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 June
30, 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 June 30, 2018, there were 33,503,604
shares of the registrant's common stock issued and outstanding.
SINO UNITED WORLDWIDE CONSOLIDATED
LTD.
FORM 10-Q
June 30, 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 June 30, 2018 and December 31, 2017
|
F-2
|
|
Unaudited Consolidated Statements of Comprehensive Income(loss) for the Three and Six Months Ended June 30, 2018 and 2017
|
F-3
|
|
Unaudited Consolidated Statements of Cash Flows for the Six Months Ended June 30, 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)
|
|
|
|
|
|
|
|
|
|
|
June 30,
2018
|
|
|
|
December 31,
2017
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
Current Assets
|
|
|
|
|
|
|
|
|
|
Cash
|
|
$
|
9,845
|
|
|
$
|
50,044
|
|
|
Accounts receivable
|
|
|
20,000
|
|
|
|
15,000
|
|
|
Total Current Assets
|
|
|
29,845
|
|
|
|
65,044
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Assets
|
|
$
|
29,845
|
|
|
$
|
65,044
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' DEFICIENCY
|
|
|
|
|
|
|
|
|
|
Current Liabilities
|
|
|
|
|
|
|
|
|
|
Credit card payable
|
|
$
|
10,388
|
|
|
$
|
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
|
|
|
11,297
|
|
|
|
43,922
|
|
|
Total Current Liabilities
|
|
|
116,685
|
|
|
|
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
|
|
|
(1,768,075
|
)
|
|
|
(1,759,743
|
)
|
|
Total Stockholders' Deficiency
|
|
|
(86,840
|
)
|
|
|
(78,508
|
)
|
|
Total Liabilities and Stockholders’ Deficiency
|
|
$
|
29,845
|
|
|
$
|
65,044
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of these consolidated financial statements.
|
|
Sino United Worldwide Consolidated Ltd.
|
|
Consolidated Statements of Comprehensive Income (Loss)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
30,000
|
|
|
$
|
—
|
|
|
$
|
60,000
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General and administrative
|
|
|
45,205
|
|
|
|
22,522
|
|
|
|
65,957
|
|
|
|
32,995
|
|
|
Total operating expenses
|
|
|
45,205
|
|
|
|
22,522
|
|
|
|
65,957
|
|
|
|
32,995
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from operations
|
|
|
(15,205
|
)
|
|
|
(22,522
|
)
|
|
|
(5,957
|
)
|
|
|
(32,995
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other expense:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense - related party
|
|
|
(375
|
)
|
|
|
—
|
|
|
|
(750
|
)
|
|
|
—
|
|
|
Interest expense - other
|
|
|
(812
|
)
|
|
|
—
|
|
|
|
(1,625
|
)
|
|
|
—
|
|
|
Total other expense
|
|
|
(1,187
|
)
|
|
|
—
|
|
|
|
(2,375
|
)
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from continuing operations before income tax provision
|
|
|
(16,392
|
)
|
|
|
(22,522
|
)
|
|
|
(8,332
|
)
|
|
|
(32,995
|
)
|
|
Income tax provision
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Loss from continuing operations
|
|
|
(16,392
|
)
|
|
|
(22,522
|
)
|
|
|
(8,332
|
)
|
|
|
(32,995
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Discontinued operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from discontinued operations, net of tax
|
|
|
—
|
|
|
|
114,387
|
|
|
|
—
|
|
|
|
278,949
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
|
(16,392
|
)
|
|
|
91,865
|
|
|
|
(8,332
|
)
|
|
|
245,954
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translation adjustment
|
|
|
—
|
|
|
|
7,910
|
|
|
|
—
|
|
|
|
46,811
|
|
|
Comprehensive
income (loss)
|
|
$
|
