Docoh
Loading...

CLOW Cloudweb

Filed: 3 Nov 21, 12:32pm

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

Form 10-Q

 

(Mark One)

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

 

 

 

For the quarterly period ended September 30, 2021

 

or

 

TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from _________ to _________

 

Commission File Number 333-199193

 

Cloudweb, Inc.

(Exact name of registrant as specified in its charter)

 

Florida

47-0978297

(State or other jurisdiction of

incorporation or organization)

(IRS Employer

Identification No.)

800 W El Camino Real Suite 180

Mountain View, CA

94040

(Address of principal executive offices)

(Zip Code)

 

713-583-6813

(Registrant’s telephone number, including area code)

 

N/A

(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

None

None

None

 

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

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this 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, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

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 Rule 12b-2 of the Exchange Act) ☐ YES     ☒ NO

 

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY

PROCEEDINGS DURING THE PRECEDING FIVE YEARS

 

Check whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by a court. ☐ YES     ☐ NO

 

APPLICABLE ONLY TO CORPORATE ISSUERS

 

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

 

63,140,557 common shares issued and outstanding as of October 29, 2021.

 

 

 

    

TABLE OF CONTENTS

 

PART I - FINANCIAL INFORMATION

 

Item 1.

Financial Statements

 

3

 

Item 2.

Management’s Discussion and Analysis of Financial Condition or Plan of Operation

 

11

 

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

 

14

 

Item 4.

Controls and Procedures

 

14

 

PART II - OTHER INFORMATION

 

Item 1.

Legal Proceedings

 

15

 

Item 1A.

Risk Factors

 

15

 

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

 

15

 

Item 3.

Defaults Upon Senior Securities

 

15

 

Item 4.

Mine Safety Disclosures

 

15

 

Item 5.

Other Information

 

15

 

Item 6.

Exhibits

 

16

 

SIGNATURES

 

17

  

 
2

Table of Contents

  

PART I - FINANCIAL INFORMATION

 

Item 1. Financial Statements

 

CLOUDWEB, INC.

CONDENSED BALANCE SHEETS

(in U.S. Dollars, except for number of shares or otherwise stated)

(Unaudited)

 

 

 

September 30, 2021

 

 

December 31, 2020

 

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Current Assets

 

$0

 

 

$0

 

 

 

 

 

 

 

 

 

 

TOTAL ASSETS

 

$0

 

 

$0

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ DEFICIT

 

 

 

 

 

 

 

 

Current Liabilities

 

 

 

 

 

 

 

 

Accounts payable and accrued liabilities

 

$56,839

 

 

$55,409

 

Accrued interest

 

 

135,260

 

 

 

107,565

 

Promissory notes payable

 

 

2,160

 

 

 

2,160

 

Convertible notes payable, net of note discount of $1,784and $0, respectively

 

 

154,198

 

 

 

39,982

 

Due to related party

 

 

28,480

 

 

 

0

 

Total Current Liabilities

 

 

376,937

 

 

 

205,116

 

 

 

 

 

 

 

 

 

 

Convertible notes payable, net of note discount of $0 and $3,584, respectively

 

 

0

 

 

 

112,416

 

Promissory notes payable

 

 

67,326

 

 

 

67,326

 

 

 

 

 

 

 

 

 

 

Total Liabilities

 

 

444,263

 

 

 

384,858

 

 

 

 

 

 

 

 

 

 

Stockholders’ Deficit

 

 

 

 

 

 

 

 

Common stock, no par value; 500,000,000 shares authorized, 63,140,557 shares issued and outstanding

 

 

128,437,821

 

 

 

128,437,821

 

Accumulated deficit

 

 

(128,785,868)

 

 

(128,726,463)

Accumulated deficit from discontinued operations

 

 

(96,216)

 

 

(96,216)

Total Stockholders’ Deficit

 

 

(444,263)

 

 

(384,858)

TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT

 

$0

 

 

$0

 

    

The accompanying notes are an integral part of these unaudited condensed financial statements.

 

 
3

Table of Contents

      

CLOUDWEB, INC.

