UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

___________


FORM 10-K 

___________


  X.

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


For the Fiscal Year EndedAugust 31, 2011


(Mark One)

 X.

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

     For the Fiscal Year EndedAugust 31, 2010

      .

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE EXCHANGE ACT


For the transition period from ________ to ______

 

SINO PAYMENTS, INC.

(Exact name of registrant as specified in its charter)


Nevada

000-53537

26-3767331

(State or other jurisdiction

(Commission File Number)

(IRS Employer

of Incorporation)

 

Identification Number)


Unit T25, GF Bangkok Bank Building

18 Bonham Strand West

Sheung Wan, Hong Kong

(Address of principal executive offices)

(877) 205-6270

(Registrant’s Telephone Number)


Copy of all Communications to:

Carrillo Huettel, LLP

3033 Fifth Avenue, Suite 400

San Diego, CA 92103

Phone: 619-546-6100

Fax: 619-546-6060

Unit T25, GF Bangkok Bank Building

18 Bonham Strand West

Sheung Wan, Hong Kong

(Address of principal executive offices)

(877) 205-6270

(Registrant’s Telephone Number)


Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes     . No X.


Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes     . No X.


Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes X.No     .


Indicate by check mark whether the registrant is a shell company (as defined inhas submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 12b-2405 of Regulation S-T (§ 232.405 of this chapter) during the Exchange Act)preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes     . No      X  .


Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.     .

 

The aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant was $701,924 based upon the price $0.02 at which the common stock was last sold as of the last business day of the most recently completed second fiscal quarter, multiplied by the approximate number of shares of common stock held by persons other than executive officers, directors and ten percent stockholders of the registrant without conceding that any such person is an “affiliate” of the registrant for purposes of the federal securities laws.  Our common stock is quoted on the Over-The-Counter Bulletin Board under the symbol “SNPY.OB.”



Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.


Large accelerated filer

.

Accelerated filer

.

Non-accelerated filer

.(Do not check if a smaller reporting company)

Smaller reporting company

 X.

Large Accelerated Filer

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes     .

Accelerated Filer  

.


Non-Accelerated Filer  

.

Smaller Reporting Company

No X.


The aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant as of February 28, 2011 was $654,450.51 based upon the price ($0.013) at which the common stock was last sold as of the last business day of the most recently completed second fiscal quarter, multiplied by the approximate number of shares of common stock outstanding asheld by persons other than executive officers, directors and five percent stockholders of the registrant without conceding that any such person is an “affiliate” of the registrant for purposes of the federal securities laws.  


As of December 13, 2010 was 54,521,221.





19, 2011, there were 72,000,000shares of the registrant’s $0.00001 par value common stock issued and outstanding.


Documents incorporated by reference: None




SINO PAYMENTS, INC.2



Table of Contents


  

  

Page

  

PART I

 

  

  

 

Item 1

Business

45

Item 1A

Risk Factors

67

Item 1B

Unresolved Staff Comments

67

Item 2

Properties

7

Item 3

Legal Proceedings

7

Item 4

[Removed and Reserved]REMOVED AND RESERVED]

7

  

  

7

  

PART II

 

  

  

 

Item 5

Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

7

Item 6

Selected Financial Data

8

Item 7

Management's Discussion and Analysis of Financial Condition and Results of Operations

8

Item 7A

Quantitative and Qualitative Disclosures about Market Risk

11

Item 8

Financial Statements and Supplementary Data

12F-1

Item 9

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

1312

Item 9A

Controls and Procedures

1312

Item 9B

Other Information

1413

  

  

 

  

PART III

 

  

  

 

Item 10

Directors and Executive Officers and Corporate Governance

1513

Item 11

Executive Compensation

1716

Item 12

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

18

Item 13

Certain Relationships and Related Transactions

19

Item 14

Principal Accountant Fees and Services

1920

  

  

 

  

PART IV

 

  

  

 

Item 15

Exhibits

21




3



FORWARD-LOOKING STATEMENTS


NOTE REGARDING FORWARD LOOKING STATEMENTS

CAUTIONARY STATEMENT FOR PURPOSES OF THE "SAFE HARBOR" PROVISIONS

OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995


This Annual Report on Form 10-K contains historical information as well as forward looking statements. Statements looking forward in time are included in this Annual Report pursuant toforward-looking statements within the safe harbor provisionsmeaning of Section 27A of the Private Securities Litigation Reform Act of 1995. Such1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These forward-looking statements involve knownare not historical facts but rather are based on current expectations, estimates and unknown risksprojections. We may use words such as “anticipate,” “expect,” “intend,” “plan,” “believe,” “foresee,” “estimate” and uncertainties that may cause our actual results in future periodsvariations of these words and similar expressions to be materially different from anyidentify forward-looking statements. These statements are not guarantees of future performance suggested herein.  We wishand are subject to caution readers that in additioncertain risks, uncertainties and other factors, some of which are beyond our control, are difficult to the important factors described elsewhere in this Form 10-K, the following forward looking statements, among others, sometimes have affected, and in the future could affect, our actual resultspredict and could cause our actual consolidated results during 2010 and beyond, 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;

·

Economic, competitive, demographic, business and other conditions in our local and regional markets;

·

Changes or developments in laws, regulations or taxes in our industry;

·

Actions taken or omitted to be taken by third parties including our suppliers and competitors, as well as legislative, regulatory, judicial and other governmental authorities;

·

Competition in our industry;

·

The loss of or failure to obtain any license or permit necessary or desirable in the operation of our business;

·

Changes in our business strategy, capital improvements or development plans;

·

The availability of additional capital to support capital improvements and development; and

·

Other risks identified in this report and in our other filings with the Securities and Exchange Commission or the SEC.

This 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 report are made as of the date of this report and should be evaluated with consideration of any changes occurring after the date of this 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, made bywhether as a result of new information, future events or on our behalf.otherwise.


Use of Term


Except as otherwise indicated by the context, references in this report to “Company,” “SNPY,” “we,”“Company”, “SNPY”, “we”, “us” and “our” are references to Sino Payments, Inc. All references to “USD” or United States Dollars refer to the legal currency of the United States of America.






4



PART I


ITEM 1.

BUSINESS


Corporate History


We were incorporated in the State of Nevada on June 26, 2007 under the name China Soaring Inc. Then on November 26, 2008, we changed the Company's name to Sino Payments, Inc. We operate as a credit card processing and merchant-acquiring services company that provides credit card clearing services to merchants and financial institutions in China. Since inception, we have made significant steps to develop and further our business plan, including creating our Global Processing Platform (“SinoPay GPP”) and establishing our website, www.sinopayments.com.  We are a credit card processing and merchant-acquiring services company that provides credit card clearing services to merchants and financial institutions in China.  


The Company’s objective is to be a provider of IP (Internet Protocol)Internet Protocol (IP) processing services in Asia to bankcard-acceptingbank card-accepting merchants. We market our services to local merchants with regional retail locations across Asia Pacific as potential customers of its IP and related credit card and debit card processing systems. We offer interoperability through a highly-efficient infrastructure and exceptional knowledge of the IP processing market through our SinoPay GPP platform. The SinoPay GPP system facilitates the processing of all credit card types (Visa/MC/AMEX/Diners/Discover/JCB) and will be integrated with China UnionPay to provide processing of UnionPay Debit cards in China. Sino Payments intends to deploy the SinoPay GPP platform throughout Asia with a focus on China, Hong Kong, Thailand, Philippines, Malaysia, Korea, and Japan.


Current Strategy


The Company’s strategy is to market credit card processing services to retail merchants in targeted markets, offer its merchant-acquiring base to selected banks, provide support using world-class technology platforms, and maximize strategic partnerships to accelerate market development. We provide credit and debit card processing services to target companies that maintain regional retail store operations in Asia, such as large department stores, regional supermarket chains, and other retailers with a presence in multiple markets in Asia, and specifically China. Our focus continues to be on multinational retailers based in China and Hong Kong with later expansion into other Asian markets as we further develop. Development objectives have been selected and an organization for executing those objectives has been put in place.


Corporate Developments


On January 13, 2010, we signed an agreement with Valitor (the "Valitor Agreement") as an agent to refer European credit and debit card accepting merchants. As a result of the Valitor Agreement, we are now able to market to and sign up both ecommerce and physical store merchants throughout Europe with a single seamless data processing platform.


On January 19, 2010, we signed an agreement with Payvision, one of the leading international payment solutions providers for the card-not-present marketplace, as an agent for the sale of credit and debit card merchant accounts.


On June 4, 2010, the Company entered into a Line of Credit Note (the “Note”) with Moon Gate Limited. Under the terms of the Note, the Company may borrow, from time to time, up to the maximum principal amount of the Note, which is $150,000, for general working capital. The minimum advance under the Note is $1,000 and the interest rate of the Note is 8%. The Note is unsecured and all borrowings plus interest are due on demand.


On September 24, 2010, we executed a Letter of Intent with an existing partner, TAP Group, whereby the parties agreed to form a joint venture company in Hong Kong that will provide regional retailers throughout Asia with card processing services.


Regulatory Requirements


We do not need to pursue nor satisfy any special licensing or regulatory requirements before establishing or delivering our intended services other than requisite business licenses. If new government regulations, laws, or licensing requirements are passed that would cause us to restrict or eliminate delivery of any of our intended services, then our business would suffer. For example, if we were required to obtain a government issued license for the purpose of providing coaching and consulting services, then we could not guarantee that we would qualify for such license. If such a licensing requirement existed, and we were not able to qualify, then our business would suffer. Presently, to the best of our knowledge, no such regulations, laws, or licensing requirements exist or are likely to be implemented in the near future that would reasonably be expected to have a material impact on or sales, revenues, or income from our business operations.







Marketing


Our services are promoted by our CEO and President, Mr. Matthew Mecke. He is responsible for providing credit and debit card processing services to retail stores located in Asia. Mr. Mecke and the other directors of the Company bring extensive international and public company experience and have an extensive track record of successful start-ups. Most importantly, the directors are well-known and respected in the IP processing industry throughout the Asia Pacific region.


We anticipate utilizing several other marketing activities in our attempt to make our services known to corporations and attract clientele. These marketing activities will be designed to inform potential clients about the benefits of using our services and will include the following: development and distribution of marketing literature; direct mail and email; advertising; promotion of our web site; and industry analyst relations.


Revenue


We will generate revenue, if any, from three sources:


1.1)

Term Fee - By charging a fee for given services;

2.

2)

Fixed Fee - By charging a fixed fee;

3.


3)

Transaction Fee - By charging a transaction fee for processing credit or debit card transactions.


We have developed a database of all our clients so that we can anticipate various needs and continuously build and expand our advisory services. There is no assurance that we will be able to interest any retail store operators in our target market.


Insurance


We do not maintain any insurance and do not intend to maintain insurance in the future. Because we do not have any insurance, if we are made a party to a liability action, we may not have sufficient funds to defend the litigation. If that occurs a judgment could be rendered against us that could cause us to cease operations.


Network Security


We will, if successful, compile and maintain a large database of information relating to our merchants and their transactions. We intend to focus significant resources on maintaining a high level of security in order to protect the information of our merchants and their customers.


Competition


The payment processing industry is highly competitive. We compete with other providers of payment processing services on the basis of the following factors: quality of service; reliability of service; ability to evaluate, undertake and manage risk; speed in approving merchant applications; and price.


We will be competing with both small and large companies in providing payment processing and related services to a wide range of merchants. Our competitors sell their services either through a direct sales force, generally concentrating on larger accounts, or through Independent Sales Organizations, telemarketers or banks, generally concentrating on smaller accounts. There are a number of large payment processors, including First Data Corporation, Bank of America Corporation, Global Payments Inc., Fifth Third Bank, Chase Paymentech Solutions and Elavon, Inc., a subsidiary of U.S. Bancorp, that serve a broad market spectrum from large to small merchants; further, certain of these provide banking, ATM, and other payment-related services and systems in addition to bank card payment processing. There are also a large number of smaller payment processors that provide various services to small- and medium-sized merchants.


Some of our competitors have substantially greater capital resources than we have and operate as subsidiaries of financial institutions or bank holding companies, which may allow them on a consolidated basis to own and conduct depository and other banking activities that we do not have the regulatory authority to own or conduct. Since they are affiliated with financial institutions or banks, these competitors do not incur the costs associated with being sponsored by a bank for registration with card networks and they can settle transactions quickly for their own merchants. We do not, however, currently contemplate acquiring or merging with a financial institution in order to increase our competitiveness.







Offices


Our offices are currently located at Unit T25, GF Bangkok Bank Building, 18 Bonham Strand West, Sheung Wan, Hong Kongand our telephone number is (877) 205-6270. This is the rental office that we maintain where we sublet desk space, telephone, office services and space for computer equipment. As of the date of this filing, we have not sought to move or change our office site.


Employees; Identification of Certain Significant Employees


Matthew Mecke, our chief executive officer and director devotes approximately 60 hours a week of his time to our operations. We currently have no other employees, other than our officers and directors. We also frequently use third party consultants to assist in the completion of various projects. Third parties are instrumental to keep the development of projects on time and on budget.


Government Regulation


We are not currently subject to direct Chinese, federal, state or local regulationregulations other than regulations applicable to businesses generally or directly applicable to electronic commerce. However, the Internet is increasingly popular. As a result, it is possible that a number of laws and regulations may be adopted with respect to the Internet. These laws may cover issues such as user privacy, freedom of expression, pricing, content and quality of products and services, taxation, advertising, intellectual property rights and information security. Furthermore, the growth of electronic commerce may prompt calls for more stringent consumer protection laws. Several states have proposed legislation to limit the uses of personal user information gathered online or require online services to establish privacy policies.




