UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended: December 31, 2006
[_] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the transition period from _________ to _________
Commission File number: 000-30145
JOINTLAND DEVELOPMENT, INC.
-------------------------------
(Name of small business issuer in its charter)
Florida 59-3723328
-------- ----------
State or Other Jurisdiction (I.R.S. Employer Identification
of incorporation or organization) Number)
7th Floor, New Henry House, No.10 Ice House Street, Central, Hong Kong, China
------------------------------------------------------------
(Address of principal Executive Offices Zip Code)
Registrant's telephone number, including area code: 011 852 2824 0008
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: None
Check whether the issuer is not required to file reports pursuant to Section 13
or 15(d) of the Exchange Act.
Check whether the issuer (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 [_]
Check if disclosure of delinquent filers pursuant to Item 405 of Regulation
S-B is not contained in this form, and no disclosure will 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-KSB or any amendment to
this Form 10-KSB. [X]
Indicate by check mark whether the registrant is a shell company (as
defined in Rule 12b-2 of the Exchange Act). Yes [X] No [_]
State issuer's revenues for its most recent fiscal year. $0
As of April 13, 2007, 1,979,965 shares of common stock and issued and
outstanding. The aggregate market value of the 629,965 shares of Stock held by
non-affiliates of Registrant was $62,996 based upon a closing price of $.10 on
December 31, 2006.
Documents incorporated by reference: (1) The Company's Registration
Statement on Form S-18 (33-41063-A).
Transitional Small Business Disclosure Format: Yes [_] No [X]
TABLE OF CONTENTS
PART I PAGE
Item 1. Description of Business 1
Item 2. Description of Property 6
Item 3. Legal Proceedings 6
Item 4. Submission of Matters to a Vote of Security Holders 6
PART II
Item 5. Market for Common Equity and Related Stockholder Matters 6
Item 6. Management's Discussion and Analysis or Plan of Operation 7
Item 7. Financial Statements 10
Item 8. Changes in and Disagreements With Accountants on Accounting 10
and Financial Disclosure
Item 8A. Controls and Procedures 10
Item 8B. Other Information 10
PART III
Item 9. Directors, Executive Officers, Promoters and Control Persons;
Compliance with Section 16(a) of the Exchange Act 11
Item 10. Executive Compensation 12
Item 11. Security Ownership of Certain Beneficial Owners and Management 14
Item 12. Certain Relationships and Related Transactions 15
Item 13. Exhibits 16
Item 14. Principal Accountant Fees & Services 18
SIGNATURES 19
Part I
Item 1. Description of Business
General Description of Company
------------------------------
History
--------
Jointland Development, Inc., ("the Company" or "JLDV"), a Florida
corporation, was organized in May 25, 1988 as Cornerstone Capital, Inc. and the
name was changed on September 22, 1990 to Chatham International, Inc. It
completed an initial public offering which commenced on November 14, 1991,
comprised of 16,268 shares of Common Stock and One Zero Coupon U.S.
Treasury-Backed Obligation ("USTBO") with a maturity value of $1,000 at a price
of $1,000. The Registrant offered a maximum of 3,000 units and a minimum of 75
units on a best efforts basis. The underwriter for the offering was Boe and
Company formerly known as SBV Securities, Inc. A total of 98 units was sold and
net proceeds were $67,770. The Company closed its offering May 14, 1992.
The Company intended upon completion of the public offering, to commence
operations as an export management company and provide a range of business
services and assistance to manufacturers desiring to do business in foreign
markets. The Company was unsuccessful in its efforts. The Company is presently
in the developmental stage.
In April 1996, the Company merged with Chatham International, Inc. The
Company changed its name to Art Music and Entertainment, Inc. on April 5, 1996.
The Company utilized most of 1996 to further develop its business plan and
acquire the following companies, and develop business plans of each. Certain
subsidiaries were acquired under a stock exchange agreement which utilized a
$10.00 per share value for its stock.
1
The Company renegotiated in January 1997 with the former owners of the
various assets acquired by the respective classes of convertible preferred
stock, culminating in October 1997 with the exchange of all of the classes of
issued preferred stock for restricted common shares of the Company. The number
of the restricted common shares issued for each class of preferred shares is as
follows:
Retired Class G Preferred for 28,000 shares of common
Retired Class I Preferred for 230,000 shares of common
Retired Class F Preferred for 7,967 shares of common
Retired Class E Preferred for 10,000 shares of common
Retired Class C Preferred for 100,000 shares of common
Retired Class A Preferred for 380,000 shares of common
The Company changed its name in 2001 to Global Assets & Services, Inc.
On December 20, 2001, Global Assets & Services, Inc. completed a Share
Purchase Agreement with shareholders of S.D.E. Holdings 3 Inc. in which Global
Assets & Services, Inc., a Florida corporation, acquired all 500,000 shares
outstanding of the Registrant for the purposes of accomplishing a Merger of
S.D.E. Holdings 3 Inc. and Global Assets & Services, Inc. The Merger was
subsequently completed on December 20, 2001.
The Company is a successor registrant pursuant to Section 12(g) 3 of the
Securities Exchange Act of 1934, by virtue of a statutory merger of the Parent,
Global Assets & Services, Inc. a Florida corporation, and its wholly owned
subsidiary, S.D.E. Holdings 3 Inc., a Nevada corporation, with Global Assets &
Services, Inc. being the survivor. There was no change to the issued and
outstanding shares of Global Assets & Services, Inc. and all shares of S.D.E.
Holdings 3 Inc. were retired by virtue of the merger.
Global Assets & Services, Inc. (the "Company") acquired licenses and
attempted to market products and software from developers in Japan but was
unsuccessful.
In August 2004, the Company formed a wholly owned subsidiary, Global Tech
Assets, Inc. in the State of Florida. The Company transferred all of its non-
operating licenses to the subsidiary and distributed all of the stock of Global
Tech Assets, Inc. as a dividend to the Company's shareholders of record as of
September 30, 2004.
