U. S.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
10-QSB Mark One XX QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) - - --------- OF THE SECURITIES EXCHANGE ACT OF 193410-Q(MARK ONE)
☒
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31,
19962022OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) - - --------- OF THE SECURITIES EXCHANGE ACT OF 1934
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______ to ______
Commission File
Number: 1-13160 DYCAM, INC. (Exact name of small business issuer as specified in its charter) Delaware 95-4202424 (State or other jurisdiction (I.R.S. Employer or organization) Identification Number) 9414 Eton Ave. Chatsworth, California 91311 (AddressNo. 000-56156
FOVEA JEWELRY HOLDINGS, LTD.
(Exact name of registrant as specified in its charter)
Wyoming
95-4202424
(State or other jurisdiction of
(I.R.S. Employer
incorporation or organization)
Identification No.)
Room 403, 4/F, Phase 1 Austin Tower
22-26A Austin Avenue
Tsim Sha Tsui, Hong Kong
(Address of principal executive
offices) (818) 998-8008 (Issuer'soffices, zip code)+852 6847 6812
(Registrant’s telephone number, including area code)
(NONE) (Former(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Indicate by check mark whether the
registrantissuer (1) has filed all reports required to be filed by Section 13 or15 (d)15(d) of the Securities Exchange Act of 1934 during thepreceedingpreceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.YES X NO ----- ----- StateYes ☒ No ☐Indicate by check mark whether the
numberregistrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 ofshares outstandingRegulation S-T (§232.405 ofeachthis chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐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
issuer's classesExchange Act. (check one):
Large accelerated filer
☐
Accelerated filer
☐
Non-accelerated Filer
☒
Smaller reporting company
☒
Emerging growth company
☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Exchange Act Rule 12b-2 of the Exchange Act): Yes ☐ No ☒
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes ☐ No ☐
APPLICABLE ONLY TO CORPORATE ISSUERS
As of April 7, 2022, there were approximately 8,099,119 shares of common
equitystock, $0.001 par value per share, outstanding.
FOVEA JEWELRY HOLDINGS, LTD.
QUARTERLY REPORT ON FORM 10-Q
FOR THE PERIOD ENDED MARCH 31, 2022
INDEX
2 Table of contents CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q of Fovea Jewelry Holdings, Ltd., a Wyoming corporation (the “Company”), contains “forward-looking statements,” as defined in the United States Private Securities Litigation Reform Act of 1995. In some cases, you can identify forward-looking statements by terminology such as “may”, “will”, “should”, “could”, “expects”, “plans”, “intends”, “anticipates”, “believes”, “estimates”, “predicts”, “potential” or “continue” or the negative of such terms and other comparable terminology. These forward-looking statements include, without limitation, statements about our market opportunity, our strategies, competition, expected activities and expenditures as we pursue our business plan, and the adequacy of our available cash resources. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Actual results may differ materially from the predictions discussed in these forward-looking statements. The economic environment within which we operate could materially affect our actual results. Additional factors that could materially affect these forward-looking statements and/or predictions include, among other things: the volatility of oil and gas prices, the possibility that equipment development efforts will not produces equipment that prospective customers want to purchase, the Company’s need for and ability to obtain additional financing, other factors over which we have little or no control; and other factors discussed in the Company’s filings with the Securities and Exchange Commission (“SEC”).
Our management has included projections and estimates in this Form 10-Q, which are based primarily on management’s experience in the industry, assessments of our results of operations, discussions and negotiations with third parties and a review of information filed by our competitors with the SEC or otherwise publicly available. We caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the
latest practicable date. Common Stock, $.01 Par Value, 3,120,836 shares asdate made. We disclaim any obligation subsequently to revise any forward-looking statements to reflect events or circumstances after the date ofMay 1, 1996 Transitional Small Business Disclosure Format (Check one) YES NO X ----- -----such statements or to reflect the occurrence of anticipated or unanticipated events.
3 Table of contents PART I. FINANCIAL INFORMATION
ItemITEM 1.
Financial Statements DYCAM, INC.FINANCIAL STATEMENTS.FOVEA JEWELRY HOLDINGS, LTD
CONDENSED CONSOLIDATED BALANCE SHEETS
March 31, 1996
ASSETS ------ March 31, 1996 December 31, 1995Current assets: Cash and cash equivalents $1,385,000 $1,374,000 Accounts receivable, net 201,000 115,000 Inventory 624,000 698,000 Prepaid expenses and other current assets 34,000 37,000 ------------- --------------- Total current assets 2,244,000 2,224,000 Goodwill, net of accumulated amortization of $596,000 4,958,000 5,027,000 Property and equipment, net 437,000 452,000 Deposits 32,000 33,000 Note Receivable from Styles 1,000,000 1,000,000 ------------- --------------- $8,671,000 $8,736,000 ============= ===============LIABILITIES AND STOCKHOLDERS' EQUITY -------------------------------------Current liabilities: Accounts payable $255,000 $120,000 Accrued payroll and related expenses 65,000 65,000 Accrued expenses 24,000 14,000 -------- -------- Total current liabilities 344,000 199,000 Stockholders' equity Common stock (par value $.01) 31,000 31,000 Additional paid in capital 10,710,000 10,710,000 Retained earnings (deficit) (2,414,000) (2,204,000) ------------- --------------- Total shareholders' equity 8,327,000 8,537,000 ------------- --------------- Total liabilities and shareholders' equity $8,671,000 $8,736,000 ============= ===============The(Currency expressed in United States Dollars (“US$”), except for number of shares)
March 31, 2022
December 31, 2021
(Unaudited)
(Audited)
ASSETS
Current asset:
Cash and cash equivalents
$ 1,735
$ 1,476
Amount due from a shareholder
99,641
100,188
Inventories
727,939
731,038
Total current assets
829,315
832,584
Non-current asset:
Plant and equipment
18,518
20,521
TOTAL ASSETS
$ 847,833
$ 853,105
LIABILTIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accrued liabilities
$ 74,500
$ 74,500
Income tax payable
255
234
Deferred tax liabilities
3,055
3,386
Total current liabilities
77,810
78,120
TOTAL LIABILITIES
77,810
78,120
Commitments and contingencies
0
0
STOCKHOLDERS’ EQUITY
Preferred stock, $0.001 par value; 5,000,000 shares authorized, no share issued and outstanding as of March 31, 2022 and December 31, 2021, respectively
0
0
Series A preferred stock, $0.001 par value,1,000,000 shares designated; 1,000,000 issued and outstanding, as of March 31, 2022 and December 31, 2021, respectively
1,000
1,000
Common stock, $0.001 par value; 2,000,000,000 shares authorized; 8,099,119 and 8,099,119 shares issued and outstanding as of March 31, 2022 and December 31, 2021, respectively
8,099
8,099
Common stock to be issued
-
-
Additional paid-in capital
131,700
131,700
Accumulated other comprehensive loss
(24,278 )
(20,678 ) Retained earnings
653,502
654,864
Stockholders’ equity
770,023
774,985
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
$ 847,833
$ 853,105
See accompanying notes
are an integral part of theseto condensed consolidated financial statements.2DYCAM, INC.
