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 years ended December 31, or [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to ____ to ______ |
Commission File Number: 000-51815
WEYLAND TECH INC.
(formerly known as SERATOSA INC.)
(Exact name of registrant as specified in its charter)
Delaware | 46-5057897 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
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Central Hong Kong HKSAR | |
(Address of principal executive offices, including Zip Code) | |
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(Registrant’s telephone number, including area code) | |
Securities registered under Section 12 (b) of the Exchange Act: None
Securities registered under Section 12 (g) of the Exchange Act: Common stock, $0.00001$0.0001 par value (the “Common Stock”).
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
[ ] Yes
[X] [X] No
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
[X] [X] No
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.
[X] Yes
[ ] No
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 229.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
[X] Yes
[ ] No
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) 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.
[ ]
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 the 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 [ ] �� Smaller reporting company
(Do not check if a smaller reporting company) |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).
[ ] Yes
[X] [X] No
As of June 30, 20142015 (the last business day of the registrant’s most recently completed second fiscal quarter), the aggregate market value of the shares of the registrant’s common stock held by non-affiliates (based upon the closing sale price of such shares as reported on the Pink Sheets Market) was approximately $0.3 million.$995,549. Shares of the registrant’s common stock held by each executive officer and director and each person who owns 10% or more of the outstanding common stock have been excluded from the calculation in that such persons may be deemed to be affiliates of the registrant. This determination of affiliate status is not necessarily a conclusive determination for other purposes.
There were a total of 212,804,67516,442,963 shares of the registrant’s common stock outstanding as of March 27, 2015.
31, 2016.
DOCUMENTS INCORPORATED BY REFERENCE
None.
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Table of Contents
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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This annual report on Form 10-K and other reports that we file with the SEC contain statements that are considered forward-looking statements. Forward-looking statements give the Company’s current expectations, plans, objectives, assumptions or forecasts of future events. All statements other than statements of current or historical fact contained in this annual report, including statements regarding the Company’s future financial position, business strategy, budgets, projected costs and plans and objectives of management for future operations, are forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “anticipate,” “estimate,” “plans,” “potential,” “projects,” “ongoing,” “expects,” “management believes,” “we believe,” “we intend,” and similar expressions. These statements are based on the Company’s current plans and are subject to risks and uncertainties, and as such the Company’s actual future activities and results of operations may be materially different from those set forth in the forward looking statements. Any or all of the forward-looking statements in this annual report may turn out to be inaccurate and as such, you should not place undue reliance on these forward-looking statements. The Company has based these forward-looking statements largely on its current expectations and projections about future events and financial trends that it believes may affect its financial condition, results of operations, business strategy and financial needs. The forward-looking statements can be affected by inaccurate assumptions or by known or unknown risks, uncertainties and assumptions due to a number of factors, including:
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dependence on key personnel;
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competitive factors;
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continued growth of e-commercemobile app markets;
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the operation of our business; and
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general economic conditions in the ASEAN, Asia-Pacific Region and in the United States.
These forward-looking statements speak only as of the date on which they are made, and except to the extent required by federal securities laws, we undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events. In addition, we cannot assess the impact of each factor on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. All subsequent written and oral forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by the cautionary statements contained in this annual report.
USE OF TERMS
Except as otherwise indicated by the context, all references in this report to:
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“Seratosa,Weyland Tech,” “Company,” “we,” or “our,” unless the context otherwise requires, are to SeratosaWeyland Tech Inc.
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“SEC” are to the United States Securities and Exchange Commission;
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“Securities Act” are to the Securities Act of 1933, as amended;
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“Exchange Act” are to the Securities Exchange Act of 1934, as amended;
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“U.S. dollar,” “USD,” “US$” and “$” are to the legal currency of the United States; and
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“China,” “Chinese” and “PRC” are to the People’s Republic of China.
Available Information
The Company’s website is www.seratosa.com,www.weyland-tech.com, where information about the Company may be reviewed and obtained. In addition, the Company’s filings with the Securities and Exchange Commission (“SEC”) may be accessed at the internet address of the SEC, which is http://www.sec.gov. Also, the public may read and copy any materials that the Company files with at the SEC’s Public Reference Room at 100 F Street, N.E., Room 1580 Washington, D.C. 20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330.
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PART I
ITEM 1. BUSINESS
Overview
Seratosa specializesWeyland Tech, prior to September 1, 2015 specialized in providing e-commerce solutions and services that facilitate multi-channel B2C (business-to-consumer) and B2B (business-to-business) transactions. Its solutions and services enableenabled e-commerce transactions with speed and efficiency, and allowallowed an interactive and engaging customer experience as well as targeted marketing and advertising.
On September 1, 2015, Weyland Tech acquired the exclusive right to use the ‘CreateApp’ M-commerce applications platform ("apps") from Technopreneurs Resource Centre Private Limited, a Singapore Limited company ("TRC") which was satisfied by the issuance of shares in the Company. Weyland Tech, have registered the domain name www.createapp.com
TRC's CreateApp platform was marketed and sold predominantly in Singapore with less than 1% of sales attributable to ex-Singapore customers.
The Company’s revenues are generated from one-time integration feesCreateApp platform is offered in eleven languages and enables small-medium-sized businesses ("SMBs") to create a mobile application ("app") without the need of technical knowledge and background.
SMB's can increase sales, reach more customers and promote their products and services via a simple easy to build mobile app at an affordable and cost-effective manner without specialist IT knowledge and IT investment.
On January 19, 2016 the company signed a Software Licensing Agreement ("SLA") with Info Zone Development Limited ("Info Zone") to provide a 'white label' rollout of the Company's CreateApp platform in the Hong Kong and China market.
On January 21, 2016 the company signed an exclusive Software Licensing Agreement ("SLA") with Silver Ridge-Tangerine Sdn Bhd ("Silver Ridge") to provide a 'white label' rollout of the Company's CreateApp platform in Malaysia.
On February 11, 2016 the company signed an exclusive Software Licensing Agreement ("SLA") with Augicom S.A., ("Augicom") to distribute the Company's CreateApp platform in the Euro-Zone except Russia, Turkey, Armenia and Azerbaijan.
On February 24, 2016 the company signed a Term Sheet ("TS") with Meta 4 Group SarL ("Meta4") to form a joint venture partnership for the implementationrollout of e-commerce solutions as well as recurring license and service fees. The Company has been hosting two e-commerce solutions:Meta4's 'Worldfriend's' network platform in the greater Indonesia market.
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4-GS, Ltd. is a B2B e-commerce platform that optimizes supply chain sourcing for international enterprise customers through B2B Search Engine Optimization (SEO), e-catalogOn March 9, 2016 the company signed an exclusive Software Licensing Agreement ("SLA") with Aurum Digital, Inc. ("Aurum") to distribute CreateApp in the Americas, covering North, Central and inventory management systems and a transaction platform.
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ZBL Cybermarketing, Ltd. is a Search Engine Marketing (SEM) and Search Engine Optimization (SEO) provider in Northern China and utilizes the Company’s e-commerce solutions to identify and engage targeted consumer segments and optimize purchase conversions. South Americas.
We service 4-GS and ZBL Cybermarketing underOn March 14, 2016 the strategic partnershipcompany signed an exclusive Software Licensing Agreement ("SLA") with IAM, Inc. ("IAM") to distribute CreateApp in the Republic of Korea.
On March 22, 2016 the company signed the joint venture agreement ("JV") with Soconison Technology Ventures, dated July 11, 2011 and extended by an additional two years on June 13, 2013.Meta 4 Group SarL ("Meta4") for the rollout of Meta4's 'Worldfriend's' network platform in the greater Indonesia market.
Our corporate headquarters are located at 138 Queens Road Central, 11th Floor,9/F, The Wellington, 198 Wellington Street, Central, Hong Kong HKSAR and our telephone number is (408) 548-7520.HKSAR. Although we maintain a website at www.seratosa.com,www.weyland-tech.com, we do not intend that information available on our website be incorporated into this filing.
Our Growth Strategy
We aimManagement plans for expansion into other markets by repurposing the CreateApp platform into the target countries predominant languages as well as establishing a small base of operations in each target country. The goal is to position ourselves asreplicate the early success of TRC in its 2014 year of operations and scale the business to a provider in e-commerce solutionsgreater level and services. We have identified the following factors critical to the achievement of this goal:a global geographical footprint.
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Enable our current customers to continue growing their e-commerceFrom January 2015 until August 2015, TRC concentrated product development efforts towards developing a fully-hosted Software-as-a-Service ("SaaS"), monthly paid service offering versus the business
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Continue utilizing our efficient cost structure, and source technical and engineering personnel model of an annual licensing fee paid up front as in Asia for servicing our customers.
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Develop new technologies and service products.
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Identify opportunities to acquire technologies or companies to accelerate the growth of the Company.fiscal year 2014.
To increase our recurring revenue, the Company must execute on our strategy of offering the CreateApp platform to SMB's and resellers with an affordable monthly fee, free upgrades, and expansion into new markets.
Growth of the E-CommerceMobile Apps Industry
We believe that there are a number of factors that are contributing to the continued growth of e-commerce:the mobile apps industry: (i) adoption of the Internet'smartphone continues to increase globally; (ii) broadband technology is increasingly being used to deliver Internet service enabling the deliverylower entry prices of richer content as well as larger files to consumers;smartphones; (iii) Internetsmartphone users are becoming increasingly comfortable with the process of buying products online;searching for and conducting business on their phones; (iv) the functionality of online stores continues to improve, offering a broader assortment of payment options with more promotion alternatives; (v) businesses are placing more emphasis on their online channel, reachingimplementing a larger audience at comparatively lower costs than other methods;mobile app versus a mobile website thereby enabling customers to gain a higher level of interaction and (vi) concerns about conflicts between onlinefunctionality with the SMB through said mobile app; and traditional sales channels continue to subside.(v) emerging markets having broad-based adoption of smartphones and bypassing the desktop PC entirely. We believe that the Company will be able to participate in the growth of the e-commercemobile apps industry be leveraging its current business model.
by offering an affordable, easy to build and use platform.
Competition
Our business is rapidly evolving and highly competitive. Our current and potential competitors include: (1) physical-world retailers, vendors, distributors,Advertising companies, Web design firms and manufacturers of our products;more recently, mobile app makers; (2) other online e-commerce andDIY mobile e-commerce sites;app companies; (3) a number of indirect competitors, including media companies, web portals, comparison shopping websites, and web search engines, either directly or in collaboration with other retailers;SMBs; (4) companies that provide e-commerce services, including website development, fulfillment, and customer service;website/app development.; (5) companies that provide infrastructure web services or other information storage or computing services or products.and mobile services. We believe that the principal competitive factors in our e-commercemobile apps business include selection, price,ease of use, affordability and convenience, including fast and reliable fulfillment.broad range of functionality. Many of our current and potential competitors have greater resources, slightly longer histories, more customers, and greater brand recognition. They may secure better terms from suppliers, adopt more aggressive pricing and devote more resources to technology, infrastructure, fulfillment,functionality and ease of use and marketing. Other companies also may enter into business combinations or alliances that strengthen their competitive positions.
Employees
The Company outsourcescurrently has twelve full-time employees in Singapore, Hong Kong and Jaipur India and our joint venture partner in Jaipur, has 200 developers on staff to assist with technical, customer support, integration and engineering personnel in Asia to develop e-commerce solutions and provide ongoing hosting services to its customers. Competition for qualified personnel in the industry is intense. The Company’s future success will depend, in part, on its continued ability to attract and retain qualified personnel.tasks.
Transfer Agent
We have engaged Nevada Agency and Trust Company as our stock transfer agent. Nevada Agency and Trust Company is located at 50 West Liberty Street, Reno, Nevada 89501. Phone: (775) 332-0626.
Regulations
The servers for our online e-commerce platform are located in Hong Kong. The Hong Kong government or regulatory agencies may block or suspend our internet transmission capabilities if we are deemed to be in violation of the following content regulations for online services:
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Securities and Futures Ordinance(Cap. 571 of the Laws of Hong Kong) – We are subject to the laws, rules and regulations regarding trading. The Securities and Futures Commission is responsible for: maintaining and promoting the fairness, efficiency, competitiveness, transparency and orderliness of the securities and futures industry. The Commission may suppress illegal, dishonorable and improper practices in the securities and futures industry; to take appropriate steps in relation to the securities and futures industry. Regardless of the communication or delivery medium used, the Commission will continue to apply the general anti-fraud and anti-manipulation provisions of the relevant Ordinances in its enforcement actions. If any person responsible for activities over the Internet is found to have acted in contravention of the provisions of the Ordinances or appears to have been involved in any misconduct whether in Hong Kong or elsewhere, the Commission may exercise its regulatory powers (including prosecution or taking other disciplinary actions as may be required); and when necessary, the Commission may consider other regulatory means available to it including seeking cooperation from foreign regulators and law enforcement agencies to take joint enforcement action, if necessary. We are prohibited from carrying on any regulated activity, as defined under the Securities and Futures Ordinance, such as dealing in securities and/or futures contracts, unless we have been granted the appropriate license(s) from the Commission.
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Personal Data (Privacy) Ordinance (Cap. 486 of the Laws of Hong Kong) – We are subject to data privacy laws, rules and regulations that regulate the use of customer data. In Hong Kong we are governed by the Personal Data (Privacy) Ordinance and as a data user we are prohibited from doing or engaging in any practice that contravenes the data protection principles set out therein.