CONDENSED STATEMENTS OF OPERATIONS

(in U.S. Dollars, except for number of shares or otherwise stated)

(Unaudited)

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING EXPENSES

 

 

 

 

 

 

 

 

 

 

 

 

Professional fees

 

$7,560

 

 

$5,550

 

 

$29,910

 

 

$18,957

 

Web development cost

 

 

0

 

 

 

10,030

 

 

 

0

 

 

 

10,030

 

Salaries and wages - related party

 

 

0

 

 

 

11,625,000

 

 

 

0

 

 

 

34,875,000

 

Total Operating Expenses

 

 

7,560

 

 

 

11,640,580

 

 

 

29,910

 

 

 

34,903,987

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OTHER EXPENSES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

(9,933)

 

 

(16,368)

 

 

(29,495)

 

 

(67,568)

Total Operating Expenses

 

 

(9,933)

 

 

(16,368)

 

 

(29,495)

 

 

(67,568)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET LOSS

 

$(17,493)

 

$(11,656,948)

 

$(59,405)

 

$(34,971,555)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET LOSS PER SHARE: BASIC AND DILUTED

 

$(0.00)

 

$(0.18)

 

$(0.00)

 

$(0.73)

WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING: BASIC AND DILUTED

 

 

63,140,557

 

 

 

63,140,557

 

 

 

63,140,557

 

 

 

47,998,221

 

 

The accompanying notes are an integral part of these unaudited condensed financial statements.

 

 
4

Table of Contents

  

 

CLOUDWEB, INC.

CONDENSED STATEMENTS OF STOCKHOLDERS’ DEFICIT

(in U.S. Dollars, except for number of shares or otherwise stated)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated Deficit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

From

 

 

Total

 

 

 

Common Stock (no par value)

 

 

Accumulated

 

 

Discontinued

 

 

Stockholders’

 

 

 

Number of Shares

 

 

Amount

 

 

Deficit

 

 

Operations Deficit

 

 

Deficiency

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance - December 31, 2020

 

 

63,140,557

 

 

$128,437,821

 

 

$(128,726,463)

 

$(96,216)

 

$(384,858)

Net loss

 

 

-

 

 

 

0

 

 

 

(26,780)

 

 

0

 

 

 

(26,780)

Balance - March 31, 2021

 

 

63,140,557

 

 

$128,437,821

 

 

$(128,753,243)

 

$(96,216)

 

$(411,638)

Net loss

 

 

-

 

 

 

0

 

 

 

(15,132)

 

 

0

 

 

 

(15,132)

Balance - June 30, 2021

 

 

63,140,557

 

 

$128,437,821

 

 

$(128,768,375)

 

$(96,216)

 

$(426,770)

Net loss

 

 

-

 

 

 

0

 

 

 

(17,493)

 

 

0

 

 

 

(17,493)

Balance – September 30, 2021

 

 

63,140,557

 

 

$128,437,821

 

 

$(128,785,868)

 

$(96,216)

 

$(444,263)

  

 

 

Common Stock (no par value)

 

 

 

 

 

 

 

Discontinued

 

 

Total

 

 

 

Number of Shares

 

 

Amount

 

 

Stock

Payable

 

 

Accumulated

Deficit

 

 

Operations Deficit

 

 

Stockholders’

Deficiency

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance - December 31, 2019

 

 

140,557

 

 

$35,369,809

 

 

$46,500,000

 

 

$(82,109,560)

 

$(96,216)

 

$(335,967)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Conversion of convertible notes into common stock

 

 

3,000,000

 

 

 

9,000

 

 

 

0

 

 

 

0

 

 

 

0

 

 

 

9,000

 

Beneficial Note Conversion Feature

 

 

-

 

 

 

21,801

 

 

 

0

 

 

 

0

 

 

 

0

 

 

 

21,801

 

Stock-based compensation

 

 

60,000,000

 

 

 

58,125,000

 

 

 

(46,500,000)

 

 

0

 

 

 

0

 

 

 

11,625,000

 

Net loss

 

 

-

 

 

 

0

 

 

 

0

 

 

 

(11,662,639)

 

 

0

 

 

 

(11,662,639)

Balance - March 31, 2020

 

 

63,140,557

 

 

$93,525,610

 

 

$0

 

 

$(93,772,199)

 

$(96,216)

 

$(342,805)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Beneficial Note Conversion Feature

 

 

-

 

 

 

13,800

 

 

 

0

 

 

 

0

 

 

 

0

 

 

 

13,800

 

Stock-based compensation

 

 

-

 

 

 

11,625,000

 

 

 

0

 

 

 

0

 

 

 

0

 

 

 

11,625,000

 

Net loss

 

 

-

 

 

 

0

 

 

 

0

 

