Item 1A. Risk Factors 23
Item 1B. Unresolved Staff Comments 29
Item 2. Properties 29
Item 3. Legal Proceedings 30
Item 4. Mine Safety Disclosure 30
PART II
Item 6. Selected Financial Data 31
Item 7A. Quantitative and Qualitative Disclosures About Market Risk 41
Item 8. Financial Statements and Supplementary Data 41
Item 9A. Controls and Procedures 41
Item 9B. Other Information 42
PART III
Item 10. Directors, Executive Officers and Corporate Governance 43
Item 11. Executive Compensation 49
Item 14. Principal Accounting Fees and Services 52
PART IV
Item 15. Exhibits, Financial Statement Schedules 53
SIGNATURES 55
CAUTIONARY
NOTE REGARDING FORWARD-LOOKING STATEMENTS
This
Annual Report on Form 10-K contains forward-looking statements. These forward-looking statements are not historical facts but
rather are based on current expectations, estimates and projections. We may use words such as “anticipate,” “expect,”
“intend,” “plan,” “believe,” “foresee,” “estimate” and variations
of these words and similar expressions to identify forward-looking statements. These statements are not guaranteed to future performance
and are subject to certain risks, uncertainties and other factors, some of which are beyond our control, are difficult to predict
and could cause actual results to differ materially from those expressed or forecasted. These risks and uncertainties include
the following:
● The availability and adequacy of our cash flow to meet our requirements;
● Changes or developments in laws, regulations or taxes in our industry;
● Competition in our industry;
● Changes in our business strategy, capital improvements or development plans;
This
Annual Report should be read completely and with the understanding that actual future results may be materially different from
what we expect. The forward-looking statements included in this Annual Report are made as of the date of this Annual Report and
should be evaluated with consideration of any changes occurring after the date of this Annual Report. We will not update forward-looking
statements even though our situation may change in the future and we assume no obligation to update any forward-looking statements,
whether as a result of new information, future events or otherwise.
Use
of Defined Terms
Except
as otherwise indicated by the context, references in this Annual Report to:
● “Common Stock” refers to the common stock, par value $.0001, of the Company;
● “HK” refers to Hong Kong;
● “U.S. dollar,” “$” and “US$” refer to the legal currency of the United States;
● “Securities Act” refers to the Securities Act of 1933, as amended; and
● “Exchange Act” refers to the Securities Exchange Act of 1934, as amended.
PART
I
ITEM
1. BUSINESS
Corporate
History
We
were incorporated on July 19, 2013 in the state of Nevada under the name “Greenpro, Inc.”. On May 6, 2015,
we changed our name to “Greenpro Capital Corp.”. Our corporate structure is set forth below:
A
list of our subsidiaries with a brief description of their business is set forth below:
Name (Domicile) Business
Greenpro Resources Limited (British Virgin Islands) A holding company.
Greenpro Holding Limited (Hong Kong) A holding company
Greenpro Venture Capital Limited (Anguilla) A holding company.
Incorporation
of Subsidiaries and VIE
Incorporation
of Greenpro Resources Limited, a British Virgin Islands company
On
July 3, 2012, Greenpro Resources Limited (“GRBVI”) was founded and incorporated by our directors, Mr. Lee Chong Kuang
and Mr. Loke Che Chan Gilbert (“Messrs. Lee and Loke”) in the British Virgin Islands.
Incorporation
of Greenpro Resources Limited’s wholly owned subsidiaries
Greenpro
Resources (HK) Limited, a Hong Kong company
On
April 5, 2012, Greenpro Resources (HK) Limited (“GRHK”)
was founded and incorporated by our directors, Messrs. Lee and Loke in Hong Kong.
Greenpro
Financial Consulting Limited, a Belize company
On
July 26, 2012, Greenpro Financial Consulting Limited (“GFCL”, formerly known as Weld Asia Financial Consulting Limited)
was founded and incorporated by our director, Mr. Lee Chong Kuang (“Mr. Lee”) in Belize.
Greenpro
Resources Sdn. Bhd., a Malaysian company
On
April 25, 2013, Greenpro Resources Sdn. Bhd. (“GRSB”) was founded and incorporated by our director, Mr. Lee and his
spouse, Ms. Yap Pei Ling (“Ms. Yap”) in Malaysia.
Greenpro
Holding Limited, a Hong Kong company
On
July 22, 2013, Greenpro Holding Limited (“GHL”) was founded and incorporated by GRBVI in Hong Kong.
Greenpro
Management Consultancy (Shenzhen) Limited, a Shenzhen, China company
On
August 30, 2013, Greenpro Management Consultancy (Shenzhen) Limited (“GMCSZ”) was founded and incorporated by GRHK
in Shenzhen, China.
Development
of Greenpro Resources Limited and its wholly owned subsidiaries through acquisitions
On
January 1, 2014 , Greenpro Resources Limited (“GRBVI”)
acquired 100% of the outstanding shares of GFCL, from our director, Mr. Lee at a consideration
of $1.
