MICROALLIANCE GROUP INC. Item 1.01 Entry into a Material Definitive Agreement.
OnFebruary 1, 2021 , the Company entered into a Share Exchange Agreement (the "Exchange Agreement"), withWei Lian Jin Meng Group Limited , a limited liability company incorporated in theCayman Islands ("WLJM Cayman" and together with its subsidiaries, the "WLJM Group "), and shareholders who together own shares constituting 100% of the issued and outstanding shares of WLJM Cayman (the "Sellers"). Pursuant to the terms of the Exchange Agreement, the Sellers transferred to the Company all of their shares of WLJM Cayman in exchange for the issuance of 600,000,000 shares (the "Shares") of the Company's common stock (the "Acquisition"). The Acquisition has been accounted for as a recapitalization of the Company, whereby WLJM Cayman is the accounting acquirer. As a result of the Acquisition, the Company is now a holding company, is engaged in providing products and services in the food and beverage industry, including producing and selling "coffee tea" products, which represent drinks made from a mixture of coffee and tea, black coffee products and other coffee products. Immediately after completion of the Acquisition onFebruary 2, 2020 (the "Closing Date"), the Company's capital stock consisted of: (i) 750,000,000 shares of common stock, par value$0.00001 per share ("Common Stock"), authorized, of which 600,034,500 shares are issued and outstanding; and (ii) 100,000,000 shares of preferred stock, par value$0.00001 per share, of which all 100,000,000 shares are designated Series A Preferred Stock ("Series A Preferred Stock"), of which all 100,000,000 shares are issued and outstanding. As a result of the Acquisition, as of the Closing Date the Company has ceased to fall under the definition of shell company as defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended (the "Exchange Act") and WLJM Cayman is now a wholly owned subsidiary. The Exchange Agreement contains a number of representations and warranties made by the Company, on the one hand, and WLJM Cayman and the Sellers on the other hand, made solely for the benefit of the other, which in certain cases are subject to specified exceptions and qualifications contained in the Exchange Agreement or in information provided pursuant to certain disclosure schedules to the Exchange Agreement. The representations and warranties are customary for transactions similar to the Acquisition.
The obligation of the parties to complete the Acquisition is subject to the fulfilment (or, in some cases, the waiver) of certain closing conditions, including but not limited to:
? the approval of the Exchange Agreement and the transactions contemplated
thereby by the Company's board of directors and stockholders;
? all necessary consents from government authorities and third parties have been
obtained; and
? no adverse effect has occurred to any party as of the Closing.
A copy of the Exchange Agreement is incorporated herein by reference and is filed as Exhibit 2.1 to this Current Report on Form 8-K and is incorporated herein by reference, and the foregoing description of the Agreement is qualified in its entirety by reference thereto.
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Item 2.01 Completion of Acquisition or Disposition of Assets.
On the Closing Date, the Company consummated the transactions contemplated by the Exchange Agreement, pursuant to which the Company acquired 100% of the issued and outstanding equity shares of WLJM Cayman from the Sellers, in exchange for the issuance in the aggregate of 600,000,000 shares of the Company's Common Stock to the Sellers (representing approximately 99.8% of the Company's outstanding common stock upon issuance, and 6% of the total voting power of the Company), resulting in WLJM Cayman becoming the Company's wholly-owned subsidiary. For federal income tax purposes, it is intended that the Acquisition qualify as a tax-free reorganization under the provisions of Section 368(a) of the Internal Revenue Code of 1986, as amended. The acquisition was accounted for as a recapitalization effected by a share exchange, wherein WLJM Cayman is considered the acquirer for accounting and financial reporting purposes.
As a result of the acquisition of all the issued and outstanding shares of WLJM
Cayman, we have now assumed the
The disclosures set forth in Item 1.01 "Entry into a Material Definitive Agreement" are incorporated by reference into this Item 2.01.
FORM 10 DISCLOSURE
As described in Item 1.01 "Entry into a Material Definitive Agreement", onFebruary 2, 2021 , the Company acquired WLJM Cayman in a reverse merger business combination transaction. As the Company was formerly a shell company prior to such acquisition and is now entering into a business combination, other than a business combination with a shell company, as those terms are defined in Rule 12b-2 under the Exchange Act, according to Item 2.01(f) of Form 8-K, the Company is required to disclose the information that would be required if the Company were filing a general form for registration of securities under the Exchange Act on Form 10. We hereby provide below information that would be included in a Form 10 registration statement. Description of Business Business Business Overview
The Company is a US holding company incorporated inNevada onFebruary 25, 2004 , and operating through the Company's wholly owned subsidiaryWei Lian Jin Meng Group Limited ("WLJM Cayman"), a company incorporated under the laws of theCayman Islands onJune 30, 2020 . The Company's entire business, including operations, employees, sales and marketing and research and development, are all conducted through its subsidiaries located within the People's Republic of
China ("PRC").