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Telecommunications Ordinance (Cap. 106 of the Laws of Hong Kong), Crimes Ordinance (Cap. 200 of the Laws of Hong Kong) and Theft Ordinance (Cap. 210 of the Laws of Hong Kong) – Provisions under the Telecommunications Ordinance, Crimes Ordinance and Theft Ordinance make it an offense for unauthorized access to computer by telecommunication, to access a computer with criminal or dishonest intent, and extend the meaning of criminal damage to include misuse of computer programs or data, and burglary to include unlawfully causing a computer to function other than as it has been established and altering, erasing or adding any computer program or data. In this respect, any of the abovementioned computer related crimes committed by any staff, employees or agents, will subject us to possible criminal charges and/or investigations.
These rules and regulations are administered by the three branches of Hong Kong’s Commerce and Economic Development Bureau: (i) the Commerce, Industry and Tourism Branch (responsible for policy matters on Hong Kong's external commercial relations, inward investment promotion, intellectual property protection, industry and business support, tourism, consumer protection and competition), (ii) the Communications and Technology Branch (responsible for policy matters on broadcasting, film-related issues, overall view of creative (including film) industry, development of telecommunications, innovation and technology, and control of obscene and indecent articles); and (iii) the Office of the Government Chief Information Officer (responsible for policy, strategy and execution of information technology programs and initiatives).
If any of these government agencies acts to block or limit access to our website or adopt policies restricting our customers from providing us with accurate and up-to-date information, the value of our electronic trading platform could be negatively impacted, which would adversely affect our ability to offer compelling hiring and marketing solutions and subscriptions to our customers, enterprises, and professional organizations.
ITEM 1A. RISK FACTORS
We operate in a highly competitive environment in which there are numerous factors which can influence our business, financial position or results of operations and which can also cause the market value of our common stock to decline. Many of these factors are beyond our control and therefore, are difficult to predict. The following section sets forth what we believe to be the principal risks that could affect us, our business or our industry, and which could result in a material adverse impact on our financial results or cause the market price of our common stock to fluctuate or decline.
RISKS RELATED TO OUR BUSINESS
We are subject to risks associated with changing technologies in the e-commercemobile apps industry, which could place us at a competitive disadvantage.
The successful implementation of our business strategy requires us to continuously evolve our existing solutions and introduce new solutions to meet customers’ needs. We believe that our customers rigorously evaluate our solution and service offerings on the basis of a number of factors, including, but not limited to:quality; price competitiveness; technical expertise and development capability; innovation; reliability and timeliness of delivery; operational flexibility; customer service; and overall management.
Our success depends on our ability to continue to meet our customers’ changing requirements and specifications with respect to these and other criteria. There can be no assurance that we will be able to address technological advances or introduce new offerings that may be necessary to remain competitive within the e-commercemobile apps industry.
Systems failures could cause interruptions in our services or decreases in the responsiveness of our services which could harm our business.
If our systems fail to perform, we could experience disruptions in operations, slower response times or decreased customer satisfaction. Our ability to facilitate e-commerce transactionshost mobile apps successfully and provide high quality customer service depends on the efficient and uninterrupted operation of our hosting company's computer and communications hardware and software systems. TheseAlthough unlikely, our hosting company's systems have in the past experienced periodic interruptions and disruptions in operations, which we believe will continue to occur from time to time. Our systems also are vulnerable to damage or interruption from human error, natural disasters, power loss, telecommunication failures, break-ins, sabotage, computer viruses, intentional acts of vandalism and similar events. We do not have fully redundant capabilities. Any systems failure that causes an interruption in our services or decreases the responsiveness of our services could impair our reputation, damage our brand name and materially adversely affect our business, financial condition and results of operations and cash flows.
Our cost structure is partially fixed. If our revenues decline and we are unable to reduce our costs, our profitability will be adversely affected.
Our cost structure is partially fixed. We base our cost structure on historical and expected levels of demand for our services, as well as our fixed operating infrastructure, such as computer hardware and software, hosting facilities and security and staffing levels. If demand for our services declines and, as a result, our revenues decline, we may not be able to adjust our cost structure on a timely basis and our profitability may be materially adversely affected.
Attrition of customer accountscustomers and failure to attract new accountscustomers could have a material adverse effect on our business, financial condition and results of operations and cash flows. Even if we do attract new customers, we may fail to attract the customers in a cost-effective manner, which could materially adversely affect our profitability and growth.
Although we offer e-commerce solutions and servicesmobile apps designed to support and retain our customers, our efforts to attract new customers or prevent attrition of our existing customers may not be successful. If we are unable to retain our existing customers or acquire new customers in a cost-effective manner, our business, financial condition and results of operations and cash flows would likely be adversely affected. Although we have spent significant resources on business development and related expenses and plan to continue to do so, these efforts may not be cost-effective at attracting new customers.
Any future acquisitions may result in significant transaction expenses, integration and consolidation risks and risks associated with entering new markets, and we may be unable to profitably operate our consolidated company.
Although our growth strategy has not focused historically on acquisitions, we may in the futureThe Company intends to selectively pursue acquisitions and new businesses. Any future acquisitions may result in significant transaction expenses and present new risks associated with entering additional markets or offering new products and services, and integrating the acquired companies. Because acquisitions historically have not been a core part of our growth strategy, we do not have significant experience in successfully completing acquisitions. We may not have sufficient management, financial and other resources to integrate companies we acquire or to successfully operate new businesses and we may be unable to profitably operate our expanded company. Additionally, any new businesses that we may acquire, once integrated with our existing operations, may not produce expected or intended results.
We may be unable to respond to customers' demands for new e-commercemobile app solutions and service offerings and our business, financial condition and results of operations and cash flows may be materially adversely affected.
Our customers may demand new e-commercemobile app solutions and service offerings. If we fail to identify these demands from customers or update our offerings accordingly, new offerings provided by our competitors may render our
existing solutions and services less competitive. Our future success will depend, in part, on our ability to respond to customers' demands for new offerings on a timely and cost-effective basis and to adapt to address the increasingly sophisticated requirements and varied needs of our customers and prospective customers. We may not be successful in developing, introducing or marketing new offerings. In addition, our new offerings may not achieve market acceptance. Any failure on our part to anticipate or respond adequately to customer requirements, or any significant delays in the development, introduction or availability of new offerings or enhancements of our current offerings could have a material adverse effect on our business, financial condition and results of operations and cash flows.
We may be unable to respond to the evolving industry practices and technology solutions, and our business, financial condition and results of operations and cash flows may be materially adversely affected.
To remain competitive as an e-commerce solutions and servicesa mobile app provider, we must continue to invest in research and development of new technology solutions in order to keep up with the ever evolving industry practices and enhancements to our existing solutions. The process of developing new technologies, products and services is complex and expensive. The introduction of new solutions by our competitors, the market acceptance of competitive solutions based on new or alternative technologies or the emergence of new industry practices could render our solutions less competitive.
We may be exposed to liabilities under the Foreign Corrupt Practices Act, and any determination that we violated the Foreign Corrupt Practices Act could have a material adverse effect on our business.
We are subject to the Foreign Corrupt Practice Act, or FCPA, and other laws that prohibit improper payments or offers of payments to foreign governments and their officials and political parties by U.S.
persons and issuers as defined by the statute for the purpose of obtaining or retaining business. We have operations, agreements with third parties and make sales in Asia, which may experience corruption. Our activities in Asia create the risk of unauthorized payments or offers of payments by one of the employees, consultants or agents of our company, because these parties are not always subject to our control. It is our policy to implement safeguards to discourage these practices by our employees. Also, our existing safeguards and any future improvements may prove to be less than effective, and the employees, consultants, sales agents or distributors of our Company may engage in conduct for which we might be held responsible. Violations of the FCPA may result in severe criminal or civil sanctions, and we may be subject to other liabilities, which could negatively affect our business, operating results and financial condition. In addition, the government may seek to hold our Company liable for successor liability FCPA violations committed by companies in which we invest or that we acquire.
RISKS RELATED TO THE MARKET FOR OUR STOCK
The market price of our common stock can become volatile, leading to the possibility of its value being depressed at a time when you may want to sell your holdings.
The market price of our common stock can become volatile. Numerous factors, many of which are beyond our control, may cause the market price of our common stock to fluctuate significantly. These factors include:
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our earnings releases, actual or anticipated changes in our earnings, fluctuations in our operating results or our failure to meet the expectations of financial market analysts and investors;
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changes in financial estimates by us or by any securities analysts who might cover our stock;
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speculation about our business in the press or the investment community;
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significant developments relating to our relationships with our customers or suppliers;
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stock market price and volume fluctuations of other publicly traded companies and, in particular, those that are in our industry;
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customer demand for our business solutions;
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investor perceptions of our industry in general and our Company in particular;
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the operating and stock performance of comparable companies;
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general economic conditions and trends;
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announcements by us or our competitors of new products, significant acquisitions, strategic partnerships or divestitures;
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changes in accounting standards, policies, guidance, interpretation or principles;
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loss of external funding sources;
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sales of our common stock, including sales by our directors, officers or significant stockholders; and
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addition or departure of key personnel.
Securities class action litigation is often instituted against companies following periods of volatility in their stock price. Should this type of litigation be instituted against us, it could result in substantial costs to us and divert our management’s attention and resources.
Moreover, securities markets may from time to time experience significant price and volume fluctuations for reasons unrelated to the operating performance of particular companies. These market fluctuations may adversely affect the price of our common stock and other interests in our Company at a time when you want to sell your interest in us.our common stock.
Our common stock is quoted on the over-the-counter electronic quotation system maintained by the OTC Markets which may have an unfavorable impact on our stock price and liquidity.
Our common stock is quoted on the Pink Sheets, an over-the-counter electronic quotation system maintained by the OTC Markets. The Pink Sheets is a significantly more limited than a trading market such as the New York Stock Exchange or NASDAQ. The Pink Sheets is a less liquid market for the trading of our common stock by existing and potential stockholders, and so trading of our common stock on the Pink Sheets could depress the trading price of our common stock and could have a long-term adverse impact on our ability to raise capital in the future. We plan to list our common stock as soon as practicable. However, we cannot assure you that we will be able to meet the initial listing standards of any stock exchange, or that we will be able to maintain any such listing.
We may be subject to penny stock regulations and restrictions and you may have difficulty selling shares of our common stock.
The SEC has adopted regulations which generally define so-called “penny stocks” to be an equity security that has a market price less than $5.00 per share or an exercise price of less than $5.00 per share, subject to certain exemptions. If our common stock becomes a “penny stock,” we may become subject to Rule 15g-9 under the Exchange Act, or the Penny Stock Rule. This rule imposes additional sales practice requirements on broker-dealers that sell such securities to persons other than established customers and “accredited investors” (generally, individuals with a net worth in excess of $1,000,000 or annual incomes exceeding $200,000, or $300,000 together with their spouses). For transactions covered by the Penny Stock Rule, a broker-dealer must make a special suitability determination for the purchaser and have received the purchaser’s written consent to the transaction prior to sale. As a result, this rule may affect the ability of broker-dealers to sell our securities and may affect the ability of purchasers to sell any of our securities in the secondary market.
For any transaction involving a penny stock, unless exempt, the rules require delivery, prior to any transaction in a penny stock, of a disclosure schedule prepared by the SEC relating to the penny stock market. Disclosure is also required to be made about sales commissions payable to both the broker-dealer and the registered representative and current quotations for the securities. Finally, monthly statements are required to be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stock.
There can be no assurance that our common stock will qualify for exemption from the Penny Stock Rule. In any event, even if our common stock were exempt from the Penny Stock Rule, we would remain subject to Section 15(b)(6) of the Exchange Act, which gives the SEC the authority to restrict any person from participating in a distribution of penny stock, if the SEC finds that such a restriction would be in the public interest.
We may be required to raise additional financing by issuing new securities with terms or rights superior to those of our shares of common stock, which could adversely affect the market price of our shares of common stock.
We may require additional financing to fund future operations, develop and exploit existing and new products and to expand into new markets. We may not be able to obtain financing on favorable terms, if at all. If we raise additional funds by issuing equity securities, the percentage ownership of our current shareholders will be reduced, and the holders of the new equity securities may have rights superior to those of the holders of shares of common stock, which could adversely affect the market price and the voting power of shares of our common stock. If we raise additional funds by issuing debt securities, the holders of these debt securities would similarly have some rights senior to those of the holders of shares of common stock, and the terms of these debt securities could impose restrictions on operations and create a significant interest expense for us.
We do not intend to pay dividends for the foreseeable future.
For the foreseeable future, we intend to retain any earnings to finance the development and expansion of our business, and we do not anticipate paying any cash dividends on our common stock.
Accordingly, investors must be prepared to rely on sales of their common stock after price appreciation to earn an investment return, which may never occur. Investors seeking cash dividends should not purchase our common stock. Any determination to pay dividends in the future will be made at the discretion of our board of directors and will depend on our results of operations, financial condition, contractual restrictions, restrictions imposed by applicable law and other factors our board deems relevant.
ITEM 1B. UNRESOLVED STAFF COMMENTS.
Not Applicable.