On
January 22, 2014, GHL acquired 2 shares, representing 100% of the outstanding shares of GRHK from its shareholders, Messrs. Lee
and Loke for a total consideration of HK$2 (approximately $0.26). At
the same day after this acquisition, GRHK allotted additional 1,075,000 shares to GHL for
HK$1,075,000 (approximately $138,709).
On
June 30, 2014, GRHK acquired 100% of the issued and outstanding shares of Greenpro
Resources Sdn. Bhd., a Malaysian company (“GRSB”) from our director, Mr. Lee
and his spouse, Ms. Yap for HK$2,943,298 (approximately $379,780). GRSB is principally
engaged in commercial real estate investments in Malaysia.
Incorporation
of Greenpro Venture Capital Limited, an Anguilla company and its wholly owned subsidiary, Global Leaders Corporation, an Anguilla
company
On
September 5, 2014, Greenpro Venture Capital Limited (“GVCL”) was founded and incorporated by our directors, Messrs.
Lee and Loke in Anguilla.
On
September 5, 2014, Greenpro Venture Cap (Qianhai) Limited (“GVCQH”, renamed to Global Leaders Corporationon June 26, 2020) was founded and incorporated
by our director, Mr. Lee in Anguilla.
On
July 18, 2015, GVCL acquired all shareholdings of GVCQH from our director, Mr. Lee for $4. Mr. Lee was a sole shareholder of GVCQH
before the transaction.
Incorporation
and restructure of VIE, Greenpro New Finance Academy Limited, a Hong Kong company and its wholly owned subsidiary, Greenpro Synergy
Network (Shenzhen) Limited, a Shenzhen, China company
On
March 2, 2016, Greenpro New Finance Academy Limited (formerly known as Greenpro Synergy Network Limited) (“GNFA”)
was incorporated in Hong Kong, as a variable interest entity (the “VIE”), which is required to consolidate with the
Company. The principal activity of GNFA is providing a borderless platform through networking events and programs in Hong
Kong. The Company controlled GNFA through a series of contractual arrangements (the “VIE
Agreements”) between Greenpro Holding Limited, a subsidiary of the Company (“GHL”) and GNFA. Our directors,
Messrs. Lee and Loke, are also the shareholders of GNFA.
The
VIE agreements included (i) an Exclusive Business Cooperation Agreement, (ii) a Loan Agreement, (iii) a Share Pledge Agreement,
(iv) a Power of Attorney and (v) an Exclusive Option Agreement with the shareholders of GNFA.
Set
forth below is a more detailed description of each of the VIE agreement.
Exclusive
Business Cooperation Agreement: Pursuant to the Exclusive Business Cooperation Agreement, GHL serves as an exclusive provider
of technical support, consulting services and management services to GNFA.
Loan
Agreement: Pursuant to the Loan Agreement, GHL granted interest-free loans to the shareholders of GNFA for the sole purpose of
increasing the registered capital of GNFA. These loans are eliminated with the capital of GNFA during consolidation.
Share
Pledge Agreement: Pursuant to the Share Pledge Agreement, the shareholders of GNFA pledged to GHL a first security interest in
all their equity interests in GNFA to secure GNFA’s timely and complete payment, and performance of its obligations under
the Exclusive Business Cooperation Agreement.
Power
of Attorney: Pursuant to the Power of Attorney, Messrs. Lee and Loke, as the shareholders of GNFA, granted to GHL the right to
(i) attend the shareholder meetings of GNFA (ii) exercise all shareholder rights (including voting rights) with respect to such
equity interests in GNFA and (iii) designate and appoint on behalf of such shareholders any legal representatives, directors,
supervisors, and other senior management members of GNFA.
Exclusive
Option Agreement: Pursuant to the Exclusive Option Agreement, the shareholders of GNFA granted to GHL an irrevocable and exclusive
right and option to purchase all their equity interests in GNFA.
GHL
acquired a life insurance policy (the “Policy”) on May 15, 2015. On June 13, 2016, GHL transferred the ownership of
the Policy to GNFA. On December 19, 2019, GNFA redeemed the Policy valued at $156,058. After deducting the loan balance of $115,889
and the insurance expense of $531 from the value of the Policy, GNFA received a net cash surrender value of $39,638.
On
July 28, 2017, Greenpro Synergy Network (Shenzhen) Limited (“GSNSZ”), a wholly owned subsidiary of GNFA, was incorporated
in Shenzhen, China. GSNSZ provides a borderless platform
through networking events and programs in China for our members to seek professional services, business opportunities, and to
exchange sources of information and research.
On
April 20, 2020, after our directors, Messrs. Lee and Loke transferred all shareholdings of GNFA to GHL, the VIE was dissolved
and restructured as a subsidiary of the Company.
