ITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
You should read the following plan of operation together with our financial statements and related notes appearing elsewhere in this annual report. This plan of operation contains forward-looking statements that involve risks, uncertainties, and assumptions. The actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors.
Overview
Weyland Techs CreateApp platform is provided in fourteen languages and enables small-medium-sized businesses ("SMB") to create a mobile application ("app") without the need of technical knowledge, high investment or background in IT. The Company recognizes revenue on a pay to use subscription basis when our customers use our platform.
We believe that SMB can reach additional customers, promote their products and services and increase sales, via a simple easy to build mobile app at an affordable and cost-effective manner.
On April 8, 2017
, the Company entered into that certain Amended and Restated Software License Agreement by and between the Company and Technopreneurs Resource Centre Private Limited (the Amended License Agreement) and that certain Amended and Restated Sale and Purchase Agreement by and among the Company, Eddie Foong Wai Keong, Zhao Yongxin and Brent Suen (the Amended Purchase Agreement). The Amended Licensing Agreement continues and amends and restates Weyland Techs exclusive use of the CreateApp Platform together with any instances or variations to it and all current and future revenues and income that are a result of sales, licensing and sub-licensing agreements for an initial ten-year term, which is extendable at the Companys option for two consecutive five year periods, for a total of twenty years. The Amended Purchase Agreement provides for the purchase of a controlling interest in Technopreneurs Resource Centre Private Limited by the Company. The Amended License Agreement and Amended Purchase Agreement amends and restates the rights of the parties with respect to the (i) that certain MOU dated May 2015, and the subsequent Sale and Purchase Agreement (the Original Purchase Agreement), and (ii) the global license agreement relating to the CreateApp Platform (the Global License Agreement).
In September 2015, we completed the acquisition of rights to Technopreneurs Resource Centre Private Limiteds CreateApp Platform through the Original Licensing Agreement. Our exclusive license through the Original License Agreement has been described in our prior filings, including most recently our Annual Report on Form 10-K for the period ended December 31, 2016, filed with the SEC on March 31, 2017, as our Global Exclusive Licensing Agreement. The Amended License Agreement clarifies certain terms of our original agreement and extends the term of the license.
The original Sales and Purchase Agreement, dated May 28, 2015, was subsequently rescinded and pursuant to that rescission certain shares originally issued were canceled. The Amended Purchase Agreement reduces the amount of ownership of Technopreneurs Resource Centre Private Limited acquired to 55%, rather than 100% in order to reduce the risks related to certain operating liabilities of Technopreneurs Resource Centre Private Limited discovered during due diligence. At December 31, 2017, this Sales and Purchase Agreement has not been completed.
The above descriptions of the Amended Sale and Purchase Agreement and Amended Licensing Agreement are qualified in their entirety by reference to the forms of such documents attached as Exhibits 4.1 and 4.2 to this Current Report on Form 8-K.
On April 27, 2017
the Company announced that initial subscriptions and revenues from its South East Asian cooperation partner, MOCAAPP. Marketing and development of additional applications -- http://www.mocaapp.com/ -- continues in the Philippines through the Company's white label channel distribution.
12
According to the Department of Trade and Industry, the Philippines is home to nearly 90,000 Small and Medium businesses ("SMB") and ~900,000 MSMBs (Micro-Small-Medium-sized-Business) overall.
http://ctt.marketwire.com/?release=11G137142-001&id=11596615&type=0&url=http%3a%2f%2fwww.dti.gov.ph%2fbusinesses%2fmsmes%2fmsme-resources%2fmsme-statistics
Weyland believes that a substantial number of these businesses will ultimately choose to expand their reach through mobile commerce (m-commerce), which has been the case in the US, Europe, and North Asia.
http://ctt.marketwire.com/?release=11G137142-001&id=11596618&type=0&url=http%3a%2f%2fwww.businessinsider.com%2fmobile-commerce-shopping-trends-stats-2016-10
Concurrently, MOCAAPP indicated initial marketing and trade show efforts have begun in Vietnam. The Company believes the expansion of m-commerce in South East Asia is in the early stages and is working with their channel distributors to become the mobile on-ramp for e-commerce in the region.
http://ctt.marketwire.com/?release=11G137142-001&id=11596624&type=0&url=https%3a%2f%2fwww.jwtintelligence.com%2f2016%2f08%2fsoutheast-asias-m-commerce-revolution%2f
On May 1, 2017
, the Company signed a definitive Share Purchase Agreement with Escape Pixel, a provider of Web Development, Mobile Development, & Digital Customized Solutions, based in Singapore and Yangon Myanmar. The terms of the agreement are confidential. Following the closing of the transaction, Escape Pixel will become a wholly-owned subsidiary of the Company. At December 31, 2017, this Share Purchase Agreement has not been completed.
