UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
_______________
FORM
10-Q
☑
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For
the quarterly period ended March 31, 2018
☐
TRANSITION
REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT OF 1934
For
the transition period from ______ to _______
Commission
File Number 000-53737
SINO
UNITED WORLDWIDE CONSOLIDATED LTD.
(Exact
name of registrant as specified in its charter)
Nevada
(State
of incorporation)
136-20
38th Ave. Unit 3G
Flushing,
NY 11354(Address of Principal Executive Offices)
_______________
718-395-8706
(Issuer Telephone number)
_______________
Check
whether the issuer (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding
12 months (or for such shorter period that the issuer 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 and posted on its corporate web site, if any, every Interactive
Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the
preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☑ No ☐
Indicate
by check mark whether the registrant is a larger accelerated filer, an accelerated filer, or a non-accelerated filer. See definition
of "accelerated filer and large accelerated filer" in Rule 12b-2 of the Exchange 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 Rule 12b-2 of the Exchange Act. Yes ☐ No ☑
At
March 31, 2018, there were 33,503,604 shares of the registrant's common stock issued and outstanding.
SINO
UNITED WORLDWIDE CONSOLIDATED LTD.
FORM
10-Q
March
31, 2018
INDEX
PART
I-- FINANCIAL INFORMATION
|
Item
1.
|
Financial
Statements
|
3
|
|
Item
2.
|
Management’s
Discussion and Analysis of Financial Condition and Results of Operations.
|
11
|
|
Item
3.
|
Quantitative
and Qualitative Disclosures About Market Risk
|
14
|
|
Item
4.
|
Control
and Procedures
|
14
|
PART
II-- OTHER INFORMATION
|
Item
1.
|
Legal
Proceedings
|
16
|
|
Item
2.
|
Unregistered
Sales of Equity Securities and Use of Proceeds
|
16
|
|
Item
3.
|
Defaults
Upon Senior Securities
|
16
|
|
Item
4.
|
Mine
Safety Disclosures.
|
16
|
|
Item
5.
|
Other
Information.
|
16
|
|
Item
6.
|
Exhibits
|
16
|
|
SIGNATURES
|
17
|
Sino
United Worldwide Consolidated Ltd.
Index
to the consolidated financial statements
|
Table
of Contents
|
Page(s)
|
|
Unaudited
Consolidated Balance Sheets at March 31, 2018 and December 31, 2017
|
F-2
|
|
Unaudited
Consolidated Statements of Comprehensive Income for the Three Months Ended March 31, 2018 and 2017
|
F-3
|
|
Unaudited
Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2018 and 2017
|
F-4
|
|
Notes
to the Consolidated Financial Statements (Unaudited)
|
F-5
- F-8
|
|
Sino United Worldwide Consolidated Ltd.
|
|
Consolidated Balance Sheets
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
March 31,
2018
|
|
|
|
December 31,
2017
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
Current Assets
|
|
|
|
|
|
|
|
|
|
Cash
|
|
$
|
47,203
|
|
|
$
|
50,044
|
|
|
Accounts receivable
|
|
|
10,000
|
|
|
|
15,000
|
|
|
Total Current Assets
|
|
|
57,203
|
|
|
|
65,044
|
|
|
|
|
|
|
|
|
|
|
|
|
Property, plant and equipment, net
|
|
|
444
|
|
|
|
—
|
|
|
Total Assets
|
|
$
|
57,647
|
|
|
$
|
65,044
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' DEFICIENCY
|
|
|
|
|
|
|
|
|
|
Current Liabilities
|
|
|
|
|
|
|
|
|
|
Credit card payable
|
|
$
|
5,486
|
|
|
$
|
4,630
|
|
|
Convertible promissory note - related party
|
|
|
30,000
|
|
|
|
30,000
|
|
|
Convertible promissory note - other
|
|
|
65,000
|
|
|
|
65,000
|
|
|
Accrued expenses and other current liabilities
|
|
|
27,609
|
|
|
|
43,922
|
|
|
Total Current Liabilities
|
|
|
128,095
|
|
|
|
143,552
|
|
|
|
|
|
|
|
|
|
|
|
|
COMMITMENTS AND CONTINGENCIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders' Deficiency
|
|
|
|
|
|
|
|
|
|
Common stock, $0.001 par value, 394,500,000 shares authorized; 33,503,604 shares issued and outstanding
|
|
|
33,504
|
|
|
|
33,504
|
|
|
Additional paid-in capital
|
|
|
1,647,731
|
|
|
|
1,647,731
|
|
|
Accumulated deficit
|
|
|
(1,751,683
|
)
|
|
|
(1,759,743
|
)
|
|
Total Stockholders' Deficiency
|
|
|
(70,448
|
)
|
|
|
(78,508
|
)
|
|
Total Liabilities and Stockholders’ Deficiency
|
|
$
|
57,647
|
|
|
$
|
65,044
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of these consolidated financial statements.