Acquisition
and Reorganization of Subsidiaries
Acquisitions
of entities under common control:
Acquisition
of Greenpro Resources Limited, a British Virgin Islands company
On
July 31, 2015, we acquired 100% of the issued and outstanding securities of Greenpro Resources Limited, a British Virgin Islands
corporation (“GRBVI”), which had been our affiliate at the time of the acquisition. As consideration thereof, we issued
9,070,000 restricted shares of our Common Stock and paid $25,500 in cash.
At
the time of the acquisition of GRBVI, Mr. Lee was the Company’s Chief Executive Officer, President and director of
the Company, and Mr. Loke was the Company’s Chief Financial Officer, Secretary, Treasurer and director, and Messrs.
Lee and Loke each held a 44.6% interest in the Company. Before the transaction, Mr. Lee was GRBVI’s Chief
Executive Officer and director, and Mr. Loke was GRBVI’s Chief Financial Officer and director, and Messrs. Lee and Loke
each held a 50% interest in GRBVI. Upon the consummation of the acquisition, Messrs. Lee and Loke received, in the aggregate,
$25,500 in cash and 9,070,000 shares of restricted Common Stock of the Company, and the acquisition was accounted for as
a transfer among entities under common control.
Acquisition
of Greenpro Venture Capital Limited, an Anguilla corporation
On
September 30, 2015, the Company acquired all the issued and outstanding securities of Greenpro Venture Capital Limited, an Anguilla
corporation (“GVCL”), from its shareholders, Messrs. Lee and Loke, respectively. At the time of the acquisition of
GVCL, Mr. Lee was the Company’s Chief Executive Officer, President and director, and Mr. Loke was the Company’s Chief
Financial Officer, Secretary, Treasurer and director of the Company, and Messrs. Lee and Loke each held a 43.02% interest in the
Company. At the time of the acquisition of GVCL, Mr. Lee was GVCL’s Chief Executive Officer and director, and Mr. Loke was
GVCL’s Chief Financial Officer and director, and Messrs. Lee and Loke each held a 50% interest in GVCL. Upon the consummation
of the acquisition, Messrs. Lee and Loke received, in the aggregate, $6,000 in cash and 13,260,000 shares of restricted Common
Stock of the Company, and the acquisition was accounted for as a transfer among entities under common control.
Acquisition
of A&G International Limited, a Belize company
On
September 30, 2015, we acquired 100% of the issued and outstanding securities of A&G International Limited, a Belize corporation
(“A&G”), from Ms. Yap Pei Ling (“Ms. Yap”). Ms. Yap, a director and sole shareholder
of A&G, is the spouse of our director, Mr. Lee.
In
connection therewith, we issued to Ms. Yap, 1,842,000 restricted shares of our Common Stock and the acquisition
was accounted for as a transfer among entities under common control.
A&G
provided corporate and business advisory services through its wholly owned subsidiaries, Asia UBS Global Limited, a Hong Kong
limited company (“AUH”) and Asia UBS Global Limited, a Belize corporation (“AUB”).
On
December 30, 2015, A&G transferred all the issued and outstanding securities of AUH and AUB to GRBVI in order to simplify
our corporate structure. Then A&G, a corporation with no assets, was subsequently transferred back to Ms. Yap.
Acquisition
of Falcon Accounting & Secretaries Limited (formerly known as Falcon Secretaries Limited) and Falcon Corporate Services Limited
(formerly known as Ace Corporate Services Limited), Hong Kong companies, and Shenzhen Falcon Financial Consulting Limited, a Shenzhen,
China company
On
September 30, 2015, we acquired all the issued and outstanding securities of Falcon Secretaries Limited (renamed to
Falcon Accounting & Secretaries Limited on February 25, 2020), Ace Corporate Services Limited (renamed to Falcon Corporate
Services Limited on August 26, 2016) and Shenzhen Falcon Financial Consulting Limited (these companies collectively known
as “F&A”). As consideration thereto, we issued to Ms. Chen Yanhong, a sole shareholder of F&A (“Ms.
Chen”), 2,080,200 restricted shares of our Common Stock, representing an aggregate purchase price of $1,081,704 based
on the average closing price of the ten trading days preceding the date of the acquisition agreement on July 31, 2015, of $0.52
per share. The purchase price was determined based on the business value generated from F&A at the time of acquisition. The
acquisition was accounted for as a transfer among entities under common control.
Ms.
Chen, a director and sole shareholder of F&A, is also a director and legal representative of Greenpro Management Consultancy
(Shenzhen) Limited, one of our subsidiaries in Shenzhen, China.
Acquisition
of Greenpro Global Capital Sdn. Bhd., a Malaysian company
On
May 23, 2016, our wholly owned subsidiary, Greenpro Holding Limited (“GHL”) acquired 400 shares, representing
40% of the outstanding shares of Greenpro Wealthon Sdn. Bhd. (“GGCSB”, renamed to Greenpro Global Capital Sdn.
