The accompanying notes are an integral part
of the consolidated financial statements.
The accompanying notes are an integral part
of the consolidated financial statements
The accompanying notes are an integral part
of the consolidated financial statements.
The accompanying notes are an integral part
of the consolidated financial statements.
NOTES TO FINANCIAL STATEMENTS
(In U.S. dollars)
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1.
|
ORGANIZATION
AND BUSINESS
|
Ho Wah Genting Group Limited (“HWGG”), a Nevada corporation (formerly
Computron, Inc.) through Ho Wah Genting Group SDN BHD (“Malaysia HWGG”), a Malaysia company and our wholly owned subsidiary, is
engaged to promote travel and entertainment services to members to our partnering resorts and cruises in the Asia region and develop
and invest in real estate property.
On September 2, 1985, Malaysia HWGG was incorporated
under the laws of Malaysia as a private company limited by shares with the name “Ho Wah Genting Holdings SDN. BHD”
for the purpose of functioning as a holding company to obtain ownership interests in Malaysian businesses across various industries.
Throughout the years, we have expanded our business operations and undergone multiple name changes and restructuring to fit our
evolving business objectives. First on February 17, 1989, the company changed its name to “Ho Wah Genting Group (M) SDN.
BHD.” On October 2, 1990, the company changed its name to “Ho Wah Genting Group SDN. BHD.” On December 22, 1990
its name was changed to “Ho Wah Genting Group Berhad” and was converted to a public company limited by shares. Lastly,
on January 18, 1995, the company converted back into a private company limited by shares and changed its name to “Ho Wah
Genting Group Sdn. Bhd.”
From 1985 to 2005, Malaysia HWGG was involved
in wire and cable, taxi, travel agent and tour bus charterers and general insurance agent services. In August 2006, Malaysia HWGG
shifted its operations to primarily focus on commercial and residential property investment by purchasing a condominium in Kuala
Lumpur, Malaysia and renting it out for revenue.
In 2015, Malaysia HWGG entered the travel and entertainment services business by launching the Exclusive
Travel Membership program in Malaysia.
On June 25, 2015, Malaysia HWGG acquired
65% of the equity interests of Beedo SDN BHD (“Beedo”). On July 7, 2015, Beedo increased its issued and paid-up
shares from 2,500 to 1,000,000. HWGG acquired an additional 508,375 shares on that date, making its balance of shares 510,000
and effectively diluting its shareholding in Beedo from 65% to 51%. Beedo is mainly engaged in the provision of information
technology services. On August 12, 2016, HWGG completed the disposal of its subsidiary, Beedo, by wholly transferring the
shares it owns to a related party, Dato’ Lim Hui Boon, for the consideration of $ 118,881 (RM 510,000).
REVERSE MERGER
On
October 28, 2016, Computron acquired all the issued and outstanding shares of Malaysia HWGG, a privately held Malaysia corporation,
pursuant to the Share Exchange Agreement and Malaysia HWGG became the wholly owned subsidiary of Computron in a reverse merger,
or the Merger. Pursuant to the Merger, all of the issued and outstanding shares of Malaysia HWGG common stock were converted, at
an exchange ratio of 0.56-for-1, into an aggregate of 799,680,000 (560,000
pre-reverse split
)
shares of Computron common stock and Malaysia HWGG became a wholly owned subsidiary of Computron. The holders of Computron’s
common stock as of immediately prior to the Merger held an aggregate of 200,375,532 (140,319
pre-reverse split
)
shares of Computron’s common stock. The accompanying financial statements share and per share information has been retroactively
adjusted to reflect the exchange ratio in the Merger. Subsequent to the Merger, Computron’s name was changed from “Computron,
Inc.” to “Ho Wah Genting Group Limited.”.
On November 4, 2016, we completed and closed
a share exchange (the “Share Exchange”) under a Share Exchange Agreement (the “Share Exchange Agreement”)
of the same date by and among us, Malaysia HWGG and the shareholders of Malaysia HWGG pursuant to which Malaysia HWGG became a
wholly owned subsidiary of ours. In the Share Exchange, all of the outstanding shares of Malaysia HWGG were converted into shares
of our Common Stock.
In connection with the Share Exchange and pursuant
to the Split-Off Agreement (defined below), we transferred our pre-Share Exchange assets and liabilities to our pre-Share Exchange
majority stockholder, in exchange for the surrender by him and cancellation of 5,000,000 shares of our Common Stock.
Under generally accepted accounting principles in the United States,
(“U.S. GAAP”) because Malaysia HWGG’s former stockholders received the greater portion of the voting rights in
the combined entity and Malaysia HWGG’s senior management represents all of the senior management of the combined entity,
the Merger was accounted for as a recapitalization effected by a share exchange, wherein Malaysia HWGG is considered the acquirer
for accounting and financial reporting purposes. The assets and liabilities of Malaysia HWGG have been brought forward at their
book value and no goodwill has been recognized. Accordingly, the assets and liabilities and the historical operations that are
reflected in Malaysia HWGG's consolidated financial statements are those of Malaysia HWGG and are recorded at the historical cost
basis of Malaysia HWGG.
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2.
|
SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES
|
Basis of presentation
The accompanying consolidated financial
statements of the Company have been prepared in accordance with U.S. GAAP.
This basis of accounting involves the application
of accrual accounting and consequently, revenues and gains are recognized when earned, and expenses and losses are recognized when
incurred. The Company’s financial statements are expressed in U.S. dollars.
Principles of consolidation
The consolidated financial statements
include the accounts of HWGG, Malaysian HWGG and its subsidiary, Beedo, collectively referred to within as the Company. All
material intercompany accounts, transactions, and profits have been eliminated upon consolidation.
Use of estimates
The preparation of financial
statements in conformity with U.S. GAAP requires
management to make estimates and assumptions that affect certain reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses
during the reporting periods. Actual results could differ from those estimates.
Foreign currency translation and transactions
The functional currency of the Company
is the Malaysian Ringgit (“MYR”) and reporting currency of the Company is the United States Dollar (“USD”).
The financial statements of the Company are translated into USD using the exchange rate as of the balance sheet date for assets
and liabilities and average exchange rate for the year for income and expense items. Translation gains and losses are recorded
in accumulated other comprehensive income or loss as a component of shareholders’ equity.
Cash and cash equivalents
The Company considers highly-liquid investments
with maturities of three months or less, when purchased, to be cash equivalents. As of December 31, 2016 and 2015, the Company’s
cash and cash equivalents were comprised of cash in bank of $363,015 and $471,907, respectively.
Investments
The Company invests its excess cash primarily
in equity instruments of high-quality corporate issuers listed on the Main Board of Bursa Malaysia. Such securities are classified
as short-term investments. They are classified as available-for-sale and carried at fair value.
Changes in the value of these investments
are primarily related to changes in their share prices and are considered to be temporary in nature. Except for declines in fair
value that are not considered temporary, net unrealized gains or losses on these investments are reported in the Consolidated Statements
of Comprehensive Loss. The Company recognizes realized gains and losses upon sale of investments using the specific identification
method.