(16,392
|
)
|
|
$
|
99,775
|
|
|
$
|
(8,332
|
)
|
|
$
|
292,765
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic - continuing operation
|
|
$
|
(0.00
|
)
|
|
$
|
(0.00
|
)
|
|
$
|
(0.00
|
)
|
|
$
|
(0.00
|
)
|
|
- discontinuing operation
|
|
$
|
—
|
|
|
$
|
0.00
|
|
|
$
|
—
|
|
|
$
|
0.00
|
|
|
Total
|
|
$
|
(0.00
|
)
|
|
$
|
0.00
|
|
|
$
|
(0.00
|
)
|
|
$
|
0.00
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted - continuing operation
|
|
$
|
(0.00
|
)
|
|
$
|
(0.00
|
)
|
|
$
|
(0.00
|
)
|
|
$
|
(0.00
|
)
|
|
- discontinuing operation
|
|
$
|
—
|
|
|
$
|
0.00
|
|
|
$
|
—
|
|
|
$
|
0.00
|
|
|
Total
|
|
$
|
(0.00
|
)
|
|
$
|
0.00
|
|
|
$
|
(0.00
|
)
|
|
$
|
0.00
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
33,503,604
|
|
|
|
58,985,937
|
|
|
|
33,503,604
|
|
|
|
58,985,937
|
|
|
Diluted
|
|
|
33,503,604
|
|
|
|
58,985,937
|
|
|
|
33,503,604
|
|
|
|
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)
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30,
|
|
|
|
2018
|
|
2017
|
|
CASH FLOW FROM OPERATING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
$
|
(8,332
|
)
|
|
$
|
245,954
|
|
|
Net income from discontinued operation
|
|
|
—
|
|
|
|
278,949
|
|
|
Net loss from continuing operation
|
|
|
(8,332
|
)
|
|
|
(32,995
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Adjustment to reconcile net income(loss) to net cash provided by (used in) operating activities:
|
|
|
|
|
|
|
|
|
|
Change in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
|
Accounts receivable
|
|
|
(5,000
|
)
|
|
|
—
|
|
|
Credit card payable
|
|
|
5,758
|
|
|
|
4,347
|
|
|
Accrued expenses and other current liabilities
|
|
|
(32,625
|
)
|
|
|
(3,881
|
)
|
|
Net cash used in continuing operation
|
|
|
(40,199
|
)
|
|
|
(32,529
|
)
|
|
Net cash provided by discontinued operation
|
|
|
—
|
|
|
|
259,122
|
|
|
Net cash provided by(used in) operating activities
|
|
|
(40,199
|
)
|
|
|
226,593
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH FLOW FROM INVESTING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
Net cash used in continuing operation
|
|
|
—
|
|
|
|
—
|
|
|
Net cash used in discontinued operation
|
|
|
—
|
|
|
|
(635
|
)
|
|
Net cash used in investing activities
|
|
|
—
|
|
|
|
(635
|
)
|
|
|
|
|
|
|
|
|
|
|
|
CASH FLOW FROM FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
Net cash provided by continuing operation
|
|
|
—
|
|
|
|
—
|
|
|
Net cash used in discontinued operation
|
|
|
—
|
|
|
|
(244,334
|
)
|
|
Net cash used in financing activities
|
|
|
—
|
|
|
|
(244,334
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Effect of exchange rate changes on cash
|
|
|
—
|
|
|
|
17,459
|
|
|
DECREASE IN CASH
|
|
|
(40,199
|
)
|
|
|
(917
|
)
|
|
Cash - beginning of period
|
|
|
50,044
|
|
|
|
3,016
|
|
|
Cash - end of period
|
|
$
|
9,845
|
|
|
$
|
2,099
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplement disclosure information
|
|
|
|
|
|
|
|
|
|
Cash paid for interest - continuing operation
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Cash paid for interest - discontinued operation
|
|
$
|
—
|
|
|
$
|
16,301
|
|
|
Cash paid for income taxes - continuing operation
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Cash paid for income taxes - discontinued operation
|
|
$
|
—
|
|
|
$
|
2,735
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of these consolidated financial statements.
|
Sino United Worldwide Consolidated
Ltd.