|
|
Sino United Worldwide Consolidated Ltd.
|
|
Consolidated Statements of Comprehensive Income
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended
|
|
|
|
March 31,
|
|
|
|
2018
|
|
2017
|
|
Revenue
|
|
$
|
30,000
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
|
|
|
|
|
|
|
|
|
General and administrative
|
|
|
20,752
|
|
|
|
10,473
|
|
|
Total operating expenses
|
|
|
20,752
|
|
|
|
10,473
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from operations
|
|
|
9,248
|
|
|
|
(10,473
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Other expenses:
|
|
|
|
|
|
|
|
|
|
Interest expense - related party
|
|
|
(375
|
)
|
|
|
—
|
|
|
Interest expense - other
|
|
|
(813
|
)
|
|
|
—
|
|
|
Total other expense
|
|
|
(1,188
|
)
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from continuing operations before income tax
|
|
|
8,060
|
|
|
|
(10,473
|
)
|
|
Income tax provision
|
|
|
—
|
|
|
|
—
|
|
|
Income (loss) from continuing operations
|
|
|
8,060
|
|
|
|
(10,473
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Discontinued operations
|
|
|
|
|
|
|
|
|
|
Income from discontinued operations, net of tax
|
|
|
—
|
|
|
|
164,562
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
8,060
|
|
|
|
154,089
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive income
|
|
|
|
|
|
|
|
|
|
Foreign currency translation adjustment
|
|
|
—
|
|
|
|
38,901
|
|
|
Comprehensive income
|
|
$
|
8,060
|
|
|
$
|
192,990
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per share
|
|
|
|
|
|
|
|
|
|
Basic - continuing operation
|
|
$
|
0.00
|
|
|
$
|
(0.00
|
)
|
|
- discontinued operation
|
|
$
|
—
|
|
|
$
|
0.00
|
|
|
Total
|
|
$
|
0.00
|
|
|
$
|
0.00
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted - continuing operation
|
|
$
|
0.00
|
|
|
$
|
(0.00
|
)
|
|
- discontinued operation
|
|
$
|
—
|
|
|
$
|
0.00
|
|
|
Total
|
|
$
|
0.00
|
|
|
$
|
0.00
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
33,503,604
|
|
|
|
58,985,937
|
|
|
Diluted
|
|
|
130,878,604
|
|
|
|
58,985,937
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of these consolidated financial statements.
|
|
Sino United Worldwide Consolidated Ltd.
|
|
Consolidated Statements of Cash Flows
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31,
|
|
|
|
2018
|
|
2017
|
|
CASH FLOW FROM OPERATING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
8,060
|
|
|
$
|
154,089
|
|
|
Net income from discontinued operation
|
|
|
—
|
|
|
|
164,562
|
|
|
Net income (loss) from continuing operation
|
|
|
8,060
|
|
|
|
(10,473
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Adjustment to reconcile net income to net cash provided by (used in) operating activities:
|
|
|
|
|
|
|
|
|
|
Change in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
|
Accounts receivable
|
|
|
5,000
|
|
|
|
—
|
|
|
Credit card payable
|
|
|
856
|
|
|
|
188
|
|
|
Accrued expenses and other current liabilities
|
|
|
(16,313
|
)
|
|
|
5,000
|
|
|
Net cash used in continuing operation
|
|
|
(2,397
|
)
|
|
|
(5,285
|
)
|
|
Net cash provided by discontinued operation
|
|
|
—
|
|
|
|
252,078
|
|
|
Net cash provided by (used in) operating activities
|
|
|
(2,397
|
)
|
|
|
246,793
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH FLOW FROM INVESTING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
Acquisition of property, plant and equipment
|
|
|
(444
|
)
|
|
|
—
|
|
|
Net cash used in continuing operation
|
|
|
(444
|
)
|
|
|
—
|
|
|
Net cash used in discontinued operation
|
|
|
—
|
|
|
|
(1,253
|
)
|
|
Net cash used in investing activities
|
|
|
(444
|
)
|
|
|
(1,253
|
)
|
|
|
|
|
|
|
|
|
|
|
|
CASH FLOW FROM FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
Net cash used in continuing operation
|
|
|
—
|
|
|
|
—
|
|
|
Net cash used in discontinued operation
|
|
|
—
|
|
|
|
(254,847
|
)
|
|
Net cash used in financing activities
|
|
|
—
|
|
|
|
(254,847
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Effect of exchange rate changes on cash
|
|
|
—
|
|
|
|
11,522
|
|
|
INCREASE (DECREASE) IN CASH
|
|
|
(2,841
|
)
|
|
|
2,215
|
|
|
Cash - beginning of period
|
|
|
50,044
|
|
|
|
3,016
|
|
|
Cash - end of period
|
|
$
|
47,203
|
|
|
$
|
5,231
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplement disclosure information
|
|
|
|
|
|
|
|
|
|
Cash paid for interest - continuing operation
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Cash paid for interest - discontinued operation
|
|
$
|
—
|
|
|
$
|
8,156
|
|
|
Cash paid for income taxes - continuing operation
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Cash paid for income taxes - discontinued operation
|
|
$
|
—
|
|
|
$
|
2,698
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of these consolidated financial statements.