We are not certain how business may be affected by the application of existing laws governing issues such as property ownership, copyrights, encryption and other intellectual property issues, taxation, libel, obscenity and export or import matters. The vast majority of such laws were adopted prior to the advent of the Internet. As a result, they do not contemplate or address the unique issues of the Internet and related technologies. Changes in laws intended to address such issues could create uncertainty in the Internet market place. Such uncertainty could reduce demand for services or increase the cost of doing business as a result of litigation costs or increased service delivery costs. In addition, because our services are available over the Internet in multiple states and foreign countries, other jurisdictions may claim that we are required to qualify to do business in each such state or foreign country. We are qualified to do business only in Nevada .Nevada. Our failure to qualify in a jurisdiction where it is required to do so could subject us to taxes and penalties. It could also hamper our ability to enforce contracts in such jurisdictions. The application of laws or regulations from jurisdictions whose laws currently apply to our business could have a material adverse affect on our business, results of operations and financial condition.


WHERE YOU CAN GET ADDITIONAL INFORMATION


We file annual, quarterly and current reports, proxy statements and other information with the SEC. You may read and copy our reports or other filings made with the SEC at the SEC’s Public Reference Room, located at 100 F Street, N.W.N.E., Washington, DC 20549. You can obtain information on the operationoperations of the Public Reference Room by calling the SEC at 1-800-SEC-0330. You can also access these reports and other filings electronically on the SEC’s web site,www.sec.gov.


In addition, certain of our SEC filings, including our annual reports on Form 10-K, our quarterly reports on Form 10-Q and current reports on Form 8-K, and amendments to these reports, can be viewed and printed from the investor information section of our website atwww.sinopayments.com, as soon as reasonably practicable after filing with the SEC. Certain materials relating to our corporate governance, including our senior financial officers’ code of ethics, are also available in the investor relations section of our website.


The information on the websites listed above, is not and should not be considered part of this Report on Form 10-K and is not incorporated by reference in this document. These websites are, and are only intended to be, inactive textual references.


ITEM 1A.

RISK FACTORS


We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.


ITEM 1B

1B. UNRESOLVED STAFF COMMENTS


None.







ITEM 2.

PROPERTIES


    We do not own any real estate. Our offices are currently located at Unit T25, GF Bangkok Bank Building, 18 Bonham Strand West, Sheung Wan, Hong Kongand our telephone number is (877) 205-6270. This is the rental office that we maintain where we sublet desk space, telephone, office services and space for computer equipment. As of the date of this filing, we have not sought to move or change our office site.  Currently, we do not own any real property.


ITEM 3.

LEGAL PROCEEDINGS


We know of no material, existing or pending legal proceedings against our company, nor are we involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which our director, officer or any affiliates, or any registered or beneficial shareholder, is an adverse party or has a material interest adverse to our interest.


ITEM 4.

[REMOVED [REMOVED AND RESERVED]



PART II


ITEM 5.

MARKET FOR THE COMPANY’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES


Common Stock


Our common stock is currently quoted on the OTC Bulletin Board. Our common stock has been quoted on the OTC Bulletin Board since October 29, 2008, and we originally traded under the symbol “CHIJ.OB.” On December 16,17, 2008, we began trading under our current symbol of “SNPY.OB.” Because we are quoted on the OTC Bulletin Board, our securities may be less liquid, receive less coverage by security analysts and news media, and generate lower prices than might otherwise be obtained if they were listed on a national securities exchange.


The following table sets forth the high and low bid quotationsprices for our common stockCommon Stock per fiscal quarter as reported by the OTCBB based on the OTC Bulletin Boardour fiscal year end August 31. These prices represent quotations between dealers without adjustment for the periods indicated.retail mark-up, markdown or commission and may not represent actual transactions.  


2010 Fiscal Year

  

High Bid 

  

Low Bid 

Fourth Quarter: 6/1/10 to 8/31/10 

$

0.06 

$

0.02 

Third Quarter: 3/1/10 to 5/31/10 

$

0.07 

$

0.02 

Second Quarter: 12/1/09 to 2/28/10 

$

0.05 

$

0.02 

First Quarter: 9/1/09 to 11/30/09 

$

0.27 

$

0.03 


Reports to Security Holders


We are a reporting company pursuant to the Securities and Exchange Act of 1934.  As such, we provide an annual report to our security holders, which will include audited financial statements, and quarterly reports, which will contain unaudited financial statements.

Fiscal Quarter

High

Low

First Quarter (Sept. 1, 2010 – Nov. 30, 2010)

$0.0395

$0.0085

Second Quarter (Dec. 1, 2010 – Feb. 28, 2011)

$0.031

$0.011

Third Quarter (Mar. 1, 2011 – May 31, 2011)

$0.025

$0.0076

Fourth Quarter (June 1, 2011 – Aug. 31, 2011)

$0.028

$0.005


Record Holders


As of August 31, 2010, there2011, an aggregate of 72,000,000 shares of our Common Stock were 34issued and outstanding and were owned by approximately 33 holders of record, based on information provided by our transfer agent.

Recent Sales of ourUnregistered Securities


On November 24, 2011, the Company entered into a Share Exchange Agreement (the “Share Exchange Agreement”) by and among TIG Investments Group Limited, a Hong Kong Limited Company (“TIG”), and a majority of the stockholders of TIG (the “TIG Majority Stockholders”), whereby TIG shall issue 49 shares of Tap ePayment Services (HK) Limited (“TeP”) and other payment processing and financial framework project assets as set forth in the Share Exchange Agreement in exchange for fifty percent (50%) of  the issued and outstanding shares of common stock.stock of the Company.  A true and correct copy of the Share Exchange Agreement is attached hereto as Exhibit 10.13 and is incorporated herein by reference.


Re-Purchase of Equity Securities


None.

 

Dividends


We have not paid any cash dividends on our common stockCommon Stock since inception and presently anticipate that all earnings, if any, will be retained for development of our business and that no dividends on our common stockCommon Stock will be declared in the foreseeable future. Any future dividends will be subject to the discretion of our Board of Directors and will depend upon, among other things, future earnings, operating and financial condition, capital requirements, general business conditions and other pertinent facts. Therefore, there can be no assurance that any dividends on our common stockCommon Stock will be paid in the future.







Securities Authorized for Issuance Under Equity Compensation Plans

 

On July 24, 2009, our Board of Directors authorized the 2009 Stock Incentive Plan (the "2009 Plan") pursuant to which we set aside 10,000,000 shares of our common stock.Common Stock to be issued under the 2009 Plan. Our Board of Directors adopted the 2009 Plan to permit us to offer to our employees, officers, directors and consultants whose past, present and/or potential contributions to our company have been, are or likely to be, important to our success, an opportunity to acquire a proprietary interest in the Company. We believe that the types of long-term incentive awards that may be provided under the 2009 Plan will enable us to respond to changes in compensation practices, tax laws, accounting regulations and the size and diversity of our businesses.business.

Recent Sales of Unregistered Securities

None, other than those set forth in the Form 8-Ks filed during the year ended August 31, 2010, those set forth elsewhere in this Report, and those filed on Form 8-Ks subsequent to August 31, 2010 and through the date of this Report.


ITEM 6.

SELECTED FINANCIAL DATA


We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.


ITEM 7.

MANAGEMENT’S    MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSOPERATION


This Annual Report on Form 10-K contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). 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 guarantees of 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. You should read this report completel ycompletely and with the understanding that actual future results may be materially different from what we expect. The forward lookingforward-looking statements included in this report are made as of the date of this report and should be evaluated with consideration of any changes occurring after the date of this 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.




RESULTS OF OPERATIONS


Balance SheetWorking Capital


 

August 31,

2011

$

August 31,

2010

$

Current Assets

-

10

Current Liabilities

118,508

186,648

Working Capital (Deficit)

(118,508)

(186,638)

As at August 31, 2010, the Company had total assets of $10 compared with total assets of $777 as at August 31, 2009.  The decrease in total assets is attributed to use of the cash during the fiscal year as the Company obtained minimal financing from debt and equity to support its day-to-day operations.  


The Company had total liabilities of $186,648 as at August 31, 2010 compared with $93,113 as at August 31, 2009.  The increase in liabilities is attributed to increases in accounts payable and accrued liabilities of $95,135 due to the Company’s lack of sufficient cash flow to settle outstanding obligations as they became due, and $10,282 of convertible notes offset by decreases in amounts to related parties of $11,882, which were settled by issuances of common shares during the year.    Cash Flows


During the year ended August 31, 2010, the Company did issue 7,146,575 common shares including 6,314,560 common shares with a fair value of $169,874 in exchange for services, and 832,015 common shares with a fair value of $38,665 to settle outstanding debentures issued by the Company.  Furthermore, the Company cancelled and retired 1,120,000 common shares that were previously issued.  


For the year ended August 31, 2010, the Company incurred a net loss of $305,779 compared with $548,174 for the year ended August 31, 2009.  

 

Year ended

August 31,

2011

$

Year ended

August 31,

2010

$

Cash Flows from (used in) Operating Activities

(20,120)

(33,019)

Cash Flows from (used in) Financing Activities

20,110

33,022

Net Increase (decrease) in Cash During Period

(10)

3


Operating Revenues


We have not generated any revenues since inception.







Operating Expenses


During the year ended August 31, 2011, and August 31, 2010, the Company incurred operatingdid not record any revenues.


Operating Expenses and Net Loss


Operating expenses totaling $296,884 compared with $547,983 for the year ended August 31, 2009.2011 was $213,930 compared with $296,884 for the year ended August 31, 2010. The decrease in operating expensesexpenditures was attributed to limited cash flows that affected the fact thatability for the Company had $446,270 of stock-based compensation in 2009to continue to increase their operating expenditures with respect to their credit card processing business.  


Net loss for the year ended August 31, 2011 was $231,113 compared with only $162,575 in$305,779 for the year ended August 31, 2010.  Overall, there were no substantial changes in the level or type of operations incurred byIn addition to operating losses, the Company forincurred $1,315 of interest expense during the current year.    


Net Loss


Duringyear ended August 31, 2011 compared to $925 for the year ended August 31, 2010 and $15,868 loss on settlement of outstanding accounts payable and debt with the Company incurred a net lossissuance of $305,779common shares compared with a net loss on settlement of $548,174 fordebt of $7,970 during the year ended August 31, 2009.  The decrease in net loss is attributed to lower stock-based compensation expense in 2010 compared to 2009.2010.  


Liquidity and Capital Resources


As at August 31, 2010,2011, the Company’s cash balance and total assets were $nil compared to $10 as at August 31, 2010.  The decrease in cash and total assets were due to limited cash flows that were available to the Company during the year.   


As at August 31, 2011, the Company had a cash balancetotal liabilities of $10 and$118,508 compared with total liabilities of $186,648 as at August 31, 2010.  The decrease in total liabilities is attributed to the fact that the Company settled outstanding obligations with the issuance of common shares during the year.


As at August 31, 2011, the Company had a working capital deficit of $186,548$118,508 compared with a cash balance of $7 and working capital deficit of $93,106$186,638 as at August 31, 2009.2010.  The increasedecrease in working capital deficit iswas attributed to the operating expenditures incurredsettlement of accounts payable and notes payable with the issuance of common shares during the year and the lack of sufficient cash financing by the Company to settle the obligations incurred.year.    


Cashflow from Operating Activities


During the year ended August 31, 2010,2011, the Company used $33,019$20,120 of cash flow for operating activities compared with $33,101to the use of $33,019 of cash for operating activities during the year ended August 31, 2009.  Overall, there were no substantial changes2010. The decrease in cash used for operating activities was due to limited cash flows as the levelCompany had minimal cash financing during the year and settled a significant amount of operations inoutstanding liabilities with the current year as compared to prior year.issuance of common shares.  




Cashflow from Investing ActivityActivities


During the years ended August 31, 20102011 and 2009,2010, the Company did not have any cash transactions related to investing activities.


Cashflow from Financing Activities


During the year ended August 31, 2010,2011, the Company was provided $33,022received $20,110 of cash flow from financing sourcesactivities compared with $27,910to $33,022 for the year ended August 31, 2009.  The increase in2010.  During the proceeds from financing activities were mainly attributed to the fact thatyear ended August 31, 2011, the Company received $30,535 in cash financingnet proceeds of $3,982 from issuance of promissory notes which was offset bycompared with $30,535 during the fact thatyear ended August 31, 2010.  Furthermore, the Company received $7,200 of proceeds from comvertible notes in 2009 compared to $nil in the 2010, and also received $18,223 less cash$2,487 from related parties asduring the year ended August 31, 2010 compared to prior year.


$16,128 year ended August 31, 2011.        

 

Off-Balance Sheet Arrangements


We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.


Going Concern


We have not attained profitable operations and are dependent upon obtaining financing to pursue any extensive activities. For these reasons, our auditors stated in their report on our audited financial statements that they have substantial doubt that we will be able to continue as a going concern without further financing.


Future Financings


We will continue to rely on equity sales of our common shares in order to continue to fund our business operations. Issuances of additional shares will result in dilution to existing stockholders. There is no assurance that we will achieve any additional sales of the equity securities or arrange for debt or other financing to fund planned acquisitions and exploration activities.







Critical Accounting Policies


Our financial statements and accompanying notes have been prepared in accordance with United States generally accepted accounting principles applied on a consistent basis. The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods.


We regularly evaluate the accounting policies and estimates that we use to prepare our financial statements. A complete summary of these policies is included in note (1) of the notes to our financial statements. In general, management's estimates are based on historical experience, on information from third party professionals, and on various other assumptions that are believed to be reasonable under the facts and circumstances. Actual results could differ from those estimates made by management.


Use of Estimates


The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes for the reporting period. Significant areas requiring the use of management estimates relate to the valuation of its mineral leases and claims and our ability to obtain final government permission to complete the project.