Fair value of financial instruments
FASB ASC 820, “Fair Value Measurement,”
specifies a hierarchy of valuation techniques based upon whether the inputs to those valuation techniques reflect assumptions other
market participants would use based upon market data obtained from independent sources (observable inputs). In accordance with
ASC 820, the following summarizes the fair value hierarchy:
Level 1 Inputs – Unadjusted quoted
market prices for identical assets and liabilities in an active market that the Company has the ability to access.
Level 2 Inputs – Inputs other than
the quoted prices in active markets that are observable either directly or indirectly.
Level 3 Inputs – Inputs based on
prices or valuation techniques that are both unobservable and significant to the overall fair value measurements.
ASC 820 requires the use of observable
market data, when available, in making fair value measurements. When inputs used to measure fair value fall within different levels
of the hierarchy, the level within which the fair value measurement is categorized is based on the lowest level input that is significant
to the fair value measurements. Valuation techniques used need to maximize the use of observable inputs and minimize the use of
unobservable inputs. As of December 31, 2016 and 2015, none of the Company’s assets and liabilities were required to be reported
at fair value on a recurring basis. Carrying values of non-derivative financial instruments, including cash, accounts receivables,
payables and accrued liabilities, approximate their fair values due to the short term nature of these financial instruments. There
were no changes in methods or assumptions during the periods presented.
Property and equipment, net
Property and equipment are carried at cost
less accumulated depreciation. Depreciation is calculated on a straight-line basis over the following estimated useful lives:
Leasehold building
|
50 years
|
|
|
Computer and software
|
5 years
|
|
|
Furniture and fixtures
|
5 years
|
|
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Leasehold improvement
|
10 years
|
Goodwill and intangible assets
Goodwill is calculated as the purchase
premium after adjusting for the fair value of net assets acquired. Goodwill is not amortized but is reviewed for potential impairment
on an annual basis, or when events or circumstances indicate a potential impairment, at the reporting unit level.
Under applicable accounting guidance, the
goodwill impairment analysis is a two-step test. The first step of the goodwill impairment test involves comparing the fair value
of each reporting unit with its carrying amount including goodwill. If the fair value of the reporting unit exceeds its carrying
amount, goodwill of the reporting unit is considered not impaired; however, if the carrying amount of the reporting unit exceeds
its fair value, the second step must be performed to measure potential impairment. The second step involves calculating an implied
fair value of goodwill for each reporting unit for which the first step indicated possible impairment. The implied fair value of
goodwill is determined in the same manner as the amount of goodwill recognized in a business combination, which is the excess of
the fair value of the reporting unit, as determined in the first step, over the aggregate fair values of the assets, liabilities
and identifiable intangibles as if the reporting unit was being acquired in a business combination.
Measurement of the fair values of the assets
and liabilities of a reporting unit is consistent with the requirements of the fair value measurements accounting guidance, which
defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date. The adjustments to measure the assets, liabilities, and intangibles at fair
value are for the purpose of measuring the implied fair value of goodwill and such adjustments are not reflected in the consolidation
balance sheet. If the implied fair value of goodwill exceeds the goodwill assigned to the reporting unit, there is no impairment.
If the goodwill assigned to a reporting unit exceeds the implied fair value of goodwill, an impairment charge is recorded for the
excess. An impairment loss recognized cannot exceed the amount of goodwill assigned to a reporting unit. An impairment loss establishes
a new basis in the goodwill and subsequent reversals of goodwill impairment losses are not permitted under applicable accounting
guidance.
Goodwill amounting to $4,662 was generated
from the acquisition of Beedo on June 25, 2015. In 2015, the Company recorded a goodwill write-down of $4,662, which eliminated
all remaining goodwill of the Company. Goodwill was determined to have been impaired because of the current financial condition
of the Company and the Company’s inability to generate future operating income. Furthermore, the Company’s anticipated
future cash flows indicate that the recoverability of goodwill is not reasonably assured. The goodwill write-down was included
as a component of operating expense in 2015.
For intangible assets subject to amortization,
an impairment loss is recognized if the carrying amount of the intangible asset is not recoverable and exceeds fair value. The
carrying amount of the intangible asset is considered not recoverable if it exceeds the sum of the undiscounted cash flows expected
to result from the use of the asset.
Revenue recognition
The Company provides rental,
Information technology and junket operation services to customer. For the years ended December 31, 2016 and 2015, the
Company has recognized $5,801 and $6,147 in lease revenue respectively, based upon its annual rental over the life of the
operating lease. Lease revenue is recognized using the straight-line method in accordance with ASC Topic 970-605, “Real
Estate – General – Revenue Recognition” (“ASC Topic 970-605”). For the years ended December 31,
2016 and 2015, the Company has recognized $ 74,291 and $28,872, respectively, in revenue from the provision of
information technology services. Revenue from the provision of information technology services is recognized when (a) there
is persuasive evidence that an arrangement exists, (b) delivery has occurred, (c) the vendor’s fee is fixed or
determinable and (d) collectability is probable in accordance with ASC Topic 985-605, “Software – Revenue
Recognition” (“ASC 985-605”). Junket operation revenue is recognized when service is performed,
vendor’s fee is fixed or determinable and collectability is probable. For the years ended December 31, 2016 and 2015,
the Company recognized $16,730 and nil, respectively in revenue from junket operations.
Income taxes
Current income taxes are provided for in
accordance with the laws of the relevant tax authorities. Deferred income taxes are recognized when temporary differences exist
between the tax bases of assets and liabilities and their reported amounts in the combined financial statements. Net operating
loss carry forwards and credits are applied using enacted statutory tax rates applicable to future years. Deferred tax assets are
reduced by a valuation allowance when, in the opinion of management, it is more-likely-than-not that a portion of or all of the
deferred tax assets will not be realized. The components of the deferred tax assets and liabilities are individually classified
as current and non-current based on their characteristics.
The impact of an uncertain income tax position
on the income tax return is recognized at the largest amount that is more-likely-than-not to be sustained upon audit by the relevant
tax authority. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained.
Interest and penalties on income taxes are classified as a component of the provisions for income taxes. The Company recognized
$725 and $121 income tax expense for the year ended December 31, 2016 and 2015, respectively.
Comprehensive loss
Comprehensive loss includes net loss and
cumulative foreign currency translation adjustments and is reported in the Combined Statement of Comprehensive Loss.
Loss per share
The loss per share is computed using the
weighted average number of shares outstanding during the fiscal years. For the years ended December 31, 2016 and 2015, there is
no dilutive effect due to net loss for the periods.
Segment reporting
ASC Topic 280 requires use of the
“management approach” model for segment reporting. The management approach model is based on the way a
company’s management organizes segments within the company for making operating decisions and assessing performance.
Reportable segments are based on products and services, geography, legal structure, management structure, or any other manner
in which management disaggregates a company. During the year ended December 31, 2016, the Company operated in three
reportable business segments: (1) investment property holding which generates rental income from the leasing out of its
leasehold building, (2) exclusive membership and junket operations (3) information technology services, which generates
revenue from the provision of information technology services, and (4) others which comprise of general operating and
administrative expenses, and other income/expenses not directly attributable to the sources of revenue of the Company for the
years ended December 31, 2016 and 2015.