|
Sino
United Worldwide Consolidated Ltd.
Notes
to the Consolidated Financial Statements
March
31, 2018
(Unaudited)
Note
1 – Organization and Basis of presentation
Organization
Sino
United Worldwide Consolidated Ltd. (the “Company”) provides IT management consulting services. The Company is also
developing new businesses in various fields through careful review and critical selection of new growth businesses. The Company
is planning to strengthen our core competencies in high technology and blockchain related businesses, such as blockchain dapps
technology, fintech services, professional consultancy for ICO’s, and other high potential critical blockchain projects.
Basis
of presentation and consolidation
The
unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in
the United States for interim financial information and the rules and regulations of the Securities and Exchange Commission. In
the opinion of management, the unaudited financial statements have been prepared on the same basis as the annual financial statements
and reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly the financial position
as of March 31, 2018 and the results of operations and cash flows for the periods ended March 31, 2018 and 2017. The financial
data and other information disclosed in these notes to the interim financial statements related to these periods are unaudited.
The results for the three months ended March 31, 2018 are not necessarily indicative of the results to be expected for any subsequent
periods or for the entire year ending December 31, 2018. The balance sheet on December 31, 2017 has been derived from the audited
financial statements at that date.
Certain
information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles
generally accepted in the United States have been condensed or omitted pursuant to the Securities and Exchange Commission's rules
and regulations. These unaudited financial statements should be read in conjunction with our audited financial statements and
notes thereto for the year ended December 31, 2017 as included in our Annual Report on Form 10-K.
Certain
amounts in last year’s financial statements have been reclassified to conform to current year presentation.
Note
2 – Going Concern
The
accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern.
The Company had a working capital deficit of $70,892, an accumulated deficit of $1,751,683 and a stockholders’ deficiency
of $70,448 as of March 31, 2018. The Company did not generate sufficient cash or income from its continuing operation. These factors,
among others, raise substantial doubt about the Company’s ability to continue as a going concern. The consolidated financial
statements do not include any adjustments that might result from the outcome of this uncertainty.
The
company is developing new businesses in various fields. There are no assurances that the Company will be able to either (1) achieve
a level of revenues adequate to generate sufficient cash flow from operations; or (2) obtain additional financing through either
private placement, public offerings and/or bank financing necessary to support the Company’s working capital requirements.
To the extent that funds generated from any private placements, public offering and/or bank financing are insufficient to support
the Company’s working capital requirements, the Company will have to raise additional working capital from additional financing.
No assurance can be given that additional financing will be available, or if available, will be on terms acceptable to the Company.
If adequate working capital is not available, the Company may not be able continue its operations.
Note
3 — Summary of Significant Accounting Policies
Translation
Adjustment
The
Company’s financial statements are presented in the U.S. dollar ($), which is the Company’s reporting and functional
currency. The functional currency of the Company’s subsidiaries is TWD. Transactions in foreign currencies are initially
recorded at the functional currency rate prevailing at the date of transaction. Any differences between the initially recorded
amount and the settlement amount are recorded as a gain or loss on foreign currency transaction in the consolidated statements
of comprehensive income (loss). Monetary assets and liabilities denominated in foreign currency are translated at the functional
currency rate of exchange prevailing at the balance sheet date. Any differences are taken to profit or loss as a gain or loss
on foreign currency translation in the statements of comprehensive income (loss).