The following is the organization structure of the Company along with ownership detail of all companies:
WLJM Cayman was incorporated in theCayman Islands onJune 30, 2020 . It is 100% owned byFountain Healthy Aging, Inc. Refer to Item 1.01 "Entry into a Material Definitive Agreement" of this Current Report on Form 8-K for a full description of the acquisition of WLJM Cayman byFountain Healthy Aging, Inc. Wei Lian Jin Meng (Hong Kong )Company Limited ("WLJM HK"), was established in theHong Kong Special Administrative Region ("HKSAR") of the PRC onAugust 5, 2020 . It is 100% owned by WLJM Cayman.
Shenzhen Wei Lian Jin Meng Electronic Commerce Limited ("Shenzhen Wei Lian") was incorporated onOctober 17, 2017 , under the laws of the PRC. It is 100% owned by JYWM WFOE.
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The Company, through our subsidiaries, develops, produces, markets and sells "coffee tea" products, which represent drinks made from a mixture of coffee and tea, as well as black coffee products and other coffee products. We sell our products wholesale to retail partners and corporate customers, and we also sell directly to consumers in the PRC via our e-commerce channels. We adopted the "online to offline", or O2O sales mode (i.e. selling products online and delivering products through offline channels), committing to building the first brand of "coffee tea" culture in the PRC.
Industry and Market Overview
As of the time of filing this Current Report on form 8-K, we sell our products exclusively within the PRC. However, we intend to sell our products into global markets at a later time. Chinese consumers are already familiar with tea, a traditional Chinese drink. Our "coffee tea" products are aimed at attracting Chinese consumers who are also interested in coffee. Our black coffee products and other coffee products are also targeting coffee consumers inChina . . . .
Item 3.02 Unregistered Sales of
The disclosure in Item 1.01 and Item 2.01 of this Current Report on Form 8-K is incorporated by reference into this Item 3.02.
Item 5.01 Changes in Control of Registrant
The disclosure in Items 1.01 and 2.01 of this Current Report on Form 8-K is incorporated by reference into this Item 5.01. Following the closing of the Acquisition, the Company issued 600,000,000 shares of the Company's common stock to the Sellers, which immediately after closing represented approximately 99.8% of the Company's outstanding common stock. The 600,000,000 shares would be issued to the Sellers pro-rata based on each Seller's ownership percentage of WLJM Cayman prior to the Acquisition. The stockholders of the Company, by written consent datedFebruary 2, 2021 , approved the Acquisition. There are no arrangements known to the Company which may at a subsequent date result in a change of control of the Company.
Item 5.06 Change in Shell Company Status
Prior to the Acquisition, we were a "shell company" (as such term is defined in Rule 12b-2 under the Exchange Act). As a result of the Acquisition, we have ceased to be a shell company. The information contained in this Current Report on Form 8-K constitutes the current "Form 10 information" necessary to satisfy the conditions contained in Rule 144(i)(2) under the Securities Act.
Item 9.01 Financial Statements and Exhibits.
(a) Financial Statements of Businesses Acquired.
The audited financial statements of WLJM CaymanDecember 31, 2019 and audited financial statements of WLJM Cayman for the fiscal year endedDecember 31, 2018 are set forth below beginning on page F-1. 41 WEI LIAN JIN MENG GROUP LIMITED CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDEDDECEMBER 31, 2019 AND 2018 F-1 WEI LIAN JIN MENG GROUP LIMITED TABLE OF CONTENTS Pages Report of Independent Registered Public Accounting Firm
F-3
Consolidated Balance sheets as ofDecember 31, 2019 and 2018
F-4
Consolidated Statements of Loss and Comprehensive Loss for the years F-5
ended
Consolidated Statements of Changes in Equity (Deficit) for the years F-6
ended
Consolidated Statements of Cash Flows for the years ended
Notes to Consolidated Financial Statements for the years ended F-8 - F-
F-2
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders of
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets ofWeilian Jin Meng Group Limited ("the Company") as ofDecember 31, 2019 and 2018, and the related consolidated statements of loss and comprehensive loss, stockholders' deficit, and cash flows for the years then ended, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial positions of the Company as ofDecember 31, 2019 and 2018, and the results of its operations and its cash flows for the period then ended, in conformity with accounting principles generally accepted inthe United States . Going concern uncertainty
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company incurred losses from operations, has net current liabilities and accumulated deficits 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 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audit. We are a public accounting firm registered with thePublic Company Accounting Oversight Board (United States ) ("PCAOB") and are required to be independent with respect to the Company in accordance with theU.S. federal securities laws and the applicable rules and regulations of theSecurities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.
Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion. Emphasis of Matter The Company has significant transactions with related parties, which are described in Note 12 to the financial statements. Transactions involving related parties cannot be presumed to be carried out on an arm's length basis, as the requisite conditions of competitive, free market dealings may not exist. /s/Audit Alliance LLP
We have served as the Company's auditor since 2020.
Singapore February 2, 2021 F-3 WEI LIAN JIN MENG GROUP LIMITED CONSOLIDATED BALANCE SHEETS (In U.S. Dollars, except share data or otherwise stated) AS OF DECEMBER 31, 2019 AND 2018 As of December 31, 2019 2018 US$ US$ ASSETS Current assets: Cash and cash equivalents 23,046 2,419 Other receivables 78,385 15,222 Inventory 69,518 - Prepayment 129,879 -
Amount due from related parties 57,446
18,586
Total current assets 358,274 36,227
Non-current assets:Leasehold improvements and equipment, net 104,432
11,810
Intangible assets 76,546 - Operating lease right-of-use assets 613,831
70,412
Total non-current assets 794,809 82,222
Total assets 1,153,083 118,449
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable 131,247 -
Income tax payables 5,808 -
Other payables and accruals 181,942 79,592
Advance from customers 458,165 -
Amount due to related parties 95,772 -Current operating lease liabilities 243,959
7,077
Total current liabilities 1,116,893 86,669
Non-current liabilities:Non-current operating lease liabilities 369,872
63,335
Total non-current liabilities 369,872 63,335
Total liabilities 1,486,765 150,004
COMMITMENTS AND CONTINGENCIES
EQUITY (DEFICIT)
Share capital (
10,000 10,000
Additional paid in capital (2,731 ) (2,731 ) Foreign currency translation reserves 4,547
1,593
Accumulated deficit (345,498 ) (40,417 )
Total deficit (333,682 ) (31,555 )Total liabilities and equity 1,153,083
118,449
The accompanying notes are an integral part of the financial statements.
F-4
WEI LIAN JIN MENG GROUP LIMITED
CONSOLIDATED STATEMENTS OF LOSS AND COMPREHENSIVE LOSS
(In U.S. Dollars, except share data or otherwise stated)
FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018
For the years ended
December 31,
2019 2018
US$ US$
Revenue 2,107,465 -
Cost of revenue (275,916 ) -
Gross profit 1,831,549 -
Selling and marketing expenses (200,042 ) -
General and administrative expense (1,917,263 ) (39,334 )
Total operating expenses (2,117,305 ) (39,334 )
Operating loss (285,756 ) (39,334 )
Other expenses, net (13,459 ) (4 )
Loss before income taxes (299,215 ) (39,338 )
Income (taxes) benefits (5,866 ) -
Net loss for the year (305,081 ) (39,338 )
Foreign currency translation differences 2,954 1,635 Total comprehensive loss for the year (302,127 ) (37,703 )
The accompanying notes are an integral part of the financial statements.
F-5
WEI LIAN JIN MENG GROUP LIMITED
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (DEFICIT)
(In U.S. Dollars, except share data or otherwise stated)
FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018
Foreign
Additional Currency Accumulated Deficit
Share Translation Statutory Total
Capital paid in Capital Reserve Unrestricted Reserve Equity
US$ US$ US$ US$ US$ US$
Balance at January 1, 2018 10,000 (10,000 ) (42 ) (1,079 ) - (1,121 ) Capital injection - 7,269 - - - 7,269 Loss for the year - - - (39,338 ) - (39,338 ) Other comprehensive income - - 1,635 - - 1,635 Balance at December 31, 2018 10,000 (2,731 ) 1,593 (40,417 ) - (31,555 ) Loss for the year - - - (311,975 ) 6,894 (305,081 ) Other comprehensive income - - 2,954 - - 2,954 Balance at December 31, 2019 10,000 (2,731 )
4,547 (352,392 ) 6,894 (333,682 )
The accompanying notes are an integral part of the financial statements.