Bhd. on June 13, 2018), from our director, Mr. Lee for MYR1 (approximately $0.25) and the
acquisition was accounted for as a transfer among entities under common control.On June 7, 2016, GGCSB issued another 200 shares to GHL at the price of MYR120,000
(approximately $30,000), resulting in GHL owing 60% of GGCSB.
On
August 30, 2018, the remaining 40% of the outstanding shares of GGCSB were transferred to GHL, and currently GHL holds 100% of
GGCSB.
Acquisition
of Greenpro Credit Limited (formerly known as Gushen Credit Limited), a Hong Kong company
On
April 27, 2017, our wholly owned subsidiary, GRBVI and Gushen Credit Limited (“GCL”, renamed to Greenpro Credit Limited
on May 16, 2017), a Hong Kong corporation, entered into an asset purchase agreement, pursuant to which GRBVI purchased all the
assets of GCL. As consideration thereto, GRBVI agreed to pay a purchase price of $105,000 and the
acquisition was accounted for as a transfer among entities under common control.
GCL
operates a money lending business in Hong Kong, located at 1701-03, 17/F, Metropolis Tower, 10 Metropolis Drive, Hung Hom, Kowloon,
Hong Kong. On April 28, 2017, GCL sold two (2) ordinary shares, representing 100% of its ownership, at a total consideration of
$0.26 in cash to GRBVI. The purchase price was determined based on the mutual agreement between GCL
and GRBVI.
Acquisition
of Greenpro Family Office Limited, a Hong Kong company
On
July 21, 2017, our wholly owned subsidiary, GRBVI acquired 51% of the outstanding shares of Greenpro Family Office
Limited (“GFOL”) from our director, Mr. Loke. Mr. Loke was the sole shareholder of GFOL before the transaction
and the acquisition was accounted for as a transfer among entities under common control. On September 21, 2018, the remaining
49% shareholdings of GFOL were transferred to GRBVI, and currently GRBVI holds
100% of GFOL.
Acquisition
of Greenpro Sparkle Brokers Limited (formerly known
as Sparkle Insurance Brokers Limited), a Hong Kong company
On
January 2, 2019, the Company acquired Sparkle Insurance Brokers Limited (“Sparkle”, renamed Greenpro Sparkle Brokers
Limited on April 4, 2019) from Mr. Teh Boo Yim and Ms. Teh Jocelyn Nga Man, the former
100% shareholders of Sparkle for total consideration of $170,322, made up of $129,032 in cash and the issuance of 8,602 shares
of the Company’s Common Stock valued at $41,290. The shares were valued based on the closing price of the Company’s
Common Stock of $4.80 per share at acquisition and the acquisition was accounted for as a transfer among entities under common
control. The Company aims to expand its long term and general insurance services through the acquisition of Sparkle.
Acquisitions
of controlling interests:
Acquisition
of Forward Win International Limited, a Hong Kong company
On
February 25, 2015, we acquired 60% of the issued and outstanding shares of Forward Win International
Limited, a Hong Kong company (“FWIL”) at a consideration of $774. FWIL is principally engaged in commercial real estate
investments in Hong Kong.
Acquisition
of Yabez (Hong Kong) Company Limited, a Hong Kong company and its wholly owned subsidiary, Yabez Business Service (SZ) Company
Limited, a Shenzhen, China company
On
September 30, 2015, we acquired 60% of the issued and outstanding securities of Yabez (Hong Kong) Company Limited, a Hong Kong
corporation, together with its wholly owned subsidiary, Yabez Business Service (SZ) Company Limited in Shenzhen, China (collectively,
“Yabez”). As consideration thereto, we issued to the shareholders of Yabez 486,171 restricted shares of our Common
Stock, representing an aggregate purchase price of $252,808 based on the average closing price of the ten trading days preceding
the date of the acquisition agreement on July 31, 2015, of $0.52 per share. The purchase price was determined based on the business
value generated from Yabez at the time of acquisition. Yabez provides company formation advisory services, corporate secretarial
services and IT-related services to both of Hong Kong and Shenzhen-based clients.
Disposal
of subsidiaries
Disposal
of Yabez (Hong Kong) Company Limited, a Hong Kong company and its wholly owned subsidiary, Yabez Business Service (SZ) Company
Limited, a Shenzhen, China company
On
February 29, 2020, the Company sold its entire 60% interest in Yabez (Hong Kong) Limited and Yabez Business Service (SZ) Company
Limited (collectively, “Yabez”) to an unrelated party for $1. The transaction closed on February 29, 2020, and Yabez
was deconsolidated following the closing.
At
February 29, 2020, Yabez’s assets totaled $167,017, and consisted of cash of $24,887, trade accounts receivable of $129,792,
and other assets of $12,338. At February 29, 2020, Yabez’s liabilities consisted of trade accounts payables of $173,680.