In
accordance with ASC 830, Foreign Currency Matters, the Company translates the assets and liabilities into U.S. dollars using
the rate of exchange prevailing at the balance sheet date and the statements of comprehensive income (loss) and cash flows are
translated at an average rate during the reporting period. Adjustments resulting from the translation from TWD into U.S. dollar
are recorded in stockholders’ equity as part of accumulated other comprehensive income. The exchange rates used for the
financial statements in accordance with ASC 830, Foreign Currency Matters, are as follows:
|
Average
Rate for the period
|
|
March 31, 2018
|
|
March 31, 2017
|
|
Taiwan dollar (TWD)
|
|
|
—
|
|
|
|
1
|
|
|
United States dollar ($)
|
|
|
—
|
|
|
|
0.0322
|
|
|
|
|
|
|
|
|
|
|
|
|
Exchange Rate at
|
|
March 31, 2018
|
|
December 31, 2017
|
|
Taiwan dollar (TWD)
|
|
|
—
|
|
|
|
1
|
|
|
United States dollar ($)
|
|
|
—
|
|
|
|
0.0330
|
|
The
subsidiary in Taiwan was sold as of September 30, 2017.
Recently
Issued Accounting Pronouncements
From
time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board or other standard bodies that
may have an impact on the Company’s accounting and reporting. The Company believes that any recently issued accounting pronouncements
and other authoritative guidance for which the effective date is in the future either will not have an impact on its accounting
or reporting or that such impact will not be material to its financial position, results of operations, and cash flows when implemented.
NOTE
4 – Discontinued Operation
On
September 30, 2017, pursuant to agreements with one of our directors, Li-An Chu, the Company transferred the 100% ownership in
Jinchih, to Li-An Chu in exchange for cancellation of loan payable of $379,254 to Li-An Chu and cancellation of total 25,503,333
shares of the Company’s common stock owned by a group of stockholders, including Li-An Chu. As a result of these transactions,
Jinchih is no longer a wholly owned subsidiary of the Company as of September 30, 2017. Since Jinchih was sold back to Li-An Chu
who is the Company’s director, CEO and CFO at the time of the transaction, no gain or loss was recorded. The net gain of
$99,822 from the sale of Jinchih was included in stockholders’ equity.
The
results of operations of discontinued operations for the three months ended March 31, 2018 and 2017 are as following:
|
|
|
2018
|
|
2017
|
|
Revenue
|
|
$
|
—
|
|
|
$
|
834,487
|
|
|
Cost of goods sold
|
|
|
—
|
|
|
|
(540,203
|
)
|
|
General and administrative expenses
|
|
|
—
|
|
|
|
(74,438
|
)
|
|
Depreciation and amortization
|
|
|
—
|
|
|
|
(13,387
|
)
|
|
Interest income (expense), net
|
|
|
—
|
|
|
|
(6,879
|
)
|
|
Income tax provision
|
|
|
—
|
|
|
|
(35,018
|
)
|
|
Income from discontinued operations
|
|
$
|
—
|
|
|
$
|
164,562
|
|
NOTE
5 – Convertible Promissory Note
On
October 1, 2017, Mr. Tee-Keat Ong, the Chairmen of the Board of Directors, and the Company entered into a loan agreement pursuant
to which Mr. Tee-Keat Ong agreed to lend the Company $30,000 initially with future loan amount up to $1,000,000. On the same date,
the Company issued a promissory note to Mr. Tee-Keat Ong for the principal amount of $30,000. The promissory note bears interest
at five percent (5%) per annum and is due on demand. Pursuant to the terms of the note, the note is convertible into the Company’s
common stock at a conversion price of $0.001 per share. The note began to accrue interest at 10% per annum when it is past due.
On
October 1, 2017, the Company entered into a loan agreement with Ms. Shoou Chyn Kan, an unrelated individual. Pursuant to the loan
agreement, Ms. Shoou Chyn Kan agreed to lend the Company $65,000 initially with future loan amount up to $1,000,000. On the same
date, the Company issued a promissory note to Ms. Shoou Chyn Kan for the principal amount of $65,000. The promissory note bears
interest at five percent (5%) per annum and is due on demand. Pursuant to the terms of the note, the note is convertible into
the Company’s common stock at a conversion price of $0.001 per share. The note began to accrue interest at 10% per annum
when it is past due.
NOTE
6 – Related Party Transactions and Balances
As
of March 31, 2018 and December 31, 2017, balance of convertible promissory note with related party was $30,000 (See Note 5). The
Company accrued interest of $375 for the three months ended March 31, 2018.