On May 1, 2017
, the Company signed a software development agreement with Faith United Technology LTD, a Hong Kong based software developer. Weyland Tech and Faith United are collaborating on Online-to-Offline (O2O) applications initially targeting the food service industry. Weyland Tech believes O2O solutions allow merchants to reach online buyers that are not directly served by Third Party Logistics providers (3PL) but can reach more centralized physical locations for pick-up.
On July 20, 2017
, the Company entered into an advisory agreement with TMC Prime Pte. Ltd (TMC) for the sourcing of strategic investments into the company by Southeast Asian technology companies and high net worth individuals with experience investing in technology companies TMC will commit to fund up to $10 million USD over a period of one year via direct investments.
The principals of TMC are former founders and executives of regionally based systems integrators, cloud services and mobile telephony companies.
On Jul 24, 2017
the Company announced that the Company's distribution partner in Indonesia, OAP ("OAP"), has signed an agreement to provide a stored-value 'top-up' application aimed at the 120 million adults living without access to traditional banking facilities. The application is designed to be offered via major telecommunications providers in Indonesia.
OAP has initiated a pilot program to 20 communities in Indonesia. Upon success of the pilot, OAP will offer the community application to the other 500,000 communities throughout Indonesia.
13
In Indonesia, the unbanked population, or people who do not have bank accounts, is still very large. The Financial Inclusion Index (Global FIndex) for 2014 shows that only 36 percent of adults in Indonesia have bank accounts, which means there are approximately 120 million adults categorized as unbanked. A Top-Up application enables unbanked smartphone users to purchase goods and services via their phones (e-commerce/m-commerce).
Indonesia, the fourth most populous country in the world, has seen explosive mobile phone growth alongside a burgeoning e-commerce industry segment. A smartphone boom has been fueling Indonesia's e-commerce growth. The e-commerce industry in Indonesia has grown from $12 billion in 2014 to $18 billion last year and is forecasted to touch $130 billion by 2020 as per Indonesian tech ministry spokesman, Ismail Cawidu.
On August 11, 2017
, the Company applied for uplisting to the OTC Markets Groups OTCQX Marketplace which is a higher tier market for publicly traded companies.
On Aug 29, 2017
the Company announced that its exclusive eurozone partner, Augicom S.A., has entered into a partnership with Orange Pro. As part of this agreement, Weyland Tech's CreateApp will be made available to Orange Pro clients via "la Carte Pro" program or 'Pro Card' in English.
The "Pro Card" program of Orange is a loyalty program for independent professionals and SMBs. It is believed that initial sales will begin the fourth quarter of 2017 or first quarter of 2018. Orange Pro operates under the business umbrella of Orange S.A., formerly France Télécom S.A., is a French multinational telecommunications corporation. It has 256 million customers worldwide and employs 95,000 people in France, and 59,000 elsewhere. In 2015, the group had revenues of EUR 40 billion.
Additionally, the Company has begun exploratory discussions with an eSports video aggregation operator regarding a potential partnership and the building of an online betting app for the eSports industry. Due to the high growth of the eSports sector, we anticipate that the app would be marketed worldwide and find exposure through JV's with entities such as casinos and other gambling avenues.
On April 2, 2013
, the SEC issued a Report of Investigation in which it announced that the Commission had determined not to pursue an enforcement action against Netflix, Inc. for alleged violations of Regulation Fair Disclosure, Section 13(a) of the Securities Exchange Act and Rules 13a-11 and 13a-15 thereunder, relating to the disclosure of material information selectively over social media. This report makes clear that companies can use social media outlets like Facebook and Twitter to announce key information in compliance with Regulation Fair Disclosure (Regulation FD), so long as investors have been alerted about which social media will be used to disseminate such information. Weyland Tech, Inc (Weyland Tech) is filing this 8k pursuant to that report to provide such information.