ITEM 2. PROPERTIES
The Company’s current executive offices are located at 138 Queens Road Central, 11th Floor,9/F, The Wellington, 198 Wellington Street, Central, Hong Kong, HKSARKong. The Company leases space from a strategic partner, OP Investment Management for $1 per month in exchange for providing mobile applications advisory services on an ad-hoc basis.
ITEM 3. LEGAL PROCEEDINGS
From time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business. We are currently not aware of any such legal proceedings or claims that we believe will have a material adverse affecteffect on our business, financial condition or operating results.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
PART II
ITEM 5. MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
Common Stock
We are authorized to issue 10,000,000,000250,000,000 shares of Common Stock, at a par value $0.00001$0.0001 per share. The holders of Common Stock are entitled to one vote for each share held of record on all matters to be voted on by stockholders. There is no cumulative voting with respect to the election of directors, with the result that the holders of more than 50% of the shares voting for the election of directors can elect all of the directors then up for election.
The holders of Common Stock are entitled to receive ratably such dividends when, as and if declared by the Board of Directors out of funds legally available therefore. In the event we have liquidation, dissolution or winding up, the holders of Common Stock are entitled to share ratably in all assets remaining which are available for distribution to them after payment of liabilities and after provision has been made for each class of stock, if any, having preference over the Common Stock. Holders of shares of Common Stock, as such, have no conversion, preemptive or other subscription rights, and there are no redemption provisions applicable to the Common Stock.
Market Information
The Company’s Common Stock currently only trades on the Pink Sheets operated by OTC Markets Inc. under the symbol “STOA”“WEYL”. The Company’s Common Stock commenced trading under this symbol on June 8, 2011,September 1, 2016, and previously traded under the symbol “SOBM”“STOA” from March 2, 2007 until June 7, 2011 on the OTC Pink.Pink Sheets.
The following historical quotations obtained online at www.yahoo.com reflects the high and low bids for our Common Stock based on inter-dealer prices, without retail mark-up, mark-down or commission and may not necessarily represent actual transactions:
Quarter Ended | High ($) | Low ($) |
December 31, 2014 | $0.00 | $0.00 |
September 30, 2014 | $0.00 | $0.00 |
June 30, 2014 | $0.00 | $0.00 |
March 31, 2014 | $0.00 | $0.00 |
December 31, 2013 | $0.00 | $0.00 |
September 30, 2013 | $0.00 | $0.00 |
June 30, 2013 | $0.00 | $0.00 |
March 31, 2013 | $0.00 | $0.00 |
Quarter Ended | High ($) | Low ($) |
December 31, 2015 | $0.99 | $0.40 |
September 30, 2015 | $1.00 | $0.00 |
Sep 1, 2015 1:1000 Stock split |
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June 30, 2015 adj. | $0.65 | $0.40 |
March 31, 2015 adj. | $1.00 | $0.40 |
December 31, 2014 adj. | $2.90 | $0.70 |
September 30, 2014 adj. | $91.00 | $5.00 |
June 30, 2014 adj. | $300.00 | $80.00 |
March 31, 2014 adj. | $690.00 | $201.00 |
As of March 31, 2015,2016, the Company’s Common Stock closed at a price of $0.0003.$1.20.
Holders
Shareholders
As of March 27, 2015,31, 2016, there are 212,804,67516,442,963 shares of Common Stock issued and outstanding held by 181202 shareholders of record.
Dividend Policy
We have never paid any cash dividends and have no plans to do so in the foreseeable future. Our future dividend policy will be determined by our Board of Directors and will depend upon a number of factors, including our
financial condition and performance, our cash needs and expansion plans, income tax consequences and the restrictions that applicable laws and other arrangements then impose.
Securities Authorized for Issuance Under Equity Compensation Plans
The following table sets forth information as of the end of the fiscal year ended December 31, 2014, with respect toAll compensation plans (including individual compensation arrangements) under which equity securities of the Company are authorized for issuance, aggregated as follows: (i) all compensation plans previously approved by security holders; and (ii) all compensation plans not previously approved by security holders.
Plan category | Number of securities to be issued upon exercise of outstanding options | Weighted-average exercise price of outstanding options | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) |
| (a) | (b) | (c) |
Equity compensation plans approved by security holders (1) | 410,000 | $0.83 | 24,590,000 |
Total | 410,000 | $0.83 | 24,590,000 |
Notes: (1) The Company’s Board of Directors adopted a stock option plan on November 3, 2006 and was subsequently ratified by the shareholders at the Annual Meeting of Shareholders held on March 1, 2007. | |||
outstanding at the year ended December 31, 2015 have been cancelled.
Recent Sales of Unregistered Securities
NoneThe following is a summary of transactions since our previous disclosure on our Form 10-Q filed with the Securities and Exchange Commission on March 25, 2016 involving sales of our securities that were not registered under the Securities Act of 1933, as amended (the "Securities Act"). Each offer and sale was exempt from registration under either Section 4(2) of the Securities Act or Rule 506 under Regulation D of the Securities Act because (i) the securities were offered and sold only to accredited investors; (ii) there was no general solicitation or general advertising related to the offerings; (iii) each investor was given the opportunity to ask questions and receive answers concerning the terms of and conditions of the offering and to obtain additional information; (iv) the investors represented that they were acquiring the securities for their own account and for investment; and (v) the securities were issued with restrictive legends.
The securities granted or sold under these agreements are unregistered and may only be resold or transferred if they later become registered or fall under an exemption to the Securities Act or applicable state laws. Our typical investor or grantee generally relies upon Rule 144 of the Securities Act, which, in addition to requiring several other conditions before resale may occur, requires that the securities issued be held for a minimum of six months.
From September 1, 2015 to December 31, 2015, the Company raised $400,000 from the issuance of 1,040,000 unregistered shares of its common stock, par value $0.0001, to a group of Accredited Investors.
On March 23, 2016 The Company raised $263,000 from the issuance of 317,000 unregistered shares of its common stock, par value $0.0001, to a group of Accredited Investors.
Purchase of Equity Securities by the Company and Affiliated Purchasers
Not Applicable.The Chief Executive Officer of the Company agreed to convert $50,000 of CEO payables to common stock at a purchase price of $0.58 per share. The CEO payables were accumulated in connection with the purchase of a previously issued convertible note, in 2014, from KBM Worldwide, in the full amount of $104,838 including principal amount plus accrued interest.
ITEM 6. SELECTED FINANCIAL DATA
The Company, as a “smaller reporting company” (as defined by §229.10(f) (1)), is not required to provide the information required by this Item.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
You should read the following plan of operation together with our financial statements and related notes appearing elsewhere in this annual report. This plan of operation contains forward-looking statements that involve risks, uncertainties, and assumptions. The actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors.
Overview
Seratosa specializesWeyland Tech, prior to September 1, 2015 specialized in providing e-commerce solutions and services that facilitate multi-channel B2C (business-to-consumer) and B2B (business-to-business) transactions. Its solutions and services enableenabled e-commerce
transactions with speed and efficiency, and allowallowed an interactive and engaging customer experience as well as targeted marketing and advertising.
On September 1, 2015, Weyland Tech acquired the exclusive right to use the ‘CreateApp’ M-commerce applications platform ("apps") from Technopreneurs Resource Centre Private Limited, a Singapore Limited company ("TRC") which was satisfied by the issuance of shares in the Company. Weyland Tech, have registered the domain name www.createapp.com
TRC's CreateApp platform was marketed and sold predominantly in Singapore with less than 1% of sales attributable to ex-Singapore customers.
The Company’s revenues are generated from one-time integration feesCreateApp platform is offered in eleven languages and enables small-medium-sized businesses ("SMBs") to create a mobile application ("app") without the need of technical knowledge, high investment and background in IT.
SMB's can increase sales, reach more customers and promote their products and services via a simple easy to build mobile app at an affordable and cost-effective manner.
On January 19, 2016 the company signed a Software Licensing Agreement ("SLA") with Info Zone Development Limited ("Info Zone") to provide a 'white label' rollout of the Company's CreateApp platform in the Hong Kong and China market.
On January 21, 2016 the company signed an exclusive Software Licensing Agreement ("SLA") with Silver Ridge-Tangerine Sdn Bhd ("Silver Ridge") to provide a 'white label' rollout of the Company's CreateApp platform in Malaysia.
On February 11, 2016 the company signed an exclusive Software Licensing Agreement ("SLA") with Augicom S.A., ("Augicom") to distribute the Company's CreateApp platform in the Euro-Zone except Russia, Turkey, Armenia and Azerbaijan.
On February 24, 2016 the company signed a Term Sheet ("TS") with Meta 4 Group SarL ("Meta4") to form a joint venture partnership for the implementationrollout of e-commerce solutions as well as recurring license and service fees. The Company has been hosting two e-commerce solutions:Meta4's 'Worldfriend's' network platform in the greater Indonesia market.
1.
4-GS, Ltd. is a B2B e-commerce platform that optimizes supply chain sourcing for international enterprise customers through B2B Search Engine Optimization (SEO), e-catalogOn March 9, 2016 the company signed an exclusive Software Licensing Agreement ("SLA") with Aurum Digital, Inc. ("Aurum") to distribute CreateApp in the Americas, covering North, Central and inventory management systems and a transaction platform.
2.
ZBL Cybermarketing, Ltd. is a Search Engine Marketing (SEM) and Search Engine Optimization (SEO) provider in Northern China and utilizes the Company’s e-commerce solutions to identify and engage targeted consumer segments and optimize purchase conversions.South Americas.
We service 4-GS and ZBL Cybermarketing underOn March 14, 2016 the strategic partnershipcompany signed an exclusive Software Licensing Agreement ("SLA") with IAM, Inc. ("IAM") to distribute CreateApp in the Republic of Korea.
On March 22, 2016 the company signed the joint venture agreement ("JV") with Soconison Technology Ventures, dated July 11, 2011 and extended by an additional two years on June 13, 2013. Meta 4 Group SarL ("Meta4") for the rollout of Meta4's 'Worldfriend's' network platform in the greater Indonesia market.
Plan of Operations
Although Weyland Tech's CreateApp platform originally focused on the ASEAN and pan-Asia markets, we have partners that work with us to develop the EU and North American markets. The CreateApp platform is offered in 11 languages and enables small-medium-sized businesses ("SMB's") to create a mobile application ("app") without the need of technical knowledge, high investment and background in IT.
SMB's can increase sales, reach more customers and promote their products and services via a simple easy to build mobile app at an affordable and cost-effective manner.
Weyland Tech currently offers the CreateApp platform directly, in the following key markets:
Singapore:
www.createappsingapore.com
India (Jaipur):
www.aapkiapp.in
US/Canada:
www.createappamericas.com
Weyland Tech currently offers a DIY App builder through a 'white label' platform, in the following markets:
EU (excluding Russia, Turkey, Armenia, Azerbaijan) via a Strategic Partnership with Augicom S.A. www.augicom.ch
Malaysia via a Strategic Partnership with Silver Ridge Tangerine Sdn Bhd www.silverridge.com.my
Hong Kong/ South China via a Strategic Partnership with Info Zone Ltd.
Indonesia via a Strategic Partnership with Worldfriend's Network www.worldfriends.com
North America via a Strategic Partnership with Aurum Digital Inc. www.createappamericas.com
Korea via IAM, Inc. www.createapp.kr (launches June 1, 2016)
The Company believes that it can participatethe strategic partnerships that were structured in late 2015 and early 2016, represent a large enough addressable market opportunity to generate sales and profits in a scalable manner, grow the growth of e-commerce as a provider of e-commerce solutionsCompany's business and services. The Company expects to continue utilizing its technology and efficient cost structure, and source technical and engineering personnel in Asia for servicing its customers. The Company is also pursuing initiatives to identify opportunities to acquire technologies or companies that can accelerate the growth of the Company.enhance shareholder value.
Need for Additional Capital
To become profitable and competitive, and execute strategic transactions, we may have to raise additional capital. If we are unable to raise additional equity capital to develop our business and continue earning revenues, we might have to suspend or cease operations and our investors may lose their investment.
We have no assurance that future financings will be available to us on acceptable terms. If financing is not available on satisfactory terms, we may be unable to continue, develop, or expand our operations. Equity financing could result in additional dilution to existing shareholders.
For the Fiscal Year Ended December 31, 20142015
Liquidity and Capital Resources
Our registered independent auditors for the year ended December 31, 2014 have issued a going concern opinion. This means that there is substantial doubt that we can continue as an on-going business for the next 12 months unless we obtain additional capital or generate revenues to pay our bills. Potential sources of revenues are our two customers for whom we are currently hosting e-commerce solutions. Our other source for cash at this time is investments by others in the Company.
On December 31, 2014,2015, we had a working capital deficitarising from changes in operating assets and liabilities of $231,768$ 1,595,563 compared with a working capital deficit of $138,995$288,416 on December 31, 2013.2014. The decreaseincrease is primarily due to a decrease of our cash as a result ofthe contribution from CreateApp effective September 1, 2015 and our net loss. Operating activities used $174,798 inprofit arising thereon. Net cash generated from operations provided $1,595,563 in the twelve months ended December 31, 2014.2015. Investing activities provided $0$6,885 in the twelve months ended December 31, 2014. Financing activities provided $0 in the twelve months ended December 31, 2014.2015.
We expect to continue utilizing our personnel in Greater Asia, including ASEAN and India for servicing our customers. In order to accelerate the growth of the Company, we will also consider raising additional funding from investors.