NOTE
7 – Income Taxes
The
Company was incorporated in the United States and are subject to income tax according to U.S. tax law.
A
reconciliation of the provision for income taxes to the Company’s effective income tax rate for continuing operation is
as follows:
|
|
|
Three Months Ended March 31,
|
|
|
|
2018
|
|
2017
|
|
Pre-tax income (loss)
|
|
$
|
8,060
|
|
|
$
|
(10,473
|
)
|
|
U.S. federal corporate income tax rate
|
|
|
21
|
%
|
|
|
35
|
%
|
|
Expected U.S. income tax expense (credit)
|
|
|
1,693
|
|
|
|
(3,666
|
)
|
|
Change of valuation allowance
|
|
|
(1,693
|
)
|
|
|
3,666
|
|
|
Effective tax expense
|
|
$
|
—
|
|
|
$
|
—
|
|
As
of March 31, 2018, the Company has approximately $1 million net operating loss carryforwards available in US, which will expire
in 2026. It is more likely than not that the deferred tax assets cannot be utilized in the future because there will not be significant
future earnings from the entity which generated the net operating loss. Therefore, the Company has set up 100% valuation allowance
on deferred tax assets resulting from net operating loss incurred in the U.S.
As
of March 31, 2018 and December 31, 2017, the Company has no material unrecognized tax benefits which would favorably affect the
effective income tax rate in future periods, and does not believe that there will be any significant increases or decreases of
unrecognized tax benefits within the next twelve months. No interest or penalties relating to income tax matters have been imposed
on the Company during the three months ended March 31, 2018 and 2017, and no provision for interest and penalties is deemed necessary
as of March 31, 2018 and December 31, 2017.
The
U.S. Tax Cuts and Jobs Act (Tax Act) was enacted on December 22, 2017 and introduces significant changes to U.S. income tax law.
Effective in 2018, the Tax Act reduces the U.S. statutory tax rate from 35% to 21% and creates new taxes on certain foreign-sourced
earnings and certain related-party payments, which are referred to as the global intangible low-taxed income tax and the base
erosion tax, respectively. The Tax Act requires the Company to pay U.S. income taxes on accumulated foreign subsidiary earnings
not previously subject to U.S. income tax at a rate of 15.5% to the extent of foreign cash and certain other net current assets
and 8% on the remaining earnings. Since the Company has no foreign subsidiaries after it disposed its Taiwan subsidiary on September
30, 2017, the Company believes that Tax Act will not have significant impact on the Company’s financial statements.
NOTE
8 – Subsequent Events
The
Company has evaluated the existence of significant events subsequent to the balance sheet date through the date the financial
statements were issued and has determined that there were no subsequent events or transactions which would require recognition
or disclosure in the financial statements.
Item
2. Management's Discussion and Analysis Of Financial Condition And Plan Of Operation.
This
Quarterly Report contains forward-looking statements within the meaning of the federal securities laws. These include statements
about our expectations, beliefs, intentions or strategies for the future, which we indicate by words or phrases such as "anticipate,"
"expect," "intend," "plan," "will," "we believe," "management believes"
and similar language. The forward-looking statements are based on the current expectations of the Company and are subject to certain
risks, uncertainties and assumptions, including those set forth in the discussion under "Management's Discussion and Analysis
of Financial Condition and Results of Operations" in this report. Actual results may differ materially from results anticipated
in these forward-looking statements. We base the forward-looking statements on information currently available to us, and we assume
no obligation to update them.
Investors
are also advised to refer to the information in our previous filings with the Securities and Exchange Commission (SEC), especially
on Forms 10-K, 10-Q and 8-K, in which we discuss in more detail various important factors that could cause actual results to differ
from expected or historic results. It is not possible to foresee or identify all such factors. As such, investors should not consider
any list of such factors to be an exhaustive statement of all risks and uncertainties or potentially inaccurate assumptions.
Overview
From
October 2013 until September, 2017, through our Taiwan subsidiary Jinchih International Limited (“Jinchih”), we were
engaged in design, marketing and distributing of hardware and software technologies, including new cell phone apps, as well as
solutions and technology in fleet management, the driving record management system (DMS) that provide total solution and management
mechanism for vehicles and driver behavior control and analysis, which increase driving safety and efficiency.
