6. Stockholders' Equity
Preferred Stock
In September 2013, the Company adopted
an amended and restated certificate of incorporation by which the Company is authorized to issue 5,000,000 shares of preferred
stock with a $0.0001 par value. As of March 31, 2020 and December 31, 2019, there were no shares of preferred stock issued or outstanding.
Common Stock, Stock Split and
Dividend
In September 2013, the Company adopted
an amended and restated certificate of incorporation by which the Company is authorized to issue 195,000,000 shares of common stock
with a $0.0001 par value, which amended and restated certificate of incorporation went effective on October 21, 2013.
In anticipation of the acquisition
of the Company’s common stock by Zosano Pharma and on October 21, 2013, the Company completed a 1-for-200 reverse stock split.
As a result, existing stockholders held an aggregate of 10,027 shares on a post-split basis. All share and per share amounts have
been retroactively restated for the effect of this split.
On October 31, 2013, the Company issued
10,016,973 shares of common stock to Zosano Pharma in exchange for an aggregate cash purchase price of $365,000. Concurrently with
the receipt of the proceeds from the sale of its common stock to Zosano Pharma, the Company declared a dividend of the purchase
price to its stockholders of record immediately prior to the closing of the purchase transaction.
On January 5, 2017, the Company entered
into a Share Exchange Agreement with Essential Element Limited, a British Virgin Islands company (“ESEL”), and Leung
Chi Wah Earnest, the principal shareholder of ESEL, pursuant to which the Company issued an aggregate of 2,005,400 shares of common
stock, or approximately 17% of the issued and outstanding common stock of the Company, to Mr. Leung in exchange for 100% of the
issued and outstanding shares of ESEL. ESEL owns all of the issued and outstanding shares of J.E.M. Capital Limited, a company
organized under the laws of Hong Kong (“JEM Capital”). ESEL and JEM Capital currently have no operations, but include
the corporate structure that the Company believes necessary for the acquisition of assets in Hong Kong and China. ESEL has incurred
material expenses setting up such structure.
On June 21, 2019, the Company passed a unanimous
written consent of the Board of Directors to issue 1,000,000 and 1,000,000 common shares to Mr. MingJing Xia (“Mr. Xia”)
and Mr. Yulong Yang (“Mr. Yang”), respectively. These shares were issued on the same date to Mr. Xia for his service
in the capacity of Chief Financial Officer and Chairperson of the Board, and issued to Mr. Yang for his service in the capacity
of Chief Executive Officer and member of the Board, for their first year’s services commencing from 1 July 2019. Both of
Mr. Xia and Mr. Yang are entitled to a monthly salary of $1,000 during this period. In connection with these stock grants and in
accordance with ASC Topic 718, the Company recognized $6,000 of non-cash stock-based compensation included in general and administrative
expenses on the consolidated statements of operations for the three months ended March 31, 2020.
The Company is authorized to issue 195,000,000
shares of common stock with a $0.0001 par value. As of March 31, 2020 and 31 December, 2019, 14,032,400 shares of common stock
were issued and outstanding.
As of March 31, 2020 and 31 December,
2019, the Company did not have any dilutive securities, such as stock options, warrants or convertible securities, issued or outstanding.
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