 

 

(11,651,968)

 

 

0

 

 

 

(11,651,968)

Balance - June 30, 2020

 

 

63,140,557

 

 

$105,164,410

 

 

$0

 

 

$(105,424,167)

 

$(96,216)

 

$(355,973)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Beneficial Note Conversion Feature

 

 

-

 

 

 

7,307

 

 

 

0

 

 

 

0

 

 

 

0

 

 

 

7,307

 

Shareholder Contribution

 

 

-

 

 

 

10,030

 

 

 

0

 

 

 

0

 

 

 

0

 

 

 

10,030

 

Stock-based compensation

 

 

 

 

 

 

11,625,000

 

 

 

0

 

 

 

0

 

 

 

0

 

 

 

11,625,000

 

Net loss

 

 

-

 

 

 

0

 

 

 

0

 

 

 

(11,656,948)

 

 

0

 

 

 

(11,656,948)

Balance - September 30, 2020

 

 

63,140,557

 

 

$116,806,747

 

 

$0

 

 

$(117,081,115)

 

$(96,216)

 

$(370,584)

   

The accompanying notes are an integral part of these unaudited condensed financial statements.

 

 
5

Table of Contents

     

CLOUDWEB, INC.

CONDENSED STATEMENTS OF CASH FLOWS

(in U.S. Dollars, except for number of shares or otherwise stated)

(Unaudited)

 

 

 

Nine Months Ended

 

 

 

September 30,

 

 

 

2021

 

 

2020

 

 

 

 

 

 

 

 

CASH FLOWS FROM OPERATING ACTIVITIES

 

 

 

 

 

 

Net loss

 

$(59,405)

 

$(34,971,555)

Adjustments to reconcile net loss to net cash from operating activities:

 

 

 

 

 

 

 

 

Amortization of debt discount

 

 

1,800

 

 

 

44,707

 

Stock based compensation

 

 

0

 

 

 

34,875,000

 

Web development cost

 

 

0

 

 

 

10,030

 

Changes in operating liabilities:

 

 

 

 

 

 

 

 

Accounts payable and accrued liabilities

 

 

1,430

 

 

 

(6,917)

Accrued interest

 

 

27,695

 

 

 

22,860

 

Net cash used in operating activities

 

 

(28,480)

 

 

(25,875)

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES

 

 

0

 

 

 

0

 

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES

 

 

 

 

 

 

 

 

Advancement from related party

 

 

28,480

 

 

 

0

 

Proceeds from issuance of convertible notes

 

 

0

 

 

 

25,875

 

Net cash provided by financing activities

 

 

28,480

 

 

 

25,875

 

 

 

 

 

 

 

 

 

 

Net change in cash and cash equivalents

 

 

0

 

 

 

0

 

Cash and cash equivalents - beginning of period

 

 

0

 

 

 

0

 

Cash and cash equivalents - end of period

 

$0

 

 

$0

 

 

 

 

 

 

 

 

 

 

Supplemental Cash Flow Disclosures

 

 

 

 

 

 

 

 

Cash paid for interest

 

$0

 

 

$0

 

Cash paid for income taxes

 

$0

 

 

$0

 

 

 

 

 

 

 

 

 

 

Non-Cash Investing and Financing Activity:

 

 

 

 

 

 

 

 

Amendment of promissory note to convertible note

 

$0

 

 

$17,033

 

Conversion of convertible notes for common stock

 

$0

 

 

$9,000

 

Beneficial conversion feature

 

$0

 

 

$42,908

 

  

The accompanying notes are an integral part of these unaudited condensed financial statements.

 

 
6

Table of Contents

  

CLOUDWEB, INC.

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

AS OF AND FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2021 AND 2020

(in U.S. Dollars, except for number of shares or otherwise stated)

 

NOTE 1 – ORGANIZATION AND BUSINESS OPERATIONS

 

Cloudweb, Inc. (the “Company”, or “we”) is a Florida corporation incorporated on May 25, 2014 as Formigli, Inc. In December 2015, the Company changed its name to Data Backup, Inc., and on November 4, 2016, the Company changed its name to Data Backup Solutions Inc. On October 1, 2017, the Company changed its name to Cloudweb, Inc.

 

We are currently exploring different options of further developing and marketing our web hosting and data storage services. This includes plans to make hosting available for free while being supported by advertiser content. The Company will also look into white labeling its services to allow other brands to use our platforms for their own needs.