On
September 30, 2017, pursuant to agreements with one of the Company’s directors, Li-An Chu, the Company transferred the 100%
ownership in its wholly owned Taiwan Subsidiary, Jinchih International Limited (“Jinchih”), to Li-An Chu in exchange
for cancellation of debt $379,254, and cancellation of total 25,503,333 shares of the Company’s common stock owned by a
group of stockholders, including Li-An Chu. As a result of these transactions, Jinchih is no longer a wholly owned subsidiary
of the Company as of September 30, 2017.
Currently,
the Company provides IT management consulting services. The Company is also developing new businesses in various fields through
careful review and critical selection of new growth businesses. The Company is planning to strengthen its core competencies in
high technology and blockchain related businesses, such as blockchain dapps technology, fintech services, professional consultancy
for ICO’s, and other high potential critical blockchain projects.
Results
of Operations
Three
Months Ended March 31, 2018 and 2017
Revenue
The
Company generated $30,000 revenue from the continuing operation during the three months ended March 31, 2018. As discussed previously,
the Company sold its wholly-owned subsidiary Jinchih on September 30, 2017, we included the revenue from Jinchih for the three
months ended March 31, 2017 in the income from discontinued operation on Consolidated Statements of Comprehensive Income.
Our
revenue of $30,000 were generated from the I.T. management consulting services.
General
and administrative expenses
General
and administrative expenses primarily consist of investor relation expenses, professional fees and other miscellaneous operational
expenses. General and administrative expenses for the three months ended March 31, 2018 and 2017 were $20,752 and $10,473, respectively.
Interest
expense
Interest
expense from continuing operation was $1,188 for the three months ended March 31, 2018 which included the interest on the convertible
promissory notes issued for $1,188. There was no interest expense from continuing operation for the three months ended March 31,
2017.
Income
(Loss) from continuing operations
The
Company generated net income from continuing operations of $8,060 and net loss from continuing operations of $10,473 for the three
months ended March 31, 2018 and 2017, respectively.
Income
from discontinued operations
The
Company generated net income from discontinued operations of $0 and $164,562 for the three months ended March 31, 2018 and 2017,
respectively.
Net
income
As
a result of the foregoing, the Company generated net income of $8,060 and $154,089 for the three months ended March 31, 2018 and
2017, respectively.
Foreign
currency translation adjustments
The
functional currency of our subsidiaries operating in the Taiwan is the Taiwan Dollars (“TWD”). The financial statements
of our subsidiaries are translated to U.S. dollars using period end rates of exchange for assets and liabilities, and average
rates of exchange (for the period) for revenues, costs, and expenses. Net gains and losses resulting from foreign exchange transactions
are included in the consolidated statements of comprehensive income. As a result of these translations, which are a non-cash adjustment,
we reported foreign currency translation gain of $38,901 for the three months ended March 31, 2017. There is no foreign currency
translation adjustment recorded for the three months ended March 31, 2018 since the Company sold the wholly-owned subsidiary Jinchih
on September 30, 2017.
Liquidity
and Capital Resources
We
have funded our operations to date primarily through the operations and related party loan, bank loan and capital contributions.
The Company had a working capital deficit of $70,892, an accumulated deficit of $1,751,683 and a stockholders’ deficiency
of $70,448 as of March 31, 2018. The Company did not generate sufficient cash or income from its continuing operation. There are
no assurances that the Company will be able to either (1) achieve a level of revenues adequate to generate sufficient cash flow
from operations; or (2) obtain additional financing through either private placement, public offerings and/or bank financing necessary
to support the Company’s working capital requirements. These conditions, among others, raise substantial doubt about the
Company’s ability to continue as a going concern. The financial statements do not include any adjustments that might
result from the outcome of this uncertainty.
The
Company plans to rely on the advances and loans from related parties, the proceeds from funds generated from private placements,
public offering and/or bank financing to support the Company’s working capital requirements. No assurance can be given that
additional financing will be available, or if available, will be on terms acceptable to the Company. If adequate working capital
is not available, the Company may not be able continue its operations.
As
of March 31 2018, we had a working capital deficit of $70,892. Our current assets on March 31, 2018 were $57,203 primarily consisting
of cash of $47,203. Our current liabilities were primarily composed of credit card payable of $5,486, convertible promissory notes
of $95,000 and accrued expenses and other current liabilities of $27,609.
Cash
Flow from Operating Activities
Net
cash used in operating activities was $2,397 for the three months ended March 31, 2018, which consisted of our net income from
continuing operation of $8,060, a change of accounts receivable of $5,000, a change of credit card payable of $856 and a change
of accrued expenses of $16,313.