Stock-Based Compensation


The Company records stock-based compensation in accordance with ASC 718,Compensation – Stock Compensation, using the fair value method. All transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable. Equity instruments issued to employees and the cost of the services received as consideration are measured and recognized based on the fair value of the equity instruments issued.




RecentRecently Issued Accounting Pronouncements


In August 2009, FASB issued an amendment to theThe Company has implemented all new accounting standards related to the measurement of liabilitiespronouncements that are recognized or disclosed at fair value on a recurring basis. This standard clarifies how a company should measure the fair value of liabilities and that restrictions preventing the transfer of a liability should not be considered as a factor in the measurement of liabilities within the scope of this standard. This standard is effective for the Company on October 1, 2009. The adoption of this amendmenteffect. These pronouncements did not have aany material effect on the Company’s consolidated financial statements.


In October 2009, FASB issued an amendment to the accounting standards related to the accounting for revenue in arrangements with multiple deliverables including how the arrangement consideration is allocated among delivered and undelivered items of the arrangement. Among the amendments, this standard eliminated the use of the residual method for allocating arrangement considerations and requires an entity to allocate the overall consideration to each deliverable based on an estimated selling price of each individual deliverable in the arrangement in the absence of having vendor-specific objective evidence or other third party evidence of fair value of the undelivered items. This standard also provides further guidance on how to determine a separate unit of accounting in a multiple-deliverable revenue arrangement and expands the disclosure requirements about the judgments made in applying the estimated selling price method and how those judgments affect th e timing or amount of revenue recognition. This standard, for which the Company is currently assessing the impact, will become effective on January 1, 2011.


In October 2009, the FASB issued an amendment to the accounting standards related to certain revenue arrangements that include software elements. This standard clarifies the existing accounting guidance such that tangible products that contain both software and non-software components that function together to deliver the product’s essential functionality, shall be excluded from the scope of the software revenue recognition accounting standards. Accordingly, sales of these products may fall within the scope of other revenue recognition standards or may now be within the scope of this standard and may require an allocation of the arrangement consideration for each element of the arrangement. This standard, for which the Company is currently assessing the impact, will become effective on January 1, 2011.


In January 2010, the FASB issued an amendment to ASC 505, Equity, where entities that declare dividends to shareholders that may be paid in cash or shares at the election of the shareholders are considered to be a share issuance that is reflected prospectively in EPS, and is not accounted for as a stock dividend.  This standard is effective for interim and annual periods ending on or after December 15, 2009 and is to be applied on a retrospective basis.  The adoption of this standard is not expected to have a significant impact on the Company’s financial statements.  statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.


In January 2010, the FASB issued an amendment to ASC 820, Fair Value Measurements and Disclosure, to require reporting entities to separately disclose the amounts and business rationale for significant transfers in and out of Level 1 and Level 2 fair value measurements and separately present information regarding purchase, sale, issuance, and settlement of Level 3 fair value measures on a gross basis.  This standard, for which the Company is currently assessing the impact, is effective for interim and annual reporting periods beginning after December 15, 2009, with the exception of disclosures regarding the purchase, sale, issuance, and settlement of Level 3 fair value measures which are effective for fiscal years beginning after December 15, 2010.  Contractual Obligations







In February 2010,We are a smaller reporting company as defined by Rule 12b-2 of the FASB issued ASU No. 2010-09 “Subsequent Events (ASC Topic 855) “AmendmentsSecurities Exchange Act of 1934 and are not required to Certain Recognition and Disclosure Requirements” (“ASU No. 2010-09”). ASU No. 2010-09 requires an entity that is an SEC filer to evaluate subsequent events throughprovide the date that the financial statements are issued and removes the requirement for an SEC filer to disclose a date, in both issued and revised financial statements, through which the filer had evaluated subsequent events. The adoption ofinformation under this standard did not have a significant impact on the Company’s consolidated financial statements.item.


In March 2010, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update 2010-11 (ASU 2010-11), “Derivatives and Hedging (Topic 815): Scope Exception Related to Embedded Credit Derivatives.”  The amendments in this update are effective for each reporting entity at the beginning of its first fiscal quarter beginning after June 15, 2010.  Early adoption is permitted at the beginning of each entity’s first fiscal quarter beginning after issuance of this update.  The adoption of this standard is not expected to have an impact on the Company’s consolidated financial statements.


ITEM 7A.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK


We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.




11



ITEM 8.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA











SINO PAYMENTS INC.

(formerly China Soaring, Inc.)

(A Development Stage Company)


Financial Statements



For the Years Ended August 31, 2011 and 2010


Index

Report of Independent Registered Public Accounting Firm

F-1

Report of Independent Registered Public Accounting Firm-MaloneBailey, LLP

F-2

Balance Sheets

F-3

Statements of Operations

F-4

Statements of Cash Flows

F-5

Statement of Stockholders’ Equity (Deficit)

F-6

Notes to the Financial Statements

F-7













Report of Independent Registered Public Accounting Firm

F-2

Balance Sheets

F-3

Statements of Operations

F-4

Statements of Cash Flows

F-5

Notes to the Financial Statements

F-6



F-1



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM



To the Shareholders, Audit Committee and Board of Directors

Sino Payments Inc.

(A Development Stage Company)


We have audited the accompanying balance sheetsheets of Sino Payments Inc. (a Development Stage Company) as of August 31, 2011 and 2010, and the related statements of operations, stockholders' deficit and cash flows for the yearyears then ended and accumulated from June 26, 2007 (Date of Inception) to August 31, 2010.2011. These financial statements are the responsibility of the Company'scompany's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audit.


We conducted our auditaudits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal controls over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management as well as evaluating the overall consolidated financ ialfinancial statement presentation. We believe that our auditaudits provide a reasonable basis for our opinion.


In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Sino Payments Inc. as of August 31, 2011 and 2010 and the results of their operationsoperation and their cash flows for the periods described above, in conformity with U.S. generally accepted accounting principles.


The accompanying financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has suffered losses from operations and there is substantial doubt about its ability to continue as a going concern. The financial statements do not include any adjustments that might reflect these uncertainties.


/s/M&K CPAS, PLLC

Houston, Texas


­­­­­­­­December 14, 2010


21, 2011






F-2


REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM



TO THE BOARD OF DIRECTORS


SINO PAYMENTS, INC.

(DEVELOPMENT STAGE COMPANY)

Sheung Wan, Hong Kong

We have audited the accompanying balance sheet of Sino Payments Inc.(a development stage company) as of August 31, 2009 and the related statement of expenses, stockholders' equity(deficit), and cash flows for the year ended August 31, 2009, and for the period from inception (June 26, 2007) through August 31, 2009. These financial statements are the responsibility of Sino Payments Inc. Our responsibility is to express an opinion on these financial statements based on our audits.


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 an audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluati ng 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 financial position of Sino Payments Inc as of August 31, 2009 and the results of its operations and its cash flows for the year ended August 31, 2009 and the period from inception through August 31, 2009 in conformity with accounting principles generally accepted in the United States of America.




/s/MALONE BAILEY, LLP.


MALONE BAILEY, LLP

WWW.MALONE-BAILEY.COM

HOUSTON, TX

December 14, 2009



F-2







SINO PAYMENTS, INC.

(formerly China Soaring, Inc.)

(A Development Stage Company)

Balance Sheets



August 31,

2010

$

August 31,

2009

$

 

 

August 31,

2011

$

August 31,

2010

$

ASSETS

 

 

 

 

 

 

 

 

Current Assets

 

 

 

 

 

 

 

 

Cash

 10

 7

10

 

 

 

 

Total Current Assets

 10

 7

 

 

Other assets

 –

 770

 

 

Total Assets

 10

 777

10

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ DEFICIT

 

 

 

 

 

 

 

 

Current Liabilities

 

 

 

 

 

 

 

 

Bank indebtedness

9

Accounts payable

 73,142

 13,657

95,709

73,142

Accrued liabilities

 90,346

 54,696

1,786

90,346

Due to related party

 8,828

 20,710

4,876

8,828

Convertible notes payable

 14,332

 4,050

Loan payable

16,128

14,332

 

 

 

 

Total Liabilities

 186,648

 93,113

118,508

186,648

 

 

 

 

Stockholders’ Deficit

 

 

 

 

 

 

 

 

Preferred stock, 100,000,000 shares authorized, $0.00001 par value;

no shares issued and outstanding

 –

 –

 

 

 

 

Common stock, 100,000,000 shares authorized, $0.00001 par value;

54,521,221 and 48,494,646 shares issued and outstanding, respectively

 545

 485

Common stock, 100,000,000 shares authorized, $0.00001 par value;

72,000,000 and 54,521,221 shares issued and outstanding, respectively

720

545

 

 

 

 

Additional paid-in capital

 741,932

 530,515

1,041,000

741,932

 

 

 

 

Deficit accumulated during the development stage

 (929,115)

 (623,336)

(1,160,228)

(929,115)

 

 

 

 

Total Stockholders’ Deficit

 (186,638)

 (92,336)

(118,508)

(186,638)

 

 

 

 

Total Liabilities and Stockholders’ Deficit

 10

 777

10




(The accompanying notes are an integral part of these financial statements)


F-3



SINO PAYMENTS, INC.

(A Development Stage Company)

Statements of Operations




For the Year Ended

August 31,

2011

$

For the Year Ended

August 31,

2010

$

Accumulated from

June 26, 2007

(Date of Inception)

to August 31,

2011

$

 

 

 

 

Revenue

 

 

 

 

Operating Expenses

 

 

 

 

 

 

 

General and administrative

203,996

296,884

1,122,804

Foreign exchange loss (gain)

(66)

(66)

Loss on joint venture

10,000

10,000

 

 

 

 

Total Operating Expenses

213,930

296,884

1,132,738

 

 

 

 

Operating loss

(213,930)

(296,884)

(1,132,738)

 

 

 

 

Other Expense

 

 

 

 

 

 

 

Interest expense

(1,315)

(925)

(3,652)

Loss on settlement of debt

(15,868)

(7,970)

(23,838)

 

 

 

 

Net loss

(231,113)

(305,779)

(1,160,228)

 

 

 

 

Net loss per share, basic and diluted

(0.00)

(0.01)

 

 

 

 

 

Weighted average number of shares outstanding

61,148,067

51,746,097

 



(The accompanying notes are an integral part of these financial statements)


F-4



SINO PAYMENTS, INC.

(A Development Stage Company)

Statements of Cash Flows



 

For the Year Ended

August 31,

2011

$

For the Year Ended

August 31,

2010

$

Accumulated from

June 26, 2007 (Date of Inception)

to August 31,

2011

$

 

 

 

 

Operating Activities

 

 

 

 

 

 

 

Net loss

(231,113)

(305,779)

(1,160,228)

 

 

 

 

Adjustments to reconcile net loss to net cash used

  In operating activities:

 

 

 

Accretion expense

3,150

3,600

Loss on settlement of debt

15,868

7,970

23,838

Loss on joint venture

10,000

10,000

Shares issued for services

29,150

162,575

637,995

Warrants issued for services

2,938

2,938

 

 

 

 

Changes in operating assets and liabilities:

 

 

 

Other assets

770

Accounts payable and accrued liabilities

155,975

95,357

319,685

 

 

 

 

Net cash used in operating activities

(20,120)

(33,019)

(162,172)

 

 

 

 

Financing Activities

 

 

 

 

 

 

 

Proceeds from issuance of common stock

85,130

Proceeds from convertible notes payable

7,200

Proceeds from promissory note payable

3,982

30,535

 30,517

Proceeds from related parties, net

16,128

2,487

 39,325

 

 

 

 

Net cash provided by financing activities

20,110

33,022

162,172

 

 

 

 

Increase (Decrease) in cash

(10)

3

 

 

 

 

Cash, beginning of period

10

7

 

 

 

 

Cash, end of period

10

 

 

 

 


Supplemental disclosures:

 

 

 

 

 

 

 

Interest paid

Income taxes paid

 

 

 

 

Non-cash investing and financing activities:

 

 

 

 

 

 

 

Beneficial conversion expense of convertible notes

3,150

3,600

Shares issued for joint venture

10,000

10,000

Shares issued to settle liabilities

260,093

33,994

294,087




(The accompanying notes are an integral part of these financial statements)





SINO PAYMENTS, INC.

(formerly China Soaring, Inc.)

(A Development Stage Company)

Statements of Operations




 

 

For the Year Ended

For the Year Ended

Accumulated from

June 26, 2007

(Date of Inception)

 

 

 

August 31,

August 31,

to August 31,

 

 

 

2010

2009

2010

 

 

 

$

$

$

 

 

 

 

 

 

Revenue



 –

 –

 –

 



 

 

 

Operating Expenses



 

 

 

 



 

 

 

General and administrative

 

 

296,884

547,983

918,808

 

 

 

 

 

 

Total Operating Expenses

 

 

296,884

547,983

918,808

 

 

 

 

 

 

Other Expense

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

925

191

2,337

Loss on settlement of debt

 

 

7,970

7,970

 

 

 

 

 

 

 

 

 

8,895

191

10,307

 

 

 

 

 

 

Net loss

 

 

(305,779)

(548,174)

(929,115)

 

 

 

 

 

 

Net loss per share, basic and diluted

 

 

(0.01)

(0.01)

 

 

 

 

 

 

 

Weighted average number of shares outstanding

 

 

51,746,097

44,146,930

 




(The accompanying notes are an integral part of these financial statements)





SINO PAYMENTS, INC.

(formerly China Soaring, Inc.)