Notes to the Consolidated Financial
Statements
June 30, 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 June 30, 2018 and the results of operations and cash flows for the periods ended June 30, 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 and six months ended June 30, 2018 is 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 $86,840, an accumulated deficit of $1,768,075 and a stockholders’ deficiency of $86,840 as of June 30, 2018. The
Company did not generate sufficient cash or income from its continuing operation. These factors, among others, raise substantial
doubt about the Company’s ability to continue as a going concern. The consolidated financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
The company is developing new
businesses in various fields. There are no assurances that the Company will be able to either (1) achieve a level of revenues
adequate to generate sufficient cash flow from operations; or (2) obtain additional financing through either private placement,
public offerings and/or bank financing necessary to support the Company’s working capital requirements. To the extent that
funds generated from any private placements, public offering and/or bank financing are insufficient to support the Company’s
working capital requirements, the Company will have to raise additional working capital from additional financing. No assurance
can be given that additional financing will be available, or if available, will be on terms acceptable to the Company. If adequate
working capital is not available, the Company may not be able continue its operations.
Note 3 — Summary of
Significant Accounting Policies
Translation Adjustment
The Company’s financial
statements are presented in the U.S. dollar ($), 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 (deficiency) 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
|
|
June 30, 2018
|
|
June 30, 2017
|
|
Taiwan dollar(TWD)
|
|
|
—
|
|
|
|
1
|
|
|
United States Dollar($)
|
|
|
—
|
|
|
|
0.0326
|
|
|
|
|
|
|
|
|
|
|
|
|
Exchange Rate at
|
|
|
June 30, 2018
|
|
|
|
June 30, 2017
|
|
|
Taiwan dollar(TWD)
|
|
|
—
|
|
|
|
1
|
|
|
United States Dollar($)
|
|
|
—
|
|
|
|
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.
NOTE 4 – Discontinued Operation
(Continued)
The results of operations of discontinued
operations for the three months ended June 30, 2018 and 2017 are as following:
|
|
|
2018
|
|
2017
|
|
Revenue
|
|
$
|
—
|
|
|
$
|
1,132,506
|
|
|
Cost of goods sold
|
|
|
—
|
|
|
|
(874,425
|
)
|
|
General and administrative expenses
|
|
|
—
|
|
|
|
(98,374
|
)
|
|
Depreciation and amortization
|
|
|
—
|
|
|
|
(12,542
|
)
|
|
Interest expense, net of interest income
|
|
|
—
|
|
|
|
(8,035
|
)
|
|
Income tax provision
|
|
|
—
|
|
|
|
(24,743
|
)
|
|
Income from discontinued operations
|
|
$
|
—
|
|
|
$
|
114,387
|
|
The results of operations of discontinued
operations for the six months ended June 30, 2018 and 2017 are as following:
|
|
|
2018
|
|
2017
|
|
Revenue
|
|
$
|
—
|
|
|
$
|
1,966,993
|
|
|
Cost of goods sold
|
|
|
—
|
|
|
|
(1,414,628
|
)
|
|
General and administrative expenses
|
|
|
—
|
|
|
|
(172,812
|
)
|
|
Depreciation and amortization
|
|
|
—
|
|
|
|
(25,929
|
)
|
|
Interest expense, net of interest income
|
|
|
—
|
|
|
|
(14,914
|
)
|
|
Income tax provision
|
|
|
—
|
|
|
|
(59,761
|
)
|
|
Income from discontinued operations
|
|
$
|
—
|
|
|
$
|
278,949
|
|
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 June 30, 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 and $750 for the three and six
months ended June 30, 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:
|
|
|
Six Months Ended June 30,
|
|
|
|
2018
|
|
2017
|
|
Pre-tax loss
|
|
$
|
(8,332
|
)
|
|
$
|
(32,995
|
)
|
|
U.S. federal corporate income tax rate
|
|
|
21
|
%
|
|
|
35
|
%
|
|
Expected U.S. income tax benefit
|
|
|
(1,750
|
)
|
|
|
(11,548
|
)
|
|
Change of valuation allowance
|
|
|
1,750
|
|
|
|
11,548
|
|
|
Effective tax expense
|
|
$
|
—
|
|
|
$
|
—
|
|
As of December 31, 2017,
the Company has approximately $1 million net operating loss carryforwards available in US, which will start to expire in
2026.
