 | ||||
| Total current assets | 4,986 | 5,000 | ||||||
| Other assets | ||||||||
| Deferred financings costs | 30,000 | - | ||||||
| Total Assets | $ | 34,986 | $ | 5,000 | ||||
| LIABILITIES & STOCKHOLDERS' DEFICIT | ||||||||
| Current liabilities | ||||||||
| Accounts payable and accrued liabilities | $ | 1,461 | $ | 1,461 | ||||
| Accrued officer compensation | 195,000 | - | ||||||
| Loan payable - related party | 93,607 | 22,372 | ||||||
| Total current liabilties | 290,068 | 23,833 | ||||||
| Total Liabilities | 290,068 | 23,833 | ||||||
| Stockholders' Deficit | ||||||||
| Common stock, $0.001 par value per share | 8,500 | 6,500 | ||||||
| 75,000,000 shares authorized; | ||||||||
| 8,500,000 and 6,600,000 shares issued and | ||||||||
| outstanding at February 28, 2014 and 2013 | ||||||||
| respectively | ||||||||
| Additional paid in capital | 398,486 | 300,486 | ||||||
| Retained deficit | (662,068 | ) | (325,819 | ) | ||||
| Total Stockholders' Deficit | (255,082 | ) | (18,833 | ) | ||||
| Total Liabilities and Stockholders' Deficit | $ | 34,986 | $ | 5,000 | ||||
The accompanying notes toare an integral part of the consolidated financial statementsstatements.
F-3
| ( |
| Additional | ||||||||||||||||||||
| Common stock | Paid-in | Accumulated | ||||||||||||||||||
| Description | Shares | Amount | Capital | Deficit | Total | |||||||||||||||
| Balance - February 28, 2011 | 3,980,000 | $ | 3,980 | $ | 62,720 | $ | 17,418 | $ | 84,118 | |||||||||||
| Common stock issued for cash at $0.05 per share | 1,010,000 | 1,010 | 49,490 | - | 50,500 | |||||||||||||||
| Net loss for the year | - | - | - | (133,346 | ) | (133,346 | ) | |||||||||||||
| Balance - February 29, 2012 | 4,990,000 | $ | 4,990 | $ | 112,210 | $ | (115,928 | ) | $ | 1,272 | ||||||||||
| Debt relief - related party | - | - | 81,713 | - | 81,713 | |||||||||||||||
| Capital contributions - related party | - | - | 32,573 | - | 32,573 | |||||||||||||||
| Compensatory stock issuances | 1,510,000 | 1,510 | 73,990 | - | 75,500 | |||||||||||||||
| Net loss for the year | - | - | - | (209,891 | ) | (209,891 | ) | |||||||||||||
| Balance - February 28, 2013 | 6,500,000 | $ | 6,500 | $ | 300,486 | $ | (325,819 | ) | $ | (18,833 | ) | |||||||||
| Year Ended | Year Ended | |||||||
| February 28, | February 28, | |||||||
| 2014 | 2013 | |||||||
| Revenues - net | $ | - | $ | - | ||||
| Cost of revenues | - | - | ||||||
| Gross profit | - | - | ||||||
| Operating Expenses: | ||||||||
| General and administrative | 336,249 | 93,939 | ||||||
| Total operating expenses | 336,249 | 93,939 | ||||||
| Income (loss) from operations | (336,249 | ) | (93,939 | ) | ||||
| Other income (expense): | ||||||||
| Foreign currency translation | - | (49 | ) | |||||
| Other income (expense) net | - | (49 | ) | |||||
| Income (loss) from continuing operations | ||||||||
| before provision for income taxes | (336,249 | ) | (93,988 | ) | ||||
| Provision for income tax: | - | - | ||||||
| Income (loss) from continuing operations | (336,249 | ) | (93,988 | ) | ||||
| Discontinued operations: | ||||||||
| Income (loss) from discontinued operations | - | (115,903 | ) | |||||