(A Development Stage Company)

Statements of Cash Flows



 

For the

Year Ended

August 31,

2010

$

For the

Year Ended

August 31,

2009

$

Accumulated from

June 26, 2007 (Date of Inception)

to August 31,

2010

$

 

 

 

 

Operating Activities

 

 

 

 

 

 

 

Net loss for the year

 (305,779)

 (548,174)

 (929,115)

 

 

 

 

Adjustments to reconcile net loss to net cash used

In operating activities:

 

 

 

Accretion expense

 3,150

450

 3,600

Loss on settlement of debt

 7,970

 7,970

Shares issued for services

 162,575

446,270

 608,845

Warrants issued for services

 2,938

 2,938

 

 

 

 

Changes in operating assets and liabilities:

 

 

 

Other assets

 770

 –

 –

Accounts payable and accrued liabilities

 95,357

 68,353

 163,710

 

 

 

 

Net cash used in operating activities

 (33,019)

 (33,101)

 (142,052)

 

 

 

 

Financing Activities

 

 

 

 

 

 

 

Proceeds from issuance of common stock

 4,000

 85,130

Proceeds from convertible notes payable

 –

7,200

 7,200

Proceeds from promissory note payable

 26,535

 26,535

Proceeds from related parties, net

 2,487

20,710

 23,197

 

 

 

 

Net cash provided by financing activities

 33,022

 27,910

 142,062

 

 

 

 

Increase (Decrease) in cash

 3

 (5,191)

 10

 

 

 

 

Cash, beginning of period

 7

 5,198

 –

 

 

 

 

Cash, end of period

 10

 7

 10

 

 

 

 

Supplemental disclosures:

 

 

 

 

 

 

 

Interest paid

 –

 –

 –

Income taxes paid

 –

 –

 –

 

 

 

 

Non-cash investing and financing activities:

 

 

 

 

 

 

 

Shares issued to settle notes payable

 22,925

 –

 22,703

Shares issued to settle amount due related parties

 11,069

 –

 11,069

Beneficial conversion expense of convertible notes

 3,150

 3,600

 3,600





(The accompanying notes are an integral part of these financial statements)





SINO PAYMENTS, INC.

(formerly China Soaring, Inc.)

(A Development Stage Company)

Statement of Stockholders’ Equity (Deficit)


 

 

 

Additional

 

 

 

 

 

Common Stock

 

Paid-in

 

Accumulated

 

 

 

Shares

 

Par Value

 

Capital

 

Deficit

 

Total

 

#

 

$

 

$

 

$

 

$

 

 

 

 

 

 

 

 

 

 

Balance – June 26, 2007 (Date of Inception)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares for cash at $0.000003 per share

39,000,000

 

390

 

(260)

 

 

130

 

 

 

 

 

 

 

 

 

 

Net loss for the period

 

 

 

(10,570)

 

(10,570)

 

 

 

 

 

 

 

 

 

 

Balance – August 31, 2007

39,000,000

 

390

 

(260)

 

(10,570)

 

(10,440)

 

 

 

 

 

 

 

 

 

 

Shares for cash at $0.0167 per share

4,860,000

 

48

 

80,952

 

 

 

81,000

 

 

 

 

 

 

 

 

 

 

Net loss for the year

 

 

 

 

 

 

(64,592)

 

(64,592)

 

 

 

 

 

 

 

 

 

 

Balance – August 31, 2008

43,860,000

 

438

 

80,692

 

(75,162)

 

5,968

 

 

 

 

 

 

 

 

 

 

Shares for settlement of debt

4,634,646

 

47

 

446,223

 

 

 

446,270

 

 

 

 

 

 

 

 

 

 

Beneficial conversion on notes payable

 

 

 

 

3,600

 

 

 

3,600

 

 

 

 

 

 

 

 

 

 

Net loss for the year

 

 

 

(548,174)

 

(548,174)

 

 

 

 

 

 

 

 

Balance – August 31, 2009

48,494,646

 

485

 

530,515

 

(623,336)

 

(92,336)

 

 

 

 

 

 

 

 

 

 

Return to treasury

(1,120,000)

 

(11)

 

11

 

 

 

 

 

 

 

 

 

 

 

 

Fair value of warrants issued

 

 

2,938

 

 

2,938

 

 

 

 

 

 

 

 

 

 

Shares for settlement of debt

832,015

 

8

 

38,657

 

 

38,665

 

 

 

 

 

 

 

 

 

 

Shares issued for services

6,314,560

 

63

 

169,811

 

 

169,874

 

 

 

 

 

 

 

 

 

 

Net loss for the year

 

 

 

(305,779)

 

(305,779)

 

 

 

 

 

 

 

 

 

 

Balance – August 31, 2010

54,521,221

 

545

 

741,932

 

(929,115)

 

(186,638)

 

 

 

 

 

 

 

 

 

 

Shares issued for joint venture

1,000,000

 

10

 

9,990

 

 

10,000

 

 

 

 

 

 

 

 

 

 

Shares for settlement of liabilities

13,828,779

 

138

 

259,955

 

 

260,093

 

 

 

 

 

 

 

 

 

 

Shares issued for services

2,650,000

 

27

 

29,123

 

 

29,150

 

 

 

 

 

 

 

 

 

 

Net loss for the year

 

 

 

(231,113)

 

(231,113)

 

 

 

 

 

 

 

 

 

 

Balance – August 31, 2011

72,000,000

 

720

 

1,041,000

 

(1,160,228)

 

(118,508)

 

 

 

 

 

 

 

 

 

 


 

 

 

Additional

 

 

 

 

 

Common Stock

 

Paid-in

 

Accumulated

 

 

 

Shares

 

Par Value

 

Capital

 

Deficit

 

Total

 

#

 

$

 

$

 

$

 

$

 

 

 

 

 

 

 

 

 

 

Balance – June 26, 2007 (Date of Inception)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares for cash at $0.000003 per share

39,000,000

 

390

 

(260)

 

 

130

 

 

 

 

 

 

 

 

 

 

Net loss for the period

 

 

 

(10,570)

 

(10,570)

 

 

 

 

 

 

 

 

 

 

Balance – August 31, 2007

39,000,000

 

390

 

(260)

 

(10,570)

 

(10,440)

 

 

 

 

 

 

 

 

 

 

Shares for cash at $0.0167 per share

4,860,000

 

48

 

80,952

 

 

 

81,000

 

 

 

 

 

 

 

 

 

 

Net loss for the year

 

 

 

 

 

 

(64,592)

 

(64,592)

 

 

 

 

 

 

 

 

 

 

Balance – August 31, 2008

43,860,000

 

438

 

80,692

 

(75,162)

 

5,968

 

 

 

 

 

 

 

 

 

 

Shares for settlement of debt

4,634,646

 

47

 

446,223

 

 

 

446,270

 

 

 

 

 

 

 

 

 

 

Beneficial conversion on notes payable

 

 

 

 

3,600

 

 

 

3,600

 

 

 

 

 

 

 

 

 

 

Net loss for the year

 

 

 

(548,174)

 

(548,174)

 

 

 

 

 

 

 

 

Balance – August 31, 2009

48,494,646

 

485

 

530,515

 

(623,336)

 

(92,336)

 

 

 

 

 

 

 

 

 

 

Return to treasury

(1,120,000)

 

(11)

 

11

 

 

 

 

 

 

 

 

 

 

 

 

Fair value of warrants issued

 

 

2,938

 

 

2,938

 

 

 

 

 

 

 

 

 

 

Shares issued for cash

80,000

 

1

 

3,999

 

 

4,000

 

 

 

 

 

 

 

 

 

 

Shares for settlement of debt

458,511

 

4

 

22,921

 

 

22,925

 

 

 

 

 

 

 

 

 

 

Shares issued for services

6,608,064

 

66

 

181,548

 

 

181,614

 

 

 

 

 

 

 

 

 

 

Net loss for the year

 

 

 

(305,779)

 

(305,779)

 

 

 

 

 

 

 

 

 

 

Balance – August 31, 2010

54,521,221

 

545

 

741,932

 

(929,115)

 

(186,638)

 

 

 

 

 

 

 

 

 

 




(The accompanying notes are an integral part of these financial statements)


F-6



SINO PAYMENTS, INC.

(formerly China Soaring, Inc.)

(A Development Stage Company)

Notes to the Financial Statements

August 31, 2010


2011


1.

Nature of Operations and Continuance of Business


Sino Payments Inc. (the “Company”) was incorporated in the State of Nevada on June 26, 2007. The Company is a Development Stage Company, as defined by Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 915,Development Stage Entities. The Company’s principal business is to provide credit and debit card processing services to multinational retailers in Asia.


Going Concern


These financial statements have been prepared on a going concern basis, which implies the Company will continue to realize its assets and discharge its liabilities in the normal course of business. The Company has not generated significant revenues since inception and is unlikely to generate significant revenue or earnings in the immediate or foreseeable future. The continuation of the Company as a going concern is dependent upon the continued financial support from its shareholders, the ability of the Company to obtain necessary equity financing to continue operations, and the attainment of profitable operations. As at August 31, 2010,2011, the Company has not generated revenues, has a working capital deficitdeficiency of $186,638$118,508 and has accumulated losses totaling $929,115$1,160,228 since inception. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern. These financial statements do not include any adjustments to the recover abilityrecoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.


2.

Summary of Significant Accounting Policies


a)

Basis of Presentation


These financial statements and related notes are presented in accordance with accounting principles generally accepted in the United States, and are expressed in U.S. dollars. The Company’s fiscal year end is August 31.  


b)

Use of Estimates


The preparation of financial statements in conformity with U.S. generally accepted accounting principles 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 revenues and expenses during the reporting period. The Company regularly evaluates estimates and assumptions related to stock-based compensation andthe deferred income tax asset valuation allowances. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materi allymaterially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.


c)

Cash and Cash Equivalents


The Company considers all highly liquid instruments with maturity of three months or less at the time of issuance to be cash equivalents.




F-7



SINO PAYMENTS, INC.

(formerly China Soaring, Inc.)

(A Development Stage Company)

Notes to the Financial Statements

August 31, 2010



2.

Summary of Significant Accounting Policies (continued)


d)

Financial Instruments


Pursuant to ASC 820,Fair Value Measurements and Disclosuresand ASC 825,Financial Instruments, an entity is required to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 and 825 establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. ASC 820 and 825 prioritizes the inputs into three levels that may be used to measure fair value:


Level 1


Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.



F-7



SINO PAYMENTS, INC.

(A Development Stage Company)

Notes to the Financial Statements

August 31, 2011


2.

Summary of Significant Accounting Policies (continued)


Level 2


Level 2 applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.


Level 3


Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.


The Company’s financial instruments consist principally of cash, and amounts due to related parties.  Pursuant to ASC 820, and 825, the fair value of our cash is determined based on “Level 1” inputs, which consist of quoted prices in active markets for identical assets. We believe that the recorded values of all of our other financial instruments approximate their current fair values because of their nature and respective maturity dates or durations.


e)

Loss Per Share


The Company computes net loss per share in accordance with ASC 260,Earnings per Share. ASC 260 requires presentation of both basic and diluted earnings per share (“EPS”) on the face of the income statement. Basic EPS is computed by dividing net loss available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti dilutive.


f)

Revenue Recognition


The Company recognizes revenue from its processing services in accordance with ASC 605,Revenue Recognition. Revenue is recognized only when the price is fixed or determinable, persuasive evidence of an arrangement exists, the service has been provided, and collectability is reasonably assured.  


g)

Comprehensive Loss


ASC 220,Comprehensive Income, establishes standards for the reporting and display of comprehensive loss and its components in the financial statements. As at August 31, 20102011 and 2009,2010, the Company has no items that represent a comprehensive loss and, therefore, has not included a schedule of comprehensive loss in the financial statements.




F-8



SINO PAYMENTS, INC.

(formerly China Soaring, Inc.)

(A Development Stage Company)

Notes to the Financial Statements

August 31, 2010



2.

Summary of Significant Accounting Policies (continued)


g)h)

Foreign Currency Translation


Transactions in foreign currencies are translated into the currency of measurement at the exchange rates in effect on the transaction date. Monetary balance sheet items expressed in foreign currencies are translated into United States dollars at the exchange rates in effect at the balance sheet date. The resulting exchange gains and losses are recognized in income.  Foreign currency transactions are primarily undertaken in Hong Kong dollars.  


h)i)

Stock-based Compensation


The Company records stock-based compensation in accordance with ASC 718,Compensation – Stock Compensation using the fair value method. All transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable. Equity instruments issued to employees and the cost of the services received as consideration are measured and recognized based on the fair value of the equity instruments issued.


i)

Recent Accounting Pronouncements


In August 2009, FASB issued an amendment to the accounting standards related to the measurement of liabilities that are recognized or disclosed at fair value on a recurring basis. This standard clarifies how a company should measure the fair value of liabilities and that restrictions preventing the transfer of a liability should not be considered as a factor in the measurement of liabilities within the scope of this standard. This standard is effective for the Company on October 1, 2009. The adoption of this amendment did not have a material effect on the Company’s consolidated financial statements.


In October 2009, FASB issued an amendment to the accounting standards related to the accounting for revenue in arrangements with multiple deliverables including how the arrangement consideration is allocated among delivered and undelivered items of the arrangement. Among the amendments, this standard eliminated the use of the residual method for allocating arrangement considerations and requires an entity to allocate the overall consideration to each deliverable based on an estimated selling price of each individual deliverable in the arrangement in the absence of having vendor-specific objective evidence or other third party evidence of fair value of the undelivered items. This standard also provides further guidance on how to determine a separate unit of accounting in a multiple-deliverable revenue arrangement and expands the disclosure requirements about the judgments made in applying the estimated selling price method and how those judgments affect t he timing or amount of revenue recognition. This standard, for which the Company is currently assessing the impact, will become effective on January 1, 2011.