4 Table of contents FOVEA JEWELRY HOLDINGS, LTD
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(Currency expressed in United States Dollars (“US$”))
(Unaudited)
Three Months ended March 31,
2022
2021
Revenue, net
$ 1,217
$ 162,887
Cost of revenue
(952 )
(81,682 )
Gross profit
265
81,205
Operating expenses:
General and administrative expenses
(1,922 )
(8,509 ) Total operating expenses
(1,922 )
(8,509 )
(LOSS) INCOME BEFORE INCOME TAXES
(1,657 )
72,696
Income tax expenses
295
319
NET (LOSS) INCOME
(1,362 )
73,015
Other comprehensive loss:
– Foreign currency adjustment loss
(3,600 )
(7,757 )
COMPREHENSIVE (LOSS) INCOME
$ (4,962 )
$ 65,258
Net (loss) income per share – Basic and Diluted
$ (0.01 )
$ 0.01
Weighted average common shares outstanding
– Basic and Diluted
8,099,119
10,889,119
See accompanying notes to condensed consolidated financial statements.
5 Table of contents FOVEA JEWELRY HOLDINGS, LTD
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Currency expressed in United States Dollars (“US$”))
(Unaudited)
Three Months ended March 31,
2022
2021
Cash flow from operating activities:
Net (loss) income
$ (1,362 )
$ 73,015
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Depreciation of plant and equipment
1,922
1,934
Change in operating assets and liabilities:
Inventories
3,099
0
Deferred tax liabilities
(331 )
(319 ) Amount due from a shareholder
429
0
Net cash provided by operating activities
3,757
74,630
Foreign currency translation adjustment
(3,498 )
(7,695 )
Net change in cash and cash equivalents
259
66,935
BEGINNING OF PERIOD
1,476
832,151
END OF PERIOD
$ 1,735
$ 899,086
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for income taxes
$ 0
$ 0
Cash paid for interest
$ 0
$ 0
See accompanying notes to condensed consolidated financial statements.
6 Table of contents FOVEA JEWELRY HOLDINGS, LTD
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
(Currency expressed in United States Dollars (“US$”), except for number of shares)
(Unaudited)
For the Three Months ended March 31, 2021 and 2022
Series A preferred stock
Common stock
Common
stock
Additional
paid-in
Accumulated other comprehensive
income
Retained
Total
stockholders’
No. of shares
Amount
No. of shares
Amount
to be issued
capital
(loss)
earnings
equity
Balance as of January 1, 2021
1,000,000
$ 1,000
10,199,119
$ 10,199
$ 90
$ 129,510
$ (10,591 )
$ 725,403
$ 855,611
Shares issued to service providers
-
0
900,000
900
(90 )
(810 )
0
0
0
Foreign currency translation adjustment
-
0
-
0
0
0
(7,757 )
0
(7,757 ) Net income for the period
-
0
-
0
0
0
0
73,015
73,015
Balance as of March 31, 2021
1,000,000
$ 1,000
10,161,039
$ 10,161
$ 0
$ 128,700
$ (18,348 )
$ 798,418
$ 920,869
Balance as of January 1, 2022
1,000,001
$ 1,000
8,099,119
$ 8,099
$ 0
$ 131,700
$ (20,678 )
$ 654,864
$ 774,985
Foreign currency translation adjustment
-
0
-
0
0
0
(24,278 )
0
(24,278 ) Net income for the period
-
0
-
0
0
0
0
1,362
1,362
Balance as of March 31, 2022
1,000,001
$ 1,000
8,099,119
$ 8,099
$ 0
$ 131,700
$ (44,956 )
$ 656,226
$ 752,069
See accompanying notes to condensed consolidated financial statements.
7 Table of contents FOVEA JEWELRY HOLDINGS, LTD
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31,
19962022(Currency expressed in United States Dollars (“US$”), except for number of shares)
(Unaudited)
NOTE – 1 DESCRIPTION OF BUSINESS AND
1995ORGANIZATIONFovea Jewelry Holdings, Ltd (the “Company” or “FJHL”) was originally founded on February 1, 2006 as Dycam, Inc. On March 4, 2019, the Company redomiciled from Nevada to Wyoming. Currently, the Company through its subsidiary, mainly commenced to operate an online store to sell the quality jewelry at affordable prices on www.fovea-jewellery.com. The goal is to "Deliver A Better Living". All products selling on the online store are with great quality, natural, socially responsible and niche.