| Net income (loss) | $ | (336,249 | ) | $ | (209,891 | ) | ||
| Net income (loss) per share | ||||||||
| (Basic and fully diluted) | ||||||||
| Continuing operations | $ | (0.04 | ) | $ | (0.02 | ) | ||
| Discontinued operations | $ | - | $ | (0.02 | ) | |||
| Total operations | $ | (0.04 | ) | $ | (0.04 | ) | ||
Weighted average number of common shares outstanding | ||||||||
| (Basic and fully diluted) | 7,538,356 | 5,365,833 | ||||||
F-4
| ( | ||||||||||
| Year | Year | |||||||
| Ended | Ended | |||||||
| February 28, | February 29, | |||||||
| 2013 | 2012 | |||||||
| Cash Flows from Operating Activities: | ||||||||
| Net Income (Loss) | $ | (209,891 | ) | $ | (133,346 | ) | ||
Adjustments to reconcile net (loss) to net cash (used in) operating activities: | ||||||||
| Stock for services | 75,500 | - | ||||||
| Changes in Current Assets and Liabilities- | ||||||||
| Accounts payable and accrued liabilities | 1,461 | - | ||||||
| Accounts payable - related party | 22,372 | - | ||||||
| Income taxes payable | (1,524 | ) | - | |||||
| Discontinued operations | 35,428 | 47,262 | ||||||
| Net Cash Provided by (Used in )Operating Activities | (76,654 | ) | (86,084 | ) | ||||
| Cash Flows from Investing Activities: | ||||||||
| - | - | |||||||
| Net Cash Used in Investing Activities | - | - | ||||||
| Cash Flows from Financing Activities: | ||||||||
| Paid in capital | 32,573 | - | ||||||
| Proceeds from issuance of common stock | - | 50,500 | ||||||
| Net Cash Provided by Financing Activities | 32,573 | 50,500 | ||||||
| Net Increase (Decrease) In Cash | (44,081 | ) | (35,584 | ) | ||||
| Cash - Beginning of Period | 49,081 | 84,665 | ||||||
| Cash - End of Period | $ | 5,000 | $ | 49,081 | ||||
| Supplemental Disclosure of Cash Flow Information: | ||||||||
In fiscal year February 2013 former Officers contributed $81,713 in net liabilities to the capital of the Company. | ||||||||
| Cash paid during the period for: | ||||||||
| Interest | $ | - | $ | - | ||||
| Income taxes | $ | 1,549 | $ | 6,366 | ||||
| Common Stock | Stockholders' | |||||||||||||||||||
| Amount | Paid in | Retained | Equity | |||||||||||||||||
| Shares | ($0.001 Par) | Capital | (Deficit) | (Deficit) | ||||||||||||||||
| Balances at February 29, 2012 | 4,990,000 | $ | 4,990 | $ | 112,210 | $ | (115,928 | ) | $ | 1,272 | ||||||||||
| Debt relief - related party | - | - | 81,713 | - | 81,713 | |||||||||||||||
| Capital contributions - related party | - | - | 32,573 | - | 32,573 | |||||||||||||||
Compensatory stock issuances @ $0.05 per share | 1,510,000 | 1,510 | 73,990 | - | 75,500 | |||||||||||||||
| Net loss for the year | - | - | - | (209,891 | ) | (209,891 | ) | |||||||||||||
| Balances at February 28, 2013 | 6,500,000 | 6,500 | 300,486 | (325,819 | ) | (18,833 | ) | |||||||||||||
Compensatory stock issuances @ $0.05 per share | 2,000,000 | 2,000 | 98,000 | - | 100,000 | |||||||||||||||
| Net loss for the year | - | - | - | (336,249 | ) | (336,249 | ) | |||||||||||||
| Balances at February 28, 2014 | 8,500,000 | $ | 8,500 | $ | 398,486 | $ | (662,068 | ) | $ | (255,082 | ) | |||||||||
The accompanying notes toare an integral part of the consolidated financial statementsstatements.