At February 29, 2020, Yabez’s net deficit was ($6,663), of which the non-controlling interest was ($7,446) and the Company’s
basis was $783, resulting in a loss on disposal of $727, after consideration of foreign currency adjustments.
Disposal
of Global Leaders Corporation, an Anguilla corporation
On
May 20, 2020, Global Leaders Corporation (“GVCQH”) allotted an additional 196 shares to an unrelated party
at a price of $196. As a result, an immediate holding company of GVCQH, Greenpro Venture Capital Limited (“GVCL”),
holds a 2% interest in GVCQH, and GVCQH’s sole asset, cash of $129, was disposed and a loss on disposal of $125 was
recorded. On August 17, 2020, GVCL sold the balance of the 2% interest in GVCQH to the unrelated party for $4.
Acquisition
of an associate company
Acquisition
of Greenpro KSP Holding Group Company Limited (formerly known as KSP Holding Group Company Limited)
On
July 20, 2018, our wholly owned subsidiary, GVCL entered into a sale and purchase agreement with Mr. Prapakorn Saokliew and Ms.
Surapa Jamjang, each holding 45.13% and 45.12% shareholdings in KSP Holding Group Company Limited, respectively (collectively,
the “Sellers”). Pursuant to the agreement, GVCL agreed to acquire approximately 49% of the shareholdings of KSP Holding
Group Company Limited (“KSP”, renamed to Greenpro KSP Holding Group Company Limited on August 7, 2018) in exchange
for $363,930, made up of $75,000 in cash and 38,524 shares of the Company’s Common Stock valued at $288,930. The Company
also issued 578 shares of the Company’s Common Stock valued at $7.50 per share, or a total of $4,335, as a commission that
was also capitalized as cost of investment in KSP. KSP provides accounting, auditing and consulting services in Thailand. The
Company accounted for its investment in KSP under the equity method of accounting.
As
at December 31, 2018, the Company determined that its investment in KSP was impaired and recorded an impairment of unconsolidated
investment of $363,930. We currently hold approximately 48% of the issued and outstanding shares of KSP.
Acquisitions
of other investments
Name (Domicile) Acquisition Date Shareholding Business
1. Acquisition of Greenpro Trust Limited
On
March 30, 2015, our wholly owned subsidiary, GRBVI acquired 300,000 shares, representing approximately 8% of the issued and outstanding
shares of Greenpro Trust Limited, a Hong Kong company (“GTL”), from its shareholders at a price of HK$300,000 (approximately
$38,710) or HK$1 per share. GTL is principally engaged in provision of trusteeship, custodial and fiduciary services to clients
in Hong Kong.
On
April 13, 2016, another wholly owned subsidiary of the Company, Asia UBS Global Limited, a Belize company (“AUB”)
acquired 100,000 shares, representing approximately 3% of the issued and outstanding shares of GTL for HK$100,000 (approximately
$12,903) or HK$1 per share.
The
Company indirectly has an aggregate of approximately 11% interest in GTL with an investment value of $51,613 which was recorded
at cost and approximates its fair value. Messrs. Lee and Loke are common directors of GTL and the Company.
2. Acquisition of Agape ATP Corporation
On
April 14, 2017, GVCL acquired 17,500,000 shares of common stock of Agape ATP Corporation, a Nevada corporation (“Agape”),
par value of $0.0001 per share, for $1,750. Agape is principally engaged in providing health and wellness products and advisory
services to clients in Malaysia. Currently, we hold approximately 5% of the total outstanding shares of Agape.
3. Acquisition of Millennium Fine Art Inc.
On
June 29, 2020, the Company entered into a purchase and sale agreement with the Company’s subsidiary, Millennium Fine Art
Inc. (“MFAI”), pursuant to which the Company agreed to sell its 4% ownership interest in a 12.3 kilogram carved natural
blue sapphire (the “Millennium Sapphire”) to MFAI and MFAI agreed to acquire the 4% ownership of the Millennium Sapphire
from the Company. As consideration thereto, on July 1, 2020, MFAI issued 2,000,000 restricted shares of its Class B common stock
to the Company valued at $5,000,000 ($5 per share), in which 1,000,000 shares were retained by the Company and the other 1,000,000
shares were reserved as a dividend to the shareholders of the Company. The Company expects to distribute these 1,000,000 shares
to its shareholders in 2021. A gain on disposal of $1,000,000 was recorded at the Company level but was eliminated upon consolidation.
On
July 1, 2020, MFAI issued 19,200,000 restricted shares of its Class A common stock to the a majority owner of the Millennium Sapphire,
Mr. Daniel McKinney valued at $96,000,000 ($5 per share) to acquire the remaining 96% interest in the Millennium Sapphire. MFAI
is an investment company and has a 100% interest in the Millennium Sapphire.