We may not have enough working capital to complete our plan of operations. If it turns out that we have not raised enough capital to complete our anticipated business development, we will tryuse our best efforts to raise additional funds from
private placements or loans. There is no assurance that we will raise additional capital in the future or that future financings will be available to us on acceptable terms. If we require additional capital and are unable to raise it, we may have to suspend or cease operations.
Revenue Recognition
TheHistorically, the Company recognizesrecognized revenue from providing hosting and integration services and licensing the use of its technology platform to its customers. The Company recognizes revenue when all of the following conditions are satisfied: (1) there is persuasive evidence of an arrangement; (2) the service has been provided to the customer (for licensing, revenue is recognized when the Company’s technology is used to provide hosting and integration services); (3) the amount of fees to be paid by the customer is fixed or determinable; and (4) the collection of fees is probable. Integration revenue was recognized when integration was completed and accepted by the customer. Monthly hosting fees are recognized when billed.
We earned revenue from providing hosting and integration services to 4-GS, Ltd. and ZBL Cybermarketing, Ltd. We charge 4-GS and ZBL Cybermarketing monthly integration and hosting fees. The fee arrangement with the two customers is covered under the strategic partnership agreement with Soconison Technology Ventures, dated July 11, 2011 and extended by an additional two years on June 13, 2013. Soconison Technology Ventures is a shareholder in 4-GS and ZBL Cybermarketing.
On September 1, 2015, Weyland Tech acquired the exclusive proprietary rights to the CreateApp M-commerce platform from Technopreneurs Resource Centre Private Limited, a Singapore Limited company ("TRC") which was satisfied by the issuance of shares in the Company. Weyland Tech, owns the rights to the 'CreateApp' mobile applications ("apps") platform and have also registered the www.createapp.com domain name.
The Company's CreateApp platform generates sales to SMB's on a monthly licensing basis (direct sales model) as well as through 'resellers of the platform (reseller model) and country/market specific partnerships whereby the partner rebrands the CreateApp platform under their own branding (white label sales model).
Results of Operation for the Fiscal Year ended December 31, 20142015
Service Revenue
Service Revenues were $2,483,811$ 2,553,992 and $ 2,202,193$2,483,811 for the twelve months ended December 31, 20142015 and 2013,2014, respectively. The increase is due to slightly increased e-commerce traffic and revenue.the contribution from the CreateApp platform effective September 1, 2015.
Cost of Service
Cost of Service was $1,711,839$1,552,258 and $ 2,078,234$1,711,839 for the twelve months ended December 31, 20142015 and 2013,2014, respectively. The decreaseslight reduction is due to slightly reducedlower costs of service concurrentin connection with increase of e-commerce traffic.the CreateApp platform effective September 1, 2015.
Operating Expenses
General and administrative expenses: General and administrative expenses were $1,027,665$ 268,013 and $ 1,365,034$1,027,665 for the twelve months ended December 31, 2015 and 2014, respectively. The decline is mainly due to the change in cost structure incorporating the CreateApp platform effective September 1, 2015 and 2013, respectively. a reduction in cost of service of the existing business. Included in General and administrative expenses was Amortization of development costs capitalized of $ 83,333 (2104: Nil).
Stock-based compensation:compensation The Stock-based compensation expenses were $0are $8,960 and $0$100,000 respectively for the twelve months ended December 31, 20142015 and 2013, respectively. 2014.
Net LossIncome (Loss)
The Company had a net income of $733,721 for the twelve months ended December 31, 2015 as compared to a net loss of $255,693 for the twelve months ended December 31, 2014 as compared to a2014. The increase in net loss of $ 1,220,765 for the twelve months ended December 31, 2013. The decreaseincome is primarily due to reduced investing and upgradesthe material reduction in operating expenses related to the softwareCreateApp platform incurred in 2013.effective September 1, 2015.
Off-Balance Sheet Arrangements
We have no off-balance sheet arrangements.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not applicable
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
(formerly known as Seratosa, Inc.) | ||||||||
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INDEX TO FINANCIAL STATEMENTS | ||||||||
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Reports of Independent Registered Public Accounting Firms | F-1 | |||||||
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Balance Sheets at December 31, |
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Statements of Operations for year ended December 31, |
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Statements of Stockholders' |
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Notes to Financial Statements |
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Report of Independent Registered Public Accounting Firm
To the Board of Directors and Stockholders of Weyland Tech Inc
(formerly known as Seratosa, Inc.).
We have audited the accompanying balance sheets of SeratosaWeyland Tech Inc. (the “Company”), as of December 31, 2015 and December 31, 2014 and the related statements of operations, stockholders’ deficitequity/(deficits) and cash flows, for the year ended December 31, 2015 and December 31, 2014. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our 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 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 the Company’s internal control over financial reporting. Our audit included consideration of internal control over finance 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 evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, these financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2015 and December 31, 2014 and the results of its operations and their cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America.
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has suffered recurring losses from operations. These conditions raise substantial doubt about its abilities to continue as going concern. Management’s plans regarding those matters also are described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Dominic K.F. Chan & Co
Certified Public Accountants
Hong Kong, 27 March, 201414 April 2016
Report of Independent Registered Public Accounting Firm
To the Board of Directors and Stockholders of Sitoa Global, Inc.
We have audited the accompanying balance sheets of Sitoa Global, Inc. (the “Company”), as of December 31, 2013 and the related statements of operations, stockholders’ deficit and cash flows, for the year ended December 31, 20123 These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our 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 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 the Company’s internal control over financial reporting. Our audit included consideration of internal control over finance 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 evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, these financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2013 and the results of its operations and their cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America.
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has suffered recurring losses from operations. These conditions raise substantial doubt about its abilities to continue as going concern. Management’s plans regarding those matters also are described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
WEYLAND TECH INC. | ||||||||
(formerly known as Seratosa, Inc.) | ||||||||
Balance Sheets | ||||||||
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| December 31 |
| December 31 |
ASSETS |
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| 2014 | |||
Non-current assets |
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Investment in joint venture (Note 5) |
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| 20,230 |
| - | |||
Development costs, net of accumulated amortization (Note 4) | 666,667 |
| - | |||||
Equipment, net (Note 6) |
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| - | |||
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| 686,897 |
| - | |||
Current assets |
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Accounts receivable |
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| 722,700 |
| 202,700 | |||
Deposit and prepayment |
| 8,000 |
| - | ||||
Cash and cash equivalents |
| 832,218 |
| - | ||||
Total current assets |
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| 1,562,918 |
| 202,700 | |||
Total assets |
| $ | 2,249,815 | $ | 202,700 | |||
LIABILITIES AND STOCKHOLDERS' EQUITY |
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Current liabilities |
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Accounts payable |
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| 1,250,584 |
| - | |||
Accrued expenses and other payables (note 7) |
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| 180,494 |
| 112,977 | |||
Other payables (note 7) |
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| - |
| 303,490 | |||
CEO payables (note 7) |
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| 121,181 |
| - | |||
Deposit for stock to be issued (note 8) |
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| 147,456 |
| - | |||
Total current liabilities |
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| 1,699,715 |
| 416,467 | |||
Total liabilities |
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| 1,699,715 |
| 416,467 | |||
STOCKHOLDERS' EQUITY/(DEFICIT) (Note 9) |
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Common stock |
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Authorized 250,000,000 shares at par value of $ 0.0001 each |
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Issued and outstanding 12,628,688 shares as of December 31, 2015 and 46,256,568 shares as of December 31, 2014 | 146,179 |
| 139,177 | |||||
Additional paid-in capital |
| 36,104,026 |
| 36,080,881 | ||||
Subscriptions received |
| 1,765,855 |
| 1,765,855 | ||||
Accumulated deficit brought forward |
| (37,465,960) |
| (38,199,681) | ||||
Total stockholder’s equity/(deficit) |
| 550,100 |
| (213,768) | ||||
Total liabilities and stockholders' equity/(deficit) | $ | 2,249,815 |
| 202,700 | ||||
The accompanying notes are an integral part of these financial statements. | ||||||||
Dominic K.F. Chan & Co
Certified Public Accountants
Hong Kong, 26 March, 2014
SERATOSA INC. | ||||||||||||||
Balance Sheets | ||||||||||||||
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ASSETS |
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Current assets |
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| Cash and cash equivalents |
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| 296,916 | |||||||||
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| Total current assets |
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| 296,916 | ||||||||
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Equipment, net (Note 2) |
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| Total assets |
| $ | 168,223 | $ | 296,916 | ||||||||
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LIABILITIES AND STOCKHOLDERS' DEFICIT |
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CURRENT LIABILITIES |
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| $ | - | $ | 392,911 | ||||||||
| Accounts payable and other accruals |
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| 381,991 |
| 43,000 | ||||||||
| Total current liabilities |
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| 381,991 |
| 435,911 | ||||||||
NON-CURRENT LIABILITIES |
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| Total liabilities |
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| 381,991 |
| 435,911 | ||||||||
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STOCKHOLDERS' DEFICIT |
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| Authorized 10,000,000,000 shares at par value of $ 0.00001 each |
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| Issued and outstanding 46,256,568 shares as of December 31, 2014 and 429,317 shares as of December 31, 2013 | 139,177 |
| 138,719 | ||||||||
| Additional paid-in capital |
| 36,080,881 |
| 35,900,419 | |||||||||
| Subscriptions received |
| 1,765,855 |
| 1,765,855 | |||||||||
| Accumulated deficit |
| (38,199,681) |
| (37,943,988) | |||||||||
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| Total stockholders' deficit |
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| (213,768) |
| (138,995) | ||||||
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| Total liabilities and stockholders' equity |
| $ | 168,223 | $ | 296,916 | ||||||||
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The accompanying notes are an integral part of these financial statements. | ||||||||||||||
WEYLAND TECH INC. | |||||||
(formerly known as Seratosa, Inc.) | |||||||
Statements of Operations | |||||||
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| Year Ended December 31, | ||
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Service Revenue |
| $ | 2,553,992 | $ | 2,483,811 | ||
Cost of Service |
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| 1,711,839 | ||
Gross Profit (loss) |
|
| 1,001,734 |
| 771,972 | ||
|
|
|
|
|
|
|
|
Other Income |
|
| - |
| - | ||
Gross Income |
|
| 1,001,734 |
| 771,972 | ||
|
|
|
|
|
|
|
|
Operating Expenses |
|
|
|
|
| ||
| General and administrative |
|
| 268,013 |
| 1,027,665 | |
| Depreciation and amortization |
|
| - |
| - | |
Total Operating Expenses |
|
| 268,013 |
| 1,027,665 | ||
|
|
|
|
|
|
|
|
Profit/(Loss) from Operations |
|
| 733,721 |
| (255,693) | ||
|
|
|
|
|
|
|
|
Provision for income taxes |
|
| - |
| - | ||
Net Profit/(Loss) |
| $ | 733,721 | $ | (255,693) | ||
|
|
|
|
|
|
|
|
Net profit/(loss) per common share - basic and fully diluted: |
|
| 0.0032 |
| (0.0167) | ||
|
|
|
|
|
|
|
|
Weighted average number of basic and fully diluted common shares outstanding |
|
| 229,809,001 |
| 13,898,299 | ||
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of these financial statements. | |||||||
SERATOSA INC. | |||||||
Statements of Operations | |||||||
|
|
|
|
|
|
|
|
|
|
|
|
| Year Ended December 31, | ||
|
|
|
|
| 2014 |
| 2013 |
|
|
|
|
|
|
|
|
Service Revenue |
| $ | 2,483,811 | $ | 2,202,193 | ||
Cost of Service |
|
| 1,711,839 |
| 2,078,234 | ||
Gross Profit (loss) |