Net
cash provided by operating activities was $246,793 for the three months ended March 31, 2017, which consisted of our net loss
from continuing operation of $10,473, a change of credit card payable of $188, a change of accrued expenses of $5,000 and net
cash provided by discontinued operation of $252,078.
Cash
Flow from Investing Activities
Net
cash used in investing activities totaled $444 for the three months ended March 31, 2018, all of which contributed by continuing
operation.
Net
cash used in investing activities totaled $1,253 for the three months ended March 31, 2017, all of which contributed by discontinued
operation.
Cash
Flow from Financing Activities
Net
cash used in financing activities was $254,847 for the three months ended March 31, 2017, all of which contributed by discontinued
operation. There was no financing activities for the three months ended March 31, 2018.
Off-Balance
Sheet Arrangements
There
are 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, expenses, results of operations, liquidity, capital expenditures or capital resources.
Inflation
We
do not believe our business and operations have been materially affected by inflation
Critical
Accounting Policies and Estimates
Refer
to note 3 in the accompanying consolidated financial statements.
Impact
of Accounting Pronouncements
There
were no recent accounting pronouncements that have had a material effect on the Company’s financial position or results
of operations.
Item
3. Quantitative and Qualitative Disclosures About Market Risk.
Not
required for smaller reporting companies.
Item
4. Controls and Procedures.
Disclosure
Controls and Procedures
Regulations
under the Securities Exchange Act of 1934 (the “Exchange Act”) require public companies to maintain “disclosure
controls and procedures,” which are defined as controls and other procedures that are designed to ensure that information
required to be disclosed by the issuer in the reports that it files or submits under the Exchange Act is recorded, processed,
summarized and reported, within the time periods specified in the Securities and Exchange Commission's rules and forms. Disclosure
controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be
disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer's
management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate
to allow timely decisions regarding required disclosure.
We
conducted an evaluation, with the participation of our Chief Executive Officer and Chief Financial Officer, of the effectiveness
of our disclosure controls and procedures as of March 31, 2018. Based on that evaluation, our Chief Executive Officer and Chief
Financial Officer have concluded that as of March 31, 2018, our disclosure controls and procedures were not effective at the reasonable
assurance level due to the material weaknesses described below.
In
light of the material weaknesses described below, we performed additional analysis to ensure our financial statements were prepared
in accordance with generally accepted accounting principles. Accordingly, we believe that the financial statements included in
this report fairly present, in all material respects, our financial condition, results of operations and cash flows for the periods
presented.
A
material weakness is a control deficiency (within the meaning of the Public Company Accounting Oversight Board (PCAOB) Auditing
Standard No. 2) or combination of control deficiencies that result in more than a remote likelihood that a material misstatement
of the annual or interim financial statements will not be prevented or detected. Management has identified the following two material
weaknesses which have caused management to conclude that, as of March 31, 2018, our disclosure controls and procedures were not
effective at the reasonable assurance level:
|
|
1.
|
We
do not have written documentation of our internal control policies and procedures. Written documentation of key internal controls
over financial reporting is a requirement of Section 404 of the Sarbanes-Oxley Act which is applicable to us for the quarter
ending March 31, 2018. Management evaluated the impact of our failure to have written documentation of our internal controls
and procedures on our assessment of our disclosure controls and procedures and has concluded that the control deficiency that
resulted represented a material weakness.
|
|
|
2.
|
We
do not have sufficient segregation of duties within accounting functions, which is a basic internal control. Due to our size
and nature, segregation of all conflicting duties may not always be possible and may not be economically feasible. However,
to the extent possible, the initiation of transactions, the custody of assets and the recording of transactions should be
performed by separate individuals. Management evaluated the impact of our failure to have segregation of duties on our assessment
of our disclosure controls and procedures and has concluded that the control deficiency that resulted represented a material
weakness.
|
To
address these material weaknesses, management performed additional analyses and other procedures to ensure that the financial
statements included herein fairly present, in all material respects, our financial position, results of operations and cash flows
for the periods presented.
Management's
Report on Internal Control over Financial Reporting.
Our
management is responsible for establishing and maintaining adequate internal control over financial reporting for the company
in accordance with as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Our internal control over financial reporting
is designed to provide reasonable assurance regarding the (i) effectiveness and efficiency of operations, (ii) reliability of
financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting
principles, and (iii) compliance with applicable laws and regulations. Our internal controls framework is based on the criteria
set forth in the Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission
(COSO).
Due
to inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any
evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in
conditions, or that the degree of compliance with the policies and procedures may deteriorate.