Description of subsidiaries
Three months ended March 31, 1996 March 31, 1995Revenues Camera sales $763,000 $405,000 Contract engineering fees $66,000 License fees $16,000 $3,000 ------------------ ---------------- Total revenues $845,000 $408,000 ------------------ ---------------- CostName
Place of
revenues Camera sales 487,000 347,000 Contract engineering fees 45,000 License fees 11,000 ------------------ ---------------- Total costincorporation and kindof
revenues 543,000 347,000 ------------------ ---------------- Gross profit 302,000 61,000 ------------------ ---------------- Operating expenses: Selling, general & administrative expenses 285,000 330,000 Researchlegal entityPrincipal activities
and
Development 159,000 199,000 Depreciationplace of operationParticulars of registered/ paid up
share capital
Effective interest
held
Fovea International Holdings Limited
British Virgin Islands
Investment holding
100 ordinary shares at par value of US$1
100%
Fovea Jewellery Holdings Limited
Hong Kong
Sales and
amortization 109,000 83,000 ------------------ ---------------- Total operating expenses 553,000 612,000 ------------------ ---------------- Loss from operations (251,000) (551,000) Non-operating income 41,000 41,000 ------------------ ---------------- Loss before taxes (210,000) (510,000) Provision for income taxes 0 0 ------------------ ---------------- Net loss ($210,000) ($510,000) ================= ============== Net income (loss) per share: Primary (0.07) (0.16) Fully diluted (0.07) (0.16) Weighted averagemarketing in Hong Kong1 ordinary share at par value of HK$1
100%
Gold Shiny International Limited
British Virgin Islands
Investment holding
115 ordinary shares at par value of
common stock outstanding Primary 3,120,836 3,120,836 Fully diluted 3,120,836 3,120,836US$1100%
Gold Shiny (Asia) Limited
Hong Kong
Sales and marketing in Hong Kong
1 ordinary share at par value of HK$1
100%
The
accompanying notesCompany and its subsidiaries arean integral part of these financial statements. 3DYCAM INC. STATEMENT OF STOCKHOLDERS' EQUITY FOR THE YEAR ENDED 1995 AND THREE MONTHS ENDED MARCH 31, 1996
Common Stock --------------------- Additional Accumulated Stockholders Shares Amount Paid-in Cap. Deficit Equity ----------- --------- ------------ ----------- ------------Balance at December 31, 1994 3,120,836 $31,000 $10,710,000 ($852,000) $9,889,000 Net loss (1,352,000) (1,352,000) Balance at December 31, 1995 3,120,836 31,000 10,710,000 (2,204,000) 8,537,000 Net loss for first three months (210,000) (210,000) --------- ------- ---------- ---------- --------- Balance at March 31, 1996 3,120,836 31,000 10,710,000 (2,414,000) 8,327,0004DYCAM, INC. STATEMENT OF CASH FLOWS FOR THE THREE MONTHS ENDED MARCH 31, 1996 and 1995
March 31, 1996 March 31, 1995CASH FLOWS FROM OPERATING ACTIVITIES: Net Income ($210,000) ($510,000) ---------- ---------- Adjustments to reconcile Net Income (loss) to Net Cash provided by (used in) operating activities: Depreciation 39,000 14,000 Amortization of goodwill 69,000 69,000 Allowance for doubtful accounts Changes in assets and liabilities: (Increase)/decrease in accounts receivable (86,000) (39,000) (Increase)/decrease in royalty receivable 0 0 (Increase)/decrease in inventories 74,000 (41,000) (Increase)/decrease in prepaid expenses 3,000 20,000 (Increase)/decrease in other current assets 1,000 0 Increase/(decrease) in accounts payable 135,000 (1,000) Increase/(decrease) in accounts payable-intercompany 0 (129,000) Increase/(decrease) in accrued expenses 10,000 0 Increase/(decrease) in accrued payroll and related expenses 0 0 Increase/(decrease) in deferred revenue 0 0 Increase/(decrease) in income taxes payable 0 0 ---------- ---------- Total adjustments 137,000 (190,000) ---------- ---------- Net cash provided by operating activities 35,000 (617,000) ----------- ----------- CASH FLOWS FROM INVESTING ACTIVITIES: (Increase)/decrease in property and equipment (24,000) (131,000) (Increase)/decrease in Note receivable from SOV 0 (500,000) (Increase)/decrease in deposits 0 (28,000) ---------- ---------- Net cash used in investing activities (24,000) (659,000) CASH FLOWS FROM FINANCING ACTIVITIES: Offering Expenses 0 0 Issuance of common stock 0 0 ---------- ---------- Net cash provided by financing activities 0 0 NET INCREASE/(DECREASE) IN CASH 11,000 (1,276,000) CASH, BEGINNING BALANCE 1,374,000 3,715,000 ---------- ---------- CASH, ENDING BALANCE $1,385,000 $2,439,000 ========== ==========The accompanying notes are an integral part of these financial statements. 5DYCAM INC. NOTES TO FINANCIAL STATEMENTShereinafter referred to as (the “Company”).NOTE
1 -– 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES- - --------------------------------------------------- GeneralThe accompanying
unaudited interimcondensed consolidated financial statements reflect the application ofDycam Inc. (the "Company")certain significant accounting policies as described in this note and elsewhere in the accompanying condensed consolidated financial statements and notes.• Basis of presentation
These accompanying condensed consolidated financial statements have been prepared in
accordanceU.S. Dollars in conformity with generally accepted accounting principles in the United States of America (“U.S. GAAP”) for interim financial information pursuant to the rules andwithregulations of theinstructions to Form 10-QSB. Certain notesSecurities andother information have been condensed or omitted from the interim financial statements presented in this report.Exchange Commission (the “SEC”). Accordingly, they do not include all of the information and footnotes required bygenerally accepted accounting principlesU.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary to make the financial statementsreflect all adjustments considered necessary for a fair presentation and all such adjustments are of a normal and recurring nature. Thenot misleading have been included. Operating resultsof operationsfor thenine monthsinterim period ended March 31, 2022 are not necessarily indicative of the resultstothat may be expected for thefull year. For furtherfiscal year ending December 31, 2022. The informationrefer toincluded in this Form 10-Q should be read in conjunction with Management’s Discussion and Analysis, and the financial statements andfootnotesnotes thereto included in theCompany's annual report on form 10-KSBCompany’s Form 10-K for the fiscal year ended December 31,1995 as2021, filed with theU.S. Securities and Exchange Commission. Property and Equipment Included in property and equipment is camera equipment held under lease to a subsidiary of Styles in the amount of $206,000. Equipment under operating leases is recorded at cost, net of accumulated depreciation. Such camera equipment is being depreciated over four years. Goodwill Goodwill, which represents the excess of purchase price over fair value of net assets acquired, is amortizedSEC ona straight-line basis over the expected periods to be benefited. Dycam assesses the recoverability of this intangible asset by determining whether the amortization of the goodwill balance over its remaining life can be recovered through projected undiscounted future cash flows. The amount of goodwill impairment, if any, is measured based on projected undiscounted future cash flows and is charged to operations in the period in which goodwill impairment is determined by management. Goodwill is being amortized on a straight-line basis over the expected 20 year life. During 1995 and 1994 Dycam recorded $278,000 and $249,000 of amortization expense, respectively. Goodwill amortization of $69,000 was recorded for the three months ended March 31, 1996 and 1995, respectively. At March 31, 1996 no impairment of goodwill was determined by management. Revenue Recognition Revenue from camera sales is recognized upon shipment of products. Contract engineering fees are recognized when the service is performed. License fee revenue is recognized when earned. Revenue from camera equipment leased to a subsidiary of Styles is included in camera sales and is being recognized when earned. 6DYCAM INC.April 29, 2022.
8 Table of contents FOVEA JEWELRY HOLDINGS, LTD
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
- CONTINUED NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued - - -------------------------------------------------------------- Loss Per Common Share Loss per common share has been computed on the weighted averageFOR THE THREE MONTHS ENDED MARCH 31, 2022
(Currency expressed in United States Dollars (“US$”), except for number of
common and equivalent shares outstanding. Primary and fully diluted net loss per share are approximately the same. Dycam has granted certain options which have been treated as common share equivalents in calculating net loss per share, unless antidilutive.shares)(Unaudited)
• Use of
Estimates The preparation ofestimates and assumptionsIn preparing these condensed consolidated financial statements,
in conformity with generally accepted accounting principles ("GAAP") requiresmanagementto makemakes estimates and assumptions that affect the reported amounts of assets and liabilitiesand disclosure of contingent assets and liabilities atin thedate of the financial statementsbalance sheet andthe reported amounts ofrevenues and expenses during thereported period.periods reported. Actual resultscould materiallymay differ fromthosethese estimates.NOTE 2 - CONCENTRATIONS - - ----------------------- Major Customers/Vendors No customer accounted• Basis of consolidation
The condensed consolidated financial statements include the accounts of FJHL and its subsidiaries. All significant inter-company balances and transactions within the Company have been eliminated upon consolidation.