|
| 771,972 |
| 123,959 | ||
|
|
|
|
|
|
|
|
Other Income |
|
| - |
| 20,310 | ||
Gross Income |
|
| 771,972 |
| 144,269 | ||
|
|
|
|
|
|
|
|
Operating Expenses |
|
|
|
|
| ||
| General and administrative |
|
| 1,027,665 |
| 1,361,701 | |
| Depreciation |
|
| - |
| 3,333 | |
Total Operating Expenses |
|
| 1,027,665 |
| 1,365,034 | ||
|
|
|
|
|
|
|
|
Loss from Operations |
|
| (255,693) |
| (1,220,765) | ||
|
|
|
|
|
|
|
|
Provision for income taxes |
|
| - |
| - | ||
Net Loss |
| $ | (255,693) | $ | (1,220,765) | ||
|
|
|
|
|
|
|
|
Net loss per common share - basic and fully diluted: |
|
| (0) |
| (15) | ||
|
|
|
|
|
|
|
|
Weighted average number of basic and fully diluted common shares outstanding |
|
| 13,898,299 |
| 84,069 | ||
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of these financial statements. | |||||||
WEYLAND TECH INC. | |||||||
(formerly known as Seratosa, Inc.) | |||||||
Statements of Cash Flows | |||||||
|
|
|
|
| Year Ended December 31, | ||
|
|
|
|
| 2015 |
| 2014 |
Cash flows from operations: |
|
|
|
|
| ||
| Profit/(Loss) from continuing operations |
| $ | 733,721 | $ | (255,693) | |
| Adjustment to reconcile net loss to net cash used in operating activities: | ||||||
|
| Amortization of development costs |
|
| 83,333 |
| - |
|
| Issuance of common stock for service received |
|
| 23,262 |
| 100,000 |
| Changes in operating assets and liabilities: |
|
|
|
|
| |
|
| Accounts receivable |
|
| (520,000) |
| (202,700) |
|
| Deposits and prepayment |
|
| (8,000) |
| - |
|
| Accounts payable |
|
| 1,250,584 |
| - |
|
| CEO payable |
|
| 121,181 |
| - |
|
| Deposits received |
|
| 147,456 |
| - |
|
| Accruals and other payables |
|
| (235,974) |
| 69,977 |
Net cash generated from/(used in) operations |
|
| 1,595,563 |
| (288,416) | ||
Investment activities: |
|
|
|
|
| ||
| Investments in joint venture |
|
| (20,230) |
| - | |
| Development cost incurred |
|
| (750,000) |
|
| |
Net cash (used in) investment activities |
|
| (770,230) |
| - | ||
Financing activities: |
|
|
|
|
| ||
| Repayment of convertible debentures |
|
| - |
| (8,500) | |
| Share issuance |
|
| 6,885 |
|
| |
Net cash provided by financing activities |
|
| 6,885 |
| (8,500) | ||
|
|
|
|
|
|
|
|
Net (decreased) / increased in cash |
|
| 832,218 |
| (296,916) | ||
Balances per prior period balance sheet |
|
| - |
| 296,916 | ||
Ending balances |
| $ | 832,218 | $ | - | ||
|
|
|
|
|
|
|
|
Non-cash transactions |
|
|
|
|
| ||
| Conversion of debt to equity |
| $ | - | $ | 80,920 | |
| Issuance of common stock for services received |
| $ | 23,262 | $ | 100,000 | |
The accompanying notes are an integral part of these financial statements. | |||||||
SERATOSA INC. | |||||||
Statements of Cash Flows | |||||||
|
|
|
| ||||
|
|
|
|
| Year Ended December 31 | ||
|
|
|
|
| 2014 |
| 2013 |
|
|
|
|
|
|
|
|
Cash flows from operations: |
|
|
|
|
| ||
| Loss from continuing operations |
| $ | (255,693) | $ | (1,220,765) | |
| Adjustment to reconcile net loss to net cash used in operating activities: |
|
|
|
|
| |
|
| Depreciation expense |
|
| - |
| 3,333 |
|
| Dividend income |
|
| - |
| (3,426) |
|
| Gain on disposal of investments |
|
| - |
| (1,201) |
|
| Issuance of common stock for service received |
|
| 100,000 |
| - |
|
| Issuance of convertible debenture |
|
| - |
| 594,500 |
| Changes in operating assets and liabilities: |
|
|
|
|
| |
|
| Accounts payable and other accruals |
|
| 330,491 |
| 3,000 |
Net cash used in operations |
|
| 174,798 |
| (624,559) | ||
|
|
|
|
|
|
|
|
Investment activities: |
|
|
|
|
| ||
| Dividend received |
|
| - |
| 3,426 | |
| Sales proceeds from disposal of investments |
|
| - |
| 322,924 | |
| Purchases of trading securities |
|
| - |
| (163,030) | |
Net cash provided by / (used in) investment activities |
|
| - |
| 163,320 | ||
|
|
|
|
|
|
|
|
Financing activities: |
|
|
|
|
| ||
| Share subscriptions received |
|
| - |
| 250,000 | |
| Issuance of convertible debentures |
|
| - |
| 202,500 | |
Net cash provided by financing activities |
|
| - |
| 452,500 | ||
|
|
|
|
|
|
|
|
Net (decreased) / increased in cash |
|
| 174,798 |
| (8,739) | ||
|
|
|
|
|
|
|
|
Balances per prior period balance sheet |
|
| 296,916 |
| 305,655 | ||
Ending balances |
| $ | 471,714 | $ | 296,916 | ||
|
|
|
|
|
|
|
|
Non-cash transactions |
|
|
|
|
| ||
| Conversion of debt to equity |
| $ | 80,920 | $ | 876,319 | |
| Issuance of common stock for services received |
| $ | 100,000 | $ | - | |
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of these financial statements. | |||||||
WEYLAND TECH, INC | ||||||
(formerly known as Seratosa, Inc.) | ||||||
Statements of Stockholders' Equity | ||||||
| Common Stock | Amount | Additional paid-in capital | Subscriptions received | Accumulated (Deficit) | Stockholders' (Deficit)/ Equity |
|
|
|
|
|
|
|
Balance December 31, 2013 | 429,317 | $ 138,719 | $ 35,900,419 | $ 1,765,855 | $ (37,943,988) | $ (138,995) |
|
|
|
|
|
|
|
Shares issued pursuant to conversion of debt to equity | 35,827,251 | 358 | 80,562 | - | - | 80,920 |
Shares issued pursuant to consulting agreement | 10,000,000 | 100 | 99,900 | - | - | 100,000 |
Net (loss) for the year | - | - | - | - | (255,693) | (255,693) |
|
|
|
|
|
|
|
Balance December 31, 2014 | 46,256,568 | $ 139,177 | $ 36,080,881 | $ 1,765,855 | $ (38,199,681) | $ (213,768) |
|
|
|
|
|
|
|
Effect of reverse split from 1,000 shares to 1 share | (625,697,147) | - | - | - | - | - |
Shares issued for services | 1,163,600 | 117 | 23,145 | - | - | 23,262 |
Shares issued at par | 590,905,667 | 6,885 | - | - | - | 6,885 |
Net profit for the year | - | - | - | - | 733,721 | 733,721 |
Balance December 31, 2015 | 12,628,688 | 146,179 | 36,104,026 | 1,765,855 | $ (37,465,960) | 550,100 |
The accompanying notes are an integral part of these financial statements. | ||||||
SERATOSA INC. | ||||||
Statements of Stockholders' Equity | ||||||
|
|
|
|
|
|
|
| Common Stock | Amount | Additional paid-in capital | Subscriptions received | Accumulated (Deficit) | Stockholders' (Deficit) |
|
|
|
|
|
|
|
Balance December 31, 2011 | 26,871,131 | $ 53,743 | $ 34,417,161 | $ 442,674 | $ (35,384,422) | $ (470,844) |
|
|
|
|
|
|
|
Issue of shares in settlement of fees payable, pursuant to private placements and license agreements | 10,666,666 | 21,333 | 165,250 | 1,098,181 | - | 1,284,764 |
Shares issued pursuant to conversion of convertible debentures | 10,608,135 | 21,216 | 75,784 | - | - | 97,000 |
Stock-based compensation | - | - | 383,333 | - | - | 383,333 |
Net (loss) for the period | - | - | - | - | (1,338,801) | (1,338,801) |
|
|
|
|
|
|
|
Balance December 31, 2012 | 48,145,932 | $ 96,292 | $ 35,041,528 | $ 1,540,855 | $ (36,723,223) | $ (44,548) |
|
|
|
|
|
|
|
Shares issued pursuant to conversion of debt to equity | 1,742,670,734 | 17,427 | 858,891 | - | - | 876,318 |
Shares issued pursuant to private placement | 2,500,000,000 | 25,000 | - | 225,000 | - | 250,000 |
Effect of reverse split from 10,000 shares to 1 share | (4,290,387,349) | - | - | - | - | - |
Net (loss) for the period | - | - | - | - | (1,220,765) | (1,220,765) |
|
|
|
|
|
|
|
Balance December 31, 2013 | 429,317 | $ 138,719 | $ 35,900,419 | $ 1,765,855 | $ (37,943,988) | $ (138,995) |
|
|
|
|
|
|
|
Shares issued pursuant to conversion of debt to equity | 35,827,251 | 358 | 80,562 | - | - | 80,920 |
Shares issued pursuant to consulting agreement | 10,000,000 | 100 | 99,900 | - | - | 100,000 |
Net (loss) for the period | - | - | - | - | (255,693) | (255,693) |
|
|
|
|
|
|
|
Balance December 31, 2014 | 46,256,568 | $ 139,177 | $ 36,080,881 | $ 1,765,855 | $ (38,199,681) | $ (213,768) |
|
|
|
|
|
|
|
The accompanying notes are an integral part of these financial statements. | ||||||
SERATOSA, INC.Weyland Tech Inc.
(Formerly known as Sitoa Global Inc.)SERATOSA, INC)
DECEMBER 31, 20142015 AND 20132014
NOTES TO THE FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION – GOING CONCERNNOTE 1 - ORGANIZATION AND BUSINESS DESCRIPTION
The Company specializesWeyland Tech, specialized in providing e-commerce solutions and services that facilitate multi-channel B2C (business-to-consumer) and B2B (business-to-business) transactions. Its solutions and services enableenabled e-commerce transactions with speed and efficiency, and allowallowed an interactive and engaging customer experience as well as targeted marketing and advertising.
The Company’s revenues are generated from one-time integration fees for the implementation of e-commerce solutions as well as recurring license and service fees. The Company currently hosts two e-commerce solutions.
These financial statements of SeratosaWeyland Tech Inc. (the “Company”) have been prepared on a going-concern basis which assumes that the Company will be able to realize assets and discharge liabilities in the normal course of business for the foreseeable future.
The Company experienced losses during 2014 amounting to $255,693, which raises substantial doubt about the Company's ability to continue as a going concern. The ability of the Company to meet its commitments as they become payable is dependent on the ability of the Company to obtain necessary financing or achieving a profitable level of operations. There are no assurances that the Company will be successful in achieving these goals.
The Company believes that it canwill continue to receive revenuesgenerate sales from its customers. The Company expects to continue utilizing its cost structure by sourcing personnelthrough our Joint Venture partner in Asia for servicing its customers.Jaipur, India where costs are competitively lower than more developed countries. In order to accelerate the growth of the Company, itmanagement will also consider raisingraise additional funding from investors.
These financial statements do not give effect to adjustments to the amounts and classifications to assets and liabilities that would be necessary should the Company be unable to continue as a going concern.
2.NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
The financial statements have been prepared on a historical cost basis to reflect the financial position and results of operations of the Company in accordance with the accounting principles generally accepted in the United States of America (“US GAAP”).
USE OF ESTIMATES
The preparation of the Company’s financial statements in conformity with generally accepted accounting principles of the United States of America 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. Management makes its best estimate of the ultimate outcome for these items based on historical trends and other information available when the financial statements are prepared. Actual results could differ from those estimates.
CERTAIN RISKS AND UNCERTAINTIES
The Company relies on leased hardware and software from third parties to offer its e-commerce solutions and services.cloud based hosting through a global accredited hosting provider. Management believes that alternate sources are available; however, disruption or termination of these relationshipsthis relationship could adversely affect our operating results in the near-term. The Company currently has two customers who provide all of the Company’s recurring revenue. Loss of any one of these customers would have a significant impact on the Company’s revenue.
SEGMENT REPORTING
Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by our chief operating decision maker, or decision making group, in deciding how to allocate resources and in assessing performance.
The Company specializes in providing e-commerce solutions and services that facilitate multi-channel B2C (business-to-consumer) and B2B (business-to-business) transactions. We identify our reportable
segments as those customer groups that represent more than 10% of our combined revenue or gross profit or loss of all reported operating segments. We manage our business on the basis of the one reportable segment e-commerce solutions and service provider. The accounting policies for segment reporting are the same as for the Company as a whole. We do not segregate assets by segments since our chief operating decision maker, or decision making group, does not use assets as a basis to evaluate a segment’s performance.
CASH AND CASH EQUIVALENTSIDENTIFIABLE INTANGIBLE ASSETS
Cash equivalents comprise certain highly liquid instruments with a maturity of three monthsIdentifiable intangible assets are recorded at cost and are amortized over 3 years. Similar to tangible property and equipment, the Company periodically evaluates identifiable intangible assets for impairment whenever events or less when purchased. changes in circumstances indicate that the carrying amount may not be recoverable.
EQUIPMENT
Equipment is carried at cost less a provision for depreciation on a straight-line basis over their estimated useful lives. Estimated useful life of the computer equipment is 3 years.
SHORT TERM INVESTMENT IN JOINT VENTURE
Short term investment thatThe Company’s accounting policy for joint ventures is as follows:
The Company uses the cost method when it does not have joint control or significant influence in a joint venture. Under the cost method, these investments are classified as tradingcarried at cost. If other than temporary impairment in value is measured subsequently at fair valuedetermined, it would then be charged to current net income or loss.
If the Company enters into a joint venture in which there is joint control between the parties or the Company has significant influence, the equity method is utilized whereby the Company’s share of the ventures’ earnings and losses is included in the statement of financial position. Unrealized holding gainsoperations as earnings in joint ventures and losses for short term investmentits investments therein are includedadjusted by a similar amount. If other than temporary impairment in earnings.value is determined, it would then be charged to current net income or loss.
RECLASSIFCATIONIn a joint venture where the Company holds more than 50% of the voting interest and has significant influence, the joint venture is consolidated with the presentation of non-controlling interest. In determining whether significant influences exist, the Company considers its participation in policy-making decisions and its representation on the venture’s management committee.
Certain prior year amounts have been reclassifiedACCOUNTS RECEIVABLE AND CONCENTRATION OF RISK
Accounts receivable, net is stated at the amount the Company expects to conform withcollect, or the net realizable value. The Company provides a provision for allowances that includes returns, allowances and doubtful accounts equal to the estimated uncollectible amounts. The Company estimates its provision for allowances based on historical collection experience and a review of the current status of trade accounts receivable. It is reasonably possible that the Company’s estimate of the provision for allowances will change.