The Company has no business operations, and the Company is seeking a
business acquisition which is able to utilize a public company.
2
Subsidiaries
------------
None.
Services
--------
None.
Competition
-----------
The Company will be in competition with many companies of much greater
experience, financial resources and long established businesses. There is no
assurance that the Company will have any success in competition with other
businesses.
Employees and Consultants
-------------------------
The Company presently has no salaried employees, and its Chairman of the
Board/President, Kexi Ku, and Secretary, Yi Tung Alice Anastasia Chan serve on
an as needed basis. These officers intend to devote only such time as necessary
to the business affairs of the Company.
Presently, none of the officers receive salaries; however, they are paid
consulting fees in stock, and they are reimbursed for their expenses incurred in
their services as officers. There is no provision for any additional bonuses or
benefits. The Company anticipates that in the near future it may enter into
employment agreements with its officers. Although Directors do not receive
compensation for their services they may be reimbursed for expenses incurred in
attending Board meetings.
Item 2. Description of Property
The Company maintains its corporate records at Rooms 1203-8, 12th Floor,
Hang Seng Building, No. 77 Des Voeux Road, Central, Hong Kong, China.
Item 3. Legal Proceedings
The Company is not a party to any pending legal proceedings, as of date of
this report.
Item 4. Submission of Matters to a Vote of Security Holders
None
3
Part II
Item 5. Market for Common Equity and Related Stockholder Matters
The outstanding shares of Jointland Development, Inc. are presently traded
on the OTC Bulletin Board under the symbol JLDV.BB.
Common Stock Common Stock
2006 Bid High Bid Low
----------------------------------------------------------------
1st Quarter $0.45 $0.25
2nd Quarter $0.35 $0.25
3rd Quarter $0.3 $0.1
4th Quarter $0.15 $0.1
Common Stock Common Stock
2005 Bid High Bid Low
----------------------------------------------------------------
1st Quarter $1.00 $0.30
2nd Quarter $1.00 $0.10
3rd Quarter $1.00 $0.10
4th Quarter $0.35 $0.25
The Company's shares trade over the counter on the OTC Bulletin Board
Quotations represent only prices between dealers and do not include retail
markups, markdowns or commissions and accordingly, may not represent actual
transactions. The Company estimates that as of December 31, 2006, there are
approximately 219 stockholders of record of the Company's shares.
No dividends have been declared or paid by the Company and the Company
presently intends to retain all future earnings, if any, to finance the
expansion and development of its business.
Item 6. Management's Discussion and Analysis or Plan of Operation
Financial Condition
-------------------
During fiscal year 2006, the Company continued to be a development stage
entity with no sales and revenues. The company had no capital for operations and
had minimal business operations.
Financial Condition and Changes in Financial Condition
------------------------------------------------------
Liquidity and Capital Assets
----------------------------
The Company's primary source of liquidity since inception has been from
funds raised during its initial capitalization. The company has no sources of
capital except to use its stock for private placements. The company will be
reliant upon loans from officers for any cash needs. No loan commitments have
been made by anyone.
The Company remains in the development stage and, since inception, has
experienced significant liquidity problems and has no significant capital
resources now and has stockholder's deficit of ($280,903) at December 31, 2005.
The Company has $144 for current assets and no other assets.
The Company is unable to carry out any plan of business without funding.
The Company cannot predict to what extent its current lack of liquidity and
capital resources will impair the business or whether it will incur further
operating losses through business entity which the Company may eventually
acquire. There is no assurance that the Company can continue as a going concern
without substantial funding, for which there is no source.
4
The Company estimates it will require $25,000 to $30,000 to cover
legal, accounting, transfer and miscellaneous costs of being a reporting company
in the next fiscal year. The Company will have a cash shortfall for current
annual costs of at least $25,000 to $30,000, for which it has no source except
shareholder loans or contributions, none of which have been committed.
Results of Operations 2006 Compared to 2005
-------------------------------------------
Business operations were minimal and no revenues were generated in 2006 or
2005. The Company at year end had minimal cash. The Company needed cash or loans
from any sources, for any significant business operations.
During the fiscal year ended December 31, 2006, the Company incurred
general and administrative expenses of $28,514 compared to $109,581 in expenses
in 2005. The net loss was ($42,429) in 2006 compared to ($109,584) in 2005. Loss
per share was ($.02) in 2006 and ($.06) in 2005. The largest factors in expenses
for the Company for the year were legal and accounting fees. The Company
incurred no officer/director fees in 2006 or in 2005.
Evaluation of Internal and Disclosure Controls
----------------------------------------------
The management of the company has evaluated the effectiveness of the issuer's
disclosure controls and procedures as of the end of the period of the report
(evaluation date) and have concluded that the disclosure controls internal
controls and procedures are adequate and effective based upon their evaluation
as of the evaluation date.
There were no changes in the small business issuers internal control over
financial reporting identified in connection with the Company evaluation
required by paragraph (d) of Rule 13a-15 or Rule 15d-15 under the Exchange act
that occurred during the small business issuers fourth fiscal quarter that has
materially affected or is reasonable likely to materially affect, the small
business issuers internal control over financial reporting.
NEED FOR ADDITIONAL FINANCING
The Company does not have capital sufficient to meet the Company's cash
needs, including the costs of compliance with the continuing reporting
requirements of the Securities Exchange Act of 1934. The Company will have to
seek loans or equity placements to cover such cash needs. Lack of its existing
capital may be a sufficient impediment to prevent it from accomplishing the goal
of carying out the business plan as it attempts its business plan, the Company's
needs for additional financing are likely to increase substantially. The Company
will need to raise additional funds to conduct any business activities in the
next twelve months.
No commitments to provide additional funds have been made by management
or other stockholders. Accordingly, there can be no assurance that any
additional funds will be available to the Company to allow it to cover its
expenses as they may be incurred.
Irrespective of whether the Company's cash assets prove to be
inadequate to meet the Company's operational needs, the Company might seek to
compensate providers of services by issuances of stock in lieu of cash.