Related party transactions
A related party is generally defined as:
(i) any person that holds the Company’s
securities including such person’s immediate families,
(ii) the Company’s management,
(iii) someone that directly or indirectly
controls, is controlled by or is under common control with the Company, or
(iv) anyone who can significantly influence
the financial and operating decisions of the Company.
A transaction is considered to be a related
party transaction when there is a transfer of resources or obligations between related parties.
Recently issued accounting pronouncements
The FASB has issued Accounting Standards
Update (ASU) No. 2015-01, Income Statement - Extraordinary and Unusual Items (Subtopic 225-20): Simplifying Income Statement Presentation
by Eliminating the Concept of Extraordinary Items.
The FASB issued this ASU as part of its
initiative to reduce complexity in accounting standards. The objective of the simplification initiative is to identify, evaluate,
and improve areas of U.S. GAAP for which cost and complexity can be reduced while maintaining or improving the usefulness of the
information provided to the users of financial statements.
This ASU eliminates from U.S. GAAP the
concept of extraordinary items. Subtopic 225-20, Income Statement - Extraordinary and Unusual Items, required that an entity separately
classify, present, and disclose extraordinary events and transactions. Presently, an event or transaction is presumed to be an
ordinary and usual activity of the reporting entity unless evidence clearly supports its classification as an extraordinary item.
If an event or transaction meets the criteria
for extraordinary classification, an entity is required to segregate the extraordinary item from the results of ordinary operations
and show the item separately in the income statement, net of tax, after income from continuing operations. The entity also is required
to disclose applicable income taxes and either present or disclose earnings-per-share data applicable to the extraordinary item.
The FASB heard from stakeholders that the
concept of extraordinary items causes uncertainty because it is unclear when an item should be considered both unusual and infrequent.
Additionally, some stakeholders said that although users find information about unusual or infrequent events and transactions useful,
they do not find the extraordinary item classification and presentation necessary to identify those events and transactions. Other
stakeholders noted that it is extremely rare in current practice for a transaction or event to meet the requirements to be presented
as an extraordinary item.
This ASU will also align more closely U.S.
GAAP income statement presentation guidance with IAS 1, Presentation of Financial Statements, which prohibits the presentation
and disclosure of extraordinary items.
The amendments in this ASU are effective
for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. A reporting entity may apply
the amendments prospectively. A reporting entity also may apply the amendments retrospectively to all prior periods presented in
the financial statements. Early adoption is permitted provided that the guidance is applied from the beginning of the fiscal year
of adoption. The effective date is the same for both public business entities and all other entities.
The FASB has issued an Accounting Standards
Update (ASU) No. 2015-02,
Consolidation (Topic 810): Amendments to the Consolidation Analysis
, which is intended to improve
targeted areas of consolidation guidance for legal entities such as limited partnerships, limited liability corporations, and securitization
structures (collateralized debt obligations, collateralized loan obligations, and mortgage-backed security transactions).
The ASU focuses on the consolidation evaluation for reporting organizations (public and private companies and not-for-profit organizations)
that are required to evaluate whether they should consolidate certain legal entities.
In addition to reducing the number of consolidation
models from four to two, the new standard simplifies the FASB Accounting Standards Codification™ and improves current U.S.
GAAP by:
-Placing more emphasis on risk of loss
when determining a controlling financial interest. A reporting organization may no longer have to consolidate a legal entity in
certain circumstances based solely on its fee arrangement, when certain criteria are met.
-Reducing the frequency of the application
of related-party guidance when determining a controlling financial interest in a variable interest entity (VIE).
-Changing consolidation conclusions for
public and private companies in several industries that typically make use of limited partnerships or VIEs.
The ASU will be effective for periods beginning
after December 15, 2015, for public companies. For private companies and not-for-profit organizations, the ASU will be effective
for annual periods beginning after December 15, 2016; and for interim periods, beginning after December 15, 2017. Early adoption
is permitted, including adoption in an interim period.
The FASB has issued Accounting Standards
Update No. 2015-05,
Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer’s Accounting
for Fees Paid in a Cloud Computing Arrangement
. Existing GAAP does not include explicit guidance about a customer’s accounting
for fees paid in a cloud computing arrangement. Examples of cloud computing arrangements include: (
a
) software as a service;
(
b
) platform as a service; (
c
) infrastructure as a service; and (
d
) other similar hosting arrangements.
The amendments add guidance to Subtopic
350-40,
Intangibles - Goodwill and Other - Internal-Use Software
, which will help entities evaluate the accounting for fees
paid by a customer in a cloud computing arrangement. The guidance already exists in the
FASB Accounting Standards Codification™
in
paragraphs 985-605-55-121 through 55-123, but it is included in a Subtopic applied by cloud service providers to determine whether
an arrangement includes the sale or license of software.
The amendments provide guidance to customers
about whether a cloud computing arrangement includes a software license. If a cloud computing arrangement includes a software license,
then the customer should account for the software license element of the arrangement consistent with the acquisition of other software
licenses. If a cloud computing arrangement does not include a software license, the customer should account for the arrangement
as a service contract. The amendments do not change the accounting for a customer’s accounting for service contracts. As
a result of the amendments, all software licenses within the scope of Subtopic 350-40 will be accounted for consistent with other
licenses of intangible assets.
For public business entities, the amendments
will be effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2015.
For all other entities, the amendments will be effective for annual periods beginning after December 15, 2015, and interim periods
in annual periods beginning after December 15, 2016. Early adoption is permitted for all entities.
An entity can elect to adopt the amendments
either: (1) prospectively to all arrangements entered into or materially modified after the effective date; or (2) retrospectively.
For prospective transition, the only disclosure requirements at transition are the nature of and reason for the change in accounting
principle, the transition method, and a qualitative description of the financial statement line items affected by the change. For
retrospective transition, the disclosure requirements at transition include the requirements for prospective transition and quantitative
information about the effects of the accounting change.
The FASB has issued ASU No. 2015-06,
Earnings
Per Share (Topic 260): Effects on Historical Earnings per Unit of Master Limited Partnership Dropdown Transactions
(a
consensus of the FASB Emerging Issues Task Force). The amendments apply to master limited partnerships subject to the Master Limited
Partnerships Subsections of Topic 260,
Earnings per Share,
that receive net assets through a dropdown transaction.
The amendments specify that for purposes
of calculating historical earnings per unit under the two-class method, the earnings (losses) of a transferred business before
the date of a dropdown transaction should be allocated entirely to the general partner. In that circumstance, the previously reported
earnings per unit of the limited partners (which is typically the earnings per unit measure presented in the financial statements)
would not change as a result of the dropdown transaction. Qualitative disclosures about how the rights to the earnings (losses)
differ before and after the dropdown transaction occurs for purposes of computing earnings per unit under the two-class method
also are required.
Current GAAP does not contain guidance
for master limited partnerships that specifies how historical earnings per unit should be affected when a dropdown transaction
occurs that is accounted for as a transaction between entities under common control.
The amendments are effective for fiscal
years beginning after December 15, 2015, and interim periods within those fiscal years. Earlier application is permitted. The amendments
should be applied retrospectively for all financial statements presented.