The SECs Report of Investigation provided guidance to issuers such as Weyland Tech regarding the use of social media to disclose material non-public information. In this regard, investors and others should note that we announce material financial information to our investors using our investor relations website ( http://www.weyland-tech.com/ ), SEC filings, press releases, public conference calls and webcasts. We use these channels as well as social media to communicate with our subscribers and the public about our company, our services and other issues. It is possible that the information we post on social media could be deemed to be material information. Therefore, in light of the SECs guidance, we encourage investors, the media, and others interested in our company to review the information we post on the U.S. social media channels listed below. This list may be updated from time to time on Weyland Techs investor relations website.
Weyland Tech Facebook Page (https://www.facebook.com/weylandtech)
Weyland Tech Twitter Feed (https://twitter.com/weylandtechinc)
Weyland Tech LinkedIn Page (https://linkedin.com/company/weylandtech)
Brent Suen, CEO Public Facebook Page (https://www.facebook.com/BrentSuenWEYL)
14
Brent Suen, CEO Public Twitter Feed (https://www.twitter.com/BrentSuenWEYL
On Sept. 12, 2017
OTC Markets Group Inc., operator of financial markets for 10,000 U.S. and global securities, announced the Company had qualified to trade on the OTCQX® Best Market. The Company began trading September 12, 2017 on OTCQX under the symbol "WEYL." U.S. investors can find current financial disclosure and Real-Time Level 2 quotes for the company on www.otcmarkets.com. The Company was sponsored for OTCQX by Joseph Gunnar & Co., LLC, a qualified third-party firm responsible for providing guidance on OTCQX requirements and recommending membership.
On Sep 26, 2017
announced that it has named Mr. Ghassan R. Saade as a strategic advisor for Weyland's expansion into the Middle East & Africa ("MEA").
On Oct 17, 2017
the Company announced that its food services pilot program has launched. In the pilot, announced in May, the Company is collaborating on developing Online-to-Offline ("O2O") applications initially targeting the food service industry.
With this pilot program and the platform developed with Faith United, the Company will begin to address one of the O2O opportunities in the region. The trial will involve ordering and fulfillment of frozen foods to food distributors in Hong Kong. Following the trial, Weyland plans to extend the platform to B2C by approaching restaurants, factory kitchens and foodstuff manufacturers to expand their reach to individual and business consumers.
On Oct 19, 2017
the Company announced the addition of Mr. John Lee to its board of strategic advisors.
Mr. Lee is joining Weyland as a strategic advisor on eSports initiatives. Mr. Lee currently serves as CEO and Co-founder of kek eSports, an Asia based company with backing from globally recognized game investors including Initial Capital and Bitkraft Ventures. In addition to his role at kek eSports, he currently serves as Strategic Advisor and Honorary Chairman in Asia for ESL, the world's largest eSports league. Mr. Lee previously served as the Chief Strategy Officer at GigaMedia, which was an early leader in the competitive gaming and eSports Asia market with select Asia market rights for titles such as Counter Strike Online, FIFA Online, Freestyle Basketball and Starcraft II. Earlier in his career, he was a senior associate at Softbank Venture Capital and an associate consultant at McKinsey & Company.
On Oct 31, 2017
the Company announced that it has entered into a memorandum of understanding ("MOU") with partner iAXCESS ("iAXCESS").
iAXCESS intends to utilize the Weyland Tech CreateApp platform for iAXCESS's m-Commerce app and will also provide the CreateApp platform on a white-label basis, as a branded app, to other industries in the MENA Region. This MOU lays the groundwork for the relationship by establishing the preliminary structural terms of the venture. The Company will provide additional details to fully memorialize an agreement.
On Nov 2, 2017
the Company announced that it is targeting the digital payments marketplace with a mobile wallet platform.
The Company's mobile wallet will be called AtozPay, which means "complete" pay in local languages and will be branded as AtoZ Pay in the Company's other markets as deployed. The Company is bringing on a team experienced in mobile wallet development to build the platform.
On Nov 7, 2017
the Company announced updates on the progress of its mobile wallet initiative first discussed on November 2, 2017.
15
The Company has secured the services of a complete team in Jakarta that includes developers, marketing and sales, sales support and a general manager with 22 years of experience in tech project management to build the AtozPay team. Before agreeing to build AtozPay, the group based out of Jakarta, developed a complete mobile payments solution over the course of 14 months and ultimately advanced to $100 million in top line revenue.