• Cash and cash equivalents
Cash and cash equivalents are carried at cost and represent cash on hand, demand deposits placed with banks or other financial institutions and all highly liquid investments with an original maturity of three months or less as of the purchase date of such investments.
• Plant and equipment
Plant and equipment are stated at cost less accumulated depreciation and accumulated impairment losses, if any. Depreciation is calculated on the straight-line basis over the following expected useful lives from the date on which they become fully operational and after taking into account their estimated residual values:
Expected useful lives
Computer equipment
5 years
Expenditures for
more than 10%repairs and maintenance are expensed as incurred. When assets have been retired or sold, the cost and related accumulated depreciation are removed from the accounts and any resulting gain or loss is recognized in the results ofcamera salesoperations.Depreciation expense for the three months ended March 31,
19962022 and 2021 were $1,922 and $1,930, respectively.• Revenue recognition
The Company adopted Accounting Standards Codification (“ASC”) “606 – Revenue from Contracts with Customers” (“ASC 606”).
Under ASC 606, a performance obligation is a promise within a contract to transfer a distinct good or
1995. Dycam purchased materialsservice, or a series of distinct goods and services, to a customer. Revenue is recognized when performance obligations are satisfied and the customer obtains control of promised goods or services. The amount of revenue recognized reflects the consideration to which the Company expects to be entitled to receive in exchange for goods or services. Under the standard, a contract’s transaction price is allocated to each distinct performance obligation. To determine revenue recognition for arrangements that the Company determines are within the scope of ASC 606, the Company performs the following five steps:
•
identify the contract with a customer;
•
identify the performance obligations in the contract;
•
determine the transaction price;
•
allocate the transaction price to performance obligations in the contract; and
•
recognize revenue as the performance obligation is satisfied.
Majority of the Company's income is derived from
one vendorcontracts with customers in the sale of diamond and jewelry products, and as such, the revenue recognized depicts the transfer of promised goods or services to its customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for$280,000those goods or services. The Company considers the terms of the contract and$50,000,all relevant facts and circumstances when applying this guidance. The Company’s revenue recognition policies are in compliance with ASC 606, as follows:
9 Table of contents FOVEA JEWELRY HOLDINGS, LTD
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 2022
(Currency expressed in United States Dollars (“US$”), except for number of shares)
(Unaudited)
Product sales consist of a single performance obligation that the Company satisfies at a point in time. The Company recognizes product revenue when the following events have occurred: (a) the Company has transferred physical possession of the products, depending upon the method of distribution and shipping terms set forth in the customer contract, (b) the Company has a present right to payment, (c) the customer has legal title to the products, and (d) the customer bears significant risks and rewards of ownership of the products.
For these sales, the Company determined that the customer is able to direct the use of and obtain substantially all of the benefits from, the products at the time the products are delivered.
• Cost of revenue
Cost of revenue consists primarily of the purchase cost of diamond and jewelry products, which
represented 55%are directly attributable to the sales of products.• Income taxes
The Company adopted the ASC 740 Income tax provisions of paragraph 740-10-25-13, which addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the condensed consolidated financial statements. Under paragraph 740-10-25-13, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the condensed consolidated financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent (50%) likelihood of being realized upon ultimate settlement. Paragraph 740-10-25-13 also provides guidance on de-recognition, classification, interest and
17%penalties on income taxes, accounting in interim periods and requires increased disclosures. The Company had no material adjustments to its liabilities for unrecognized income tax benefits according to the provisions ofall materials purchased duringparagraph 740-10-25-13.The estimated future tax effects of temporary differences between the tax basis of assets and liabilities are reported in the accompanying balance sheets, as well as tax credit carry-backs and carry-forwards. The Company periodically reviews the recoverability of deferred tax assets recorded on its balance sheets and provides valuation allowances as management deems necessary.
• Uncertain tax positions
The Company did not take any uncertain tax positions and had no adjustments to its income tax liabilities or benefits pursuant to the ASC 740 provisions of Section 740-10-25 for the three months ended March 31,
19962022 and1995, respectively. Concentration2021.• Foreign currencies translation
Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of
Credit Risk Financial investments which potentially exposethe transaction. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency using the applicable exchange rates at the balance sheet dates. The resulting exchange differences are recorded in the condensed consolidated statement of operations.
10 Table of contents FOVEA JEWELRY HOLDINGS, LTD
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 2022
(Currency expressed in United States Dollars (“US$”), except for number of shares)
(Unaudited)
The reporting currency of the Company
tois United States Dollar ("US$") and the accompanying condensed consolidated financial statements have been expressed in US$. In addition, the Company is operating in Hong Kong and maintain its books and record in its local currency, Hong Kong Dollars (“HKD”), which is aconcentrationfunctional currency as being the primary currency ofcredit riskthe economic environment in which their operations are conducted. In general, for consolidation purposes, assets and liabilities of its subsidiary whose functional currency is not US$ are translated into US$, in accordance with ASC Topic 830-30, “ Translation of Financial Statement”, using the exchange rate on the balance sheet date. Revenues and expenses are translated at average rates prevailing during the period. The gains and losses resulting from translation of financial statements of foreign subsidiary are recorded as a separate component of accumulated other comprehensive income within the statements of changes in stockholder’s equity.Translation of amounts from HKD into US$ has been made at the following exchange rates for the period ended March 31, 2022 and 2021:
March 31, 2022
March 31, 2021
Period-end HKD:US$ exchange rate
0.1277
0.1286
Period average HKD:US$ exchange rate
0.1281
0.1289
• Comprehensive income
ASC Topic 220, “Comprehensive Income”, establishes standards for reporting and display of comprehensive income, its components and accumulated balances. Comprehensive income as defined includes all changes in equity during a period from non-owner sources. Accumulated other comprehensive income, as presented in the accompanying condensed consolidated statements of changes in stockholders’ equity, consists of changes in unrealized gains and losses on foreign currency translation. This comprehensive income is not included in the computation of income tax expense or benefit.
• Related parties
The Company follows the ASC 850-10, Related Party for the identification of related parties and disclosure of related party transactions.