A
material weakness in internal controls is a deficiency in internal control, or combination of control deficiencies, that adversely
affects the Company’s ability to initiate, authorize, record, process, or report external financial data reliably in accordance
with accounting principles generally accepted in the United States of America such that there is more than a remote likelihood
that a material misstatement of the Company’s annual or interim financial statements that is more than inconsequential will
not be prevented or detected. In the course of making our assessment of the effectiveness of internal controls over financial
reporting, we identified some material weaknesses in our internal control over financial reporting.
We
lack sufficient personnel with the appropriate level of knowledge, experience and training in the application of accounting operations
of our company. This weakness causes us to not fully identify and resolve accounting and disclosure issues that could lead to
a failure to perform timely internal control and reviews.
Management
is currently reviewing its staffing and systems in order to remedy the weaknesses identified in this assessment. However, because
of the above condition, management’s assessment is that the Company’s internal controls over financial reporting were
not effective as of March 31, 2018. Additionally, the Registrant’s management has concluded that the Registrant has a material
weakness associated with its U.S. GAAP expertise.
This
Annual Report does not include an attestation report of the Company’s registered public accounting firm regarding internal
control over financial reporting. Management’s report was not subject to attestation by the Company’s registered public
accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the Company to provide only
management’s report in this annual report.
Management's
Remediation Initiatives
In
an effort to remediate the identified material weaknesses and other deficiencies and enhance our internal controls, we have initiated,
or plan to initiate, the following series of measures:
We
intend to our personnel resources and technical accounting expertise within the accounting function. First, we intend to create
a position to segregate duties consistent with control objectives of having separate individuals perform (i) the initiation of
transactions, (ii) the recording of transactions and (iii) the custody of assets. Second, we intend to create a senior position
to focus on financial reporting and standardizing and documenting our accounting procedures with the goal of increasing the effectiveness
of the internal controls in preventing and detecting misstatements of accounting information. Third, we plan to appoint one or
more outside directors to our board of directors who shall be appointed to an audit committee resulting in a fully functioning
audit committee who will undertake the oversight in the establishment and monitoring of required internal controls and procedures
such as reviewing and approving estimates and assumptions made by management when funds are available to us. We anticipate the
costs of implementing these remediation initiatives will be approximately $37,500 to $50,000 a year in increased salaries, legal
and accounting expenses.
Management
believes that the appointment of one or more outside directors, who shall be appointed to a fully functioning audit committee,
will remedy the lack of a functioning audit committee and a lack of a majority of outside directors on our Board.
PART
II — OTHER INFORMATION
Item
1. Legal Proceedings.
To
the best knowledge of the officers and directors, the Company was not a party to any legal proceeding or litigation as of March
31, 2018.
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.
Item
6. Exhibits.
|
Exhibit
No.
|
Description
|
|
31.1
|
Chief
Executive Officer Certification of Periodic Financial Report Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
31.2
|
Chief
Financial Officer Certification of Periodic Financial Report Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
32.1
|
Chief
Executive Officer Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley
Act of 2002.
|
|
32.2
|
Chief
Financial Officer Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley
Act of 2002
|
|
101
|
The
following materials from Sino United Worldwide Consolidated Ltd.’s Quarterly Report on Form 10-Q for the period ended
March 31, 2018 are formatted in eXtensible Business Reporting Language (XBRL): (i) the Consolidated Balance Sheet; (ii) the
Consolidated Statement of Comprehensive Income; (iii) the Consolidated Statements of Cash Flows, and (iv) Notes to Consolidated
Financial Statements. This Exhibit 101 is deemed not filed for purposes of Sections 11 or 12 of the Securities Act of 1933
and Section 18 of the Securities Exchange Act of 1934, and otherwise is not subject to liability under these sections.
|
SIGNATURES
In
accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
|
|
SINO
UNITED WORLDWIDE CONSOLIDATED LTD.
|
|
|
|
|
|
|
|
|
|
|
Date: July 6,
2018
|
By:
/s/
Yanru Zhou
|
|
|
Yanru Zhou
|
|
|
Chief Executive Officer
|
|
|
|
|
|
|
|
|
SINO UNITED WORLDWIDE
CONSOLIDATED LTD.
|
|
|
|
|
|
|
|
|
|
|
Date: July 6,
2018
|
By:
/s/
Yanru Zhou
|
|
|
Yanru Zhou
|
|
|
Chief Financial Officer
|
17
SUIC Worldwide (PK) (USOTC:SUIC)
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