 

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Basis of Presentation

 

The accompanying unaudited interim condensed financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the nine months ended September 30, 2021 are not necessarily indicative of the results that may be expected for the year ending December 31, 2021. Notes to the unaudited interim condensed financial statements that would substantially duplicate the disclosures contained in the audited financial statements for fiscal year 2020 have been omitted. This report should be read in conjunction with the audited financial statements and the footnotes thereto for the fiscal year ended December 31, 2020 included in the Company’s Form 10-K as filed with the Securities and Exchange Commission on March 10, 2021.

 

Use of Estimates

 

The preparation of financial statements in conformity with accounting principles generally accepted in the United States 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 the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates.

 

Basic and Diluted Income (Loss) Per Share

 

The Company computes income (loss) per share in accordance with FASB ASC 260, “Earnings per Share” which requires presentation of both basic and diluted earnings per share on the face of the statement of operations. Basic loss per share is computed by dividing net income (loss) available to common shareholders by the weighted average number of outstanding common shares during the period. Diluted income (loss) per share gives effect to all dilutive potential common shares outstanding during the period. Dilutive loss per share excludes all potential common shares if their effect is anti-dilutive.

 

For the nine months ended September 30, 2021 and 2020, respectively, the following convertible notes were excluded from the computation of diluted net loss per shares as the result of the computation was anti-dilutive:

 

 

 

September 30,

 

 

September 30,

 

 

 

2021

 

 

2020

 

 

 

(Shares)

 

 

(Shares)

 

Convertible notes payable

 

 

57,827,097

 

 

 

51,753,097

 

 

 
7

Table of Contents

   

Recent accounting pronouncements

 

In August 2020, the FASB issued ASU 2020-06, ASC Subtopic 470-20 “Debt—Debt with Conversion and Other Options”. The standard reduced the number of accounting models for convertible debt instruments and convertible preferred stock. Convertible instruments that continue to be subject to separation models are (1) those with embedded conversion features that are not clearly and closely related to the host contract, that meet the definition of a derivative, and that do not qualify for a scope exception from derivative accounting; and, (2) convertible debt instruments issued with substantial premiums for which the premiums are recorded as paid-in capital. The amendments in this update are effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. The Company is currently assessing the impact of the adoption of this standard on its financial statements.

 

NOTE 3 – GOING CONCERN

 

The Company believes that its existing capital resources may not be adequate to enable it to execute its business plan. These conditions raise substantial doubt as to the Company’s ability to continue as a going concern. The Company estimates that it will require additional cash resources from loan from related party and unaffiliated parties based on its current operating plan and condition. The accompanying financial statements do not include any adjustments that might be necessary should we be unable to continue as a going concern. If we fail to generate positive cash flow or obtain additional financing, when required, we may have to modify, delay, or abandon some or all of our business and expansion plans.

 

NOTE 4 – RELATED PARTY TRANSACTIONS

 

During the nine months ended September 30, 2021, the Director of the Company advance $28,480 for paying operating expenses on behalf of the Company. The loan is non-interest bearing and due on demand.

 

NOTE 5 – PROMISSORY NOTES

 

 

 

 

 

September 30,

 

 

December 31,

 

 

 

 

 

 

Expiry Date

 

2021

 

 

2020

 

 

Interest Rate

 

Promissory Note - November 2017

 

Due on demand

 

$2,160

 

 

$2,160

 

 

60% per annum

 

Promissory Note - March 2018

 

3/31/2028

 

 

15,296

 

 

 

15,296

 

 

30% per annum

 

Promissory Note - June 2018

 

6/29/2028

 

 

12,249

 

 

 

12,249

 

 

30% per annum

 

Promissory Note - September 2018

 

9/29/2028

 

 

5,408

 

 

 

5,408

 

 

30% per annum

 

Promissory Note - December 2018

 

12/30/2028

 

 

6,137

 

 

 

6,137

 

 

30% per annum

 

Promissory Note - March 2019

 

3/30/2029

 

 

7,150

 

 

 

7,150

 

 

30% per annum

 

Promissory Note - June 2019

 

6/30/2029

 

 

10,105

 

 

 

10,105

 

 

30% per annum

 

Promissory Note - September 2019

 

9/30/2029

 

 

4,081

 

 

 

4,081

 

 

30% per annum

 

Promissory Note - December 2019

 

12/31/2029

 

 

6,900

 

 

 

6,900

 

 

30% per annum

 

 

 

 

 

 

69,486

 

 

 

69,486

 

 

 

 

Less current portion of promissory note payable

 

 

 

 

(2,160)

 

 

(2,160)

 

 

 

Long-term promissory notes payable

 

 

 

$67,326

 

 

$67,326

 

 

 

 

 

As of September 30, 2021 and December 31, 2020, the accrued interest on the promissory notes was $62,180 and $34,895, respectively.