Pursuant to section 850-10-20 the related parties include a) affiliates of the Company; b) entities for which investments in their equity securities would be required, absent the election of the fair value option under the Fair Value Option Subsection of section 825–10–15, to be accounted for by
Statementthe equity method by the investing entity; c) trusts for the benefit ofFinancialemployees, such as pension and Income-sharing trusts that are managed by or under the trusteeship of management; d) principal owners of the Company; e) management of the Company; f) other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests; and g) other parties that can significantly influence the management or operating policies of the transacting parties or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests.The condensed consolidated financial statements shall include disclosures of material related party transactions, other than compensation arrangements, expense allowances, and other similar items in the ordinary course of business. However, disclosure of transactions that are eliminated in the preparation of consolidated or combined financial statements is not required in those statements. The disclosures shall include: a) the nature of the relationship(s) involved; b) a description of the transactions, including transactions to which no amounts or nominal amounts were ascribed, for each of the periods for which income statements are presented, and such other information deemed necessary to an understanding of the effects of the transactions on the financial statements; c) the dollar amounts of transactions for each of the periods for which income statements are presented and the effects of any change in the method of establishing the terms from that used in the preceding period; and d) amount due from or to related parties as of the date of each balance sheet presented and, if not otherwise apparent, the terms and manner of settlement.
11 Table of contents FOVEA JEWELRY HOLDINGS, LTD
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 2022
(Currency expressed in United States Dollars (“US$”), except for number of shares)
(Unaudited)
• Commitments and contingencies
The Company follows the ASC 450-20, Commitments to report accounting for contingencies. Certain conditions may exist as of the date the financial statements are issued, which may result in a loss to the Company but which will only be resolved when one or more future events occur or fail to occur. The Company assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or un-asserted claims that may result in such proceedings, the Company evaluates the perceived merits of any legal proceedings or un-asserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein.
If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s condensed consolidated financial statements. If the assessment indicates that a potentially material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed.
Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed. Management does not believe, based upon information available at this time that these matters will have a material adverse effect on the Company’s financial position, results of operations or cash flows. However, there is no assurance that such matters will not materially and adversely affect the Company’s business, financial position, and results of operations or cash flows.
• Fair value of financial instruments
The Company follows paragraph 825-10-50-10 of the FASB Accounting Standards
No. 105, consist primarilyCodification for disclosures about fair value of its financial instruments and has adopted paragraph 820-10-35-37 of the FASB Accounting Standards Codification (“Paragraph 820-10-35-37”) to measure the fair value of its financial instruments. Paragraph 820-10-35-37 of the FASB Accounting Standards Codification establishes a framework for measuring fair value in generally accepted accounting principles (GAAP) and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, paragraph 820-10-35-37 of the FASB Accounting Standards Codification establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three (3) levels of fair value hierarchy defined by paragraph 820-10-35-37 of the FASB Accounting Standards Codification are described below:
Level 1
Quoted market prices available in active markets for identical assets or liabilities as of the reporting date.
Level 2
Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date.
Level 3
Pricing inputs that are generally observable inputs and not corroborated by market data.
Financial assets are considered Level 3 when their fair values are determined using pricing models, discounted cash flow methodologies or similar techniques and at least one significant model assumption or input is unobservable.
The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. If the inputs used to measure the financial assets and liabilities fall within more than one level described above, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument.
The carrying amounts of the Company’s financial assets and liabilities, such as cash and
accounts receivable. The Company places itscashwith high credit quality institutions but at times has amounts in one institution in excessequivalents, approximate their fair values because of thefederally insured limitshort maturity of$100,000. Concentrationthese instruments.
12 Table of contents FOVEA JEWELRY HOLDINGS, LTD
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 2022
(Currency expressed in United States Dollars (“US$”), except for number of
credit risk with respect to trade receivablesshares)(Unaudited)
• Recent accounting pronouncements
Accounting Standards Adopted
In May 2021, the FASB issued ASU 2021-04, Earnings Per Share (Topic 260), Debt-Modifications and Extinguishments (Subtopic 470-50), Compensation-Stock Compensation (Topic 718), and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40), (“ASU 2021-04”). This ASU reduces diversity in an issuer’s accounting for modifications or exchanges of freestanding equity-classified written call options (for example, warrants) that remain equity classified after modification or exchange. This ASU provides guidance for a modification or an exchange of a freestanding equity-classified written call option that is
limited due tonot within thediversityscope of another Topic. It specifically addresses: (1) how an entity should treat a modification of theCompany's customer base. Generally,terms or conditions or an exchange of a freestanding equity-classified written call option that remains equity classified after modification or exchange; (2) how an entity should measure theCompany does not require collateraleffect of a modification orother securityan exchange of a freestanding equity-classified written call option that remains equity classified after modification or exchange; and (3) how an entity should recognize the effect of a modification or an exchange of a freestanding equity-classified written call option that remains equity classified after modification or exchange. This ASU will be effective for all entities for fiscal years beginning after December 15, 2021. An entity should apply the amendments prospectively tosupport customer receivables. Management consistently monitorsmodifications or exchanges occurring on or after thefinancial condition of its customers to reduce the risk of loss. 7DYCAM INC. NOTES TO FINANCIAL STATEMENTS - CONTINUED NOTE 3 - TRANSACTIONS WITH STYLES - - --------------------------------- Note Receivable from Styles on Video Inc. On December 14, 1994, Dycam loaned to Styles $500,000. On January 25, 1995, Dycam loaned an additional $500,000 to Styles. Styles signed an amended and restated promissory note dated January 25, 1995 for the full $1,000,000 note, bearing interest at 2% above a bank's prime rate, interest payable monthly, with a maturity date of September 1, 1995. Dycam subsequently extended the maturityeffective date of thenoteamendments. Early adoption is permitted, including adoption in an interim period. The adoption of ASU 2021-04 on January 1, 2022 did not have a material impact on the Company’s financial statements or disclosures.The Company has reviewed all recently issued, but not yet effective, accounting pronouncements and do not believe the future adoption of any such pronouncements may be expected to cause a material impact on its financial condition or the results of its operations.
NOTE – 3 STOCKHOLDERS’ EQUITY
Authorized shares
The Company’s authorized shares were 5,000,000 shares of preferred stock, with a par value of $0.001.
The Company’s authorized shares were 2,000,000,000 shares of common stock, with a par value of $0.001.
Issued and outstanding shares
As of March 31, 2022 and December 31,
1998, and fixed2021, theinterest rate at 10%. The interest is payable monthly. The Note is secured by a pledge of 1,916,667Company had 1,000,000 shares of Series A preferred stock issued and outstanding.As of March 31, 2022 and December 31, 2021, the Company had 8,099,119 and 8,099,119 shares of common stock issued and outstanding, respectively.