In October 2009, the FASB issued an amendment to the accounting standards related to certain revenue arrangements that include software elements. This standard clarifies the existing accounting guidance such that tangible products that contain both software and non-software components that function together to deliver the product’s essential functionality, shall be excluded from the scope of the software revenue recognition accounting standards. Accordingly, sales of these products may fall within the scope of other revenue recognition standards or may now be within the scope of this standard and may require an allocation of the arrangement consideration for each element of the arrangement. This standard, for which the Company is currently assessing the impact, will become effective on January 1, 2011.




F-9F-8



SINO PAYMENTS, INC.

(formerly China Soaring, Inc.)

(A Development Stage Company)

Notes to the Financial Statements

August 31, 2010


2011


2.

Summary of Significant Accounting Policies (continued)


i)j)

Recent Accounting Pronouncements (continued)


In January 2010, the FASB issued an amendment to ASC 505, Equity, where entities that declare dividends to shareholders that may be paid in cash or shares at the election of the shareholders are considered to be a share issuance that is reflected prospectively in EPS, and is not accounted for as a stock dividend.  This standard is effective for interim and annual periods ending on or after December 15, 2009 and is to be applied on a retrospective basis.  The adoption of this standard is not expected to have a significant impact on the Company’s financial statements.  


In January 2010, the FASB issued an amendment to ASC 820, Fair Value Measurements and Disclosure, to require reporting entities to separately disclose the amounts and business rationale for significant transfers in and out of Level 1 and Level 2 fair value measurements and separately present information regarding purchase, sale, issuance, and settlement of Level 3 fair value measures on a gross basis.  This standard, for which the Company is currently assessing the impact, is effective for interim and annual reporting periods beginning after December 15, 2009 with the exception of disclosures regarding the purchase, sale, issuance, and settlement of Level 3 fair value measures which are effective for fiscal years beginning after December 15, 2010.


In February 2010, the FASB issued ASU No. 2010-09 “Subsequent Events (ASC Topic 855) “Amendments to Certain Recognition and Disclosure Requirements” (“ASU No. 2010-09”). ASU No. 2010-09 requires an entity that is an SEC filer to evaluate subsequent events through the date that the financial statements are issued and removes the requirement for an SEC filer to disclose a date, in both issued and revised financial statements, through which the filer had evaluated subsequent events. The adoption of this standard did not have a significant impact on the Company’s consolidated financial statements.


In March 2010, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update 2010-11 (ASU 2010-11), “Derivatives and Hedging (Topic 815): Scope Exception Related to Embedded Credit Derivatives.”  The amendments in this update are effective for each reporting entity at the beginning of its first fiscal quarter beginning after June 15, 2010.  Early adoption is permitted at the beginning of each entity’s first fiscal quarter beginning after issuance of this update.  The adoption of this standard is not expected to have an impact on the Company’s consolidated financial statements.


The Company has implemented all new accounting pronouncements that are in effect and that may impact its financial statements and does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its consolidated financial statements.    


3.3

NotesInvestment in Joint Venture


On November 26, 2010, the Company entered into a joint venture agreement with TAP Investments Group Limited (TAP) and agreed to issue 1,000,000 common shares of the Company with a fair value of $10,000 in exchange for 51% interest of TAP. As at August 31, 2011, the Company’s interest in the joint venture was a net loss of $40,887, of which $10,000 was reflected against the investment in joint venture. The Company has not consolidated the investment in the joint venture despite the 51% ownership interest due to the lack of control the company has over the joint venture.  Of the $40,887 net loss only $10,000 was recognized with the remaining $30,887 being suspended.  The suspended loss represents the additional loss above the Companies investment in the joint venture and therefore this amount is suspended and to be used to offset any future gains from the joint venture.


4.

Loan Payable


a)

In July 2009,As at August 31, 2011, the Company issued $7,200owes $16,128 (2010 - $nil) to TAP for payment of convertible promissory notesoperating expenditures.  The amount owing is unsecured, due interest at 8% per annum, and due on demand.  Accrued interest of $328 has been recorded in accrued liabilities.


b)

As at August 31, 2011, the Company owes $nil (2010 - $14,332) to a third-party company for services rendered.  Under the terms of the note agreement, the amount isnon-related party.  The amounts owing are unsecured, non-interest bearing,due interest at 10% per annum, and due on demand, and convertible into common shares ofdemand.  On December 10, 2010, the Company at $0.04 per common share atsettled the discretionoutstanding principal balance and accrued interest of the note holder commencing from$4,492 with the issuance date.  In accordance with ASC 470,Debt – Debt with Conversions and Other Options, the Company determined that the multiple financial instruments issued in the convertible promissory notes resulted in an allocation of the fair value between the convertible note and the share purchase warrants which resulted in a discount on the convertible notes of $3,600 that was recorded against the note payable and a corresponding credit to additional paid-in capital.  On December 4, 2009, the Company converted the note into common shares.  Refer to Note 5(g)5(e).


5.

Common Shares


All common share issuances for non-cash purposes are valued using the end-of-day trading price based on the date that the shares were issued or authorized by management, unless otherwise indicated.  


a)

On May 11, 2011, the Company issued 5,827,158 common shares with a fair value of $102,496 to settle outstanding services of $87,005 resulting in a loss on settlement of debt of $15,491.  


b)

On May 10, 2011, the Company issued 960,000 common shares with a fair value of $19,400 to settle outstanding directors’ fees.   


c)

On January 28, 2011, the Company authorized the issuance of 2,656,250 common shares with a fair value of $53,125.  The common shares were issued on March 28, 2011.   


d)

On January 24, 2011, the Company authorized the issuance of 2,553,971 common shares to directors and officers with a fair value of $65,127 to settle outstanding balances owing of $66,071 resulting in a gain on settlement of debt of $944. The common shares were issued on April 1, 2011.


e)

On December 10, 2010, the Company authorized the issuance of 4,481,400 common shares with a fair value of $49,295 to settle outstanding notes payable and accrued interest of $18,824 at $0.01 per common share, and consulting services of $29,150, resulting in a loss on settlement of debt of $1,321.  The common shares were issued on March 28, 2011.  


f)

On December 10, 2010, the Company authorized the issuance of 1,000,000 common shares with a fair value of $10,000 as part of their interest in the joint venture agreement, as noted in Note 3. The common shares were issued on March 28, 2011.   




F-10F-9



SINO PAYMENTS, INC.

(formerly China Soaring, Inc.)

(A Development Stage Company)

Notes to the Financial Statements

August 31, 20102011



3.

Notes Payable (continued)


b)

On November 13, 2009, the Company issued a note payable of $12,203 to a third-party company for payment of expenditures on the Company’s behalf.  Under the terms of the note payable, the amount is unsecured, due interest at 10% per annum, and is due on demand.  On December 4, 2009, the Company converted the note into common shares. Refer to Note 5(g).  


c)

On November 13, 2009, the Company converted $3,300 of amounts owing to the President of the Company into a convertible promissory note.  Under the terms of the note agreement, the amount is unsecured, non-interest bearing, due on demand, and convertible into common shares of the Company at $0.05 per common share at the discretion of the note holder commencing from the issuance date.  The Company evaluated the convertible note pursuant to ASC 815,Disclosures about Derivative Instruments and Hedging Activities,and determined that it did not qualify for derivative treatment.  On December 4, 2009, the Company converted the note into common shares. Refer to Note 5(f).


d)

During the year ended August 31, 2010, the Company entered into a $150,000 line of credit with a non-related party, where the amounts are unsecured, bears interest at 8% per annum, and due on demand.  As at August 31, 2010, the Company had financed $14,332 under the terms of the line of credit.


4.6.

Related Party Transactions


a)

As at August 31, 2010,2011, the Company owed $1,451 (2009owes $4,876 (August 31, 2010 - $13,214) from the President$7,376) to a Director of the Company for payment of general operating expenditures.  The amounts owing are unsecured, non-interest bearing,due interest at 10% per annum, and due on demand. Accrued interest of $1,326 has been recorded in accrued liabilities.


b)

As at August 31, 2010,2011, the Company owes $nil (2009(August 31, 2010 - $120)$1,451) to a Directorthe President of the Company for payment of general operating expenditures. The amounts owing are unsecured, non-interest bearing, and due on demand.


c)7.   

As at August 31, 2010, the Company owes $7,376 (2009 - $7,376) to a shareholder of the Company for payment of general expenditures.  The amounts owing are unsecured, due interest at 10% per annum, and due on demand.  


5.

Common Shares


All common share issuances have been valued based on the end of day market price on the date of issuance:


a)

On August 4, 2010, the Company issued 1,210,400 common shares with a fair value of $24,208 for payment of management fees.


b)

On February 17, 2010, the Company issued 1,600,000 common shares with a fair value of $32,000 for professional services of $27,000 resulting in a loss on settlement of debt of $5,000.


c)

On December 9, 2009, the Company issued 484,160 common shares with a fair value of $19,366 for payment of management fees.


d)

On December 9, 2009, the Company issued 293,504 common shares with a fair value of $11,740 for settlement of amounts owing to related parties of $11,070, resulting in a loss on settlement of debt of $670.


e)

On December 7, 2009, the Company issued 2,650,000 common shares with a fair value of $79,500 for consulting services.


f)

On December 4, 2009, the Company issued 66,550 common shares at $0.05 per share to settle a convertible note owing of $3,300 plus accrued interest of $28.  


g)

On December 4, 2009, the Company issued 471,961 common shares at $0.05 per share to settle convertible and promissory notes of $19,403 plus accrued interest of $195 and a further cash contribution of $4,000.  




F-11



SINO PAYMENTS, INC.

(formerly China Soaring, Inc.)

(A Development Stage Company)

Notes to the Financial Statements

August 31, 2010



5.

Common Shares(continued)


h)

On December 1, 2009, the Company issued 120,000 common shares with a fair value of $4,800 to settle consulting fees of $5,000, resulting in a gain on settlement of $200.


i)

On November 17, 2009, the Company issued 250,000 common shares with a fair value of $10,000 to settle professional services of $7,500 resulting in a loss on settlement of debt of $2,500.


j)

On November 17, 2009, the Company cancelled 1,120,000 common shares and returned them to treasury.  


k)

On August 18, 2009, the Company issued 1,087,780 common shares for compensation expense with a fair value of $119,656.  


l)

On August 18, 2009, the Company issued 369,800 common shares with a fair value of $40,678 for consulting services.


m)

On August 4, 2009, the Company issued 1,966,666 common shares with a fair value of $177,000 for services.  


n)

On August 4, 2009, the Company issued 1,210,400 common shares with a fair value of $108,936 for management services.


o)

On March 9, 2009, the Board of Directors approved a stock dividend of two common shares for each outstanding common share of the Company for all shareholders on record as of March 23, 2009.  The effects of the stock dividend have been accounted for as a stock split and have been applied retroactively since the Company’s inception.  The effect of the stock dividend increased the issued and outstanding common shares from 14,620,000 common shares to 43,860,000 common shares.  


6.

Share Purchase Warrants


On October 20, 2009, the Company issued 50,000 share purchase warrants to a third-party company.  Each warrant grants the warrant holder the option to purchase one additional common share of the Company at $0.075 per common share for a period of three years from the date of issuance.  The Company valued the share purchase warrants using the Black-Scholes Option Pricing model with the assumptions of useful life of three years, volatility of 271%, and a risk free rate of 1.44%.


During the year ended August 31, 2010, the Company issued the following share purchase warrants:



 


Number of Warrants

Weighted Average Exercise Price

Weighted Average Contractual Life (years)

Aggregate Intrinsic Value

Balance – August 31, 2008 and 2009

 

 

 

Granted

50,000

$0.075

 

 

Balance – August 31, 2010

50,000

$0.075

2.90


As at August 31, 2010, the following share purchase warrants were outstanding:


Number of Warrants

Exercise Price

Expiry Date

50,000

$0.075

October 20, 2011

 

 

 

50,000

 

 






F-12



SINO PAYMENTS, INC.

(formerly China Soaring, Inc.)

(A Development Stage Company)

Notes to the Financial Statements

August 31, 2010



7.   Income Taxes


The Company has $651,464$866,709 of net operating losses carried forward to offset taxable income in future years which expire commencing in fiscal 2027.  The income tax benefit differs from the amount computed by applying the US federal income tax rate of 34% to net loss before income taxes for the years ended August 31, 20102011 and 20092010 as a result of the following:


 

2010

$

2009

$

2011

$

2010

$

 

 

 

 

 

Net loss before taxes

 

(305,779)

(548,174)

(231,113)

(305,779)

Statutory rate

 

34%

34%

34%

34%

 

 

 

 

 

Expected tax recovery

 

(104,000)

(186,400)

(78,578)

(104,000)

Non-deductible expenses

 

4,100

90,500

5,395

4,100

Change in valuation allowance

 

99,900

95,900

73,183

99,900

 

 

 

 

 

Income tax provision

 


The significant components of deferred income tax assets and liabilities as at August 31, 20102011 and 2009,2010, after applying enacted corporate income tax rates, are as follows:


 

2010

$

2009

$

2011

$

2010

$

 

 

 

 

 

Net operating losses carried forward

 

221,300

121,400

294,483

221,300

Valuation allowance

 

(221,300)

(121,400)

(294,483)

(221,300)

 

 

 

 

 

Net deferred tax asset

 


The Company has incurred operating losses of $651,464$866,709 which, if unutilized, will expire through to 2030.2031. Future tax benefits, which may arise as a result of these losses, have not been recognized in these financial statements, and have been offset by a valuation allowance. The following table lists the fiscal year in which the loss was incurred and the expiration date of the operating:

 

Net

 



Expiry Date

 

Loss

 

Period Incurred

$

 

 

 

 

 

2007

10,571

 

2027

2008

64,592

 

2028

2009

281,592

 

2029

2010

294,709

 

2030

2011

215,245

 

2031

 

 

 

 

 

866,709

 

 


 

 

 



Expiry

Date

 

Net

 

 

Loss

 

Period Incurred

$

 

 

 

 

 

2007

10,571

 

2027

2008

64,592

 

2028

2009

281,592

 

2029

2010

294,709

 

2030

 

 

 

 

 

651,464

 

 


8.   Subsequent Events




On November 24, 2011, the Company acquired the remaining 49% of TAP Investment Group Limited in exchange for 50% of the issued and outstanding common shares of the Company.