 

 
8

Table of Contents

    

NOTE 6 – CONVERTIBLE NOTES

 

 

 

 

 

September 30,

 

 

December 31,

 

 

 

Expiry Date

 

2021

 

 

2020

 

Convertible Notes - July 2017

 

6/30/2022

 

$116,000

 

 

$116,000

 

Convertible Notes - January 2020

 

Due on demand

 

 

8,033

 

 

 

8,033

 

Convertible Notes - March 2020

 

Due on demand

 

 

4,768

 

 

 

4,768

 

Convertible Notes - June 2020

 

Due on demand

 

 

13,800

 

 

 

13,800

 

Convertible Notes - September 2020

 

Due on demand

 

 

7,307

 

 

 

7,307

 

Convertible Notes - December 2020

 

Due on demand

 

 

6,074

 

 

 

6,074

 

Less debt discount

 

 

 

 

(1,784)

 

 

(3,584)

 

 

 

 

 

154,198

 

 

 

152,398

 

Less current portion of convertible note payable

 

 

 

 

(154,198)

 

 

(39,982)

Long-term convertible notes payable

 

 

 

$0

 

 

$112,416

 

 

Convertible Notes – July 2017

 

On July 1, 2017, the Company replaced the promissory notes held by the four non-affiliated assignees with convertible notes at principal amount of $34,000, for total note principal amount of $136,000. The convertible notes bear interest at 4% per annum, has an original expiry date of June 30, 2019 and subsequently extended to June 30, 2022 and are convertible at $0.005 per share for the Company common stock. On January 2, 2018, the four non-affiliated holders of the convertible notes elected to convert $5,000 principal portion of their notes for 1,000,000 shares of common stock at $0.005 per share. An aggregate $20,000 principal amount of the four convertible notes were converted for 4,000,000 common shares.

 

Convertible Note – January 2020

 

On January 2, 2020, the Company replaced a promissory note of $17,033 originally issued to an unaffiliated party on December 31, 2017 with a convertible note of $17,033. The convertible note is due on demand, bear interest at 10% per annum and is convertible at $0.003 per share. The discount on convertible note from beneficial conversion feature of $17,033 was fully amortized during the year ended December 31, 2020. On March 4, 2020, this convertible note was sold to another unaffiliated party.

 

Convertible Note – March 2020

 

On March 4, 2020, the convertible note originally issued on January 2, 2020 comprising of principal amount of $17,033 and accrued interest of $21,073 was sold to another unaffiliated party. On March 23, 2020, the principal amount of the convertible note of $9,000 was converted into 3,000,000 shares of common stock. (see Note 7)

 

On March 31, 2020, the Company issued to an unaffiliated party a convertible note at $4,768 for paying operating expenses on behalf of the Company. The convertible note is due on demand, bears interest at 30% per annum and is convertible at $0.001 per share. The discount on convertible note from beneficial conversion feature of $4,768 was fully amortized during the year ended December 31, 2020.

 

 
9

Table of Contents

    

Convertible Note – June 2020

 

On June 30, 2020, the Company issued to an unaffiliated party a convertible note at $13,800 for paying operating expenses on behalf of the Company. The convertible note is due on demand, bears interest at 30% per annum and is convertible at $0.001 per share. The discount on convertible note from beneficial conversion feature of $13,800 was fully amortized during the year ended December 31, 2020.

 

Convertible Note – September 2020

 

On September 30, 2020, the Company issued to an unaffiliated party a convertible note at $7,307 for paying operating expenses on behalf of the Company. The convertible note is due on demand, bears interest at 30% per annum and is convertible at $0.001 per share. The discount on convertible note from beneficial conversion feature of $7,307 was fully amortized during the year ended December 31, 2020.

 

Convertible Note – December 2020

 

On December 31, 2020, the Company issued to an unaffiliated party a convertible note at $6,074 for paying operating expenses on behalf of the Company. The convertible note is due on demand, bears interest at 30% per annum and is convertible at $0.001 per share. The discount on convertible note from beneficial conversion feature of $6,074 was fully amortized during the year ended December 31, 2020.