As
of December 31, 2020, the Company owns 2,000,000 shares of Class B common stock of MFAI, in which 1,000,000 shares were retained
by the Company and recognized at historical cost of $4,000,000 under other investments, representing approximately 5% of the issued
and outstanding shares of MFAI and approximately 1% of MFAI’s total voting rights. The other 1,000,000 shares were reserved
as a dividend to the shareholders of the Company and the Company expects to distribute these 1,000,000 shares to its shareholders
in 2021.
4. Acquisition of Ata Plus Sdn. Bhd.
On
July 8, 2020, GVCL entered into an acquisition agreement with all of eight shareholders of Ata Plus Sdn. Bhd. and Ata Plus Sdn.
Bhd., a company incorporated in Malaysia and a Recognized Market Operator (RMO) by the Securities Commission of Malaysia (“APSB”).
Pursuant to the agreement, GVCL agreed to acquire 15% of the issued and outstanding share of APSB for a purchase price of $749,992.
The purchase price was paid by the Company issuing to the shareholders approximately 457,312 restricted shares of the Company’s
Common Stock, which was based on the average closing price of the Company’s Common Stock for the five trading days preceding
the date of the agreement, $1.64 per share, on November 18, 2020.
5. Acquisition of Global Leaders Corporation
On
August 30, 2020, GVCL entered into a subscription agreement with Global Leaders Corporation, a Nevada corporation (“GLC”)
to acquire 9,000,000 shares of common stock of GLC at a price of $900 or $0.0001 per share, representing approximately 6% of the
total issued and outstanding shares of GLC. GLC’s principal activities are providing training and consulting services to
corporate clients in Hong Kong and China.
6. Acquisition of First Bullion Holdings, Inc.
On
October 19, 2020, the Company entered into a stock purchase and option agreement with Mr. Tang Ka Siu Johnny and First Bullion
Holdings Inc., a British Virgin Islands company (“FBHI”). Pursuant to the agreement, the Company agreed to acquire
10% of the issued and outstanding shares of FBHI for a purchase price of $1,000,000 by issuing approximately 685,871 restricted
shares of the Company’s Common Stock to Mr. Tang, which was based on the average closing price of the Company’s Common
Stock for the five trading days preceding the date of the agreement, $1.458 per share.
On
December 11, 2020, the Company issued 685,871 shares of its Common Stock to two designees of Mr. Tang at $1.458 per share. FBHI
is in the business of banking, payment gateway, credit cards, debit cards, money lending, crypto trading and securities token
offerings, with corporate offices in the Philippines and Hong Kong.
Pursuant
to the agreement, Mr. Tang and FBHI also granted to the Company an option for 180 days following the date of the agreement to
purchase an additional 8% of the issued and outstanding shares of FBHI, at an agreed valuation of FBHI equal to $20,000,000. In
consideration of acquisition of the option, the Company agreed to issue 250,000 restricted shares of the Company’s Common
Stock to Mr. Tang, which shall constitute partial payment for the option should the Company elect to exercise the option. Pursuant
to the agreement, the purchase price of the option shall be based on the average closing price of the Company’s Common Stock
for the five trading days preceding the date of exercise of the option.
On
February 17, 2021, the Company exercised its option and FBHI issued to our wholly owned subsidiary, GVCL, 160,000 ordinary shares
of FBHI, comprising the additional 8% of the shares sold under the agreement valued at $20,000,000.
On
February 26, 2021, the Company issued an additional 342,592 restricted shares of its Common Stock to two designees of Mr. Tang
at $2.70 per share (valued at approximately $925,000).
7. Acquisition of New Business Media Sdn. Bhd
On
November 1, 2020, the Company entered into an acquisition agreement with Ms. Lee Yuet Lye and Mr. Chia Min Kiat, shareholders
of New Business Media Sdn. Bhd. New Business Media Sdn. Bhd., a Malaysian company involved in operating a Chinese media portal,
which provides digital news services focusing on Asian capital markets (“NBMSB”). NBMSB is one of the biggest Chinese
language digital business news networks in Malaysia and has readers from across South East Asia.
Pursuant
to the agreement, both Ms. Lee and Mr. Chia have agreed to sell to the Company an 18% equity stake in NBMSB in consideration of
a new issuance of 257,591 restricted shares of the Company’s Common Stock, valued at $411,120. The consideration was derived
from an agreed valuation of NBMSB of $2,284,000, based on its assets including customers, fixed assets, cash and cash equivalents,
liabilities as of November 1, 2020.
8. Acquisition of Adventure Air Race Company Limited
On
December 21, 2020, GVCL entered into a subscription agreement with Adventure Air Race Company Limited, a company incorporated
in Nevada and is principally engaged in promoting and managing an air race series (“AARC”). Pursuant to the agreement,
GVCL acquired 2,000,000 shares of common stock of AARC at a price of $200 or $0.0001 per share.
On
December 22, 2020, GVCL entered another subscription agreement with AARC to acquire an additional 996,740 shares of common stock
of AARC at a price of $249,185 or $0.25 per share.