In six months
ended June 30, 2018, the Company
has approximately $8,000 net operating loss carryforward available in the U.S., which can be used to offset 80 percent of
future taxable income and can be carried forward indefinitely. 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 June 30, 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 and
six months ended June 30, 2018 and 2017, and no provision for interest and penalties is deemed necessary as of June 30, 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 and Six Months Ended June 30,
2018 and 2017
Revenue
The Company generated $30,000 and $60,000
of revenue from the continuing operation during the three and six months ended June 30, 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 and six months
ended June 30, 2017 in the income from discontinued operation on Consolidated Statements of Comprehensive Income (Loss).
Our revenue of $60,000 was 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 June 30, 2018 and 2017 were $45,205 and $22,522, respectively. General and administrative expenses
for the six months ended June 30, 2018 and 2017 were $65,957 and $32,995, respectively. The increase in general and administrative
expense is primarily related to the professional fee paid for filing the Company’s prior period 10K and 10Qs.
Interest expense
Interest expense from continuing
operation was $1,187 for the three months ended June 30, 2018 which included the interest on the convertible promissory notes issued
for $1,187. There was no interest expense from continuing operation for the three months ended June 30, 2017.
Interest expense from continuing
operation was $2,375 for the six months ended June 30, 2018 which included the interest on the convertible promissory notes issued
for $2,375. There was no interest expense from continuing operation for the six months ended June 30, 2017.
Loss from continuing operations
The Company generated net loss
from continuing operations of $16,392 and $22,522 for the three months ended June 30, 2018 and 2017, respectively.
The Company generated net loss
from continuing operations of $8,332 and $32,995 for the six months ended June 30, 2018 and 2017, respectively.
Income from discontinued
operations
The Company generated net income
from discontinued operations of $114,387 and $278,949 for the three and six months ended June 30, 2017, respectively. There was
no income or loss generated for the three and six months ended June 30, 2018.
Net income(loss)
As a result of the foregoing, the
Company generated net loss of $16,392 and $8,332 for the three and six months ended June 30, 2018, respectively. The Company generated
net income of $91,865 and $245,954 for the three and six months ended June 30, 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 $7,910 and $46,811 for the three and six months ended June 30, 2017. There is
no foreign currency translation adjustment recorded for the three and six months ended June 30, 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 $86,840, an accumulated deficit of $1,768,075 and a stockholders’ deficiency
of $86,840 as of June 30, 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 June 30, 2018, Our current assets were $29,845 primarily consisting of cash of $9,845 and account receivable of $20,000. Our
current liabilities were primarily composed of credit card payable of $10,388, convertible promissory notes of $95,000 and accrued
expenses and other current liabilities of $11,297.
Cash
Flow from Operating Activities
Net
cash used in operating activities was $40,199 for the six months ended June 30, 2018, which consisted of our net loss from continuing
operation of $8,332, a change of accounts receivable of $5,000, a change of credit card payable of $5,758 and a change of accrued
expenses of $32,625.
Net
cash provided by operating activities was $226,593 for the six months ended June 30, 2017, which consisted of our net loss from
continuing operation of $32,995, a change of credit card payable of $4,347, a change of accrued expenses of $3,881 and net cash
provided by discontinued operation of $259,122.
Cash
Flow from Investing Activities
There
were no investing activities for the six months ended June 30, 2018.
Net
cash used in investing activities totaled $635 for the six months ended June 30, 2017, all of which contributed by discontinued
operation.
Cash
Flow from Financing Activities
There
were no financing activities for the six months ended June 30, 2018.
Net
cash used in financing activities was $244,334 for the six months ended June 30, 2017, all of which contributed by discontinued operation.
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 June 30, 2018. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that as of
June 30, 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 June 30, 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 June 30, 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 June
30, 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 June 30, 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
|
|
10.1
|
The
following materials from Sino United Worldwide Consolidated Ltd.’s Quarterly Report on Form 10-Q for the period ended
June 30, 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: August , 2018
|
By:
/s/ Yanru Zhou
|
|
|
Yanru Zhou
|
|
|
Chief Executive Officer
|
|
|
|
|
|
|
|
|
SINO UNITED WORLDWIDE CONSOLIDATED LTD.
|
|
|
|
|
|
|
|
|
|
|
Date: August , 2018
|
By:
/s/ Yanru Zhou
|
|
|
Yanru Zhou
|
|
|
Chief Financial Officer
|
17
SUIC Worldwide (PK) (USOTC:SUIC)
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