The Company has no plans for any research and development in the next
twelve months. The Company has no plans at this time for purchases or sales of
fixed assets which would occur in the next twelve months.
The Company has no expectation or anticipation of significant changes
in number of employees in the next twelve months, however, if it achieves a
business acquisition, it may acquire or add employees of an unknown number in
the next twelve months.
The Company's auditor has issued a "going concern" qualification as
part of his opinion in the Audit Report.
5
There is substantial doubt about the ability of the Company to continue as
a "going concern." The Company has no developed business, cash capital of $7 and
debt in excess of $323,339 at year end, all of which is current, moderate cash,
no assets, and no capital commitments. The effects of such conditions could
easily be to cause the Company's bankruptcy.
The Company has incurred significant losses from operations for the year
ended December 31, 2006 totalling ($28,514) and such losses are expected to
continue. In addition, the company has a $323,332 (approximately) working
capital deficit for the year ended December 31, 2006. The foregoing raises
substantial doubt about the Company's ability to continue as a going concern.
Management's plans include seeking additional capital and/or debt financing or
the possible sale of the Company. There is no guarantee that additional capital
and/or debt financing will be available when and to the extent required, or that
if available, it will be on terms acceptable to the Company. The consolidated
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.
The Company has received an opinion from its independent auditors
containing an explanatory paragraph that describes such auditors' uncertainty as
to the Company's ability to continue as a going concern due to the Company's
negative cash flow. As of the date the independent auditors rendered this
opinion, the Company did not have access to sufficient committed capital to meet
the Company's projected operating needs for at least the next twelve months. If
the Company does not achieve positive operating results within the next few
months, then it will require additional financing. If positive operating results
are not achieved in the short term, then the Company intends to take measures to
reduce expenditures so as to minimize its requirements for additional financing,
which financing may not be available on terms acceptable to the Company, if at
all. Such measures may include reduction of the Company's cost of operations and
restructuring employee compensation packages. There can be no assurance that the
Company will be able to generate internally or raise sufficient funds to
continue the Company's operations, or that the Company's independent auditors
will not issue another opinion with a going concern qualification. The Company's
consolidated financial statements do not include any adjustments to reflect the
possible future affects on the recoverability and classification of assets or
the amounts and classification of liabilities that may result from the Company's
possible inability to continue its operations.
Item 7. Financial Statements
Attached hereto and filed as part of this Form 10-KSB are the financial
statements required by Regulation SB. Please refer to pages F-1 through F-11.
Item 8. Changes in and Disagreements on Accounting and Financial Disclosure
None
6
Item 8A. Control and Procedures
The management of the Company has evaluated the effectiveness of the
issuer's disclosure controls and procedures as of the end of the period of the
report (evaluation date) and have concluded that the disclosure controls
internal controls and procedures are adequate and effective based upon their
evaluation as of the evaluation date.
There were no changes in the small business issuer's internal controls over
financial reporting identified in connection with the Company evaluation
required by paragraph (3) of Rule 13a-15 or Rule 15d-15 under the Exchange Act
that occurred during the small business issuer's fourth fiscal quarter that has
materially affected or is reasonably likely to materially affect the small
business issuer's internal control over financial reporting.
ITEM 8A(T). CONTROLS AND PROCEDURES
Not applicable.
ITEM 8B. OTHER INFORMATION
None.
Part III
Item 9. Directors, Executive Officers, Promoters and Control Persons; Compliance
with Section 16(a).
The directors and executive officers of the Company as of December 31,
2004, are as follows:
Name Age Position Held Tenure
---- --- ------------- ------
Kexi Xu 44 President & Director Annual
King Wong 50 Secretary Annual
Madam Chen Yurong 28 Director Annual
Mr. Xu Kexi, age 44, graduated from high school in Shanghai in 1982. Mr. Xu
was the supervisor of the Shanghai Textile Company from 1982 to 1985, the Export
Manager of Shengzhen China Import-Export Company from 1985-1990, the Manager of
Shanghai Galaxy Film Limited from 1990-1996. From 1996 to the present, Mr. Xu
has been the Chief Executive Officer of Shanghai Asia Loyalty Tradings Limited.
On December 31, 2005 Mr. King Wong was appointed Secretary and Treasurer of
the Company by the Board of Directors. Mr. Wong's biographical information is as
follows:
Mr. King Wong, age 50, has attained university education level in Hangzhou
in the People's Republic of China. Mr. Wong has extensive experience in trading,
import and export and also property development business. He has worked in
various companies established in Zhejiang in Hangzhou, Shanghai and Hong Kong,
including the China Resources (Holdings) Co. Ltd. in Hong Kong.
7
Madam Chen Yurong, age 28, was graduated in July 2000 from the Xi'an
International Studies University. During the period between August 2000 and
November 2004, Madam Chen has worked for a property development group in the
People's Republic of China by the name of Zhejiang Zhong'an Real Estate
Development Co., Ltd. Her scope of work included working as a manager in the
finance department of the group as well as being a deputy general manager of the
group. As from January 2005 onwards, Madam Chen has been appointed as the
president of an associate company of Zhejiang Zhong'an Real Estate Development
Co., Ltd.
None of the above individuals have a criminal history or have had any
adverse securities actions taken against them.
The directors named above will serve until the next annual meeting of the
Company's stockholders. Thereafter, directors will be elected for one-year terms
at the annual stockholders' meeting. Officers will hold their positions at the
pleasure of the board of directors, absent any employment agreement, of which
none currently exists or is contemplated. There is no arrangement or
understanding between the directors and officers of the Company and any other
person pursuant to which any director or officer was or is to be selected as a
director or officer.
The directors and officers of the Company will devote such time to the
Company's affairs on an "as needed" basis, but less than 20 hours per month. As
a result, the actual amount of time which they will devote to the Company's
affairs is unknown and is likely to vary substantially from month to month.
Item 10. Executive Compensation.
The Company does not have any employee incentive stock option plans.