13 Table of contents FOVEA JEWELRY HOLDINGS, LTD
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 2022
(Currency expressed in United States Dollars (“US$”), except for number of
Dycam owned by Styles. Interestshares)(Unaudited)
NOTE – 4 INCOME TAX
The provision for income
of approximately $25,000 is included in the accompanying March 31, 1996 statement of operations related to the Styles loan. The carrying amount of the note receivable approximates its fair market value at December 31, 1995. Accounts Receivable From Subsidiary of Styles Included in accounts receivable at March 31, 1996 is approximately $35,000 due from a subsidiary of Styles. Revenues Included in the accompanying March 31, 1996 statement of operations under camera sales and license fees is $33,000 and $16,000, respectively, of revenues related to camera equipment leased to a subsidiary of Styles. NOTE 4 - PROPERTY AND EQUIPMENT - - ------------------------------- Property and equipment at March 31, 1996 consiststaxes consisted of the following:
Machinery and equipment $289,000 Camera equipment 223,000 Office equipment 105,000 ----------- 617,000 Less: accumulated depreciation (180,000) ----------- $ 437,000 ===========8MANAGEMENT'S DISCUSSION AND ANALYSIS General
Three months ended March 31,
2022
2021
Current tax
$ 22
$ 6,157
Deferred tax
(317 )
(319 )
Income tax expense
$ (295 )
$ 5,838
The effective tax rate in the periods presented is the result of the mix of income earned in various tax jurisdictions that apply a broad range of income tax rate. The Company
commenced operationsmainly operates inApril 1988, and was incorporated in Delaware in July, 1988. The Company became a wholly owned subsidiary of Styles on Video Inc. a publicly traded Delaware corporation (Styles) on February 7, 1994. Effective September 21, 1994, the Company effected an underwritten Rights Offering of 1,000,000 shares of its Common Stock. From and after the close of the Rights Offering, Styles owned approximately 55% of the Company's common stock. Since its inception, the Company's business has been the design, manufacture and sale of digital cameras and associated hardware and software products primarily for use with personal computers. Substantially all of the Company's revenues are derived from sales of digital cameras and supporting software and accessory products, technology licensing fees, and contract engineering work. Except for the historical information contained herein, the matters discussed in this Management's Discussion and Analysis are forward-looking statementsHong Kong thatinvolve risks and uncertainties and, in some cases, are based upon various factors beyond Dycam's control. These factors include, among other things, the ability of Forever Yoursis subject toexecute its business plan for the purchase and utilization of Dycam's digital cameras pursuant to their existing agreement, the ability of SOV to continue to service its outstanding indebtedness owed to Dycam, the market reception for digital cameras in general and Dycam's products specifically, the impact of competition from other companiestaxes in thedigital camera industry, developmentsjurisdictions in whichmay render Dycam's productsthey operate, as follows:United States of America
FJHL is registered in the State of Wyoming and
services obsolete or less attractive, Dycam's financial constraints, and overall economic conditions. Resultsis subject to the tax laws ofOperations ThreeUnited States of America.For the three months ended March 31,
19962022 and 2021, there was no operation in the United States of America.BVI
Under the current BVI law, the Company is not subject to tax on income.
Hong Kong
The Company’s subsidiary operating in Hong Kong is subject to the Hong Kong Profits Tax at the two-tiered profits tax rates from 8.25% to 16.5% on the estimated assessable profits arising in Hong Kong during the current year, after deducting a tax concession for the tax year. The reconciliation of income tax rate to the effective income tax rate for the three months ended March 31, 2022 And 2021 is as follows:
Three months ended March 31,
2022
2021
Income before income taxes
$ 1,657
$ 72,696
Statutory income tax rate
16.5 %
16.5 % Income tax expense at statutory rate
273
11,994
Tax effect of non-deductible items
317
319
Tax effect of tax holiday
(568 )
(6,156 ) Income tax expense
$ 22
$ 6,157
The following table sets forth the significant components of the deferred tax liabilities of the Company as of March 31, 2022 and December 31, 2021:
As of
March 31,
December 31,
2022
2021
Deferred tax liabilities:
Accelerated depreciation
$ (3,055 )
$ (3,386 ) NOTE – 5 RELATED PARTY TRANSACTIONS
Apart from the transactions and balances detailed elsewhere in these accompanying condensed consolidated financial statements, the Company has no other significant or material related party transactions during the periods presented.
14 Table of contents FOVEA JEWELRY HOLDINGS, LTD
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 2022
(Currency expressed in United States Dollars (“US$”), except for number of shares)
(Unaudited)
NOTE – 6 CONCENTRATIONS OF RISK
The Company is exposed to the following concentrations of risk:
(a) Major customers
For the three months ended March 31, 2022 and 2021, the individual customer who accounts for 10% or more of the Company’s revenues and its outstanding receivable balances as at period-end dates, are presented as follows:
Three months ended March 31, 2022
March 31, 2022
Customers
Revenues
Percentage
of revenues
Accounts
receivable
Customer A
$ 1,217
100 %
$ 0
Three months ended March 31, 2021
March 31, 2021
Customers
Revenues
Percentage
of revenues
Accounts
receivable
Customers B
$ 50,922
31 %
$ 0
Customers C
45,766
28 %
0
Customers D
40,738
25 %
0
Customers E
25,461
16 %
0
Total:
$ 162,887
100 %
$ 0
All of the Company’s customers are located in Hong Kong.
(b) Major vendor
For the three months ended March 31, 2022 and 2021, there was one vender represented more than 10% of the Company’s operating cost. This vendor accounted for 100% of the Company’s operating cost with no accounts payable at March 31, 2022 and 2021.
The Company’s vendor is located in Hong Kong.
(c) Economic and political risk
The Company’s major operations are conducted in Hong Kong. Accordingly, the political, economic, and legal environments in Hong Kong, as well as the general state of Hong Kong’s economy may influence the Company’s business, financial condition, and results of operations.
(d) Exchange rate risk
The Company cannot guarantee that the current exchange rate will remain steady; therefore there is a possibility that the Company could post the same amount of profit for two comparable periods and because of the fluctuating exchange rate actually post higher or lower profit depending on exchange rate of HKD converted to US$ on that date. The exchange rate could fluctuate depending on changes in political and economic environments without notice.
15 Table of contents FOVEA JEWELRY HOLDINGS, LTD
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 2022
(Currency expressed in United States Dollars (“US$”), except for number of shares)
(Unaudited)
NOTE – 7 COMMITMENTS AND CONTINGENCIES
As of March 31, 2022, the Company has no material commitments or contingencies.
NOTE – 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 condensed consolidated financial statements are issued, the Company has evaluated all events or transactions that occurred after March 31, 2022, up through the date the Company issued the unaudited condensed consolidated financial statements.