The FASB has issued Accounting Standards
Update 2015-07,
Fair Value Measurement (Topic 820): Disclosures for Investments in Certain Entities That Calculate Net Asset
Value per Share (or Its Equivalent)
. The amendments apply to reporting entities that elect to measure the fair value of an
investment using the net asset value per share (or its equivalent) practical expedient.
Topic 820,
Fair Value Measurement
,
permits a reporting entity, as a practical expedient, to measure the fair value of certain investments using the net asset value
per share of the investment. Currently, investments valued using the practical expedient are categorized within the fair value
hierarchy on the basis of whether the investment is redeemable with the investee at net asset value on the measurement date, never
redeemable with the investee at net asset value, or redeemable with the investee at net asset value at a future date. For investments
that are redeemable with the investee at a future date, a reporting entity must consider the length of time until those investments
become redeemable to determine the classification within the fair value hierarchy.
The amendments remove the requirement to
categorize within the fair value hierarchy all investments for which fair value is measured using the net asset value per share
practical expedient. The amendments also remove the requirement to make certain disclosures for all investments that are eligible
to be measured at fair value using the net asset value per share practical expedient. Rather, those disclosures are limited to
investments for which the entity has elected to measure the fair value using that practical expedient.
The amendments are effective for public
business entities for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. For all other
entities, the amendments are effective for fiscal years beginning after December 15, 2016, and interim periods within those fiscal
years. A reporting entity should apply the amendments retrospectively to all periods presented. The retrospective approach requires
that an investment for which fair value is measured using the net asset value per share practical expedient be removed from the
fair value hierarchy in all periods presented in an entity’s financial statements. Earlier application is permitted.
The FASB has issued Accounting Standards
Update (ASU) No. 2015-10,
Technical Corrections and Improvements
. The amendments cover a wide range of Topics in the FASB
Accounting Standards Codification
™ (Codification). The amendments generally fall into one of the types of amendments
listed below.
1. Amendments Related to Differences between
Original Guidance and the Codification. These amendments arose because of differences between original guidance (e.g., FASB Statements,
EITF Issues, and so forth) and the Codification. These amendments principally carry forward pre-Codification guidance or subsequent
amendments into the Codification. Many times, either the writing style or phrasing of the original guidance did not directly translate
into the Codification format and style. As a result, the meaning of the guidance might have been unintentionally altered. Alternatively,
amendments in this section may relate to guidance that was codified without some text, references, or phrasing that, upon review,
was deemed important to the guidance.
2. Guidance Clarification and Reference
Corrections. These amendments provide clarification through updating wording, correcting references, or a combination of both.
In most cases, the feedback suggested that, without these enhancements, guidance may be misapplied or misinterpreted.
3. Simplification. These amendments streamline
or simplify the Codification through minor structural changes to headings or minor editing of text to improve the usefulness and
understandability of the Codification.
4. Minor Improvements. These amendments
improve the guidance and are not expected to have a significant effect on current accounting practice or create a significant administrative
cost to most entities.
The amendments represent changes to clarify
the Codification, correct unintended application of guidance, or make minor improvements to the Codification that are not expected
to have a significant effect on current accounting practice or create a significant administrative cost to most entities. In addition,
some of the amendments will make the Codification easier to understand and easier to apply by eliminating inconsistencies, providing
needed clarifications, and improving the presentation of guidance in the Codification.
Transition guidance varies based on the
amendments. The amendments that require transition guidance are effective for all entities for fiscal years, and interim periods
within those fiscal years, beginning after December 15, 2015. Early adoption is permitted, including adoption in an interim period.
All other amendments will be effective upon issuance.
The FASB has issued Accounting Standards
Update (ASU) No. 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date.
In May 2014, the FASB issued ASU No. 2014-09,
Revenue from Contracts with Customers (Topic 606). The amendments in ASU 2015-14 defer the effective date of ASU 2014-09 for all
entities by one year. Public business entities, certain not-for-profit entities, and certain employee benefit plans should apply
the guidance in ASU 2014-09 to annual reporting periods beginning after December 15, 2017, including interim reporting periods
within that reporting period. Earlier application is permitted only as of annual reporting periods beginning after December 15,
2016, including interim reporting periods within that reporting period.
All other entities should apply the guidance
in ASU 2014-09 to annual reporting periods beginning after December 15, 2018, and interim reporting periods within annual reporting
periods beginning after December 15, 2019. All other entities may apply the guidance in ASU 2014-09 earlier as of an annual reporting
period beginning after December 15, 2016, including interim reporting periods within that reporting period. All other entities
also may apply the guidance in ASU 2014-09 earlier as of an annual reporting period beginning after December 15, 2016, and interim
reporting periods within annual reporting periods beginning one year after the annual reporting period in which the entity first
applies the guidance in ASU 2014-09. The FASB has issued Accounting Standards Update (ASU) No. 2015-14, Revenue from Contracts
with Customers (Topic 606): Deferral of the Effective Date.
In May 2014, the FASB issued ASU No. 2014-09,
Revenue from Contracts with Customers (Topic 606). The amendments in ASU 2015-14 defer the effective date of ASU 2014-09 for all
entities by one year. Public business entities, certain not-for-profit entities, and certain employee benefit plans should apply
the guidance in ASU 2014-09 to annual reporting periods beginning after December 15, 2017, including interim reporting periods
within that reporting period. Earlier application is permitted only as of annual reporting periods beginning after December 15,
2016, including interim reporting periods within that reporting period.
All other entities should apply the guidance
in ASU 2014-09 to annual reporting periods beginning after December 15, 2018, and interim reporting periods within annual reporting
periods beginning after December 15, 2019. All other entities may apply the guidance in ASU 2014-09 earlier as of an annual reporting
period beginning after December 15, 2016, including interim reporting periods within that reporting period. All other entities
also may apply the guidance in ASU 2014-09 earlier as of an annual reporting period beginning after December 15, 2016, and interim
reporting periods within annual reporting periods beginning one year after the annual reporting period in which the entity first
applies the guidance in ASU 2014-09.
The FASB has issued Accounting Standards
Update (ASU) No. 2015-16,
Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments.
To simplify the accounting for adjustments made to provisional amounts recognized in a business combination, the amendments eliminate
the requirement to retrospectively account for those adjustments.
U.S. GAAP currently requires that during
the measurement period, the acquirer retrospectively adjust the provisional amounts recognized at the acquisition date with a corresponding
adjustment to goodwill. Those adjustments are required when new information is obtained about facts and circumstances that existed
as of the acquisition date that, if known, would have affected the measurement of the amounts initially recognized or would have
resulted in the recognition of additional assets or liabilities. The acquirer also must revise comparative information for prior
periods presented in financial statements as needed, including revising depreciation, amortization, or other income effects as
a result of changes made to provisional amounts.
The amendments require that an acquirer
recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which
the adjustment amounts are determined. The amendments require that the acquirer record, in the same period’s financial statements,
the effect on earnings of changes in depreciation, amortization, or other income effects, if any, as a result of the change to
the provisional amounts, calculated as if the accounting had been completed at the acquisition date.
The amendments require an entity to present
separately on the face of the income statement or disclose in the notes the portion of the amount recorded in current-period earnings
by line item that would have been recorded in previous reporting periods if the adjustment to the provisional amounts had been
recognized as of the acquisition date.