SUMMARY COMPENSATION TABLE OF EXECUTIVES
Annual Compensation Awards
Name and Year Consulting Bonus Other Annual Restricted Securities Long Term All Other
Principal Fees ($) or ($) Compensation ($) Stock Underlying Compensation Compensation
Position Salary Award(s)($) Options/SARs Option
-------- ---- -------- ------- ---------------- ----------- ------------ ------ -------------
========= ==== ========= ======== ================ =========== ============= ======= =============
Kexi Xu, 2006 0 0 0 0 0 0 0
President, 2005 0 0 0 0 0 0 0
Director 2004 0 0 0 0 0 0 0
========= ==== ========= ======== ================ =========== ============= ======= =============
King Wong, 2006 0 0 0 0 0 0 0
Secretary/ 2005 0 0 0 0 0 0 0
Treasurer 2004 0 0 0 0 0 0 0
========= ==== ========= ======== ================ =========== ============= ======= =============
Officers 2006 0 0 0 0 0 0 0
as a Group 2005 0 0 0 0 0 0 0
2004 0 0 0 0 0 0 0
========= ==== ========= ======== ================ =========== ============= ======= =============
8
Option/SAR Grants Table (None)
Aggregated Option/SAR Exercises in Last Fiscal Year an FY-End Option/SAR value
(None)
Long Term Incentive Plans - Awards in Last Fiscal Year (None)
DIRECTOR COMPENSATION FOR LAST FISCAL YEAR
(Except for compensation of Officers who are also Directors which Compensation
is listed in Summary Compensation Table of Executives)
Cash Compensation Security Grants
Name Annual Meeting Consulting Number Number of
Retainer Fees ($) Fees/Other of Securities
Fees ($) Fees ($) Restricted Underlying
Shares (#) Options/SARs(#)
------------------------------ ---------- ---------------- --------------- ------------------------------ ---------------
A. Kexi Xu 2006 0 0 0 0 0
2005 0 0 0 0 0
2004 0 0 0 0 0
B. Madam Yurong Chen 2006 0 0 0 0 0
2005 0 0 0 0 0
2004 0 0 0 0 0
C. Directors as a Group 2006 0 0 0 0 0
2005 0 0 0 0 0
2004 0 0 0 0 0
============================== ========= ================ =============== ================== ============= =================
Option/SAR Grants Table (None)
Aggregated Option/SAR Exercises in Last Fiscal Year an FY-End Option/SAR
value (None)
Long Term Incentive Plans - Awards in Last Fiscal Year (None)
Option/SAR Grants Table
Name Number of Securities % of Total Exercise Expiration
Underlying Options/SARs or Price Date
Options/SARs Granted to Employees ($/Sh)
Granted (#) in Fiscal Year
-------------------------------------------------------------------------------------------------------------------
None
10
Aggregated Option/SAR Exercises in Last Fiscal Year
and FY-End Option/SAR value
Name Shares Value Number of Securities Value of Unexercised
Acquired Realized Underlying In the Money
on ($) Unexercised Options/SARs at FY-
Exercise Options/SARs at FY- End ($) Exercisable/
(#) End (#) Exercisable/ Unexercisable
Unexercisable
---------------------------------------------------------------------------------------------------------------------
None
Item 11. Security Ownership of Certain Beneficial Owners and Management and
Related Stockholder Matters
The following table sets forth information, as of December 31, 2006, with
respect to the beneficial ownership of the Company's common stock (or Preferred
Convertible Stock which would represent 5% or more of the Company's common
stock) by each person known by the Company to be the beneficial owner of more
than five percent of the outstanding common stock, and by current officers and
directors of the Company. There were 1,979,956 shares issued and outstanding at
December 31, 2006.
a.) Beneficial Owners
Stock Title Name and Address Amount of Beneficial Percentage
of Class of Beneficial Owner Ownership of Class
-------- ------------------- --------- --------
Common Kexi Xu, 0 0%
(President & Director)
Common King Wong 0 0%
(Secretary)
Common Madam Yurong Chen 1,000,000 50.5%
(Director)
Common Shen Tiojuan 200,000 10.1%
Top Harmony Holdings, LTD. 150,000 7.5%
(beneficially Kin Man Chan)
All Officers and 1,000,000 50.5%
Directors as a Group
(3 Persons)
11
Item 12. Certain Relationships and Related Transactions
On December 22, 2005, Madam Chen purchased 1,000,000 shares of the Company
(50.5% of the issued share capital of the Company).