At December 31, 2015, accounts receivable balances included a concentration from a major customer with receivable balances of $722,700 (2014: $202,700). For the year presentation.ended December 31, 2015, the Company had sales in excess of 10% of $2,356,501 with a major customer. For the year ended December 31, 2014 one customer had sales of $2,483,811 that was in excess of 10% of sales.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents represent cash on hand, demand deposits, and other short-term highly liquid investments placed with banks, which have original maturities of three months or less and are readily convertible to known amounts of cash.
STOCK-BASED COMPENSATION
The Company accounts for stock based compensation by recognizing the fair value of stock compensation as an expense in the calculation of net income (loss). The Company recognizes stock compensation expense in the period in which the employee is required to provide service, which is generally over the vesting period of the individual equity instruments. Stock options issued in lieu of cash to non-employees for services performed are recorded at the fair value of the options at the time they are issued and are expensed as service is provided.
LOSSEARNINGS (LOSS) PER SHARE
Basic earnings (loss) per share of common stock is computed by dividing the net earnings (loss) by the weighted average number of common shares outstanding during the period. Diluted earnings (loss) per share of common stock is computed by dividing the net earnings (loss) by the weighted average number of common shares outstanding during the period, including vested and unvested stock options that are in the money.
FAIR VALUE OF FINANCIAL INSTRUMENTS
The Company’s financial instruments consist of cash, accounts payable, interest payable, shareholder loans and other current liabilities. The carrying values of financial instruments reflected in these financial statements approximate their fair values due to the short-term maturity of the instruments.
REVENUE RECOGNITION
The Company recognizes revenue from providing hosting and integration services and licensing the use of its technology platform to its customers. The Company recognizes revenue when all of the following conditions are satisfied: (1) there is persuasive evidence of an arrangement; (2) the service has been provided to the customer (for licensing, revenue is recognized when the Company’s technology is used to provide hosting and integration services); (3) the amount of fees to be paid by the customer is fixed or determinable; and (4) the collection of fees is probable. We account for our multi-element arrangements, such as instances where we design a custom website and separately offer other services such as hosting, which are recognized over the period for when services are performed.
COST OF SERVICE
Cost of service results from 1) sales commissions to resellers 2) sourcing technical and engineering personnel in Asia on an hourly or project basis in order to develop e-commerce solutionscustomize multi-site SMB mobile apps and provide ongoingmedium to large scale customized apps. 3) cloud based hosting services to individual customers. The Company utilizes an outsourced staffing firm with offices in China.
CAPITALIZATION OF SOFTWARE
The Company accounts for internal-use software and website development costs, including the development of its partner marketplaces in accordance with ASC 350-50 (Intangibles – Website cost). The Company capitalizes internal costs consisting of payroll and direct payroll-related costs of employees who devote time to the development of internal-use software, as well as any external direct costs. It amortizes these costs over their estimated useful lives, which typically range between three to five years. The Company’s judgment is required in determining the point at which various projects enter the stages at which costs may be capitalized, in assessing the ongoing value of the capitalized costs, and in determining the estimated useful lives over which the costs are amortized. The estimated life is based on management’s judgment as to the product life cycle. Development cost of various platforms is being expensed. The Company cannot separate internal cost on a reasonably cost-effective basis between maintenance and upgrades, and cannot assess the ongoing value of its various projects, thus all project costs are expensed as such costs are incurred.services.
INCOME TAXES
Income taxes are provided for usingThe Company uses the asset and liability method wherebyof accounting for income taxes in accordance with Accounting Standards Codification (“ASC”) 740, “Income Taxes” (“ASC 740”). Under this method, income tax expense is recognized as the amount of: (i) taxes payable or refundable for the current year and (ii) future tax consequences attributable to differences between financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities are recognized using currentof a change in tax rates onis recognized in the difference betweenresults of operations in the financial statement carrying amounts andperiod that includes the respective tax basis of the assets and liabilities. The Company provides aenactment date. A valuation allowance onis provided to reduce the deferred tax assets when
reported if based on the weight of available evidence it is more likely than not that suchsome portion or all of the deferred tax assets will not be realized.
The Company recognizes the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting this standard, the amount recognized in the financial statements is the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement with the relevant tax authority. The Company recognized interest and penalties related to unrecognized tax benefits within the income tax expense line in the accompanying statements of operation. Accrued interest and penalties are included within the related tax liability in the balance sheets.
NEWRECENT ACCOUNTING PRONOUNCEMENTS
There were various other accounting standards and interpretations recently issued, none of which is expected to have a material impact on the Company's financial position, operations or cash flows.
REVERSE SPLIT
On September 1, 2015, we effected a 1-for-1,000 reverse stock split of our outstanding common stock. As a result of the reverse stock split every 1,000 shares of our common stock were converted into 1 share of our common stock. Immediately after the reverse split we had 626,576 shares of our common stock outstanding. All share and per share related amounts in this report have been restated retrospectively to reflect the reverse split.
NOTE 3 - GOING CONCERN
The Company had a negative working capital of $136,797 as of December 31, 2015. The Company’s continuation as a going concern is dependent on its ability to generate sufficient cash flows from operations to meet its obligations and/or obtaining additional financing from its members or other sources, as may be required.
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern; however, the above condition raises substantial doubt about the Company’s ability to do so. The financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result should the Company be unable to continue as a going concern.
In order to maintain its current level of operations, the Company will require additional working capital from either cash flow from operations or from the sale of its equity. However, the Company currently has no commitments from any third parties for the purchase of its equity.
NOTE 4 - INTANGIBLE ASSETS
| As of December 31, | |
| 2015 | 2014 |
Beginning balance, January 1, 2015 | $ - | $ - |
Additions | 750,000 | - |
Impairment | - | - |
Accumulated amortization | (83,333) | - |
Ending balance, December 31, 2015 | $ 666,667 | $ - |
The remaining amortization period of the Company’s amortizable intangible assets is approximately 2.67 years as of December 31, 2015. The estimated future amortization of the intangible assets is as follows:
For the years ending December 31, | Amount |
2016 | $ 250,000 |
2017 | 250,000 |
2018 | 166,667 |
Total | $ 666,667 |
3. ACCOUNTS PAYABLE
NOTE 5 - THE JOINT VENTURE
On November 26, 2015, the Company and Ranosys Technologies Pvt. Ltd (“Ranosys”) agreed to enter into the Joint Venture through CreateApp India Pvt Ltd. (“CreateApp”), an India limited liability company of which the Company and Ranosys are 50% members. The results of operations of CreateApp from November 26, 2015 were not material.
NOTE 6 - EQUIPMENT
Equipment as of December 2015 and 2014 is summarized as follows:
| As of December 31, | |
| 2015 | 2014 |
Cost | $ 10,000 | $ 10,000 |
Less: Accumulated depreciation | $ 10,000 | $ 10,000 |
Net book value | - | - |
NOTE 7 – ACCRUALS AND OTHER ACCRUALSPAYABLE
Accounts payableAccruals and other accrualspayable consisted of the following:
| As of December 31, | |
| 2014 | 2013 |
Related party liabilities | $ 303,491 | $ 12,000 |
Professional fees payable | $ 78,500 | $ 31,000 |
| $ 381,991 | $ 43,000 |
| As of December 31, | |
| 2015 | 2014 |
CEO payable | $ 121,181 | $ 0 |
Other payable | $ 0 | $ 303,491 |
Legal and professional fees payable | $ 123,850 | $ 78,500 |
| $ 245,031 | $ 381,991 |
4. CONVERTIBLE DEBENTURESNOTE 8 – DEPOSIT FOR STOCK TO BE ISSUED
As of December 31, 2014,During the year, the Company had convertible debentures in the amountreceived $147,456 as funds designated for issuing of $22,080 outstanding. The note holders are entitled to convert the outstanding principal amount into common stock at a conversion price at a 45% discount from the lowest trading price in the three days prior to the conversion. The convertible notes have been valued by an independent valuer. The fair value of the convertible notes is approximated to its carrying amounts.stock.
5.
NOTE 9 - STOCKHOLDERS’ DEFICITEQUITY/(DEFICIT)
Common Shares
Authorized common shares of the Company consist of 250,000,000 shares with a par value of $0.0001 each (2014: 10,000,000,000 shares with a par value of $0.00001 each.each).
Debt-to-Equity ConversionsIssuance of Common Stock
From January 7, 2013 throughDuring the year ended December 3,31, 2015, the Company:
-
Issued 715,600 in common shares with a value of $14,312 for legal and professional services;
-
sold 580,067,155 shares at $0.00001 per share for total proceeds of $5,801 and 10,838,512 shares at $0.0001 per share for total proceeds of $1,084. No warrants were issued with the shares;
-
During the years ended December 31, 2015 and 2014, $80,920the Company recognized stock-based compensation of $8,960 and $0, respectively, which was included in principal pursuant to convertible debenture notes was converted by note holders into 34,307,251 shares of the Company’s common stock.selling, general and administrative expense.
Employee Stock Option Plan
The Company has a stock option and incentive plan, the “Stock Option Plan”. The exercise price for all equity awards issued under the Stock Option Plan is based on the fair market value of the common share price which is the closing price quoted on the Pink Sheets on the last trading day before the date of grant. The stock options generally vest on a monthly basis over a two-year to three-year period, and have a five year life.
The Stock Option Plan allows for the issuance of stock options, stock awards, or other incentives. An aggregate of 25,000,000 shares are authorized under the Stock Option Plan. As of December 31, 2014, there are 24,590,000 shares reserved for future grants under the Stock Option Plan.
Stock-Based Compensation
A summary of the Company’s stock option activity during the twelve months ended December 31, 20142015 is presented below:
|
| Number of options | Weighted Average Exercise Price | Weighted Average Grant-date Fair Value | Weighted Average Remaining Contractual Life (Years) | Aggregate Intrinsic Value |
Options Outstanding, December 31, 2011 |
| 3,447,500 | 0.37 | 0.76 | 4.3 | $0 |
Less: Options cancelled |
| 3,000,000 | 0.30 | 0.60 |
| $0 |
Less: Options expired |
| 37,500 | 1.20 | 0.80 |
| $0 |
Options Outstanding, December 31, 2012 |
| 410,000 | 0.83 | 2.02 | 2.1 | $0 |
Options Outstanding, December 31, 2013 |
| 410,000 | 0.83 | 2.02 | 1.1 | $0 |
|
| Number of options | Weighted Average Exercise Price | Weighted Average Grant-date Fair Value | Weighted Average Remaining Contractual Life (Years) | Aggregate Intrinsic Value |
Options Outstanding , December 31, 2013 |
| 410,000 | 0.83 | 2.02 | 1.1 | $0 |
Less: Option expired |
| (160,000) | 0.47 | 0.31 |
| $0 |
Options Outstanding , December 31, 2014 |
| 250,000 | 0.6 | 2.8 | 0.67 | $0 |
Less: Option expired |
| (250,000) | 0.6 | 2.8 |
|
|
Options Outstanding , December 31, 2015 |
| - | - | - | - | - |
All options outstanding are fully vestedexpired as of December 31, 2014.2015. No new options were granted in the fiscal year 2014.
The stock-based compensation expense for the years ended December 31, 2014 and 2013 as follows:
| December 31, | |
| 2014 | 2012 |
Stock-based compensation | $0 | $0 |
The 410,000 options outstanding as of December 31, 2014 have a weighted average remaining contractual term of 1.1 years.or 2015.
6.NOTE 10 - INCOME TAXES
Potential benefits of income tax losses have not been recognized in these financial statements because the Company cannot be assured if it's more likely-than-not it will utilize the net operating losses carried forward in future years.
Income tax recovery differs from what which would be expected by applying the effective rates to net income (loss) as follows: | 2015 |
| 2014 |
|
|
|
|
Deferred Tax Assets |
|
|
|
Net Profit/(Loss) for the year | $ 733,721 |
| $ (255,693) |
Statutory and effective tax rates | 39.8% |
| 39.8% |
|
|
|
|
Expected income tax expenses (recovery) based on effective rate | 292,201 |
| (101,765) |
Tax losses carryforward deferred | (292,201) |
| 101,765 |
Corporate Income Tax expense (recovery) recognized in the accounts | - |
| - |
Income tax recovery differs from what which would be expected by applying the effective rates to net income (loss) as follows: | 2014 |
| 2012 |
Deferred Tax Assets |
|
|
|
Net (loss) for the year | $(255,693) |
| $(1,220,765) |
Statutory and effective tax rates | 39.8% |
| 39.8% |
|
|
|
|
Expected income tax expense (recovery) based on effective rates | (101,765) |
| (485,864) |
Stock based compensation |
|
| - |
Effect of temporary differences |
|
| - |
Effect of change in tax rate |
|
| - |
Tax losses carryforward deferred | 587,629 |
| 485,864 |
|
|
|
|
Corporate Income Tax expense (recovery) recognized in the accounts | - |
| - |
The Company has accumulated net operating losses totaling approximately $(2013: 3,097,000)$2,619,205 (2014: 3,352,926) for income tax purposes which expire starting in 2032. The components of the net deferred tax asset at December 31, 20142015 and 20132014 and the statutory tax rate, the effective tax rate and the amount of the valuation allowance are scheduled below:
| 2014 |
| 2013 | 2015 |
| 2014 |
Net operating loss carryforwards | $4,074,754 |
| $ 3,097,233 | $ 2,619,205 |
| $ 3,352,926 |
Accruals and reserves | 0 |
| 875,756 | - |
| - |
| 4,074,754 |
| 3,972,989 | 2,619,205 |
| 3,352,926 |
Statutory tax rate | 39.8% |
| 39.8% | 39.8% |
| 39.8% |
Deferred tax asset | 1,621,752 |
| 1,581,250 | 1,042,444 |
| 1,334,465 |
Valuation allowance | (1,621,752) |
| (1,581,250) | (1,042,444) |
| (1,334,465) |
Net deferred tax asset | - |
| - | - |
| - |
7. SEGMENT REPORTING INFORMATION
Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by our chief operating decision maker, or decision making group, in deciding how to allocate resources and in assessing performance. NOTE 11 – SUBSEQUENT EVENT
The Company specializes in providing e-commerce solutions and services that facilitate multi-channel B2C (business-to-consumer) and B2B (business-to-business) transactions. We identify our reportable segments as those customer groups that represent more than 10% of our combined revenue or gross profit or loss ofhas evaluated all reported operating segments. We manage our business on the basis of the one reportable segment e-commerce solutions and service provider. The accounting policies for segment reporting are the same as for the Company as a whole. We do not segregate assets by segments since our chief operating decision maker, or decision making group, does not use assets as a basis to evaluate a segment’s performance.