16 Table of contents ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
The following information should be read in conjunction with (i) the financial statements of Fovea Jewelry Holdings, Ltd., a Wyoming corporation (the “Company”), and the notes thereto appearing elsewhere in this Form 10-Q together with (ii) the more detailed business information and the December 31, 2021 audited financial statements and related notes included in the Company’s Annual Report on Form 10-K, as filed with the Securities and Exchange Commission on April 29, 2022. Statements in this section and elsewhere in this Form 10-Q that are not statements of historical or current fact constitute “forward-looking” statements.
OVERVIEW
The Company is incorporated in the State of Wyoming as a result of a domestication from the State of Nevada on March 4, 2019 and has a fiscal year end of December 31.
CRITICAL ACCOUNTING POLICIES
PLAN OF OPERATION
Our plan of operations over the next 12 month period is to continue developing our website to have a fully functioning online store and sell our diamond products.
Results of Operations
Comparison of the three months ended March 31, 2022 and March 31, 2021
The following table sets forth certain operational data for the three months ended March 31, 2022, compared to the three months ended March
--------------------------------------------------------------------------31,1995 - - -------- Total2021:
Three months ended
March 31,
2022
2021
Revenue
$ 1,217
$ 162,887
Cost of revenue
(952 )
(81,682 ) Gross profit
265
81,205
Operating Expenses
(1,922 )
(8,509 ) Income from operations
(1,657 )
72,696
Income tax expense
295
(5,838 ) NET (LOSS) INCOME
$ (1,362 )
$ 66,858
Revenue. We generated revenues of $1,217 and $162,887 for the three months ended March 31,
1996 were $845,000. Total revenues increased $437,000 (107%)2022 and 2021, respectively. The decrease in revenue is attributable to the decrease in market demand fromrevenuesthe Omicron outbreak in the first fiscal quarter of$408,0002022.Cost of Revenue. Cost of revenue for the three months ended March 31,
1995. The increase in revenue2022, wasprimarily associated with increased camera sales and contract engineering services. Revenues from camera sales were $763,000 (90% of total revenue) in the three months ended March 31, 1996$952, as compared to$405,000 in 1994 (99%cost oftotal revenue). Revenues from contract engineering were $66,000 (8%revenue ofrevenue) in$81,682 for theperiod as compared to negligible contract engineering revenues in thesameperiod of 1995. License fee revenues in theperiod ended March 31,19962021. Cost of$16,000 (2% of revenue) were realized from one customer, Forever Yours Inc. Dycam continues to pursue its standard product strategy by facilitating the use of general purpose digital cameras, and sellingrevenue decreased primarily as arange of Dycam branded and third party digital camera products, software, and accessories to selected target markets. Dycam, however, will continue to devote the majority of its engineering efforts in the custom product lines to exploit the opportunities to design products that combine custom built digital cameras with specialized software, hardware or packaging in order to satisfy an identified business opportunity. During 1995, Dycam devoted a substantial portion of its resources to pursuing custom and contract engineering business with the goal of generating future sales. One example of this strategy is Dycam's relationship with Forever Yours. Dycam believes that during 1996 a substantial portion of its revenues will be comprised of revenues derived from the sale of cameras to, and licensing revenues from, Forever Yours. The core elementresult of theForever Yours camera system isdecrease in market demand.Gross Profit. We achieved a
specialized digital camera subsystem engineeredgross profit of $265 andproduced by Dycam under an exclusive contract with Forever Yours. Gross profits are comprised of revenues less direct costs of products and services. Gross profits as a percentage of revenues$81,205 for the three months ended March 31,1996 increased to 36%, compared to 15%2022 and 2021, respectively. The decrease inthe three months ended March 31, 1995,gross profit is primarilyas a result of the increased revenue from mature camera product sales, decreases in new product startup costs, and increased revenues from licenses and contract engineering. Also contributingattributable to theimprovement is the improved absorptiondecreasing market demand.
17 Table of contents Operating Expenses. We incurred G&A expenses of
fixed costs afforded by the overall increase in revenues. Gross margins however, may continue to remain at lower levels if the Company's custom products business does not contribute a significant portion to the Company's revenues. 9Selling, general$1,922 andadministrative expenses consist of administrative expenses at the Company headquarters, the salaries of corporate officers and sales personnel, advertising and promotion, accounting, legal and other professional expenses, rent and occupancy costs. Selling, general and administrative expenses decreased $45,000$8,509 for the three months ended March 31,1996 to $285,000 (34% of revenues) from $330,000 (81% of revenues) for the same period2022, and 2021, respectively. The increase in1995. The decrease resultedG&A is primarilyfrom reductions in personnel and expenditures in the 1996 period, and continuing efforts to control costs. Product development and research expenses decreased $40,000 to $159,000 (19% of revenues) in the three months ended March 31, 1996 compared to $199,000 (49% of revenues) in 1995. This decrease isattributable toreductions in personnel,increase professional, administrative andthe completion of certain developments of products introduced for sale in 1995, including the camera developed in conjunction with Forever Yours, Inc.. The Company believes that continuing research and development is essential to maintaining its competitive position, and expects to continue to expend funds in this area. Inventories decreased by $74,000 to $624,000 at March 31, 1996 when compared to December 31, 1995, primarily as a result of the increase in camera shipments, including the Forever Yours camera system, and continuing sales of older products from inventory. The acceptance and success of the Forever Yours business is not yet assured, and if unsuccessful may result in lower than anticipated revenues for the Company and a write down of the carrying value of that unique inventory associated with the Forever Yours camera system. The net loss per common share was ($0.07)other fees.Income Tax Expense. Our income tax expenses for the three months ended March 31,
1996 compared to net loss per common share of ($0.16) for2022 and 2021 were $295 and $5,838, respectively.Net (Loss) Income. During the three months ended March 31,
1995.2022, we incurred a net income of $1,362, as compared to net income of $66,858 for the same period ended March 31, 2021.Liquidity and Capital Resources
AtAs of March 31,
1996, Dycam2022, we had cash andshort-term investments on handcash equivalents of$1,385,000, up $11,000 from $1,374,000 at$1,735. As of December 31,1995. Accounts receivable, net2021, we had cash and cash equivalents ofallowance for doubtful accounts of $5,000, increased $86,000 during$1,476.