Part IV
Item 13. Exhibits
(a) The following exhibits and financial statement schedules are filed as
exhibits to this Report:
Exhibits
Exhibit # Description Location/Page Number
--------- ----------------------------------- -----------------------------------
3.1 Articles of Incorporation Exhibit to Registration
Statement filed November
14, 1991 by Registrant on Form S-18
3.2 Bylaws of Registrant Exhibit to Registration
Statement filed November
14, 1991 by Registrant on Form S-18
3.3 Articles of Amendment As filed in Exhibit herewith
10.1 Articles of Amendment to Articles Exhibit listed under hardship exemption
of Incorporation of Art Music as provided in Rule 202 of Regulation
& Entertainment, Inc. and Cert. of S-T. Hardship Exemption grant date:
Designation, Preferences, Rights and 5/27/97
Limitation of Classes C, E, F, G, H, I
Convertible Preferred Stock
10.2 Articles of Incorporation of Art Music Exhibit listed under hardship exemption
& Entertainment with attachments as provided in Rule 202 of Regulation
S-T. Hardship Exemption grant date:
5/27/97
10.3 Articles of Amendment to Articles of Exhibit listed under hardship exemption
Incorporation of Chatham International, as provided in Rule 202 of Regulation
Inc. S-T. Hardship Exemption grant date:
5/27/97
10.4 Articles of Incorporation of Cornerstone Exhibit listed under hardship exemption
Capital, Inc. as provided in Rule 202 of Regulation
S-T. Hardship Exemption grant date:
5/27/97
12
10.5 Articles of Incorporation of International Exhibit listed under hardship exemption
Jazz Hall of Fame Production Co., Inc. as provided in Rule 202 of Regulation
S-T. Hardship Exemption grant date:
5/27/97
10.6 Articles of Incorporation of Exhibit listed under hardship
exemption as provided in Rule 202
Octopus Entertainment, Inc. of Regulation S-T. Hardship
Exemption grant date: 5/27/97
10.7 Articles of Amendment to Articles of Exhibit listed under hardship exemption
Incorporation of Octopus Entertainment, as provided in Rule 202 of Regulation
Inc. S-T. Hardship Exemption grant date:
5/27/97
10.8 Articles of Incorporation of Marin Exhibit listed under hardship exemption
Movies, Inc. as provided in Rule 202 of Regulation
S-T. Hardship Exemption grant date:
5/27/97
10.9 Articles of Amendment to Articles of Exhibit listed under hardship exemption
Incorporation of Marin Movies, Inc. as provided in Rule 202 of Regulation
S-T. Hardship Exemption grant date:
5/27/97
10.10 Articles of Incorporation of Classical Exhibit listed under hardship exemption
Music Collection, Inc. as provided in Rule 202 of Regulation
S-T. Hardship Exemption grant date:
5/27/97
10.11 Articles of Amendment to Articles of Exhibit listed under hardship exemption
Incorporation of Classical Music as provided in Rule 202 of Regulation
Collection, Inc. S-T. Hardship Exemption grant date:
5/27/97
10.12 Articles of Incorporation of Spellbinder Exhibit listed under hardship exemption
Productions, Inc. and Articles of as provided in Rule 202 of Regulation
Amendment to Articles of Incorporation S-T. Hardship Exemption grant date:
5/27/97
10.13 Bylaws of Art Music & Exhibit listed under hardship exemption
Entertainment, Inc. as provided in Rule 202 of Regulation
S-T. Hardship Exemption grant date:
5/27/97
10.14 Certificate of Name Change Exhibit listed under hardship exemption
as provided in Rule 202 of Regulation
S-T. Hardship Exemption grant date:
5/27/97
10.15 Articles of Amendment to Articles of Exhibit listed under hardship exemption
Incorporation of Chatham International, as provided in Rule 202 of Regulation
Inc. S-T. Hardship Exemption grant date:
5/27/97
10.16 Agreement and Plan of Reorganization Exhibit listed under hardship exemption
of AM&E, Inc. and IJHFPC as provided in Rule 202 of Regulation
S-T. Hardship Exemption grant date:
5/27/97
10.17 License Agreement for PCMCIA Based Distribution
System
10.18 License Agreement for Tomigel & Junon Systems
31 Sarbanes-Oxley Certification
32 Sarbanes-Oxley Certification
13
Item 14. Principal Accountant Fees and Services
General. Jaspers + Hall, PC ("Jaspers + Hall") is the Company's principal
auditing accountant firm. The Company's Board of Directors has considered
whether the provisions of audit services is compatible with maintaining MJC's
independence.
Audit Fees. Jaspers + Hall billed the Company $8,500 for the following
professional services: audit of the annual financial statement of the Company
for the fiscal year ended December 31, 2005 and interim financial statements for
quarters ended March 31, 2006, June 30, 2006, and September 30, 2006.
There were no audit related fees in 2006 or 2005. There were no tax fees or
other fees in 2006 or 2005.
The Company's Board acts as the audit committee and had no "pre-approval
policies and procedures" in effect for the auditors' engagement for the audit
year 2006 and 2005.
All audit work was performed by the auditors' full time employees.
14
JASPERS + HALL, PC
CERTIFIED PUBLIC ACCOUNTANTS
--------------------------------------------------------------------------------
9175 Kenyon Avenue, Suite 100
Denver, CO 80237
303-796-0099
To the Board of Directors
Jointland Development, Inc.
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We have audited the accompanying consolidated balance sheet of Jointland
Development, Inc. and its subsidiary as of December 31, 2006 and 2005, and the
related consolidated statements of operations, cash flows, and changes in
stockholders' deficit for the years then ended and for the period May 25, 1988
(inception) to December 31, 2006. 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.
We conducted our audits 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. 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 that 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 consolidated financial position of Jointland
Development, Inc. and its subsidiary at December 31, 2006 and 2005, and the
results of its operations and its cash flows for the years then ended and for
the period May 25, 1988 (inception) to December 31, 2006, in conformity with
accounting principles generally accepted in the United States.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As described in Note 2 to the
financial statements, the Company is in the development stage and conditions
exist which raise substantial doubt about the Company's ability to continue as a
going concern. Management's plans in regard to these matters are described in
Note 2. The financial statements do not include any adjustments that might
result from the outcome of this uncertainty.
/s/ Jaspers + Hall, PC
March 30, 2007
F-1
JOINTLAND DEVELOPMENT, INC. AND SUBSIDIARY
(Formerly Global Assets and Services, Inc.)
(A Development Stage Company)
Consolidated Balance Sheets
December 31, December 31,
2006 2005
----------------- -----------------
Assets
Current Assets:
Cash $ 7 $ 144
----------------- -----------------
Total Current Assets 7 144
----------------- -----------------
Total assets $ 7 $ 144
================= =================
Liabilities and Stockholders' Equity (Deficit)
Current liabilities:
Accounts payable and accrued liabilities $ 70,524 $ 50,849
Advance payable, related party 6,985 -
Note payable, related party 245,830 230,198
----------------- -----------------
Total current liabilities 323,339 281,047
----------------- -----------------
Stockholders' equity (deficit)
Common stock, $0.001 par value; 100,000,000 shares 1,981 1,981
authorized 1,979,965 shares issued and outstanding
December 31, 2006 and December 31, 2005 respectively
Additonal paid in capital 3,480,670 3,480,670
Deficit accumulated during the development stage (3,805,983) (3,763,554)
----------------- -----------------
Total stockholders' equity (deficit) (323,332) (280,903)
----------------- -----------------
Total liabilities and stockholders' equity (deficit) $ 7 $ 144
================= =================
The accompanying notes are an integral part of these consolidated financial statements.