8. SUBSEQUENT EVENTS
In accordance with ASC Topic 855, “Subsequent Events”, which establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued, we have evaluated significant events and transactions that occurred afterfrom December 31, 20142015 through the financial statement issuance date of the financial statements were issuedfor subsequent event disclosure consideration and filed with this Form 10-K. During the year, the Company did not have any material recognizablenoted no significant subsequent events.
9. RELATED PARTY TRANSACTION
The Company had the following related party transactions during the year and balance at the year ended:
| Related party |
|
|
| 2014 |
| 2013 |
Name of parties | relationship |
| Nature |
| $ |
| $ |
|
|
|
|
|
|
|
|
Soconison Ventures Ltd | Holding company |
| Sales to | (i) | 2,483,811 |
| 36,430 |
|
|
|
|
|
|
|
|
(i) Sales to holding company were charged on an arm’s length basis. | |||||||
10. HOLDING COMPANY
The directors regard Soconison Ventures Ltd, a company incorporated offshore, as being the holding company.event that needs to be disclosed.
ITEM 9. CHANGES AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES
None
ITEM 9A(T). CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Our management is responsible for establishing and maintaining a system of disclosure controls and procedures (as defined in Rule 13a-15(e)) under the Exchange Act) that is designed to ensure that information required to be disclosed by the Company in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time specified in the Commission's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer's management, including its principal executive officer or officers and principal financial officer or officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
As required by Rule 13a-15 under the Securities Exchange Act of 1934, as of the end of the period covered by this report, we have carried out an evaluation of the effectiveness of the design and operation of our company’s disclosure controls and procedures. Under the direction of James Wang, our Former Chief Executive and Chief Financial Officer, we evaluated our disclosure controls and procedures and internal control over financial reporting and concluded that (i) there continues to be material weaknesses in the Company’s internal controls over financial reporting, that the weaknesses constitute a “deficiency” and that this deficiency could result in misstatements of the foregoing accounts and disclosures that could result in a material misstatement to the financial statements for the periods covered by this report that would not be detected, and (ii) accordingly, our disclosure controls and procedures were not effective as of December 31, 2014.
With the appointment on July 15, 2015 of Lionel Choong, our present Chief Financial Officer, procedures over the timely reporting of financial quarterly results for the September 2015 quarter were introduced and are being used for the annual reporting of the Company’s annual 10-K. With the current procedures in place, we have increased our ability to identify significant transactions that require disclosure under the Securities Exchange Act of 1934. We plan to enhance our current procedures and comply fully with the disclosure controls and procedures and internal control over financial reporting in fiscal year 2016.
Annual Report of Management on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Securities Exchange Act of 1934 as a process designed by, or under the supervision of, the company’s principal executive officers and effected by the company’s board of directors, management and other personnel, 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 and includes those policies and procedures that:
1.
Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the company;
2.
Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and
3.
Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. 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. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Because of the inherent limitations of internal control, there is a risk that material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting. However, these inherent limitations are known features of the financial reporting process. Therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this risk.
As of December 31, 2014,2015, management assessed the effectiveness of our internal control over financial reporting and based on that evaluation, they concluded that, during the period covered by this report, such internal controls and procedures were not effective to detect the inappropriate application of US GAAP rules as more fully described below. This was due to deficiencies that existed in the design or operation of our internal controls over financial reporting that adversely affected our internal controls and that may be considered to be material weaknesses.
The matters involving internal controls and procedures that our management considered to be material weaknesses under the standards of the Public Company Accounting Oversight Board were: (1) lack of a functioning audit committee due to a lack of a majority of independent members and a lack of a majority of outside directors on our board of directors, resulting in ineffective oversight in the establishment and monitoring of required internal controls and procedures; and (2) inadequate segregation of duties consistent with control objectives. The aforementioned material weaknesses were identified by our prior Chief Executive Officer and prior Chief Financial Officer in connection with the review of our financial statements as of December 31, 2014.
Management believes that the material weakness set forth in item (2) above did not have an effect on our financial results. However, management believes that the lack of a functioning audit committee and the lack of a majority of outside directors on our board of directors results in ineffective oversight in the establishment and monitoring of required internal controls and procedures, which could result in a material misstatement in our financial statements in future periods.
This annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by our registered public accounting firm pursuant to temporary rules of the SEC that permit us to provide only the management's report in this annual report.
ITEM 9B. OTHER INFORMATION
None.
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE
Directors, Executive Officers and Significant Employees
The following table sets forth certain information regarding the members of our Board of Directors, executive officers and our significant employees as of March 27, 2014:31, 2016:
Name | Age | Positions and Offices Held |
Brent Suen |
| President, Chief Executive Officer, Director and Secretary |
Lionel Choong | 54 | Acting Chief Financial Officer and Director |
|
|
|
Ankit Agarwal | 28 | Chief Technology Officer |
Matthew Burlage | 53 | Independent Non-Executive Board Member |
Ross O'Brien | 46 | Independent Non-Executive Board Member |
Brett Lay | 53 | Independent Non-Executive Board Member |
Brent Suen (age 47)(age 49) has been President & Chief Executive and Financial Officer of the Company since November 19, 2014, and a director of the Company since November 19, 2014. Mr. Suen has 27 years of experience in the investment banking industry. He attended Westminster receiving his BA in Finance. He began his career in merger arbitrage at Bear Stearns in 1988, at the age of 20, as the firms’ youngest hire. In 1993, he founded Axis Trading Corp., one of the first online platforms for stock trading and subsequently sold it to a division of Softbank in 1996. In 1997, he co-founded Elevation Capital which invested in and advised Silicon Valley based companies on IPO’s, mergers and acquisitions, strategic partnerships and fund raising. In 2003 Brent moved to Hong Kong and China where he established Bay2Peak S.A. Bay2Peak has invested in and advised over fifty companies which include Internet, software, renewable energy and life science companies. From 2006 to 2008 he also advised IRG TMT Asia Fund on private and public investments. In 2012 Brent served as advisor to McLarty Group and Citibank Venture Capital on a sale/leaseback program valued at $160 million leading to the eventual sale of the company for $630 million. For the past twofive years, Brent led the start-up and management of Empirica S.A., a security/intelligence and frontier markets focused advisory firm operating in Asia, the Middle East, Africa and Central Asia.
Philip KaLionel Choong (age 44)54) has been acting Chief Financial Officer since July 17, 2015. In addition, Mr. Choong has been the Senior Vice PresidentChairman of CY Oriental Holdingsthe Board and a director of Emerson Radio Corp. (NYSE: MSN) since November 2013. Mr. Choong was acting Chief Financial Officer of Global Regency Ltd., between April 2009 and June 2015 and remains as a consultant thereafter. Mr. Choong is a consultant for Zenith Professionals Ltd., a position he has held since 2001.August 2004 and Board Advisor to Really Sports Co., Ltd., a position he has held since June 2013. Mr. Choong has a wide range of experience in a variety of senior financial positions with companies in China, Hong Kong SAR, and London, UK. His experience encompasses building businesses, restructuring insolvency, corporate finance, and initial public offerings in a number of vertical markets, including branded apparel, consumer and lifestyle, consumer products, pharmaceuticals, and logistics. From June 2008 to May 2011, Mr. Choong was acting Chief Financial Officer of Sinobiomed, Inc. (now Weyland Technology, Inc.). Mr. Choong is a fellow member and holds a corporate finance diploma from the Institute of Chartered Accountants in England and Wales. He is also a CPA and practicing member of the Hong Kong Institute of Certified Public Accountants and a member of the Hong Kong Securities
Institute. Mr. Choong holds a Bachelor of Arts in Accountancy from London Guildhall University, UK, and a Master of Business Administration from the Hong Kong University of Science and Technology and the Kellogg School of Management at Northwestern University.
Based on Mr. Choong’s background in accounting, business and corporate finance, the Board believes that he is well qualified to serve as a director and acting Chief Financial Officer of the Company.
Eddie Foong (age 43), Chief Operating Officer, is the founder and creator of CreateApp, and has over 17 years of experience in IT, sales and marketing and operations. He was involved in a RFID technology company that developed and changed Singapore National Library Books borrowing system islandwide. He previously headed the sales and marketing department of Info. Technology within MNCs and government agencies. He graduated with a Class 1 BEng Honours Degree and IBM Award holder from University of Strathclyde, U.K.
Ankit Agarwal (age 28), is the Chief Technology Officer of the Company. Ankit is a PMP certified professional with 5+ years of multi-country, multi-domain experience in Information Technology, which include of Services Delivery & Project Management experience in Mobility, eCommerce, Oil & Gas, Finance. This includes rich experience in Project planning. execution, Stakeholder management and Service Delivery with a strong underlying focus on customer satisfaction. Ankit has proven ability to conceptualize project methodology and tools, project estimation, project costing, resource sizing, organizing and leading multiple project teams in various industry domains. Ankit has his Bachelor of Technology from Rajasthan Technical University
Matthew Burlage (age 53) Independent, non-executive Board Member, has spent the last three decades involved in financing and advising Asia’s leading corporations, government enterprises and financial institutions and has been involved in some of the most ground-breaking transactions in Asia, particularly in the telecom, media and technology (TMT) sectors.
In 2000, Matt co-founded IRG, a boutique financial advisory and investment firm focused on the core growth sectors in Asia. He advises Asian and global corporates, private equity funds, hedge funds and sovereign wealth funds on a range of transactions including mergers, acquisitions, corporate restructurings, and debt capital and equity capital financings. He is also responsible for the firm’s investment strategy and management of its proprietary capital.
Before co-founding IRG, Matt was a Managing Director and Head of Industry Groups at Lehman Brothers in Hong Kong where he created the first and largest dedicated TMT industry group at an investment bank in Asia in the early 1990s. He has been an adviser on capital raisings, equity/debt financings and merger and acquisition strategy to Asia’s leading companies in Japan, Singapore, Hong Kong, Indonesia, China, Thailand, Taiwan, and South Korea, as well as to global telecommunications operators in Europe and the US.
Matt was ranked Number One in ex-Japan Corporate Asia, and Number Two in Corporate Asia, by Institutional Investor, and is a member of Institutional Investor’s Top 20 Global E-Finance Elite for Asia and Europe.
He has a MBA from Harvard Business School and a Bachelor of Arts from Yale University, and attended the Japanese Language Institute of Sophia University.
Ross O'Brien (age 46), Independent, non-executive Board Member, is an analyst, writer, presenter, and consultant focused on the economies and business environments of the Asia-Pacific, with over 25 years of experience in the region. His analysis surrounds Asia’s Innovation Economy—the intersection of information technology and the region’s broader society and economy. For nine years he was Director of the Economist Corporate Network, a membership-based business advisory programme for senior executives of multinationals in Asia.
Based in Hong Kong for over 17 years, Ross has an AB in Asian Studies and Anthropology from Dartmouth College (1989), and an MBA from the University of California at Berkeley’s Haas School (1996). He is conversant and literate in Mandarin and Indonesian.
Currently, and beginning in 2003, Ross was Managing Director of the Hong Kong operations of Intercedent Asia, a region-wide partnership of B2B market consultants, which provides research-based market entry and positioning advice in several verticals across Asia. Ross' practice focuses on market entry strategies for telecoms and IT companies, in managed services and wireless solutions. His client work involved extensive research work in over a dozen economies in Asia, including extended field research in China, Indonesia, Vietnam and Bangladesh.
Ross was also for many years an analyst and Asian research director for Pyramid Research (once a subsidiary of the Economist Intelligence Unit, now a division of Progressive Digital Media) a telecoms advisory firm providing forecasts and analysis on infrastructure and services markets in emerging markets. Ross worked for Pyramid in the US, Singapore and Hong Kong.
Ross has also served as a Research Director of Advisory Services for Strategic Intelligence, a venture-funded economic analysis firm with an emphasis on Internet-based delivery of analysis and forecasts on ‘new economy’ industries and markets in Asia. From 1996 to 2001, Mr. Ka1998, he was a consultant in AT&T Solutions' operational process improvement practice, serving financial services and telecoms clients in China and Indonesia, including a yearlong project overseeing customer care service process improvement for PT Telkom, based in Bandung.