For public business entities, the amendments
are effective for fiscal years beginning after December 15, 2015, including interim periods within those fiscal years. For all
other entities, the amendments in this Update are effective for fiscal years beginning after December 15, 2016, and interim periods
within fiscal years beginning after December 15, 2017. The amendments should be applied prospectively to adjustments to provisional
amounts that occur after the effective date with earlier application permitted for financial statements that have not been issued.
The only disclosures required at transition
should be the nature of and reason for the change in accounting principle. An entity should disclose that information in the first
annual period of adoption and in the interim periods within the first annual period if there is a measurement-period adjustment
during the first annual period in which the changes are effective.
The FASB has issued Accounting Standards
Update (ASU) No. 2015-17,
Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes
, which changes how deferred
taxes are classified on organizations’ balance sheets.
The ASU eliminates the current requirement
for organizations to present deferred tax liabilities and assets as current and noncurrent in a classified balance sheet. Instead,
organizations will be required to classify all deferred tax assets and liabilities as noncurrent.
Financial instrument
:
In January 2016, the FASB issued ASU No. 2016-01, “Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement
of Financial Assets and Financial Liabilities” (“ASU 2016-01”). The standard addresses certain aspects of recognition,
measurement, presentation, and disclosure of financial instruments. ASU 2016-01 is effective for fiscal years, and interim periods
within those years, beginning after December 15, 2017, and early adoption is not permitted. Accordingly, the standard is effective
for us on September 1, 2018. We are currently evaluating the impact that the standard will have on our consolidated financial statements.
Leases
:
In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) (“ASU 2016-2”), which provides guidance on lease
amendments to the FASB Accounting Standard Codification. This ASU will be effective for us beginning in May 1, 2019. We are currently
in the process of evaluating the impact of the adoption of ASU 2016-2on our consolidated financial statements.
Stock-based Compensation
: In
March 2016, the FASB issued ASU 2016-09, Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based
Payment Accounting (ASU 2016-09). ASU 2016-09 changes how companies account for certain aspects of stock-based awards to employees,
including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in
the statement of cash flows. ASU 2016-09 is effective for us in the first quarter of 2018, and earlier adoption is permitted.
We are still evaluating the effect that this guidance will have on our consolidated financial statements and related disclosures.
Financial Instruments
- Credit Losses:
In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): The amendments
in this Update require a financial asset (or a group of financial assets) measured at amortized cost basis to be presented at the
net amount expected to be collected. The amendments broaden the information that an entity must consider in developing its expected
credit loss estimate for assets measured either collectively or individually. The use of forecasted information incorporates more
timely information in the estimate of expected credit loss, which will be more decision useful to users of the financial statements.
ASU 2016-13 is effective for the Company for fiscal years beginning after December 15, 2019, including interim periods within those
fiscal years. Early adoption is allowed as of the fiscal years beginning after December 15, 2018, including interim periods within
those fiscal years. The Company is still evaluating the effect that this guidance will have on the Company’s consolidated
financial statements and related disclosures.
Statement of
Cash Flows:
In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): The amendments in this Update
apply to all entities, including both business entities and not-for-profit entities that are required to present a statement of
cash flows under Topic 230. The amendments in this Update provide guidance on the following eight specific cash flow issues. The
amendments are an improvement to GAAP because they provide guidance for each of the eight issues, thereby reducing the current
and potential future diversity in practice described above. ASU 2016-15 is effective for the Company for fiscal years beginning
after December 15, 2017, including interim periods within those fiscal years. Early adoption is permitted, including adoption in
an interim period. The Company is still evaluating the effect that this guidance will have on the Company’s consolidated
financial statements and related disclosures.
In November 2016, the FASB issued ASU No.
2016-18, Statement of Cash Flows (Topic 230): “Restricted Cash”(“ASU 2016-18”). ASU 2016-18 requires
that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally
described as restricted cash or restricted cash equivalents. ASU 2016-18 will become effective for us beginning April 1, 2018,
or fiscal 2019. ASU 2016-18 is required to be applied retrospectively. Upon the adoption, amounts described as restricted cash
will be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period amounts shown on the
statements of cash flows.
The amendments apply to all organizations that present a classified
balance sheet. For public companies, the amendments are effective for financial statements issued for annual periods beginning
after December 15, 2016, and interim periods within those annual periods. For private companies, not-for-profit organizations,
and employee benefit plans, the amendments are effective for financial statements issued for annual periods beginning after December
15, 2017, and interim periods within annual periods beginning after December 15, 2018.
3.
|
GOING CONCERN UNCERTAINTIES
|
These consolidated financial statements
have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and
the discharge of liabilities in the normal course of business for the foreseeable future.
For the year ended December 31, 2016, the
Company reported a net loss of $798,637 and working capital deficit of $412,635. The Company had an accumulated deficit of $533,282
as of December 31, 2016 due to the fact that the Company incurred losses during the year ended December 31, 2016.
The continuation of the Company as a going
concern is dependent upon improving the profitability and the continuing financial support from its stockholders or other capital
sources. Management believes that the continuing financial support from the existing shareholders or external debt financing will
provide the additional cash to meet the Company’s obligations as they become due.
These consolidation financial statements
do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the
amounts and classification of liabilities that may result from the outcome of the Company’s ability to continue as a going
concern.
|
4.
|
CASH
AND AVAILABLE FOR SALE SECURITIES
|
|
|
Estimated
Fair Value
|
|
|
|
As of
December 31, 2016
|
|
|
As of
December 31, 2015
|
|
Cash and cash equivalents:
|
|
|
|
|
|
|
|
|
Cash
|
|
$
|
363,015
|
|
|
$
|
471,907
|
|
Short-term investments:
|
|
|
|
|
|
|
|
|
Quoted shares in Malaysia
|
|
|
12,660
|
|
|
|
40,979
|
|
Total short-term investments
|
|
|
12,660
|
|
|
|
40,979
|
|
Total cash, and cash equivalents, and short-term investments
|
|
$
|
375,675
|
|
|
$
|
512,886
|
|
Realized gains and realized losses were
not significant for either of the years ended December 31, 2016 or 2015. As of December 31, 2016 unrealized loss
on investment was $2,745. As of December 31, 2015, unrealized gain on investments was $820.
During the years ended December 31,
2016 and 2015, the Company did not recognize any impairment charges on outstanding investments. As of December 31, 2016, the
Company did not consider any of its investments to be other-than-temporarily impaired.