F-2
JOINTLAND DEVELOPMENT, INC. AND SUBSIDIARY
(Formerly Global Assets and Services, Inc.)
(A Development Stage Company)
Consolidated Statements of Operations
May 25, 1988
(Inception) to
December 31, December 31,
2006 2005 2006
--------------- --------------- -----------------
Revenue
Revenue $ - $ - $ 846,545
Cost of sales - - (336,524)
--------------- --------------- -----------------
Gross Profit - - 510,021
--------------- --------------- -----------------
Operational expenses:
Doubtful accounts - - 34,469
Consulting fees - - 2,189,459
Legal and accounting 28,393 105,915 294,781
Advertising - - 14,542
Directors and officer fees - - 1,409,500
Telephone - - 30,412
Transfer fees - 150 150
Travel - 2,526 21,935
Rent - - 52,594
Other general expenses 121 990 249,688
--------------- --------------- -----------------
Total operational expenses 28,514 109,581 4,297,530
--------------- --------------- -----------------
Loss from operations (28,514) (109,581) (3,787,509)
--------------- --------------- -----------------
Other income (expense):
Interest income - - 4,021
Interest expense (13,915) (3) (22,495)
--------------- --------------- -----------------
Net loss $ (42,429) $(109,584) $(3,805,983)
=============== =============== =================
Net loss per share of common
stock $ (0.02) $ (0.06)
=============== ===============
Weighted average number of common
stock outstanding 1,979,965 1,979,965
=============== ===============
The accompanying notes are an integral part of these consolidated financial statements.
F-3
JOINTLAND DEVELOPMENT, INC. AND SUBSIDIARY
(A Development Stage Company)
Consolidated Stockholders' Equity (Deficit)
December 31, 2006
Deficit
Additional accum. during
Comon Stock paid-in the development
# of Shares Amount capital stage Totals
------------- ----------- ------------- ---------------- ------------
Balance - December 31, 1997 87,955 $ 88 $ 208,875 $ (208,963) $ -
------------- ----------- ------------- ---------------- ------------
Balance - December 31, 1998 87,955 88 208,875 (208,963) -
------------- ----------- ------------- ---------------- ------------
Balance - December 31, 1999 87,955 88 208,875 (208,963) -
------------- ----------- ------------- ---------------- ------------
Balance - December 31, 2000 87,955 88 208,875 (208,963) -
------------- ----------- ------------- ---------------- ------------
Issuance of stock for services 68,000 68 3,332 - 3,400
Net loss - - - (39,462) (39,462)
------------- ----------- ------------- ---------------- ------------
Balance - December 31, 2001 155,955 156 212,207 (248,425) (36,062)
------------- ----------- ------------- ---------------- ------------
Issuance of common stock for cash 400 1 1,999 - 2,000
Issuance of common stock for services 136,000 136 679,864 - 680,000
Issuance of common stock for services 20,000 20 99,980 - 100,000
Issuance of commonstock for services 10,000 10 49,990 - 50,000
Issuance of common stock for services 14,200 14 71,023 - 71,037
Issuance of common stock for
asset acquisition 35,000 35 656,215 - 656,250
Issuance of common stock for services 11,800 12 58,988 - 59,000
Issuance of common stock for cash 1,600 1 19,999 - 20,000
Issuance of common stock for services 98,900 99 494,401 - 494,500
Net loss - - - (2,103,229) (2,103,229)
------------- ----------- ------------- ---------------- ------------
Balance - December 31, 2002 483,855 484 2,344,666 (2,351,654) (6,504)
------------- ----------- ------------- ---------------- ------------
Issuance of common stock for services 55,500 55 254,945 - 255,000
Issuance of common stock for services 52,600 53 254,947 - 255,000
Issuance of common stock for services 2,000 2 9,998 - 10,000
Issuance of common stock for services 36,000 36 179,964 - 180,000
Net loss - - - (746,134) (746,134)
------------- ----------- ------------- ---------------- ------------
Balance - December 31, 2003 629,955 630 3,044,520 (3,097,788) (52,638)
------------- ----------- ------------- ---------------- ------------
Issuance of common stock for cash 1,000,000 1,000 249,000 - 250,000
Issuance of common stock for services 150,000 150 37,350 - 37,500
Issuance of common stock for services 10 1 - - 1
Issuance of common stock for cash 200,000 200 149,800 - 150,000
Net loss - - - (556,182) (556,182)
------------- ----------- ------------- ---------------- ------------
Balance - December 31, 2004 1,979,965 1,981 3,480,670 (3,653,970) (171,319)
------------- ----------- ------------- ---------------- ------------
Net loss - - - (109,584) (109,584)
------------- ----------- ------------- ---------------- ------------
Balance - December 31, 2005 1,979,965 1,981 3,480,670 (3,763,554) (280,903)
------------- ----------- ------------- ---------------- ------------
Net loss - - - (42,429) (42,429)
------------- ----------- ------------- ---------------- ------------
Balance - December 31, 2006 1,979,965 $ 1,981 $3,480,670 $ (3,805,983) $ (323,332)
============= =========== ============= ================ ============
The accompanying notes are an integral part of these consolidated financial statements.
F-4
JOINTLAND DEVELOPMENT, INC. AND SUBSIDIARY
(Formerly Global Assets and Services, Inc.)