Three Months Ended March 31,
2022
2021
Net cash provided by operating activities
$ 3,757
$ 68,473
Net cash used in investing activities
$ -
$ -
Net cash provided by financing activities
$ -
$ -
18 Table of contents Net Cash Provided By Operating Activities.
For the three months ended March 31,
1996. Camera2022, net cash provided by operating activities was $3,757 which consisted primarily of a net loss of $1,362, depreciation of property, plant and equipmentrelated to operating leases to Forever Yours, increasedof $1,922, an increase in inventories of $3,099 and offset by$23,000 duringan increase in deferred tax liabilities of $331.For the three months ended March 31,
1996. Such camera2021, net cash provided by operating activities was $68,473, which consisted primarily of a net income of $66,858, depreciation of property, plant and equipmentwill be depreciated overof $1,934 and a decrease in deferred tax liabilities of $319.Net Cash Used In Investing Activities.
For the
lifethree months ended March 31, 2022 and 2021, net cash used in investing activities was $0.Net Cash Provided By Financing Activities.
For the three months ended March 31, 2022, net cash provided by financing activities was $0.
Off-Balance Sheet Arrangements
The Company has no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on the financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to stockholders.
Subsequent Events
None through the date of this filing.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
As a smaller reporting company (as defined in Rule 12b-2 of the
leases. Current liabilities increasedExchange Act), we are not required to provide the information called for by$145,000this Item 3.ITEM 4. CONTROLS AND PROCEDURES.
DISCLOSURE CONTROLS AND PROCEDURES
Under the supervision and with the participation of our management, our Chief Executive Officer, who acts as both our principal executive officer and our principal financial officer, is responsible for conducting an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as of the end of the fiscal year covered by this report. Disclosure controls and procedures means that the material information required to
$344,000, primarilybe included in our Securities and Exchange Commission reports is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms relating to our company, including any consolidating subsidiaries, and was made known to us by others within those entities, particularly during the period when this report was being prepared. Based on this evaluation, our Chief Executive Officer, who acts asa resultboth principal executive officer and principal financial officer, concluded as ofincreases in accounts payablethe evaluation date that our disclosure controls and procedures were not effective as of$135,000. Dycam's working capital atMarch 31,1996 was $1,900,000 a decrease of $125,000 when compared2022.There were no changes in the Company’s internal controls over financial reporting during the most recently completed fiscal quarter that have materially affected or are reasonably likely to
$2,025,000 at December 31, 1995. Working capital decrease was primarilymaterially affect theresult of net losses of $210,000.Company’s internal control over financial reporting.
19 Table of contents PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
The
current ratio at March 31, 1996 was 6.5 to 1 compared to 11.2 to 1 at December 31, 1995. Dycam does not have any long term indebtedness and doesCompany is not currentlymaintainsubject to anycredit facilities. In December 1994 Dycam madelegal proceedings. From time to time, the Company may become subject to litigation or proceedings in connection with its business, as either asecured loan of $500,000plaintiff or defendant. There are no such pending legal proceedings toStyles. Dycam determinedwhich the Company is a party that,it wasin thebest interestsopinion ofDycam and its shareholders that it make this loan, which enabled Stylesmanagement, is likely tocontinue funding Forever Yours, and thushave a material adverse effect on thedevelopment and manufactureCompany’s business, financial condition or results of operations.ITEM 1A.RISK FACTORS
As a smaller reporting company (as defined in Rule 12b-2 of the
Forever Yours digital cameraExchange Act), we are not required to provide the information called for byForever Yoursthis Item 1A.ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
None.
ITEM 4. MINE SAFETY DISCLOSURES.
None.
ITEM 5. OTHER INFORMATION.
None.
20 Table of contents ITEM 6. EXHIBITS.
(a) Exhibits required by Item 601 of Regulation SK.:
Number
Description
101.INS
XBRL Instance Document*+
101.SCH
XBRL Taxonomy Extension Schema Document*+
101.CAL
XBRL Taxonomy Extension Calculation Linkbase Document*+
101.DEF
XBRL Taxonomy Extension Definition Linkbase Document*+
101.LAB
XBRL Taxonomy Extension Label Linkbase Document*+
101.PRE
XBRL Taxonomy Extension Presentation Linkbase Document*+
_________________
+ XBRL (Extensible Business Reporting Language) information is furnished and
Dycam. In January 1995 Dycam approved an additional secured loannot filed or a part of$500,000 to Styles. The two loans were memorialized inasingle note bearing interest at the Bankregistration statement or prospectus for purposes ofAmerica NS&TA prime rate plus two percentage points and was payable interest only for seven months with the entire principal balance plus accrued and unpaid interest thereon due and payable on September 1, 1995. Dycam subsequently extended the maturity dateSections 11 or 12 of thenote to December 31, 1998, and fixed the interest rate at 10% per year. All interest payments due have been paid. The noteSecurities Act of 1933, as amended, issecured by 1,916,667 sharesdeemed not filed for purposes ofDycam's Common Stock owned by Styles. If Styles is 10unable to satisfy its obligations under the note, Dycam may not be repaid and will exercise its right to acquire the 1,916,667 shares of Dycam Common Stock owned by Styles. Since the closingSection 18 of theRights Offering, Dycam has expended approximately $3,500,000Securities Exchange Act ofthe moneys raised in that offering, which amount includes the above-referenced $1,000,000 secured loan1934, as amended, and otherwise is not subject toStyles. Commencing in the second quarter of 1994, Dycam embarked on a program to market and sell its standard digital camera products to select markets. Although Dycam was able to generate short term increases in sales inliability under thesemarkets, it has determined that a large market does not currently exist for its standard digital camera systems. Consequently, during the first quarter of 1995, Dycam decided to de-emphasize the sale of its internally designed standard products and will, in the future, concentrate its efforts on custom product development, value added distribution of standard digital cameras produced by others for Dycam, and cooperative ventures. These cooperative ventures include Dycam's ongoing relationship with Forever Yours, for whom Dycam has developed a digital imaging system designed for taking photographs of newborn infants. Dycam anticipates that its operating and research and development activities in fiscal 1996 will continue to use cash and expects that its cash balance in fiscal 1996 will continue to decline. However, Dycam believes that its existing cash balances, the payments due under the intercompany loan and cash flow from operations will be sufficient to meet its cash requirements through December 1996, after which time it may be required to raise additional capital. In addition, to the extent Dycam experiences growth in the future, or its cash flow from operations is less than anticipated, Dycam may be required to obtain additional sources of cash. There is no assurance that such sources will be available. 11DYCAM INC.sections.
21 Table of contents SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
IssuerRegistrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.Dycam Inc. May 13, 1996 By: John Edling ------------------ John Edling, President and Chief Financial Officer 12
FOVEA JEWELRY HOLDINGS, LTD. | |||
Date: May 16, 2022 | By: | /s/ Thomson Lee | |
Name: | Thomson Lee | ||
Title: | Chief Executive Officer (principal executive officer, principal accounting officer and principal financial officer) | ||
| 22 |