ITEM 9. 

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.


On December 17, 2009, M&K CPAS, PLLC (“MKC”) was appointed as the registered independent public accountant for Sino Payments, Inc. (the “Registrant”), a Nevada corporation.the Company. On December 17, 2009, Malone & Bailey, LLP (“MB”), was dismissed as the registered independent public accountant for the Registrant.Company. The decisions to appoint MKC and dismiss MB were approved by the Board of Directors of the RegistrantCompany on December 17, 2009.


Please referencerefer to the current reportCurrent Report on Form 8-K filed on December 23, 2009 for additional information, a copy of which is incorporated herein by reference herein.reference.


ITEM 9A.

CONTROLS AND PROCEDURESPROCEDURES.


Disclosure Controls and Procedures


UnderWe maintain disclosure controls and procedures, as defined in Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934 (the "Exchange Act"), that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.


We carried out an evaluation, under the supervision and with the participation of our principal executive officermanagement, including our Chief Executive Officer and principal financial officer, we conducted an evaluationChief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as defined in Rule 13a-15(e) promulgated under the Exchange Act, as of August 31, 2010.2011. Based on thisthe evaluation of these disclosure controls and procedures, and in light of the material weaknesses found in our principal executive officerinternal controls over financial reporting, our Chief Executive Officer and principal financial officerChief Financial Officer concluded that our disclosure controls and procedures were not effective as of August 31, 2010, due to the material weaknesses resulting from not having an Audit Committee or a financial expert on our Board of Directors and our failure to maintain appropriate cash controls.


Our management, including our chief executive officer and chief financial officer, does not expect that our disclosure controls and procedures or our internal controls will prevent all error and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs. Due to the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected.effective.


Management’s Annual Report on Internal Control Over Financial Reporting


Management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Exchange Act Rule 13a-15(f). The Company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America.


Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.


Under the supervision and with the participation of management, including the Chief Executive Officer and Chief Financial Officer, the Company conducted an evaluation of the effectiveness of the Company’s internal control over financial reporting based onas of August 31, 2011 using the frameworkcriteria established in “Internal Control - Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO").  


A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis. In its assessment of the effectiveness of internal control over financial reporting as of August 31, 2010,2011, the Company determined that there were control deficiencies that constituted material weaknesses, as described below:below.


1. 

We do not have an Audit Committee– While not being legally obligated to have an audit committee, it is the management’s view that such a committee, including a financial expert member, is an utmost important entity level control over the Company’s financial statement. Currently the Board of Directors acts in the capacity of the Audit Committee, and does not include a member that is considered to be independent of management to provide the necessary oversight over management’s activities.


2.

We did not maintain appropriate cash controls– As of August 31, 2011, the Company has not maintained sufficient internal controls over financial reporting for the cash process, including failure to segregate cash handling and accounting functions, and did not require dual signature on the Company’s bank accounts.  Alternatively, the effects of poor cash controls were mitigated by the fact that the Company had limited transactions in their bank accounts.

1.     

We do not have an Audit Committee or a financial expert on our Board of Directors– While not being legally obligated to have an audit committee, it is the management’s view that such a committee, including a financial expert member, is an utmost important entity level control over the Company’s financial statement. Currently the Board of Directors acts in the capacity of the Audit Committee, consisting of three members, including two independent members.  All members of the Board of Directors lack sufficient financial expertise for overseeing financial reporting responsibilities.






3.

We did not implement appropriate information technology controls– As at August 31, 2011, the Company retains copies of all financial data and material agreements; however there is no formal procedure or evidence of normal backup of the Company’s data or off-site storage of the data in the event of theft, misplacement, or loss due to unmitigated factors.  

     

2.      

We did not maintain appropriate cash controls– As of August 31, 2010, the Company has not maintained sufficient internal controls over financial reporting for the cash process, including failure to perform monthly bank reconciliations. Alternatively, the effects of poor cash controls were mitigated by the fact that the Company had limited transactions in their bank accounts during the year ended August 31, 2010 and that the Company’s quarterly and year-end financial statements and audit working papers and supporting documents were prepared and reviewed by an independent accounting firm prior to submission to our external auditors, which mitigated the risk of misappropriation of cash.  


Accordingly, the Company concluded that these control deficiencies resulted in a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis by the company’s internal controls.


As a result of the material weaknesses described above, management has concluded that the Company did not maintain effective internal control over financial reporting as of August 31, 20102011 based on criteria established in Internal Control—Integrated Framework issued by COSO.


M&K CPAS, PLLC, an independent registered public accounting firm, was not required to andChanges in Internal Control over Financial Reporting

There has not issued a report concerningbeen no change in our internal control over financial reporting identified in connection with our evaluationwe conducted of the effectiveness of our internal control over financial reporting as of August 31, 2010.2011, that occurred during our fourth fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.  


This annual report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to temporary rules of the SEC that permit the Company to provide only management’s report in this annual report.


Changes InContinuing Remediation Efforts to address deficiencies in Company’s Internal Control andover Financial Reporting


Once the Company is engaged in a business of merit and has sufficient personnel available, then our Board of Directors, in particular and in connection with the aforementioned deficiencies, will establish the following remediation measures:


1.

Our management has also evaluatedBoard of Directors will nominate an audit committee or a financial expert on our internal control overBoard of Directors in the next fiscal year.

2.

We will appoint additional personnel to assist with the preparation of the Company’s monthly financial reporting, and there have been no significant changes in our internal controls or in other factors that could significantly affect those controls subsequent toincluding preparation of the date of our last evaluation.monthly bank reconciliations.

The Company is not required by current SEC rules to include, and does not include, an auditor's attestation report. The Company's registered public accounting firm has not attested to Management's reports on the Company's internal control over financial reporting.


ITEM 9B. 

OTHER INFORMATIONINFORMATION.


None.On November 24, 2011, the Company entered into a Share Exchange Agreement (the “Share Exchange Agreement”) by and among TIG Investments Group Limited, a Hong Kong Limited Company (“TIG”), and a majority of the stockholders of TIG (the “TIG Majority Stockholders”), whereby TIG shall issue 49 shares of Tap ePayment Services (HK) Limited (“TeP”) and other payment processing and financial framework project assets as set forth in the Share Exchange Agreement in exchange for fifty percent (50%) of  the issued and outstanding shares of common stock of the Company.  A true and correct copy of the Share Exchange Agreement is attached hereto as Exhibit 10.13 and is incorporated herein by reference.






PART III


ITEM 10.

DIRECTORS AND EXECUTIVE OFFICERS AND CORPORATE GOVERNANCEOFFICERS.


Identification of directorsDirectors and executive officersExecutive Officers


The following table sets forth the names and ages of our current directorsdirector(s) and executive officers.  Our Board of Directors appoints our executive officers. Our directors serve until the earlier occurrence of the election of his or her successor at the next meeting of stockholders, death, resignation or removal by the Board of Directors.officer(s):


Name

Age

Position with the Company

Director Since

MathewMatthew Mecke

4041

Director, Chief Executive Officer, Chief Financial Officer,CEO, CFO, President Secretary, Treasurer

Anthony Robinson& Director

45

DirectorNovember 21, 2008

Paul Manning

4445

Secretary, Treasurer & Director

June 26, 2007

Raymond Lee

 55

Director

May 4, 2011


The board of directors has no nominating, audit or compensation committee at this time.






Term of Office


Each of our directors is appointed to hold office until the next annual meeting of our stockholders or until his respective successor is elected and qualified, or until he resigns or is removed in accordance with the provisions of the Nevada Revised Statues. Our officers are appointed by our Board of Directors and hold office until removed by the Board or until their resignation


Background and Business Experience


The business experience during the past five years of the person presently listed above as an Officer or Director of the Company is as follows:


Matthew Mecke.Prior to his appointment as Chairman and CEO of Sino Payments, Matthew Mecke was a member of the board of directors of Sino Fibre Communications, Inc. (OTCBB: SFBE) based in China and Hong Kong starting in January 2006. Mr. Mecke also served as president, principal executive officer of Sino Fibre Communications from January 2006 to October 2007 and as chairman of board of directors from January 2006 to December 2007. From October 2003 to January 2006, Mr. Mecke was a founder, vice chairman, president, and CEO of Asia Payment Systems (OTCBB: APYM). From October 1998 to July 1999, Mr. Mecke was a co-founder and served as Senior Vice President, Systems and Product Development for First Ecom.com (NASD: FECC), an international e-commerce payment gateway pioneer based in Hong Kong which linked e-commerce merchants with offshore back-end transaction processing systems. From April 1994 to July 1998, Mr. Mecke was an employe eemployee of First Data Corp. (formerly NYSE: FDC) in the United States and Hong Kong. Mr. Mecke was responsible for middle management of retail card system operations. In the late 1990s,1990’s, Mr. Mecke was a management executive of First Data Asia in Hong Kong, where his responsibilities included strategic planning, new business development, e-commerce applications and pricing.

Anthony Robinson.Prior to his appointment as a Director of the Company, Anthony Robinson was the Managing Director of BiField Business Resources, Ltd., a Business Development Boutique focusing on developing local strategy for foreign companies entering China, and trading and sourcing of raw materials. Mr. Robinson worked closely with foreign multinationals entering the China market, as well as Hedge Funds and investment companies trading with China's industrial and financial core. In February 2004, Mr. Robinson established BiField Business Resources, Ltd. in Hong Kong to reflect the company’s China-focus. From April 2003 to January 2004, Mr. Robinson was the New Business Development manager of China Strategic, Ltd., another Hong Kong-based consulting company, and was stationed in Shanghai.


Paul F. Manning.From March 2002 to June 2007, Mr. Manning was project manager and card services consultant for Cardtrend International Inc., formerly Asia Payment Systems, Inc., a corporation that filed reports with the SEC pursuant to section 13 of the Securities Exchange Act of 1934 and was traded on the Pink Sheets under the symbol CDTR. During Mr. Manning’s employment at Cardtrend, Cardtrendhe was engaged in the business of implementing a credit card transaction operation in China. Other than our board of directors, Mr. Manning has not been a member of the board of directors of any corporations during the last five years. Mr. Manning holds the degree of Bachelor of Science in mathematics and economics from the University of Rhode Island. Mr. Manning was granted his degree in Applied Mathematics and Applied Economics.


Raymond Lee. Raymond Lee is an accomplished business consultant and operations manager with over fifteen years of corporate experience managing various business sectors including sales, marketing, and operations; developing corporate infrastructure; implementing systems integration; creating strategic business alliances; and integrating solutions to meet customer demands. Since 2008, Mr. Lee has been responsible for managing outsourcing, consulting and systems integration as Managing Director of Atos Origin (Hong Kong). Prior to joining Atos, Mr. Lee served as Vice President of Consulting at BEA Systems from November 2007 to June 2008, where he successfully managed sixty employees in Sales and Services. From August 2004 to October 2007, Mr. Lee worked for Unisys as Vice President & General Manager of Systems and Technology, managing eighty employees in sales and marketing and leading the company’s technology and infrastructure division. Mr. Lee gained additional management experience from July 1999 to December 2003 as Vice President of Sales and Marketing for SRS Labs and Advance Micro Devices. During the 1990’s, Mr. Lee held various senior management positions with major information technology companies and high technology vendors in Asia Pacific. In light of Mr. Lee’s prior executive and director positions and demonstrated success in business development, consulting, and management in the Asia Pacific region, the Board of Directors believed it was in the Company’s best interest to appoint Mr. Lee as a director.


Identification of Significant Employees


We have no significant employees other than: Matthew Mecke, our President, Chief Executive Officer, Chief Financial Officer, Treasurer, Secretary, and a Director; Anthony Robinson,Raymond Lee, a Director; and Paul F. Manning, our Treasurer, Secretary, and a Director, all of whom are not considered employees.Director.






Family Relationship


We currently do not have any officers or directors of our Company who are related to each other.   






Involvement in Certain Legal Proceedings


During the past ten years no director, executive officer, promoter or control person of the Company has been involved in the following:


(1)

A petition under the Federal bankruptcy laws or any state insolvency law which was filed by or against, or a receiver, fiscal agent or similar officer was appointed by a court for the business or property of such person, or any partnership in which he was a general partner at or within two years before the time of such filing, or any corporation or business association of which he was an executive officer at or within two years before the time of such filing;


(2)

Such person was convicted in a criminal proceeding or is a named subject of a pending criminal proceeding (excluding traffic violations and other minor offenses);


(3)

Such person was the subject of any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining him from, or otherwise limiting, the following activities:


i.

Acting as a futures commission merchant, introducing broker, commodity trading advisor, commodity pool operator, floor broker, leverage transaction merchant, any other person regulated by the Commodity Futures Trading Commission, or an associated person of any of the foregoing, or as an investment adviser, underwriter, broker or dealer in securities, or as an affiliated person, director or employee of any investment company, bank, savings and loan association or insurance company, or engaging in or continuing any conduct or practice in connection with such activity;


ii.

Engaging in any type of business practice; or


iii.