(A Development Stage Company)
Consolidated Statements of Cash Flows
May 25, 1988
(Inception) to
December 31, December 31,
2006 2005 2006
-------------- -------------- -----------------
Cash flows from operating activities:
Net loss $ (42,429) $(109,584) $ (3,805,983)
Stock issued for services - - 2,195,437
Adjustments to reconcile net loss to net cash used
in operating activities
Increase in accounts payable and accrued liabilities 33,590 50,849 84,439
-------------- -------------- -----------------
Total adjustments 33,590 50,849 2,279,876
-------------- -------------- -----------------
Net cash used in operating activities (8,839) (58,735) (1,526,107)
-------------- -------------- -----------------
Cash flows from financing activities:
Proceeds from notes payable, related party 1,717 - 231,915
Proceeds from advances payable, related party 6,985 - 6,985
Issuance of common stock for asset acquisition - - 656,250
Issuance of common stock - - 630,964
-------------- -------------- -----------------
Net cash flows provided by financing activities 8,702 - 1,526,114
-------------- -------------- -----------------
Net (decrease) increase in cash $ (137) $ (58,735) $ 7
-------------- -------------- -----------------
Cash and cash equivalents, beginning 144 58,879 -
-------------- -------------- -----------------
Cash and cash equivalents, ending $ 7 $ 144 $ 7
============== ============== =================
Supplemental disclosure of cash flow information:
Cash paid for interest $ - $ - $ 8,577
============== ============== =================
Cash paid for income taxes $ - $ - $ -
============== ============== =================
Supplemental disclosure of non-cash transactions:
Common stock issued in exchange for services $ - $ - $ 2,195,437
============== ============== =================
The accompanying notes are an integral part of these consolidated financial statements.
F-5
JOINTLAND DEVELOPMENT, INC. AND SUBSIDIARY
(A Development Stage Company)
Notes to the Consolidated Financial Statements
For the years ended December 31, 2006 and 2005
Note 1. Organization, Basis of Presentation and Significant Accounting Policies:
Organization:
The accompanying consolidated financial statements include the accounts of
Jointland Development, Inc., a Florida corporation, (the "Company") and its
wholly-owned subsidiary, Corporate Empire Limited ("Corporate Empire"). All
significant intercompany accounts and transactions have been eliminated in
consolidation.
Basis of Presentation - Development Stage Company:
The Company has not earned significant revenues from limited principal
operations. Accordingly, the Company's activities have been accounted for as
those of a "Development Stage Enterprise" as set forth in Financial Accounting
Standards Board Statement No. 7 ("FASB 7"). Among the disclosures required by
FASB 7 are that the Company's financial statements be identified as those of a
development stage company, and that the statements of operations, stockholders'
equity (deficit) and cash flows disclose activity since the date of the
Company's inception.
Cash and Cash Equivalents:
The Company considers all highly liquid debt instruments, purchased with an
original maturity of three months or less, to be cash equivalents.
Use of Estimates:
The preparation of financial statements, in conformity with accounting
principles generally accepted in the United States, 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 revenue and expenses during
the reporting period. Actual results could differ from those estimates.
Foreign Currency Translation:
The financial statements of the Company's foreign subsidiary are measured using
the local currency (the Hong Kong Dollar) as the functional currency. Assets and
liabilities of the subsidiaries are translated at exchange rates as of the
balance sheet date. Revenues and expenses are translated at average rates of
exchange in effect during the period.
F-6
JOINTLAND DEVELOPMENT, INC. AND SUBSIDIARY
(A Development Stage Company)
Notes to the Consolidated Financial Statements
For the years ended December 31, 2006 and 2005
Foreign Currency Transactions:
Gains and losses from foreign currency transaction are included in net income
(loss). Foreign currency transaction gains and losses were not significant
during the years ended December 31, 2006 and 2005.
Loss Per Share:
Loss per share is based on the weighted average number of common shares
outstanding during the period.
Other Comprehensive Income:
The Company has no material components of other comprehensive income (loss), and
accordingly, net loss is equal to comprehensive loss in all periods.
Recently Issued Accounting Pronouncements:
In December 2004, the Financial Accounting Standards Board ("FASB") issued SFAS
No. 123(R), Share-Based Payment, which addresses the accounting for share-based
payment transactions. SFAS No. 123(R) eliminates the ability to account for
share-based compensation transactions using APB 25, and generally requires
instead that such transactions be accounted and recognized in the statement of
operations based on their fair value. SFAS No. 123(R) will be effective for the
Company beginning with the first quarter of the fiscal year ending December 31,
2007. As the Company has no un-vested options outstanding, the implementation of
this standard is not expected to have an immediate impact on the Company's
financial position and results of operations.
In February 2006, the FASB issued SFAS 155, Accounting for Certain Hybrid
Financial Instruments, which amends SFAS 133, Accounting for Derivative
Instruments and Hedging Activities, and SFAS 140, Accounting for Transfers and
Servicing of Financial Assets and Extinguishments of Liabilities - a replacement
of FASB Statement No. 125. SFAS 155 will be effective for the Company for all
financial instruments issued or acquired after the beginning its fiscal year
ending December 31, 2006. The Company not yet evaluated and determined the
likely effect of SFAS 155 on future financial statements.
In June 2006, the FASB issued Interpretation No. 48, Accounting for Uncertainty
in Income Taxes - An Interpretation of FASB Statement No. 109, (FIN 48). FIN 48
clarifies the accounting for uncertainty in income taxes recognized in an
enterprise's financial statements in accordance with FASB Statement No. 109,
Accounting for Income Taxes. FIN 48 also prescribes a recognition threshold and
measurement attribute for the financial statement recognition and measurement of
a tax position taken or expected to be taken in a tax return that results in a
tax benefit.
F-7
JOINTLAND DEVELOPMENT, INC. AND SUBSIDIARY
(A Development Stage Company)
Notes to the Consolidated Financial Statements
For the years ended December 31, 2006 and 2005
Additionally, FIN 48 provides guidance on de-recognition, income statement
classification of interest and penalties, accounting in interim periods,
disclosure, and transition. This interpretation is effective for the Company for
its fiscal year ending December 31, 2007. The Company has not yet evaluated the
effect that the application of FIN 48 may have, if any, on its future results of
operations and financial condition.
In September 2006, the FASB issued SFAS No. 157, "Fair Value Measurements". This
statement defines fair value, establishes a framework for measuring fair value
in generally accepted accounting principles, and expands disclosures about fair
value measurements. This statement applies under other accounting pronouncements
that require or permit fair value measurements. SFAS No. 157 is effective for
the Company for its fiscal year beginning on July 1, 2008. The Company is
currently assessing the impact the adoption of SFAS No. 157 will have on its
financial statements.