 

During the nine months ended December 31, 2021 and 2020, the Company recognized amortization of debt discount and beneficial conversion feature of $1,800 and $44,707, respectively.

 

As of September 30, 2021 and December 31, 2020, the convertible notes payable was $154,198 and $152,398, net of note discount of $1,784 and $3,584, and accrued interest payable was $73,080 and $61,684, respectively.

 

NOTE 7 - EQUITY

 

Authorized Stock

 

The Company’s authorized common stock consists of 500,000,000 shares with no par value.

 

Common Shares

 

On March 5, 2020, the Company issued 60,000,000 shares of restricted common stock valued at $93,000,000 to a corporation controlled by the Company’s CEO.

 

On March 23, 2020, principal amount of $9,000 from a convertible note was converted for 3,000,000 shares of common stock at stock trading price of $1.25per share.

 

On June 20, 2021, a majority of stockholders of our company and board of directors approved a reverse stock split of our issued and outstanding shares of common stock on a basis of up to two hundred (200) old shares for one (1) new share of common stock. The reverse stock split is under assessment by FINRA for approval as of the date of the 10Q filing.

 

NOTE 8 – RISKS AND UNCERTAINTIES

 

In early 2020, the World Health Organization declared the rapidly spreading coronavirus disease (COVID-19) outbreak a pandemic. This pandemic has resulted in governments worldwide enacting emergency measures to combat the spread of the virus. The Company considered the impact of COVID-19 on the assumptions and estimates used and determined that there were no material adverse impacts on the Company’s results of operations and financial position at September 30, 2021. The full extent of the future impacts of COVID-19 on the Company’s operations is uncertain. A prolonged outbreak could have a material adverse impact on financial results and business operations of the Company in the future. The Company is not aware of any specific event or circumstance that would require an update to its estimates or judgments or a revision of the carrying value of its assets or liabilities as of the date of issuance of these financial statements. These estimates may change, as new events occur and additional information is obtained.

  

 
10

Table of Contents

    

Item 2. Management’s Discussion and Analysis of Financial Condition or Plan of Operation

 

FORWARD-LOOKING STATEMENTS

 

This quarterly report contains forward-looking statements relating to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as “may”, “should”, “intends”, “expects”, “plans”, “anticipates”, “believes”, “estimates”, “predicts”, “potential”, or “continue” or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors which may cause our or our industry’s actual results, levels of activity or performance to be materially different from any future results, levels of activity or performance expressed or implied by these forward-looking statements.

 

Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity or performance. You should not place undue reliance on these statements, which speak only as of the date that they were made. These cautionary statements should be considered with any written or oral forward-looking statements that we may issue in the future. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results, later events or circumstances or to reflect the occurrence of unanticipated events.

 

In this report unless otherwise specified, all dollar amounts are expressed in United States dollars and all references to “common shares” refer to the common shares of our capital stock.

 

The management’s discussion and analysis of our financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”).

 

As used in this quarterly report, the terms “we”, “us”, “our”, and “our company” means Cloudweb, Inc., unless otherwise indicated.

 

General Overview

 

Our Company

 

Cloudweb, Inc. is a Florida corporation incorporated on May 25, 2014 as Formigli, Inc. In December 2015, the Company changed its name to Data Backup, Inc., and on November 4, 2016, the Company changed its name to Data Backup Solutions Inc. On October 1, 2017, the Company changed its name to Cloudweb, Inc.

 

Our headquarters are located at 800 W El Camino Real Suite 180 Mountain View, Florida, CA 94040.

 

We are currently exploring different options of further developing and marketing our web hosting and data storage services Hostwizer.com, W8hosting.com, and JeyCloud.com. This includes plans to make hosting available for free while being supported by advertiser content. The Company will also look into white labeling its services to allow other brands to use our platforms for their own needs.

 

We do not have any subsidiaries.

 

We have never declared bankruptcy, been in receivership, or involved in any kind of legal proceeding.

 

Results of Operations

 

The following summary of our operations should be read in conjunction with our unaudited condensed financial statements for the nine months ended September 30, 2021 and 2020.