5.
|
OTHER RECEIVABLES, NET
|
Other receivables consist of the following:
|
|
|
|
As of
December 31,
2016
|
|
|
As of
December 31,
2015
|
|
|
|
|
|
|
|
|
|
|
Deposits
|
|
(1)
|
|
$
|
746,386
|
|
|
$
|
2,175
|
|
Prepayment
|
|
(2)
|
|
|
1,165
|
|
|
|
-
|
|
|
|
|
|
$
|
747,551
|
|
|
$
|
2,175
|
|
|
(1)
|
Deposits represented payments for telephone,
electricity, water, maintenance fee, rental & utility and parking.
|
|
(2)
|
Prepayment represented prepayments for maintenance fee,
sinking fund and fire assurance.
|
|
6.
|
PROPERTY
AND EQUIPMENT, NET
|
Property and equipment, net consist of the following:
|
|
As of
December
31, 2016
|
|
|
As of
December
31, 2015
|
|
|
|
|
|
|
|
|
Leasehold building
|
|
$
|
70,543
|
|
|
$
|
73,741
|
|
Computer and software
|
|
|
3,979
|
|
|
|
1,024
|
|
Furniture and fixtures
|
|
|
505
|
|
|
|
22,254
|
|
Leasehold improvement
|
|
|
-
|
|
|
|
4,971
|
|
|
|
|
75,027
|
|
|
|
101,990
|
|
|
|
|
|
|
|
|
|
|
Less: Accumulated depreciation
|
|
|
(14,963
|
)
|
|
|
(15,519
|
)
|
|
|
|
|
|
|
|
|
|
Balance at end of year
|
|
$
|
60,064
|
|
|
$
|
86,471
|
|
Depreciation expenses charged to the statements of operations
with the average exchange rate for the year ended December 31, 2016 and the year ended December 31, 2015 were $2,186 and $3,823,
respectively.
|
7.
|
OTHER
PAYABLES AND ACCRUALS
|
|
|
As of
December
31, 2016
|
|
|
As of
December
31, 2015
|
|
|
|
|
|
|
|
|
Other payables
|
|
$
|
2,440,117
|
|
|
$
|
903,654
|
|
Accruals
|
|
|
4,454
|
|
|
|
3,287
|
|
|
|
$
|
2,444,571
|
|
|
$
|
906,941
|
|
Provision for income taxes consisted of the
following:
|
|
For the year ended
|
|
|
|
December
31, 2016
|
|
|
December
31, 2015
|
|
|
|
|
|
|
|
|
Current:
|
|
|
|
|
|
|
|
|
Provision for Malaysian income tax
|
|
$
|
725
|
|
|
$
|
121
|
|
Provision for U.S. income tax
|
|
|
-
|
|
|
|
-
|
|
Deferred:
|
|
|
|
|
|
|
|
|
Provision for Malaysian income tax
|
|
|
-
|
|
|
|
-
|
|
Provision for U.S. income tax
|
|
|
|
|
|
|
|
|
|
|
$
|
725
|
|
|
$
|
121
|
|
Malaysia
Malaysia HWGG recorded a loss before income tax of $583,804
and $171,205 for the year ended December 31, 2016 and 2015, respectively. A reconciliation of the provision for income taxes
with amounts determined by applying the Malaysian income tax rate of 24% and 25% for the years ended December 31, 2016 and
2015, respectively, to income before income taxes are as follows:
|
|
For the year ended
|
|
|
|
December
31, 2016
|
|
|
December
31, 2015
|
|
|
|
|
|
|
|
|
Profit (loss) before income tax
|
|
$
|
(583,804
|
)
|
|
$
|
(171,205
|
)
|
Permanent difference
|
|
|
586,704
|
|
|
|
171,689
|
|
Taxable income
|
|
$
|
2,900
|
|
|
$
|
484
|
|
Malaysian income tax rate
|
|
|
24
|
%
|
|
|
25
|
%
|
Current tax expenses
|
|
$
|
725
|
|
|
$
|
121
|
|
Less: Valuation allowance
|
|
|
|
|
|
|
-
|
|
Income tax expenses
|
|
$
|
725
|
|
|
$
|
121
|
|
United States of America
HWGG is a company incorporated in State
of Nevada and recorded a loss before income tax of $208,830 and nil for the year ended December 31, 2016 and 2015, respectively.
A reconciliation of the provision for income taxes with amounts determined by applying the United States Federal income tax rate
of 34% for the years ended December 31, 2016 and 2015, respectively, to income before income taxes are as follows:
|
|
For the year ended
|
|
|
|
December
31, 2016
|
|
|
December
31, 2015
|
|
|
|
|
|
|
|
|
Profit (loss) before income tax
|
|
$
|
(208,830
|
)
|
|
$
|
-
|
|
Permanent difference
|
|
|
208,830
|
|
|
|
-
|
|
Taxable income
|
|
$
|
-
|
|
|
$
|
-
|
|
Malaysian income tax rate
|
|
|
34
|
%
|
|
|
34
|
%
|
Current tax expenses
|
|
$
|
-
|
|
|
$
|
-
|
|
Less: Valuation allowance
|
|
|
|
|
|
|
-
|
|
Income tax expenses
|
|
$
|
-
|
|
|
$
|
-
|
|
No deferred tax has been provided as there
are no material temporary differences arising during the year ended December 31, 2016 and 2015.
|
9.
|
RELATED
PARTY TRANSACTIONS
|
As of December 31, 2016 and 2015, amounts due from related parties
were as follows:
|
|
As of
December
31, 2016
|
|
|
As of
December
31, 2015
|
|
|
|
|
|
|
|
|
Ho Wah Genting Berhad
|
|
$
|
544,096
|
|
|
$
|
2,573
|
|
Vitaxel SDN BHD
|
|
|
585,619
|
|
|
|
233,100
|
|
Vitaxel Online Mall SDN BHD
|
|
|
22,299
|
|
|
|
606
|
|
|
|
$
|
1,152,014
|
|
|
$
|
236,279
|
|
The amounts due from related companies
are unsecured, interest-free and repayable on demand.
As of December 31, 2016 and 2015, amounts
due from directors were as follows:
|
|
As of
December
31, 2016
|
|
|
As of
December
31, 2015
|
|
|
|
|
|
|
|
|
Dato' Lim Boon Hui
|
|
$
|
-
|
|
|
$
|
578,358
|
|
Lim Chun Hoo
|
|
|
23,503
|
|
|
|
|
|
|
|
$
|
23,503
|
|
|
$
|
578,358
|
|
The amounts due from a director were unsecured,
interest-free and repayable on demand.
As of December 31, 2016 and 2015, amounts due to directors were
as follows:
|
|
As of
December
31, 2016
|
|
|
As of
December
31, 2015
|
|
|
|
|
|
|
|
|
Gavin Lim Chun Hoo
|
|
$
|
-
|
|
|
$
|
7,718
|
|
Liew Jenn Lim
|
|
|
-
|
|
|
|
18
|
|
|
|
$
|
-
|
|
|
$
|
7,736
|
|
Gavin Lim Chun Hoo and Liew Jenn Lim are
directors of Beedo. The amounts due to directors were unsecured, interest-free and repayable on demand.
As of December 31, 2016 and 2015, amounts
due to related parties were as follows:
|
|
As of
December
31, 2016
|
|
|
As of
December
31, 2015
|
|
|
|
|
|
|
|
|
Dato' Lim Boon Hui
|
|
$
|
208,830
|
|
|
$
|
-
|
|
Beedo SDN BHD
|
|
|
57,977
|
|
|
|
-
|
|
|
|
$
|
266,807
|
|
|
$
|
-
|
|
During the years ended December
31, 2016 and 2015, the Company recognized rental income of $5,801 and $6,147 respectively from Ho Wah Genting Berhad (“HWGB”). Our
president, Dato’ Lim Hui Boon, is also the Group President and shareholder of HWGB. In addition,
two sons of Dato’ Lim Hui Boon are directors of HWGB.