The
Company in aggregate holds approximately 4% of the issued and outstanding shares of AARC.
9. Acquisition of Pentaip Technology Inc.
On
December 29, 2020, GVCL entered into a subscription agreement with Pentaip Technology Inc., a Nevada corporation (“PTI”)
to acquired 4,000,000 shares of common stock of PTI at a price of $400 or $0.0001 per share, representing 10% of the issued and
outstanding shares of PTI. PTI uses artificial intelligence (AI) to provide investors and traders with financial data.
Business
Overview
We
currently operate and provide a wide range of business solution services to small and medium-size businesses located in South-East
Asia and East Asia, with an initial focus on Hong Kong, China and Malaysia, and subsequently in Thailand and Taiwan. Our comprehensive
range of services includes cross-border business solutions, record management services, and accounting outsourcing services. Our
cross-border business services include, among other services, tax planning, trust and wealth management, cross border listing
advisory services and transaction services. As part of the cross-border business solutions, we have developed a package solution
of services (“Package Solution”) that can reduce business costs and enhance revenues.
We
also operate a venture capital business through Greenpro Venture Capital Limited, an Anguilla corporation. Our venture capital
business is focused on (1) establishing a business incubator for start-up and high growth companies to support such companies
during critical growth periods, which includes education and support services, and (2) searching for investment opportunities
in selected start-up and high growth companies, which we expect can generate significant returns to the Company. We expect to
target companies located in Asia including Hong Kong, Malaysia, China, Thailand and Singapore. We anticipate our venture capital
business will also engage in the purchase or lease of commercial properties in the same Asian region.
Our
Services
We
provide a range of services to our clients as part of the Package Solution that we have developed. We believe that our clients
can reduce their business costs and enhance their revenues by utilizing our Package Solution.
Cross-Border
Business Solutions/Cross-Border Listing Solutions
We
provide a full range of cross-border services to small to medium-sized businesses to assist them in conducting their business
effectively. Our “Cross-Border Business Solution” includes the following services:
● Providing bank loan referral services;
● Providing company secretarial services;
● Providing corporate finance consulting services;
● Providing due diligence investigations and valuations of companies;
● Advising clients regarding debt and company restructurings;
● Providing financial and liquidity analysis;
● Assisting in setting up cloud invoicing systems for clients;
● Assisting in liaising with investors for the purposes of raising capital;
● Assisting clients in payroll matters operated in our cloud payroll system;
● International tax planning in China;
● Advising on Trust and wealth management; and
● Transaction services.
There
is a growing market in Asia of companies who are seeking to go public and become listed on a recognized exchange in a foreign
jurisdiction. We see tremendous opportunity to the extent that this trend continues worldwide. With respect to cross border listing
advisory services, we are assisting private companies in their desire to list and trade on public exchanges, including the U.S.
NASDAQ and OTC Markets. The Jumpstart Our Business Startups Act, or JOBS Act, signed in 2012, eases the initial public offering
(“IPO”) process for “emerging growth companies” and reduces their regulatory burden, (2) improves the
ability of these companies to access capital through private offerings and small public offerings without SEC registration, and
(3) allows private companies with a substantial shareholder base to delay becoming a public reporting company.
Through
our cross-border listing advisory services, we seek to form the bridge between these companies seeking to conduct their IPO (or
in some cases, self-directed public offerings), and their goal of becoming a listed company on a recognized U.S. national
exchange, such as NASDAQ and the NYSE.
While
there are several alternatives for companies seeking to go public and trade on the U.S. OTC markets, we primarily focus on three
methods:
● Registration Statement on Form S-1
● Regulation A+ offering
● The Form 10 shell company
The
manner in which the OTC markets are structured provides companies the ability to “uplist” in the marketplace as they
provide better transparency. These OTC markets include:
We
act as a case reference for our clients, as we originally had our shares quoted in the OTC markets and subsequently “uplisted”
to The Nasdaq Stock Market LLC., a U.S. national securities exchange.
With
growing competition and increasing economic sophistication, we believe more companies need strategies for cross-border restructuring
and other corporate matters. Our plan is to bundle our Cross-Border Business Solution services with our cloud accounting solutions
and Accounting Outsourcing Services described below.
Accounting
Outsourcing Services
We
intend to develop relationships with professional firms from Hong Kong, Malaysia, China and Thailand that can provide company
secretarial, business centers and virtual offices, book-keeping, tax compliance and planning, payroll management, business valuation,
and wealth management services to our clients. We intend to include local accounting firms within this network to provide general
accounting, financial evaluation and advisory services to our clients. Our expectation is that firms within our professional network
will refer their international clients to us that may need our book-keeping, payroll, company secretarial and tax compliance services.
We believe that this accounting outsourcing service arrangement will be beneficial to our clients by providing a convenient, one-stop
firm for their local and international business and financial compliance and governance needs.