 

 
11

Table of Contents

    

Three months ended September 30, 2021 compared to three months ended September 30, 2020

 

 

 

Three Months Ended

 

 

 

 

 

 

 

September 30,

 

 

 

 

 

 

 

2021

 

 

2020

 

 

Changes

 

 

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Expenses

 

 

 

 

 

 

 

 

 

 

 

 

Professional fees

 

$7,560

 

 

 

5,550

 

 

$2,010

 

 

 

36%

Salaries and wages – related party

 

 

-

 

 

 

11,625,000

 

 

 

(11,625,000)

 

 

-

 

Web development cost

 

 

-

 

 

 

10,030

 

 

 

(10,030)

 

 

-

 

Total operating expenses

 

 

7,560

 

 

 

11,640,580

 

 

 

(11,633,020)

 

(100

)%

Other expenses

 

 

9,933

 

 

 

16,368

 

 

 

(6,435)

 

(39

)%

Net Loss

 

$17,493

 

 

$11,656,948

 

 

$(11,639,455)

 

(100

)%

 

We had no revenue for the three months ended September 30, 2021 and 2020.

 

Our net loss for the three months ended September 30, 2021 was $17,493 compared with net loss of $11,656,948 for the three months ended September 30, 2020 due to the decrease in stock based compensation expenses. During the three months ended September 30, 2020, we incurred stock based compensation of $11,625,000 attributed to shares issued for Chief Executive Officer’s third quarter portion of the year 2020 salary.

 

Nine months ended September 30, 2021 compared to nine months ended September 30, 2020

 

 

 

Nine months ended

 

 

 

 

 

 

 

 

 

September 30,

 

 

 

 

 

 

 

 

 

2021

 

 

2020

 

 

Changes

 

 

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses

 

 

 

 

 

 

 

 

 

 

 

 

Professional fees

 

$29,910

 

 

$18,957

 

 

$10,953

 

 

 

58%

Salaries and wages – related party

 

 

-

 

 

 

34,875,000

 

 

 

(34,875,000)

 

 

-

 

Total operating expenses

 

 

29,910

 

 

 

34,903,987

 

 

 

(34,874,077)

 

(100

)%

Other expenses

 

 

29,495

 

 

 

67,568

 

 

 

(38,073)

 

(56

)%

Net Loss

 

$59,405

 

 

$34,971,555

 

 

$(34,912,150)

 

(100

)%

 

We had no revenue for the nine months ended September 30, 2021 and 2020.

 

Our net loss for the nine months ended September 30, 2021 was $59,405 compared with net loss of $34,971,555 for the nine months ended September 30, 2020 due to the decrease in stock based compensation expenses. During the nine months ended September 30, 2020, we incurred stock based compensation of $34,875,000 attributed to shares issued for Chief Executive Officer’s first three quarters of the year 2020 salary.

 

 
12

Table of Contents

    

Liquidity and Capital

 

Working Capital

 

 

 

As of

 

 

As of

 

 

 

 

 

 

 

 

 

September 30,

 

 

December 31,

 

 

 

 

 

 

 

 

 

2021

 

 

2020

 

 

Changes

 

 

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current Assets

 

$-

 

 

$-

 

 

$-

 

 

 

 

Current Liabilities

 

$376,937

 

 

$205,116

 

 

$171,821

 

 

 

84%

Working Capital Deficiency

 

$(376,937)

 

$(205,116)

 

$(171,821)

 

 

84%

 

As at September 30, 2021 and December 31, 2020, our company had no cash and assets.

 

As at September 30, 2021, our company had total liabilities of $444,263, of which included convertible notes payable of $154,198, accrued interest of $135,260, promissory notes payable of $67,326 and accounts payable and accrued liabilities of $56,839. As at December 31, 2020, our company had total liabilities of $384,858, of which included convertible notes payable of $152,398, accrued interest of $107,565, promissory note payable of $2,160 and accounts payable and accrued liabilities of $55,409.

 

As at September 30, 2021, our company had a working capital deficiency of $376,937 compared with a working capital deficiency of $205,116 as at December 31, 2020. The increase in working capital deficit was primarily due to an increase in convertible notes, due to related party and accrued interest.