On April 1, 2016, we entered into the Travel
and Junket Service Contract with our partner, Ho Wah Genting Holiday SDN BHD (“HWGH”), pursuant to which HWGH shall
render HWGG tour agency services, including but not limited to providing HWGG with tour packages, hotel bookings, and transportation
arrangements to offer HWGG’s members and to share in junket operation profits. Lim Chun Hoo, our Chief Executive Officer,
Chief Financial Officer, Chief Operating Officer and director, is the Executive Director of HWGH. In addition, two sons of Dato
Lim Hui Boon, our president, are the directors of HWGB, the parent company of HWGH. During the year ended December 31, 2016, the
Company recognized junket commission revenue of $16,730 from HWGH.
As of December 31, 2016, HWGB owed the Company $544,096. Such
debt is unsecured, interest-free and repayable on demand.
During the period ending December 31, 2016, Dato Lim Hui Boon,
our President, loaned $208,830 to the Company. Such debt is unsecured, interest-free and repayable on demand.
During the period ending December 31, 2016, the Company loaned
$23,503 to Lim Chun Hoo, our Chief Executive Officer, Chief Financial Officer, Chief Operating Officer and director. Such debt
is unsecured, interest-free and repayable on demand.
During the period ending December 31, 2016, the Company loaned
$585,619 to Vitaxel Sdn Bhd, a Malaysian corporation (“Vitaxel”) and $22,299 to Vitaxel Online Mall Sdn Bhd, a Malaysian
corporation (“Vionmall”). Such debt is unsecured, interest-free and repayable on demand. Vitaxel and Vionmall are wholly
owned subsidiaries of Vitaxel Group Limited, a Nevada corporation. Lim Chun Hoo, our Chief Executive Officer, Chief Financial Officer,
Chief Operating Officer and director, was a director of Vitaxel Group Limited, Vionmall and Vitaxel’s parent company, until
his resignation on March 31, 2017. In addition, Leong Yee Ming, our former Chief Financial Officer, Chief Operating Officer and
director, is a director and Chief Executive Officer of Vitaxel Group Limited.
From January 1, 2016 to August 12, 2016,
the Company, through its subsidiary Beedo recognized revenue from the provision of information technology services of $9,668 from
HWGH and $55,545 from Vitaxel. Beedo was disposed of by the Company after August 12, 2016 and stopped earning revenue from the
provision of information technology services.
During the year ended December 31, 2016
and 2015, the recognized junket commission revenue of the Company from HWGH was $16,730 and $nil, respectively.
During the year ended December 31, 2015,
the Company recognized revenue of $18,263 from the provision of information technology services from HWGH and $640 from HWGB.
|
10.
|
EARNINGS
(LOSS) PER SHARE
|
The Company has adopted ASC Topic No. 260,
“Earnings
Per Share,”
(“EPS”) which requires presentation of basic and diluted EPS on the face of the income statement,
and requires a reconciliation of the numerator and denominator of the basic EPS computation to the numerator and denominator of
the diluted EPS computation. In the accompanying financial statements, basic earnings (loss) per share is computed by dividing
net income (loss) by the weighted average number of shares of common stock outstanding during the year.
The following table sets forth the computation
of basic and diluted earnings per share:
|
|
For the years ended
|
|
|
|
December
31, 2016
|
|
|
December
31, 2015
|
|
|
|
|
|
|
|
|
Net loss applicable to common shares
|
|
$
|
(798,637
|
)
|
|
$
|
(160,080
|
)
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding (Basic)
|
|
|
830,886,025
|
|
|
|
200,375,532
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding (Diluted)
|
|
|
830,886,025
|
|
|
|
200,375,532
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(0.00
|
)
|
|
$
|
(0.00
|
)
|
The Company has no potentially dilutive
securities, such as options or warrants, currently issued and outstanding.
The Company’s operating businesses
are organized based on the business activities from which the Company earns revenues. In June 2015, the Company acquired Beedo.
After the acquisition was consummated, Beedo engaged in the provision of information technology services to generate revenue for
the Company until disposal.
Our reported segments for the years ended
December 31, 2016 and 2015 are described as follows:
Investment property holding
The Company generates rental income from
the leasing out of its leasehold building.
Information technology services
The Company generates revenue from
the provision of information technology services. This line of business commenced in the year 2015. This line of business
ended on August 12, 2016 when the Company completed the disposal of its subsidiary, Beedo.
Junket operations
The Company generates revenue from junket operations
with commissions receivable from Ho Wah Genting Holiday SDN BHD. This line of business commenced in the year 2016.
Others
These comprise of general operating and
administrative expenses, and other income/expenses not directly attributable to the sources of revenue of the Company for the years
ended December 31, 2016 and 2015.
The Company’s reportable segments
are managed separately based on the fundamental differences in their operations.
Information with
respect to these reportable business segments for the years ended December 31, 2016 and 2015 was as follows:
|
|
For the years ended
|
|
|
|
December
31, 2016
|
|
|
December
31, 2015
|
|
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
Investment property holding
|
|
$
|
5,801
|
|
|
$
|
6,147
|
|
Information technology services
|
|
|
74,291
|
|
|
|
28,872
|
|
Junket operations
|
|
|
16,730
|
|
|
|
-
|
|
Others
|
|
|
-
|
|
|
|
-
|
|
|
|
$
|
96,822
|
|
|
$
|
35,019
|
|
|
|
|
|
|
|
|
|
|
Cost of revenues:
|
|
|
|
|
|
|
|
|
Investment property holding
|
|
$
|
-
|
|
|
$
|
-
|
|
Information technology services
|
|
|
14,586
|
|
|
|
10,194
|
|
Junket operations
|
|
|
5,474
|
|
|
|
-
|
|
Others
|
|
|
-
|
|
|
|
-
|
|
|
|
$
|
20,060
|
|
|
$
|
10,194
|
|
|
|
|
|
|
|
|
|
|
Depreciation:
|
|
|
|
|
|
|
|
|
Investment property holding
|
|
$
|
1,411
|
|
|
$
|
1,621
|
|
Information technology services
|
|
|
-
|
|
|
|
-
|
|
Junket operations
|
|
|
-
|
|
|
|
-
|
|
Others
|
|
|
3,909
|
|
|
|
2,202
|
|
|
|
$
|
5,320
|
|
|
$
|
3,823
|
|
|
|
|
|
|
|
|
|
|
Net income (loss):
|
|
|
|
|
|
|
|
|
Investment property holding
|
|
$
|
4,390
|
|
|
$
|
4,526
|
|
Information technology services
|
|
|
59,705
|
|
|
|
18,678
|
|
Junket operations
|
|
|
11,256
|
|
|
|
-
|
|
Others
|
|
|
(885,940
|
)
|
|
|
(194,530
|
)
|
|
|
$
|
(810,589
|
)
|
|
$
|
(171,326
|
)
|
|
|
December 31, 2016
|
|
|
|
Investment
property
holding
|
|
|
Information
technology
services
|
|
|
Junket
operation
|
|
|
Others
|
|
|
Total
|
|
Identifiable long-lived assets, net
|
|
$
|
56,317
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
3,747
|
|
|
$
|
60,064
|
|
|
|
December 31, 2015
|
|
|
|
Investment
property
holding
|
|
|
Information
technology
services
|
|
|
Junket
operation
|
|
|
Others
|
|
|
Total
|
|
Identifiable long-lived assets, net
|
|
$
|
60,286
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
26,185
|
|
|
$
|
86,471
|
|
The Company does not allocate any administrative
expenses and other income/expenses to its reportable segments because these activities are managed at a corporate level. In addition,
the specified amounts for income tax expense are not included in the measure of segment profit or loss reviewed by the chief operating
decision maker and these specified amounts are not regularly provided to the chief operating decision maker. Therefore, the Company
has not disclosed income tax expense for each reportable segment.