Engaging in any activity in connection with the purchase or sale of any security or commodity or in connection with any violation of Federal or State securities laws or Federal commodities laws;


(4)

Such person was the subject of any order, judgment or decree, not subsequently reversed, suspended or vacated, of any Federal or State authority barring, suspending or otherwise limiting for more than 60 days the right of such person to engage in any activity described in paragraph (f)(3)(i) of this section, or to be associated with persons engaged in any such activity;


(5)

Such person was found by a court of competent jurisdiction in a civil action or by the Commission to have violated any Federal or State securities law, and the judgment in such civil action or finding by the Commission has not been subsequently reversed, suspended, or vacated;


(6)

Such person was found by a court of competent jurisdiction in a civil action or by the Commodity Futures Trading Commission to have violated any Federal commodities law, and the judgment in such civil action or finding by the Commodity Futures Trading Commission has not been subsequently reversed, suspended or vacated;


(7)

Such person was the subject of, or a party to, any Federal or State judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated, relating to an alleged violation of:


i.

Any Federal or State securities or commodities law or regulation; or


ii.

Any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order; or


iii.

Any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or


(8)

Such person was the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act (15 U.S.C. 78c(a)(26))), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act (7 U.S.C. 1(a)(29))), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.






Audit Committee and Audit Committee Financial Expert


The Company does not have an audit committee or an audit committee financial expert (as defined in Item 407 of Regulation S-K) serving on its Board of Directors. All current members of the Board of Directors lack sufficient financial expertise for overseeing financial reporting responsibilities.  The Company has not yet employed an audit committee financial expert on its Board due to the inability to attract such a person.


The Company intends to establish an audit committee of the board of directors, which will consist of independent directors. The audit committee’s duties will be to recommend to the Company’s board of directors the engagement of an independent registered public accounting firm to audit the Company’s financial statements and to review the Company’s accounting and auditing principles. The audit committee will review the scope, timing and fees for the annual audit and the results of audit examinations performed by the internal auditors and independent registered public accounting firm, including their recommendations to improve the system of accounting and internal controls. The audit committee will at all times be composed exclusively of directors who are, in the opinion of the Company’s board of directors, free from any relationship which would interfere with the exercise of independent judgment as a committee member and who possess an understanding of financial statements and generally accepted accounting principles.


Code of Ethics


We have adopted a Code of Ethics (the “Code”) that applies to our directors, officers and employees, including our Chief Executive Officer and Chief Financial Officer. A written copy of the Code is available on written request to the Company and was filed with the SEC on July 20, 2009, as part of the Company’s Quarterly Report on Form 10-Q that is incorporated by reference hereto as Exhibit 14.01.


Compliance with Section 16(a) Beneficial Ownership Reporting Complianceof the Exchange Act


Section 16(a) of the Securities Exchange Act of 1934 requires our directors, and executive officers, and persons who beneficially own more than ten percent of a registered class of our equity securities to file with the SEC initial reports of ownership and reports of change in ownership of common stock and other equity securities of the Company. Officers, directors and greater than ten percent stockholders are required by SEC regulations to furnish us with copies of all Section 16(a) forms they file. Based solely upon a review of Forms 3 and 4 and amendments thereto furnished to us under Rule 16a-3(e) during the year ended August 31, 2010,2011, Forms 5 and any amendments thereto furnished to us with respect to the year ended August 31, 2010,2011, and the representations made by the reporting persons to us, we believe that during the year ended August 31, 2010,2011, our executive officers and directors and all persons who own more than ten percent of a registered class of our equity securities complied with all Section 16(a) filing requirements.


Audit Committee and Audit Committee Financial Expert


The Company intends to establish an audit committee of the board of directors, which will consist of soon-to-be-nominated independent directors. The audit committee’s duties would be to recommend to the Company’s board of directors the engagement of an independent registered public accounting firm to audit the Company’s financial statements and to review the Company’s accounting and auditing principles. The audit committee would review the scope, timing and fees for the annual audit and the results of audit examinations performed by the internal auditors and independent registered public accounting firm, including their recommendations to improve the system of accounting and internal controls. The audit committee would at all times be composed exclusively of directors who are, in the opinion of the Company’s board of directors, free from any relationship which would interfere with the exercise of independent judgment as a committe e member and who possess an understanding of financial statements and generally accepted accounting principles.


Code of Ethics

We have adopted a Code of Ethics (the “Code”) that applies to our directors, officers and employees, including our principal executive officer and principal financial and accounting officer, respectively.  A written copy of the Code is available on written request to the Company.


Involvement in Certain Legal Proceedings

During the last five years no director, executive officer, promoter or control person of the Company has had or has been subject to:

(1)

any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time;


(2)

any conviction in a criminal proceeding or being subject to a pending criminal proceeding;


(3)

any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities; or


(4)

being found by a court of competent jurisdiction, the Commission or the Commodity Futures Trading Commission to have violated any federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated.





ITEM 11.

EXECUTIVE COMPENSATION


The following table sets forth the compensation paid to our executive officers during the twelve month periods ended August 31, 2011 and 2010: 


Summary Compensation Table

 

Compensation of Officers

Name

and

Principal

Position

Fiscal

Year

Ended

8/31




Salary

($)

Bonus

($)(2)

Stock

Awards

($)

Option

Awards

($)

Non-Equity

Incentive

Plan

Compensation

($)

Nonqualified

Deferred

Compensation

Earnings

($)

All Other Compensation

($)

Total

($)

Matthew Mecke (1)

President, CEO, CFO, and Director

2011

32,000

-0-

-0-

-0-

-0-

-0-

-0-

32,000

2010

32,000

-0-

-0-

-0-

-0-

-0-

-0-

32,000

Paul Manning (2)

Secretary, Treasurer & Director

2011

8,000

-0-

-0-

-0-

-0-

-0-

-0-

8,000

2010

-0-

-0-

-0-

-0-

-0-

-0-

-0-

-0-

 

A summary of cash and other compensation paid in accordance with management consulting contracts for our Principal Executive Officer and other executives for the most recent three years is as follows:


Name and Principal

Position

Year

Salary

Bonus

Awards

Stock

Awards

Other Incentive

Compensation

Non-Equity

Plan

Compensation

Nonqualified

Deferred

Earnings

All

Other

Compensation

Total

($)

($)

($)

($)

($)

($)

($)

($)

(a)

(b)

(c)

(d)

(e)

(f)

(g)

(h)

(i)

(j)

Matthew Mecke (1)

Chief Executive Officer and President

2010

2009

$32,000

$32,000


0

0


0

0


0

0


0

0


0

0


0

0


$32,000

$32,000



(1)

Mr. Mecke, the Chief Executive Officer, Chief Financial Officer, President Treasurer and Secretarya Director of the Company, receivesreceived $4,000 per month from September 2010 to April 2011, which iswas converted into sharescommon shares.  Subsequent to April 2011, management and directors ceased all management fees.   


(2)

Mr. Manning, the Secretary, Treasurer and a Director of the Company'sCompany, received compensation in the amount of $1,000 per month from September 2010 to April 2011, which was converted into common stock, such conversion was at a rate of $0.04 per share for a total of 800,000 shares issuedshares.  Subsequent to Mr. Mecke for the fiscal year end August 31, 2010.April 2011, management and directors ceased all management fees.   






Retirement, Resignation or Termination PlansNarrative Disclosure to Summary Compensation Table


We sponsorThere are no plan, whether writtencompensatory plans or verbal,arrangements, including payments to be received from the Company with respect to any executive officer, that would provide compensationresult in payments to such person because of his or benefits of any type to an executive uponher resignation, retirement or any plan that would provide payment for retirement, resignation,other termination of employment with the Company, or termination as a result of aits subsidiaries, any change in control, of our company or as a result of a change in the person’s responsibilities of an executive following a change in control of our company.the Company.


Executive Officer Outstanding Equity Awards at Fiscal Year-End


There were no common share purchase options, stockNo executive officer received any equity awards, or equity incentive plan awards held by our named executive officers that were outstandingholds exercisable or unexercisable options, as of August 31, 2010.


Option Exercises and Stock Vested

There were no options exercised or stock vested during the year ended August 31, 2010.2011.


Pension Benefits and Nonqualified Deferred CompensationLong-Term Incentive Plans


The Company does not maintain any qualifiedThere are no arrangements or plans in which we provide pension, retirement plans or non-nonqualified deferred compensation planssimilar benefits for its employeesdirectors or directors.executive officers.  

 

Compensation Committee

We currently do not have a compensation committee of the Board of Directors. The Board of Directors as a whole determines executive compensation.


Director Compensation


Directors receive $12,312 compensation per annum for their participation as members of the Company's Board of Directors. The following table shows the overall compensation earned for the 20102011 fiscal year with respect to each person who was a director as of August 31, 2010.2011.


Name and
Principal
Position

Fees
Earned
or Paid
in Cash
($)

Stock
Awards ($)

Option
Awards ($)
(1)

Non-Equity
Incentive Plan
Compensation
($) (2)

Nonqualified
Deferred
Compensation
Earnings ($)

All Other
Compensation ($)
(3)

Total ($)

 

 

 

 

 

 

 

 

Matthew Mecke, Director

 

 

 

 

 

 

 

 

 

Anthony Robinson, Director  

$8,206

 

$8,206

 

 

 

 

 

 

 

 

Paul Manning, Director  

$8,206

 

$8,206




Name and
Principal
Position

Fees
Earned
or Paid
in Cash
($)

Stock
Awards ($)

Option
Awards ($)
(1)

Non-Equity
Incentive Plan
Compensation
($) (2)

Nonqualified
Deferred
Compensation
Earnings ($)

All Other
Compensation ($)
(3)

Total ($)

 

 

 

 

 

 

 

 

Matthew Mecke, Director (4)

32,000

32,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Paul Manning, Director (5)

8,000

8,000

 

 

 

 

 

 

 

 

Raymond Lee, Director (6)

Anthony Robinson, Director (7)

8,000

8,000


(1)

Reflects dollar amount expensed by the company during applicable fiscal year for financial statement reporting purposes pursuant to FAS 123R. FAS 123R requires the Company to determine the overall value of the options as of the date of grant based upon the Black-Scholes method of valuation, and to then expense that value over the service period over which the options become exercisable (vest). As a general rule, for time-in-service-based options, the Company will immediately expense any option or portion thereof which is vested upon grant, while expensing the balance on a pro rata basis over the remaining vesting term of the option. For a description FAS 123 R and the assumptions used in determining the value of the options under the Blac k-ScholesBlack-Scholes model of valuation, see the notes to the consolidated financial statements included with this Report.


(2)(1)

Excludes awards or earnings reported in preceding columns.





(3)

(1)

Includes all other compensation not reported in the preceding columns, including (i) perquisites and other personal benefits, or property, unless the aggregate amount of such compensation is less than $10,000; (ii) any “gross-ups” or other amounts reimbursed during the fiscal year for the payment of taxes; (iii) discounts from market price with respect to securities purchased from the company except to the extent available generally to all security holders or to all salaried employees; (iv) any amounts paid or accrued in connection with any termination (including without limitation through retirement, resignation, severance or constructive termination, including change of responsibilities) or change in control; (v) contributions to vested and unvested defined contribution plans; (vi) any insurance premiums paid by, or on behalf of, the company relating to life insurance for the benefit of the director; (vii) any consulting fees earned, or paid or payable; (viii) any annual costs of payments and promises of payments pursuant to a director legacy program and similar charitable awards program; and (ix) any dividends or other earnings paid on stock or option awards that are not factored into the grant date fair value required to be reported in a preceding column.


(4)

Mr. RobinsonMecke is a member of the Company’s Board of Directors and received compensation in the amount of $1,026 per month$32.000 for the year ended August 31, 2011 as President, CEO, and Director of the Company, which iswas converted into 1,706,667 shares of the Company's common stock, such conversion was at a rate of $0.04 per share for a total of 205,200 shares issued to Mr. Robinson for the fiscal year end August 31, 2010.stock.


(5)

Mr. Manning is a member of the Company’s Board of Directors and received compensation in the amount of $1,026 per month$8,000 for the year ended August 31, 2011, which is converted into 423,652 shares of the Company's common stock such conversion was at


(6)

Mr. Lee is a ratemember of $0.04 per share for a totalthe Company’s Board of 205,200 shares issuedDirectors from May 4, 2011.  During the period from May 4, 2011 to Mr. Manning for the fiscal year end August 31, 2010.2011, Mr. Lee did not receive any compensation as a director of the Company.  


(7)

Mr. Robinson was a member of the Company’s Board of Directors until his resignation on May 4, 2011.  During the period from September 1, 2010 to May 4, 2011, Mr. Robinson received $8,000 in directors fees, which were converted into 423,652 common shares.


ITEM 12.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERSMATTERS.


Security Ownership of Certain Beneficial Owners and Management


The following table sets forth certain information regarding beneficial ownership of our common stock as of November 9, 2010:August 31, 2011: (i) by each of our directors,directors; (ii) by each of the Named Executive Officers,our named executive officers; (iii) by all of our executive officers and directors as a group,group; and (iv) by each person or entity known by us to beneficially own more than five percent (5%) of any class of our outstanding shares. As of November 9, 2010August 31, 2011 there were 54,521,22172,000,000 shares of our common stock outstanding:


  

 

Common Stock

 

Name and Address of Beneficial Owner

 

Beneficial

Ownership (1)

 

 

Percent of

Class(1)

 

 

 

 

 

 

 

 

Directors and Named Executive Officers

 

 

 

 

 

 

Matthew Mecke(2)

 

 

1,450,836

 

 

 

2.66

%

Anthony Robinson(2)

 

 

492,480

 

 

 

 

*

Paul Manning(2)

 

 

521,698

 

 

 

 

*

Officers and Directors as a Group

 

 

2,465,014

 

 

 

4.52

%

 

 

 

 

 

 

 

 

 

Other Beneficial Owners

 

 

 

 

 

 

 

 

Kellwood Group Limited(3)

 

 

16,960,000

 

 

 

31.11

%

 

 

 

 

 

 

 

 

 

Total

 

 

19,425,014

 

 

 

35.62

%

Name and Address of Beneficial Owner

Title of Class

Amount and Nature of  Beneficial

Ownership (1)

(#)

Percent of Class (2)

(%)

Matthew Mecke (3)

Unit T25, GF Bangkok Bank Building

18 Bonham Strand West

Sheung Wan, Hong Kong

Common

3,797,503

5.27%

Paul Manning (4)

Unit T25, GF Bangkok Bank Building

18 Bonham Strand West

Sheung Wan, Hong Kong

Common

900,150

1.25%

Raymond Lee (5)

Unit T25, GF Bangkok Bank Building

18 Bonham Strand West

Sheung Wan, Hong Kong

Common

0

0.00%

All Officers and Directors as a Group

Common

4,697,653

6.52%

Other Beneficial Owners

 

 

 

Kellwood Group Limited (6)

P.O. Box 116, Sea Meadow House

Blackburn Hwy

Road Town, Tortola BVI

Common

16,960,000

23.56%

*Indicates less than 1%.