In September 2006, the SEC issued Staff Accounting Bulletin (SAB) No. 108 in
order to eliminate the diversity of practice surrounding how public companies
quantify financial statement misstatements. In SAB 108, the SEC staff
established an approach that requires quantification of financial statement
misstatements based on the effects of the misstatements on each of the Company's
financial statements and the related financial statement disclosures. SAB No.
108 is effective for the Company for its current fiscal year. The adoption of
SAB No. 108 did not have an impact on the Company's financial statements.
On February 15, 2007, the FASB issued SFAS No. 159, "The Fair Value Option for
Financial Assets and Financial Liabilities - Including an Amendment of FASB
Statement No. 115." This standard permits an entity to measure many financial
instruments and certain other items at estimated fair value. Most of the
provisions of SFAS No. 115 ("Accounting for Certain Investments in Debt and
Equity Securities) applies to all entities that own trading and
available-for-sale securities. The fair value option created by SFAS No. 159
permits an entity to measure eligible items at fair value as of specified
election dates. Among others, eligible items exclude (1) financial instruments
classified (partially or in total) as permanent or temporary stockholders'
equity (such as a convertible debt security with a non-contingent beneficial
conversion feature) and (2) investments in subsidiaries and interests in
variable interests that must be consolidated. A for-profit business entity will
be required to report unrealized gains and losses on items for which the fair
value option has been elected in its statements of operations at each subsequent
reposting date. The fair value option (a) may generally be applied instrument by
instruments, (b) is irrevocable unless a new elections date occurs, and (c) must
be applied to the entire instrument and not to only a portion of the instrument.
SFAS No. 159 is effective as of the beginning of the first fiscal year that
begins after November 15, 2007. The Company has not yet evaluated the effect
that the application of SFAS No. 159, may have, if any, on its future results of
operations and financial condition.
F-8
JOINTLAND DEVELOPMENT, INC. AND SUBSIDIARY
(A Development Stage Company)
Notes to the Consolidated Financial Statements
For the years ended December 31, 2006 and 2005
Note 2 Going Concern and Results of Operations:
The financial statements of the Company have been presented on the basis that
they are a going concern, which contemplates the realization of assets and the
satisfaction of liabilities in the normal course of business. The Company
reported a net loss of $42,429 for the year ended December 31, 2006, and an
accumulated deficit during the development stage of $3,805,983. The Company's
current liabilities exceed current assets by $323,332 at December 31, 2006.
The future success of the Company is likely dependent on its ability to attain
additional capital, or to find an acquisition to add value to its present
shareholders and ultimately, upon its ability to attain future profitable
operations. There can be no assurance that the Company will be successful in
obtaining such financing, or that it will attain positive cash flow from
operations. Management believes that actions presently being taken to revise the
Company's operating and financial requirements provide the opportunity for the
Company to continue as a going concern.
Note 3 Notes Payable and Advances Payable, Related Parties:
Advance payable, related party:
During the year ended December 31, 2006, Mr. Chen Yorung, a director of the
Company, advance an amount of $6,985 to the Company to pay for operational
expenses. The amount is unsecured, interest free and has no fixed terms of
repayment.
Note payable, related party:
During the year ended December 31, 2005, Praise Direct Holding, a stockholder of
the Company, advanced funds of $231,915 to the Company in the form of a 6%
interest bearing promissory note. During the year ended December 31, 2006, the
note accrued interest of $13,915. The note is due upon demand. At December 31,
2006, the promissory note was still outstanding.
Note 4 Stockholders' Deficit:
The authorized capital stock of the Company is 100,000,000 shares of common
stock at $.001 par value. During the year ended December 31, 2006, the Company
did not issue any shares of common stock.
Note 5 Federal Income Taxes:
The Company has made no provision for income taxes because there has been no
income generated since 1997 for financial statements or tax purposes.
F-9
JOINTLAND DEVELOPMENT, INC. AND SUBSIDIARY
(A Development Stage Company)
Notes to the Consolidated Financial Statements
For the years ended December 31, 2006 and 2005
The Financial Accounting Standards Board (FASB) has issued Statement of
Financial Accounting Standards Number 109 ("SFAS 109"). "Accounting for Income
Taxes", which requires a change from the deferred method to the asset and
liability method of accounting for income taxes. Under the asset and liability
method, deferred income taxes are recognized for the tax consequences of
"temporary differences" by applying enacted statutory tax rates applicable to
future years to differences between the financial statement carrying amounts and
the tax basis of existing assets and liabilities.
2006 2005
Deferred tax assets
Net operating loss carry forwards $ 3,805,983 $ 3,763,554
Valuation allowance (3,805,983) (3,763,554)
------------ ------------
Net deferred tax assets $ 0 $ 0
============ ============
The Company had net operating loss carry forwards of approximately $3,805,983
and $3,763,554 at December 31, 2006 and 2005, respectively, for federal income
tax purposes. These carry forwards if not utilized to offset taxable income will
begin to expire in 2011.
Note 6 Segment Information:
The Company operates primarily in a single operating segment, the asset
management and capital raising business.
F-10
Signatures
Pursuant to the requirements of Section 13 or 15(d) of the Securities and
Exchange Act of 1934, the Registrant had duly caused this Report to be signed on
its behalf by the undersigned thereunto duly authorized.
Dated: April 13, 2007
JOINTLAND DEVELOPMENT, INC.
By: /s/ Kexi Xu
----------------------------------
Kexi Xu, President
Pursuant to the requirements of the Securities Exchange Act of 1934, this
Report has been signed by the following persons in the capacities and on the
dates indicated.
Signature Title Date
--------- ----- ----
/s/ Xu President/Director
--------------------------------- & Chief Executive Officer April 13, 2007
Kexi Xu
Directors:
/s/ Kexi Xu Director
--------------------------------- April 13, 2007
Kexi Xu
/s/ Madam Yurong Chen Director April 13, 2007
---------------------------------
Madam Yurong Chen
15