Our
Service Rates
We
intend to have a two-tiered rate system based upon the type of services being offered. We may impose project-based fees, where
we charge 10% -25% of the revenues generated by the client on projects that are completed using our services, such as transaction
projects, contract compliance projects, and business planning projects. We may also charge a flat rate fee or fixed fee based
on the estimated complexity and timing of a project when our professionals provide specified expertise to our clients on a project.
For example, for our Cross-Border Business Solutions services, we plan to charge our client a monthly fixed fee.
Our
Venture Capital Business Segment
Venture
Capital Investment
As
a result of our acquisition of Greenpro Venture Capital Limited (“GVCL”) in 2015, we entered the venture capital business
in Hong Kong with a focus on companies located in South-East Asia and East Asia, including Hong Kong, Malaysia, China, Thailand
and Singapore. Our venture capital business is focused on (1) establishing a business incubator for start-up and high growth companies
to support such companies during critical growth periods and (2) investment opportunities in select start-up and high growth companies.
We
believe that a company’s life cycle can be divided into five stages, including the seed stage, start-up stage, expansion
stage, mature stage and decline stage. We anticipate that most of a company’s funding needs will occur during these first
three stages.
We
intend for our business incubators to provide valuable support to young, emerging growth and potential high growth companies at
critical junctures of their development. For example, our incubators will offer office space at a below market rental rate. We
will also provide our expertise, business contacts, introductions and other resources to assist their development and growth.
Depending on each individual circumstance, we may also take an active advisory role in our venture capital companies including
board representation, strategic marketing, corporate governance, and capital structuring. We believe that there will be potential
investment opportunities for us in these start-up companies.
Our
business processes for our investment strategy in select start-up and high growth companies are as follows:
○ Trade sale (Acquisition): The entire company is sold to another company.
○ Secondary sale: The company’s firm sells only part of its shares.
Our
objective is to achieve a superior rate of return through the eventual and timely disposal of investments. We expect to look for
businesses that meet the following criteria:
● high growth prospects
● ambitious teams
● viability of product or service
● experienced management
● ability to convert plans into reality
● justification of venture capital investment and investment criteria
Our
Venture Capital Related Education and Support Services.
In
addition to providing venture capital services through GVCL, we also provide educational and support services that we believe
will be synergistic with our venture capital business. We have arranged seminars called the CEO & Business Owners Strategic
Session (“CBOSS”) in Malaysia and Singapore for business owners who are interested in the following:
● Developing their business globally;
● Expanding business with increased capital funding;
● Creating a sustainable SME business model;
● Accelerating the growth of the business; or
● Significantly increasing company cash flows.
The
objective of the CBOSS seminar is to educate the chief executive officers or business owners on how to acquire “smart capital”
and the considerations involved. The seminar includes an introduction to the basic concepts of “smart capital,” “wealth
and value creation,” recommendation and planning and similar topics. We believe that this seminar will synergistically support
our venture capital business segment.
China
Service Centers Expansion
Our
expansion strategy is to establish service centers in Northern and Southwest China, as well as the Greater Bay Area in Guangdong
Province (the Chinese government’s plan to link the cities of Hong Kong, Macau, Guangzhou, Shenzhen, Zhuhai, Dongguan, Foshan,
Zhongshan, Jiangmen, Zhaoqing and Huizhou (i.e. “2+9”) into an integrated economic and business hub). The centers
will cater to customers’ needs by providing and delivering professional, high quality service and assistance before, during,
and after the customer’s requirements are met. The expansion plan in each city would be based on various factors, such as
business opportunities, office property availability and job market conditions. We also intend to cooperate with different business
partners, utilizing their networks and resources in the target markets, to establish additional business opportunities.
Sales
and Marketing
We
plan to deploy three strategies to market the Greenpro brand: leadership, market segmentation and sales management process development.
Worldwide
Wealth Wisdom Development
Worldwide
Wealth Wisdom Development (“WWW”) is our marketing and promotional campaign, which is focused on building long-term
awareness of our brand. WWW targets the following markets (i) business owners and senior management; (ii) high and medium net
worth individuals in China and (iii) financial services providers, such as Certified Financial Planners in China. The campaign
involves sharing content, knowledge and information about wealth management, including wealth creation, wealth protection and
wealth succession.
The
objectives of WWW are:
3. To educate existing clients and potential prospects; and
4. To act as a channel of communication to gather market data and feedback.
Set
forth below are the marketing strategies we expect to develop.
Awareness
and Optimization
1. Email Blasts and E-Newsletter
blasts are one of the commonly used tactics to disseminate information. Our email database will be collected through leads generated
by online marketing (social media) and promotional events. Future event invitations and monthly/quarterly newsletters will be
sent to the email database in order to boost event participation and provide updates on Company development.
2. Media PR and News Releases
Our
post event information will be sent to news and media platforms as part of our publicity effort to increase public awareness about