(1)

The number and percentage of shares beneficially owned is determined under rules of the SEC and the information is not necessarily indicative of beneficial ownership for any other purpose. Under such rules, beneficial ownership includes any shares as to which the individual has sole or shared voting power or investment power and also any shares which the individual has the right to acquire within 60 days through the exercise of any stock option or other right. The persons named in the table have sole voting and investment power with respect to all shares of common stock shown as beneficially owned by them, subject to community property laws where applicable and the information contained in the footnotes to this table.

 (1)Applicable percentage of ownership is based on 54,521,221 shares of common stock outstanding on August 31, 2010. Percentage ownership is determined based on shares owned together with securities exercisable or convertible into shares of common stock within 60 days of November 9, 2010 for each stockholder. Beneficial ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect to securities.  Shares of common stock subject to securities exercisable or convertible into shares of common stock that are currently exercisable or exercisable within 60 days of November 9, 2010 are deemed to be beneficially owned by the person holding such securities for the purpose of computing the percentage of ownership of such person, but are not treated as outstanding for the purpose of computing the percentage ownership of any other person.  Our common stock is our only issued and outstanding class of securities eligible to vote.

 

(2)Address of the referenced individual is c/o Sino Payments, Inc., Unit T25, GF Bangkok Bank Building 18 Bonham Strand West, Sheung Wan, Hong Kong.

(2)

(3)Mr. David Fiddes holds investment and voting control over the shares beneficially owned by Kellwood Group Limted.

Based on 72,000,000 issued and outstanding shares of common stock as of August 31, 2011.


(3)

Matthew Mecke is the Company's President, CEO and CFO and a Director. His beneficial ownership includes3,797,503 common shares.


(4)

Paul Manning is the Company’s Secretary, Treasurer and a Director.  His beneficial ownership includes 900,150 common shares.


(5)

Raymond Lee is a Director of the Company.  His beneficial ownership includes 0 common shares.


(6)

Mr. David Fiddes holds investment and voting control over the 16,960,000 common shares beneficially owned by Kellwood Group Limted.


Changes in Control


We knowThere are no present arrangements or pledges of no plans or arrangements that willthe Company’s securities which may result in a change in control of control at our company.the Company.


ITEM 13.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.


Director IndependenceRelated Party Transactions


Mr. Robinson and Mr. Manning are each independent Directors.  Our Board of Directors usesAs at August 31, 2011, the following criteriaCompany owes $4,876 to determine whether a Director is independent:  (1) the independence requirements of the NASDAQ Stock Market; (2) a “non-employee director” withinCompany for payment of general operating expenditures.  The amounts owing are unsecured, non-interest bearing, and due on demand.


Other than the meaning of Rule 16b-3foregoing, none of the Securities Exchange Act of 1934, as amended (the “1934 Act”); and (3) an “outside director” under the regulations promulgated under Section 162(m)directors or executive officers of the Internal Revenue CodeCompany, nor any person who owned of 1986, as amended (the “Code”). record or was known to own beneficially more than 5% of the Company’s outstanding shares of its Common Stock, nor any associate or affiliate of such persons or companies, has any material interest, direct or indirect, in any transaction that has occurred during the past fiscal year, or in any proposed transaction, which has materially affected or will affect the Company.


With regard to any future related party transaction, we plan to fully disclose any and all related party transactions in the following manner:


·

Disclosing such transactions in reports where required;

·

Disclosing in any and all filings with the SEC, where required;

·

Obtaining disinterested directors consent; and

·

Obtaining shareholder consent where required.


Related Party TransactionsDirector Independence


None.For purposes of determining director independence, we have applied the definitions set out in NASDAQ Rule 5605(a)(2). The OTCBB on which shares of common stock are quoted does not have any director independence requirements. The NASDAQ definition of “Independent Officer” means a person other than an Executive Officer or employee of the Company or any other individual having a relationship which, in the opinion of the Company's Board of Directors, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director.  


According to the NASDAQ definition, Matthew Mecke and Paul Manning are not independent directors because they are also executive officers of the Company.


According to the NASDAQ definition, Mr. Lee is an independent director because he is not an executive officer of the Company.






Review, Approval or Ratification of Transactions with Related Persons


We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.


ITEM 14.

PRINCIPAL ACCOUNTINGACCOUNTANT FEES AND SERVICESSERVICES.


On December 17, 2009, the Company appointed M&K CPAS, PLLC as the Company’s independent auditor.  The Company’s prior independent auditors were Malone & Bailey, LLP. For the years ended August 31, 2010 and 2009, we incurred fees as discussed below.   


  

Fiscal year ended August 31, 2010

Fiscal year ended August 31, 2009

Audit Fees

$5,475

$12,000

Audit Related Fees

$         -

$           -         

Tax Fees

$         -

$           -         

All Other Fees

 $         -

$           -         

TOTAL

$5,475

$12,000

 

 

Year Ended

August 31, 2011

 

Year Ended

August 31, 2010

Audit fees

$

13,125

$

5,475

Audit-related fees

$

0

$

0

Tax fees

$

0

$

0

All other fees

$

0

$

0

Total

$

13,125

$

5,475


Audit Fees


During the fiscal years ended August 31, 2011, we incurred approximately $13,125 in fees to our principal independent accountants for professional services rendered in connection with the audit and reviews of our financial statements for fiscal years ended August 31, 2011.


During the fiscal year ended August 31, 2010, we incurred approximately $5,475 in fees to our principal independent accountants for professional services rendered in connection with the audit and reviews of our financial statements for fiscal year ended August 31, 2010.






During the fiscal year ended August 31, 2009, we incurred approximately $12,000 in fees to our principal independent accountants for professional services rendered in connection with the audit and reviews of our financial statements for fiscal year ended August 31, 2009.


Audit-Related Fees


The aggregate fees billed during the fiscal years ended August 31, 20102011 and 20092010 for assurance and related services by our principal independent accountants that are reasonably related to the performance of the audit or review of our financial statements (and are not reported under Item 9(e)(1) of Schedule 14A was $nil.$0 and $0, respectively.


Tax Fees


The aggregate fees billed during the fiscal yearyears ended August 31, 2011 and 2010 for professional services rendered by our principal accountant tax compliance, tax advice and tax planning was $nil.were $0 and $0, respectively.


All Other Fees


The aggregate fees billed during the fiscal year ended August 31, 20102011 for products and services provided by our principal independent accountants (other than the services reported in Items 9(e)(1) through 9(e)(3) of Schedule 14A was $nil.



$0 and $0, respectively.






PART IV


ITEM 15.

EXHIBITSEXHIBITS.


(a)

Exhibits


Exhibit Number

 

Number

Description of Exhibit

Filing

3.01

Articles of Incorporation

Incorporated by reference to our Registration Statement Form SB-2 filedFiled with the SEC on November 19, 2007.

3.01a

Restated Articles2007 as part of Incorporation

Incorporated by reference to our Current ReportRegistration Statement on Form 8-K filed with the SEC on December 3, 2008.SB-2.

3.02

Bylaws

Incorporated by reference to our Registration Statement Form SB-2 filedFiled with the SEC on November 19, 2007.2007 as part of our Registration Statement on Form SB-2.

4.01

2009 Stock Incentive Plan

Filed with the SEC on August 5, 2009 as part of our Registration Statement on Form S-8.

4.02

Sample Qualified Stock Option Plan

Filed with the SEC on August 5, 2009 as part of our Registration Statement on Form S-8.

4.03

Sample Non-Qualified Stock Option Plan

Filed with the SEC on August 5, 2009 as part of our Registration Statement on Form S-8.

4.04

Sample Performance-Based Award Plan

Filed with the SEC on August 5, 2009 as part of our Registration Statement on Form S-8.

10.01

Memorandum of Understanding between Sino Payments, Inc. and BCS Holdings, Inc. dated May 26, 2009

Filed with the SEC on June 4, 2009 as part of our Current Report on Form 8-K.

10.02

Services Agreement between Sino Payments, Inc. and PowerE2E China dated April 24, 2009

Filed with the SEC on June 4, 2009 as part of our Current Report on Form 8-K.

10.03

Pay Sourcing Agreement between Sino Payments, Inc. and PAY.ON Asia, Ltd. dated September 22, 2009

Filed with the SEC on September 29, 2009 as part of our Current Report on Form 8-K.

10.04

Reseller Agreement between Sino Payments, Inc. and eNETS Hong Kong, Ltd. dated September 29,August 3, 2009

Filed with the SEC on October 6, 2009 as part of our Current Report on Form 8-K.

10.05

Form of Convertible Note issued tobetween Sino Payments, Inc. and Matthew Mecke dated November 12, 2009

Filed with the SEC on November 20, 2009 as part of our Current Report on Form 8-K.

10.06

Convertible Note issued to Matthew Mecke dated November 12, 2009

Filed with the SEC on November 20, 2009 as part of our Current Report on Form 8-K.

10.07

Agency Agreement between Sino Payments, Inc. and Valitor dated January 13, 2010

Filed with the SEC on February 12, 2010 as part of our Current Report on Form 8-K.

10.08

10.07

Agency Agreement between Sino Payments, Inc. and Payvision dated January 19, 2010

Filed with the SEC on February 12, 2010 as part of our Current Report on Form 8-K.

10.09

10.08

Line of Credit Note between Sino Payments, Inc. and Moon Gate Limited dated June 4, 2010

Filed with the SEC on June 17, 2010 as part of our Current Report on Form 8-K.  

10.09

Letter of Intent between Sino Payments, Inc. and Tap Group dated September 24, 2010

Filed with the SEC on October 20, 2010 as part of our Current Report on Form 8-K.

10.10

Line of Credit Note between Sino Payments, Inc. and TAP Group dated January 10, 2011

Filed with the SEC on February 7, 2011 as part of our Current Report on Form 8-K.

10.11

Joint Venture Agreement between Sino Payments, Inc. and Tap Investments Group Limited dated November 26, 2010

Filed with the SEC on April 4, 2011 as part of our Quarterly Report on Form 10-Q/A.

10.12

Financial Framework Services Agreement between TAP e-Payment Services (HK) Limited and TAP Services (HK) Limited dated January 27, 2011

Filed with the SEC on April 19, 2011 as part of our Quarterly Report on Form 10-Q.

10.13

Share Exchange Agreement by and among Sino Payments, Inc., TIG Investments Group Limited and the Majority Shareholders of TIG dated November 24, 2011

Filed herewith.

14.01

Code of Ethics

Filed with the SEC on July 20, 2009  as part of our Quarterly Report on Form 10-Q.

16.01

Letter of Agreement from Malone and Bailey, PCLLP dated December 18, 2009

Filed with the SEC on December 23, 2009 as part of our Current Report on Form 8-K.

31.01

Certification of the ChiefPrincipal Executive Officer pursuantPursuant to Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002Rule 13a-14

Filed herewith.

31.02

Certification of the ChiefPrincipal Financial Officer pursuantPursuant to Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.Rule 13a-14

Filed herewith.

32.01

CEO and CFO Certification of the Chief Executive Officer pursuant to 18 U.S.C Section 1350, as adopted pursuantPursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Filed herewith.

32.02

Certification of the Chief Financial Officer pursuant to 18 U.S.C Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Filed herewith.







SIGNATURES

SIGNATURES

In accordance with

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrantCompany caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on the December 14, 2010.authorized.


Sino Payments, Inc.

By:

/s/_Matthew Mecke_____________

Matthew Mecke

CEO, CFO and Chairman of the Board


In accordance withSINO PAYMENTS, INC.



Dated: December 21, 2011

/s/ Matthew Mecke                  

By: Matthew Mecke

Its: President, CEO, and CFO


Pursuant to the requirement of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of Sino Payments, Inc.the Company and in the capacities and on the dates indicated.


Signature

Position

Date


/s/Matthew Mecke


CEO, CFO and Chairman of the Board


December 14, 2010

Matthew Mecke

/s/ Anthony Robinson

Director

December 14, 2010

Anthony Robinson

/s/ Paul Manning

Director

December 14, 2010

Paul Manning

indicated:




SUPPLEMENTAL INFORMATION TO BE FURNISHED WITH REPORTS FILED PURSUANT TO SECTION 15(d) OF THE EXCHANGE ACT BY NON-REPORTING ISSUERSDated: December 21, 2011

/s/ Matthew Mecke                  

1.

By: Matthew Mecke – Director

No annual report to security holders covering the Company’s last fiscal year has been sent as of the date of this report.

2.

No proxy statement, form of proxy, or other proxy soliciting material relating to the Company’s last fiscal year has been sent to any of the Company’s security holders with respect to any annual or other meeting of security holders.

3.

If such report or proxy material is furnished to security holders subsequent to the filing of this Annual Report on Form 10-K, the Company will furnish copies of such material to the Commission at the time it is sent to security holders.




Dated: December 21, 2011

/s/ Paul Manning                    

By: Paul Manning – Director




Dated: December 21, 2011

/s/ Raymond Lee                     

By: Raymond Lee – Director





22