Asset information
by reportable segment is not reported to or reviewed by the chief operating decision maker and, therefore, the Company has not
disclosed asset information for each reportable segment. The Company’s operations are located in Malaysia. All revenues are
derived from customers in Malaysia. All of the Company’s operating assets are located in Malaysia.
|
12.
|
FAIR
VALUE MEASUREMENTS
|
Fair Value of Financial Assets
The Company’s financial assets measured
at fair value on a recurring basis subject to disclosure requirements at December 31, 2016 and 2015 were as follows:
|
|
|
|
|
Quoted Prices
|
|
|
|
|
|
|
|
|
|
|
|
|
in Active
|
|
|
Significant
|
|
|
|
|
|
|
|
|
|
Markets for
|
|
|
Other
|
|
|
Significant
|
|
|
|
Balance at
|
|
|
Identical
|
|
|
Observable
|
|
|
Unobserved
|
|
|
|
December 31,
|
|
|
Assets
|
|
|
Inputs
|
|
|
Inputs
|
|
|
|
2016
|
|
|
(Level 1)
|
|
|
(Level 2)
|
|
|
(Level 3)
|
|
Short-term investments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quoted shares in Malaysia
|
|
$
|
12,660
|
|
|
$
|
12,660
|
|
|
$
|
-
|
|
|
$
|
-
|
|
Total short-term investments
|
|
|
12,660
|
|
|
|
12,660
|
|
|
|
-
|
|
|
|
-
|
|
Total financial assets measured at fair value
|
|
$
|
12,660
|
|
|
$
|
12,660
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
|
|
|
|
Quoted Prices
|
|
|
|
|
|
|
|
|
|
|
|
|
in Active
|
|
|
Significant
|
|
|
|
|
|
|
|
|
|
Markets for
|
|
|
Other
|
|
|
Significant
|
|
|
|
Balance at
|
|
|
Identical
|
|
|
Observable
|
|
|
Unobserved
|
|
|
|
December 31,
|
|
|
Assets
|
|
|
Inputs
|
|
|
Inputs
|
|
|
|
2015
|
|
|
(Level 1)
|
|
|
(Level 2)
|
|
|
(Level 3)
|
|
Short-term investments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quoted shares in Malaysia
|
|
$
|
40,979
|
|
|
$
|
40,979
|
|
|
$
|
-
|
|
|
$
|
-
|
|
Total short-term investments
|
|
|
40,979
|
|
|
|
40,979
|
|
|
|
-
|
|
|
|
-
|
|
Total financial assets measured at fair value
|
|
$
|
40,979
|
|
|
$
|
40,979
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
13.
|
DISPOSAL OF SUBSIDIARY AND LOSS FROM DISCONTINUED OPERATIONS
|
On June 25, 2015 the Company acquired
65% of the equity interests of Beedo, a Malaysian company founded by Lim Chun Hoo, our Chief Executive Officer, Chief
Financial Officer, Chief Operating Officer and director, who served as its director since May 2014. On July 7, 2015,
Beedo increased its number of authorized shares from 2,500 the Company acquired an additional 508,375 shares in Beedo for
MYR 508,375 ($133,403) and its equity interest in Beedo became 51%.
On August 12, 2016, the Company completed
the disposal of its subsidiary, Beedo, by wholly transferring the shares it owns to a related party, Dato’ Lim Hui Boon,
for the consideration of $118,881 (RM 510,000).
Summarized financial information for discontinued
operations is shown in the tables below.
|
|
For the year ended
December
31,
|
|
|
|
2016
|
|
|
2015
|
|
Total revenue
|
|
$
|
74,291
|
|
|
|
$ 28,872
|
|
Income (loss) from discontinued operations
|
|
$
|
(24,392
|
)
|
|
$
|
(22,951
|
)
|
Gain on disposal
|
|
$
|
7,397
|
|
|
$
|
-
|
|
Total gain (loss) from discontinued operations, before income taxes
|
|
$
|
(16,995
|
)
|
|
$
|
(22,951
|
)
|
Provision for income taxes
|
|
$
|
-
|
|
|
$
|
-
|
|
Gain (loss) from discontinued operations, net of tax
|
|
$
|
(16,995
|
)
|
|
$
|
(22,951
|
)
|
As of the date of disposal, Beedo had net assets of $194,726, and non-controlling interests of $83,242. The
Company recognized a gain on disposal of $7,397 accordingly.
|
|
As of
|
|
|
As of
|
|
|
|
December 31,
|
|
|
December 31,
|
|
|
|
2016
|
|
|
2015
|
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT ASSETS
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
-
|
|
|
$
|
8,900
|
|
Other receivables, deposits and prepayment
|
|
|
-
|
|
|
|
1,888
|
|
Other current assets
|
|
|
-
|
|
|
|
179,487
|
|
Total Current Assets
|
|
|
-
|
|
|
|
190,275
|
|
|
|
|
|
|
|
|
|
|
PROPERTY AND EQUIPMENT, NET
|
|
|
-
|
|
|
|
24,596
|
|
TOTAL ASSETS
|
|
$
|
-
|
|
|
$
|
214,871
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
|
|
|
|
Other payables and accrued expenses
|
|
$
|
-
|
|
|
$
|
1,200
|
|
Amount due to directors
|
|
|
-
|
|
|
|
7,736
|
|
Total Liabilities
|
|
|
-
|
|
|
|
8,936
|
|
Effective March 1, 2017, Mr. Leong Yee
Ming resigned as a director and as Chief Financial Officer and Chief Operation Officer of the Company.
Effective March 1, 2017, immediately following
Mr. Leong Yee Ming’s resignation, the Company appointed Mr. Lim Chun Hoo as Chief Financial Officer and Chief Operation Officer
of the Company.
Effective March 1, 2017, immediately following
Mr. Leong Yee Ming’s resignation, the board of directors of the Company increased the number of directors comprising the
Board from the previous level of three directors to four directors and appointed Mr. Liew Jenn Lim and Mr. Mok Lip Bin as directors
of the Company. Neither Mr. Liew Jenn Lim nor Mr. Mok Lip Bin are independent directors under the applicable standards of the SEC
and the Nasdaq stock market.
The Company has evaluated subsequent events
from the balance sheet date through the date the financial statements were issued and determined that there are no additional
items to disclose except above mentioned matters.