 

Cash Flows

 

 

 

Nine months ended

 

 

 

 

 

 

 

 

 

September 30,

 

 

 

 

 

 

 

 

 

2021

 

 

2020

 

 

Changes

 

 

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash flows used in operating activities

 

$(28,480)

 

$(25,875)

 

$(2,605)

 

 

10%

Cash flows provided by financing activities

 

 

28,480

 

 

 

25,875

 

 

 

2,605

 

 

 

10%

Net changes in cash

 

$-

 

 

$-

 

 

$-

 

 

 

-

 

 

Cash Flow from Operating Activities

 

We have not generated positive cash flow from operating activities. During the nine months ended September 30, 2021, net cash used in operating activities was $28,480 compared to $25,875 used during the nine months ended September 30, 2020. Cash flows used in operating activities during the nine months ended September 30, 2021, comprised of a net loss of $59,405, which was reduced by non-cash expenses of $1,800 for amortization of debt discount and a net change in working capital of $29,125. Cash flows used in operating activities during the nine months ended September 30, 2020, comprised of a net loss from of $34,971,555, which was reduced by non-cash expenses of $44,707 for amortization of debt discount, $34,875,000 for stock based compensation, web development cost of $10,030 and a net change in working capital of $15,943.

 

Cash Flow from Investing Activities

 

During the nine months ended September 30, 2021 and 2020, our company did not have any investing activities.

 

Cash Flow from Financing Activities

 

During the nine months ended September 30, 2021, net cash provided by financing activities was $24,480 compared to $25,875 during the nine months ended September 30, 2020. During the nine months ended September 30, 2021, the Company received $28,480 for advancement from the Company’s Director for paying operating expenses. During the nine months ended September 30, 2020, the Company received $25,875 for proceeds from issuance of convertible notes.

 

Going Concern

 

As of September 30, 2021, we had an accumulated deficit of $128,785,868. We believe that its existing capital resources may not be adequate to enable it to execute its business plan. These conditions raise substantial doubt as to our Company’s ability to continue as a going concern. Our Company is currently exploring different options of further developing and marketing our web hosting and data storage services. The accompanying condensed financial statements do not include any adjustments that might be necessary should we be unable to continue as a going concern. If we fail to generate positive cash flow or obtain additional financing, when required, we may have to modify, delay, or abandon some or all of our business plans.

 

 
13

Table of Contents

    

Off-Balance Sheet Arrangements

 

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

 

Item 3. Quantitative and Qualitative Disclosures About Market Risk

 

As a “smaller reporting company”, we are not required to provide the information required by this Item.

 

Item 4. Controls and Procedures

 

Disclosure Controls and Procedures

 

Our management, with the participation of our Chief Executive Officer (our principal executive officer, principal financial officer and principal accounting officer), has evaluated the effectiveness 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 amended (Exchange Act)), as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on such evaluation, our Chief Executive Officer has concluded that as of such date, our disclosure controls and procedures were not effective such that the information relating to us required to be disclosed in our Securities and Exchange Commission (“SEC”) reports (i) is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and (ii) is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding required disclosure.

 

Changes in Internal Control Over Financial Reporting

 

During the period covered by this report there were no changes in our internal control over financial reporting that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

  

 
14

Table of Contents

  

PART II - OTHER INFORMATION

 

Item 1. Legal Proceedings

 

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

 

Item 1A. Risk Factors

 

As a “smaller reporting company”, we are not required to provide the information required by this Item.

 

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

 

None.

 

Item 3. Defaults Upon Senior Securities

 

None.

 

Item 4. Mine Safety Disclosures

 

Not Applicable.

 

Item 5. Other Information

 

None.

 

 
15

Table of Contents

    

Item 6. Exhibits

 

The following exhibits are included as part of this report:

 

Exhibit Number

 

Description

31

 

Rule 13a-14(a)/15d-14(a) Certification

31.1

 

Section 302 Certification under the Sarbanes-Oxley Act of 2002 of the Principal Executive Officer

32

 

Section 1350 Certification

32.1*

 

Section 906 Certification under the Sarbanes-Oxley Act of 2002 of the Principal Executive Officer

101

 

Interactive Data Files

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

_________

*

Filed herewith. In addition, in accordance with SEC Release 33-8238, Exhibits 32.1 and 32.2 are being furnished and not filed.

 

**

XBRL Information is furnished and not filed or a part of a registration statement or prospectus for purposes of sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.

  

 
16

Table of Contents

  

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

 

CLOUDWEB, INC.

 

(Registrant)

 

 

 

 

Dated: November 3, 2021

 

/s/ Zhi De Liao

 

Zhi De Liao

 

President, Chief Executive Officer,

 

 

Chief Financial Officer and Director

 

 

(Principal Executive Officer, Principal

 

 

Financial Officer and Principal Accounting Officer)

 

 
17