F-6
WEI LIAN JIN MENG GROUP LIMITED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In U.S. Dollars, except share data or otherwise stated)
FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018
For the years ended
December 31,
2019 2018
US$ US$
Cash flows from operating activities:
Net loss (305,081 ) (39,338 )
Adjustments for:
Depreciation and amortization 28,002 607
Changes in:
Other receivables (63,970 ) (15,856 )
Inventory (70,109 ) -
Prepayment (130,983 ) -
Accounts payable 132,362 -
Income tax payables 5,857 -
Other payables and accruals 104,279 82,570
Advance from customers 462,058 -Amount due from (to) related parties 49,310 (31,212 ) Net cash used in operating activities 211,725
(3,229 )
Cash flows from investing activities: Additions to leasehold improvements and equipment (110,911 ) (4,465 ) Additions to intangible assets (79,984 )
-
Net cash provided by investing activities (190,895 )
(4,465 )
Cash flows from financing activities: Capital injection -
7,269
Net cash provided by financing activities -
7,269
Effect of exchange rate changes on cash and cash equivalents (203 )
162
Net increase in cash and cash equivalents 20,627 (263 ) Cash and cash equivalents at the beginning of year 2,419
2,682
Cash and cash equivalents at the end of year 23,046
2,419
Supplemental disclosure of non-cash investing and financing activities: Right-of-use assets obtained in exchange for operating lease obligations 302,396 17,547 Income taxes paid 5,866 -
The accompanying notes are an integral part of the financial statements.
F-7
WEI LIAN JIN MENG GROUP LIMITED
CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018
1. DESCRIPTION OF BUSINESS
WLJM Cayman was incorporated in theCayman Islands under theCayman Islands Companies Law onJune 30, 2020 . The Company does not conduct any substantive operations on its own but instead conducts its business operations through its subsidiaries in inthe Peoples' Republic of China (the "PRC"). Wei Lian Jin Meng (Hong Kong ) Co., Ltd. ("WLJM HK") was incorporated inHong Kong under the Hong Kong Companies' Ordinance (Chapter 622), onAugust 5, 2020 . Wei Lian Jin Meng (Hong Kong ) Co., Ltd. is a 100% owned subsidiary of WLJM Cayman.Jin You Wei Meng (Shenzhen) Consulting Co., Ltd. ("JYWM WFOE") was incorporated inthe Peoples' Republic of China (the "PRC") onNovember 24, 2020 . JYWM WFOE is a 100% owned subsidiary of WLJM HK.Shenzhen Wei Lian Jin Meng Electronic Commerce Limited ("Shenzhen Wei Lian") was incorporated inthe Peoples' Republic of China (the "PRC") onOctober 17, 2017 . Shenzhen Wei Lian is a 100% owned subsidiary ofJin You Wei Meng (Shenzhen) Consulting Co., Ltd. Shenzhen Wei Lian wholesales coffee beans to retail partners and corporate customers.Dongguan Dishi Coffee Limited ("Dongguan Dishi") was incorporated inthe Peoples' Republic of China (the "PRC") onOctober 25, 2018 . Dongguan Dishi is a 100% owned subsidiary of Shenzhen Wei Lian. Dongguan Dishi merchandizes coffee beans for Shenzhen Wei Lian.Shenzhen Nainiang Coffee Art Museum Limited ("Shenzhen Nainiang") was incorporated inthe Peoples' Republic of China (the "PRC") onJune 20, 2019 . Shenzhen Nainiang is a 100% owned subsidiary of Shenzhen Wei Lian.Shenzhen Nainiang had not generated any revenues in the fiscal year 2019.Shenzhen Nainiang plans to operate on self-own coffee stores or to cooperate with selective retail partners to manage the coffee stores. Shenzhen Nainiang will sell cups of freshly brewed coffee in the coffee stores. The Company was evaluating the number of stores to be opened subsequent toSeptember 30, 2020 , given the Covid-19 situation. The reorganization of WLJM Cayman and its subsidiaries (collectively referred to as the "Company) was completed onDecember 24, 2020 . Pursuant to the reorganization, WLJM Cayman became the holding company of the companies, which were under the common control of the controlling shareholder before and after the reorganization. Accordingly, the Company's financial statements have been prepared on a consolidated basis by applying the predecessor value method as if the reorganization had been completed at the beginning of the earliest reporting period.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) Basis of Presentation
The accompanying financial statements include the balances and results of
operations of the Company have been prepared pursuant to the rules and
regulations of the
The accompanying financial statements are presented on the basis that the Company is a going concern. The going concern assumption contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.
F-8
The Company incurred net loss of
The ability to continue as a going concern is dependent upon the Company's profit generating operations in the future and/or obtaining the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they become due. These consolidated 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.
The Company expects to finance operations primarily through cash flow from . . .
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