Brett Lay (age 53) Independent, non-executive Board Member, is the Managing Directorformer Chief Financial Officer of Powerlot (Pacific) Ltd.Pacnet Limited, AsiaNetcom, and Pacific Internet from February 2007 to April 2015. A seasoned successful business executive with 28 years of operating experience including 15 years as a Chief Financial Officer for both private and public companies. Acted as interim CEO during transition phases. A member of the board of directors working with private equity owners to grow and harvest their investments. Over 18 years of work experience in Asia while residing in Singapore and Hong Kong. Active member of the board of directors for joint ventures in China, India, South Korea, and Philippines. Originated and completed the successful execution of several mergers and acquisitions, including the post integration efforts.
Brett has been a company officer in diverse sized organizations including; a large corporation (NYSE $62 billion), a privately ownedstartup company during which he initiated, organizedtaking it from an idea to now a component of a $14 billion NASDAQ public company, and supervisedrecently completed the businesssale of Pacnet to Telstra for $750M. Created multiple financing programs including equity origination, senior bank facilities, high yield bond facilities, and lines of vendor credit. Created, maintained and restructured debt programs, operating environments, shareholder equity structures, vendor relationships, and bank facilities. Reviewed multiple financing structures to meet shareholder objectives including IPO, REIT spinoff, asset trust structures, and minority investments. Managed a large finance workforce over a widespread diversified region. Actively managed P&L performance and operating results. Created and implemented a corporate restructuring that included the downsizing of the company with over 500 staff members. Powerlot is engaged inworkforce by nearly 30% and reducing annual SG&A expenses by $25 million. Managed shareholder relationships including large private equity groups to meet their financial objectives.
Brett has his Masters of Science Finance and Masters of Science Management, from the businessUniversity of garment manufacturing, logistics, telecommunications, and international trade with annual revenue exceeding $50 million in 2001. Mr. Ka graduated from Shanghai Teacher’s University in Shanghai in 1991 with a bachelors of Science.Colorado, Denver.
Family Relationships
There are no family relationships between any of the Company’s directors or executive officers.
Involvement in Certain Legal Proceedings
We are not aware of any material legal proceedings that have occurred within the past five years concerning any director, director nominee, or control person which involved a criminal conviction, a pending criminal proceeding, a pending or concluded administrative or civil proceeding limiting one’s participation in the securities or banking industries, or a finding of securities or commodities law violations.
Section 16(a) Beneficial Ownership Reporting Compliance
Under U.S. securities laws, directors, certain executive officers and persons holding more than 10% of our common stock must report their initial ownership of the common stock, and any changes in that ownership, to the SEC. The SEC has designated specific due dates for these reports.
Code of Ethics
At the present time, the Company has not adopted a code of ethics. The Company intends to adopt a code of ethics in the near future.
Audit Committee
At the present time, the Company’s audit committee consists of Messrs. Philip KaLionel Choong and Brent Suen. Mr. KaChoong is the acting Chairman of the Audit Committee. Mr. Suen is considered an interested member of the audit committee as Mr. Suen is the President and CEO of the Company. At the Company’s annual board meeting, it is proposed that the three independent, non-executive board directors will join the audit committee and Mr Choong will retire as acting Chairman of the audit committee.
The Company adopted an Audit Committee Charter and Audit Committee Procedures for Whistleblowers on May 22, 2007, which were filed as exhibits 99.1 and 99.2 to the Form 10-QSB filed with the SEC via EDGAR on August 14, 2007, and are incorporated by reference herein.
ITEM 11. EXECUTIVE COMPENSATION
Summary Compensation Table
The following table sets forth information concerning all cash and non-cash compensation awarded to, earned by or paid to the named persons for services rendered in all capacities during the noted periods. No other executive officer received total annual salary and bonus compensation in excess of $100,000:
Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock awards ($) | Option awards ($) | All other Compensation ($) | Total ($) | Year | Salary ($) | Bonus ($) | Stock awards ($) | Option awards ($) | All other Compensation ($) | Total ($) |
Brent Suen President, CEO & Director | 2014
2013 | $2,000
- | -
- | -
- | -
- | $2,000
- | 2015
2014 | $9,000
$2,000 | -
- | $5,120
- | -
- | -
- | $14,120
$2,000 | |
Lionel Choong | 2015 | $27,167 |
| $3,840 |
|
| $31,007 | |||||||
Eddie Foong | 2015 | $- |
|
|
|
| $- | |||||||
Ankit Agarwal | 2015 | $- |
|
|
|
| $- | |||||||
Narrative Disclosure to the Summary Compensation Table
See Note 5 to the financial statements as of December 31, 2014 for description of the terms of Stock Option grants and the methods and assumptions used to determine fair value of Option Awards.
The Company entered into an executive employment agreement with Mr. Suen, dated as of November 19, 2014, pursuant to which, the Company is obligated to pay Mr. Suen a monthly salary of $1,000. The employment agreement ends after two years on December 19, 2016.$1,000, which increased to $2,000 per month in 2015, which will be accounted for in 2016 Q1 results.
Retirement Benefits and Change of Control
Not Applicable.
Director Compensation
The following table discloses the compensation of the directors of the Company for the Company’s fiscal year ended December 31, 20142015 (unless already disclosed above):
Name | Fees earned or paid in cash ($) | Stock awards ($) | Option awards ($) | Deferred Compensation earnings ($) | All other Compensation ($) | Total ($) |
| - | - | - | - | - | - |
Ross O'Brien | - | - | - | - | - | - |
Brett Lay | - | - | - | - | - | - |
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
The following table sets forth information as of March 27, 201431, 2015 (the “Determination Date”), with respect to the Company’s directors, Named Executive Officers, and each person who is known by the Company to own beneficially, more than five percent (5%) of the Company’s Common Stock, and with respect to shares owned beneficially by all of the Company’s directors and executive officers as a group. Common Stock not outstanding but deemed beneficially owned by virtue of the right of an individual to acquire shares within 60 days is treated as outstanding only when determining the amount and percentage of Common Stock owned by such individual. Except as noted, each person or entity has sole voting and sole investment power with respect to the shares shown. Unless otherwise specified, the address of each of the persons set forth below is in care of SeratosaWeyland Tech Inc., 138 Queens Road9/F, The Wellington, 198 Wellington Street, Central 11th Floor, Central,, Hong Kong HKSAR.HKSAR
As of the Determination Date, there are 212,804,67516,422,963 shares of Common Stock issued and outstanding.
Name of Beneficial Owner | Position | Amount and Nature of Beneficial Ownership | Percent of Common Stock(1) |
Brent Suen | Director | 590,000 | 0.002% |
Philip Ka | Director | 5,000 | 0.0% |
Soconison Ventures Ltd. | Holding company | 250,000 | 0.001% |
SSWA Software | Shareholder | 10,000,000 | 0.048% |
Directors and Officers as a group (2 persons) |
| 595,000 | 0.002% |
Notes: (1) Beneficial ownership of Common Stock has been determined for this purpose in accordance with Rule 13d-3 under the Exchange Act, under which a person is deemed to be the beneficial owner of securities if such person has or shares voting power or investment power with respect to such securities, has the right to acquire beneficial ownership within 60 days or acquires such securities with the purpose or effect of changing or influencing the control of the Company.
| |||
Name of Beneficial Owner | Position | Amount and Nature of Beneficial Ownership | Percent of Common Stock (1) | |
Brent Suen | Chief Executive Officer | 412,000 | 2.5% | |
Lionel Choong | Acting Chief Financial Officer | 394,000 | 2.3% | |
Eddie Foong | Chief Operating Officer | 2,000,000 | 12.2% | |
Ravindran S/O Ramasamy | Shareholder | 3,550,000 | 21.6% | |
Lee Gaik Hong | Shareholder | 1,500,000 | 9.1% | |
IRG TMT Asia Fund | Shareholder | 600,000 | 3.6% | |
Matthew Burlage | Director | 100,000 | 0.6%% | |
Ross O'Brien | Director | 100,000 | 0.6% | |
Brett Lay | Director | 100,000 | 0.6% | |
Directors and Officers as a group (6 persons) |
| 3,104,000 | 18.9% | |
Notes: (1) Beneficial ownership of Common Stock has been determined for this purpose in accordance with Rule 13d-3 under the Exchange Act, under which a person is deemed to be the beneficial owner of securities if such person has or shares voting power or investment power with respect to such securities, has the right to acquire beneficial ownership within 60 days or acquires such securities with the purpose or effect of changing or influencing the control of the Company.
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Securities Authorized for Issuance Under Equity Compensation Plans
See “Item 5. Market For Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities- Securities Authorized for Issuance Under Equity Compensation Plans” above.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
Transactions with Related Persons
None of our directors, director nominees or executive officers has been involved in any transactions with us or any of our directors, executive officers, affiliates or associates (other than compensation described under Item 11, “Executive Compensation”) since the beginning of our 2014 fiscal year which are required to be disclosed pursuant to the rules and regulations of the SEC.
Director Independence
None.
According to their respective Directors and Officers annual questionnaire, Messrs. Matthew Burlage, Ross O'Brien and Brett Lay, are considered independent, non-executive board directors.
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
The following table discloses the fees billed by our auditor in connection with the audit of the Company’s annual financial statements for the years ended December 31, 20142015 and 2013.2014.
Financial Statements for Year Ended December 31 | Audit Fees(1) | Audit Related Fees(2) | Tax Fees(3) | All Other Fees(4) | Audit Fees (1) | Audit Related Fees(2) | Tax Fees (3) | All Other Fees (4) |
2015 | $22,000 | - | - | - | ||||
2014 | $28,000 | - | - | $28,000 | - | - | - | |
2013 | $31,000 | - | - | |||||
Notes: (1) The aggregate fees billed for the fiscal year for professional services rendered by the principal accountant for the audit of the Company’s annual financial statements and review of financial statements included in the Company’s Form 10-Qs or services that are normally provided by the accountant in connection with statutory and regulatory engagements for that fiscal years. (2) The aggregate fees billed in the fiscal year for assurance and related services by the principal accountants that are reasonably related to the performance of the audit or review of the Company’s financial statements and are not reported in Note 1. (3) The aggregate fees billed in the fiscal year for professional services rendered by the principal accountant for tax compliance, tax advice, and tax planning. (4) The aggregate fees billed in the fiscal year for the products and services provided by the principal accountant, other than the services reported in Notes (1), (2) and (3).
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Notes: (1) The aggregate fees billed for the fiscal year for professional services rendered by the principal accountant for the audit of the Company’s annual financial statements and review of financial statements included in the Company’s Form 10-Qs or services that are normally provided by the accountant in connection with statutory and regulatory engagements for that fiscal years. (2) The aggregate fees billed in the fiscal year for assurance and related services by the principal accountants that are reasonably related to the performance of the audit or review of the Company’s financial statements and are not reported in Note 1. (3) The aggregate fees billed in the fiscal year for professional services rendered by the principal accountant for tax compliance, tax advice, and tax planning. (4) The aggregate fees billed in the fiscal year for the products and services provided by the principal accountant, other than the services reported in Notes (1), (2) and (3).
| Notes: (1) The aggregate fees billed for the fiscal year for professional services rendered by the principal accountant for the audit of the Company’s annual financial statements and review of financial statements included in the Company’s Form 10-Qs or services that are normally provided by the accountant in connection with statutory and regulatory engagements for that fiscal years. (2) The aggregate fees billed in the fiscal year for assurance and related services by the principal accountants that are reasonably related to the performance of the audit or review of the Company’s financial statements and are not reported in Note 1. (3) The aggregate fees billed in the fiscal year for professional services rendered by the principal accountant for tax compliance, tax advice, and tax planning. (4) The aggregate fees billed in the fiscal year for the products and services provided by the principal accountant, other than the services reported in Notes (1), (2) and (3). | ||||||
Audit Committee’s Pre-Approval Practice
Our audit committee pre-approves all audit services to be performed by our independent registered public auditor.
PART IV
ITEM 15. EXHIBITS, FINANCIAL STATEMENTS
Financial Statements
The financial statements are set forth under Item 8 of this annual report on Form 10-K. Financial statement schedules have been omitted since they are either not required, not applicable, or the information is otherwise included.
Exhibits
Exhibit No. |
| Description of Exhibit |
3.1 |
| Certificate of Amendment to the Certificate of Incorporation of the Company (incorporated by reference to Schedule 14C Information of the Company filed on |
4.1 |
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10.1 |
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31.1* |
| Certificate pursuant to Rule 13a-14(a) |
31.2* |
| Certificate pursuant to Rule 13a-14(a) |
32.1* |
| Certificate pursuant to 18 U.S.C. Section 1350 |
32.2* |
| Certificate pursuant to 18 U.S.C. Section 1350 |
Notes: |
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* |
| Filed herewith |
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on this 15th14th day of April, 2015.2016.
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(Registrant) |
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| By: /s/ Brent Y. Suen |
| Brent Y. Suen |
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Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Company and in the capacities and on the dates indicated:
Signature
| Title
| Date
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/s/ Brent Y. Suen Brent Y. Suen | President and Chief Executive Officer (Principal Executive and Financial Officer) | April |
2025