On Nov 9, 2017
the Company announced that its joint venture discussions with FuntaseSports Entertainment ("Funtase"), a leading provider of eSports content and fantasy sports games in South Korea, are making significant progress and the companies have reached terms for cooperation.
The Company and Funtase are also exploring near term opportunities for deploying Funtase's platform to the Company's CreateApp users as a 'white-label' app that enables daily fantasy sports for a new, younger eSports audience on a gamified platform that will differ radically from the current draft fantasy sport market offerings.
Funtase provides gamified daily fantasy draft games for the mobile and PC platforms in the Asia market based around several of the world's leading eSports titles. Funtase and Weyland are also in discussions to provide their offerings for the non-Asia international markets.
On Nov 28, 2017
the Company announced that it has signed a new reseller agreement with HandsOn Systems.
On Dec. 12, 2017
the Company announced that its upcoming mobile wallet AtozPay has entered beta testing stage.
While the AtozPay team has focused on app development, management has been working diligently to lay the corporate infrastructure to begin formal operations.
On Dec. 22, 2017
the Company announced that it has entered into a memorandum of understanding (MOU) with DDBill Payment Co., LTD, the operators of Chinas fourth largest payments gateway Dinpay (www.dinpay.com, English: us.dinpay.com).
Under the terms of the MOU, DDBill will assist Weyland in scaling its digital payments and wallet platforms and provide access to DDBills Dinpay China payments gateway.
On December 28, 2017
the Company announced that it has entered into a memorandum of understanding with TKS Ventures (dba Tokes Platform) to bring blockchain technology to Weylands platforms.
Under the terms of the memorandum, TKS and Weylands final agreement will support the purposes of:
(1) Applying and utilizing blockchain technology for payment and banking layer solutions in the unbanked demographic prevalent in Weyland's SE Asia markets;
(2) Jointly developing logistics and fulfillment solutions via the blockchain that allows for more secure tracking, compliance of transactions along the supply chain in various industries;
(3) Combining WEYL's current mobile marketplace solutions which include e-wallet and other fiat currency-based payment services with TKSs Merchant Gateway services facilitating a two-way conversion of paper currency in jurisdictions where that is allowed; and
(4) Expanding the use of the TKS cryptocurrency into various non-cannabis industry applications by virtue of Weyland's other payment solutions.
16
Plan of Operations
In addition to Weyland Techs focus on the ASEAN and pan-Asia markets, we have business cooperation partners with whom we develop the EU and North American markets. The CreateApp platform is offered in fourteen languages and enables SMB to create a mobile application ("app") without the need of technical knowledge, high investment and background in IT. The Company recognizes revenue on a pay to use subscription basis when our customers use our platform.
SMB can increase sales, reach more customers and promote their products and services via a simple easy to build mobile app at an affordable and cost-effective manner.
The Company believes that the strategic Cooperation agreements that were structured in late 2015, 2016 and early 2017, represent a significantly large addressable market opportunity allowing the company to generate sales and profits in a scalable manner, grow the Company's business and enhance shareholder value.
Given the nature of DIY mobile apps ("apps"), and the primary target market of SMB, a typical go-to-market strategy would have direct sales force or resellers approach SMB directly to drive revenue.
Over the past two years, the Company has evolved this model with three distinct market paths to drive recurring revenue sales. We currently do not sell software licenses and instead generate revenue through our Platform as a Service model:
A) Strategic Cooperation agreements in countries/regions where our partners are responsible for targeting SMB either through an installed base of customers or groups of Direct Sellers with a sales force encompassing SMB as end customers.
B) Enterprise Solutions where large retailers (hypermarket chains, mall owners, brand owners with company-owned and franchise stores) adopt a 'Master App' on a white-label basis, hosted at a 3rd party regional Hosting or Data Center facility.
C) Digital Wallet or e-Wallet a digital financial services business, a distinguishing characteristic of GSEA compared to the United States is the substantially lower percentage of the population with bank accounts, credit cards, or debit cards. This creates the need for alternative payment methods, specifically e-wallets. GSEA is poised for its own payments transformation in much the same way that China has shifted to online payments, according to IDC. Online payments in GSEA is divided into four broad payment modes: e-wallets, such as our AtoZPay platform, credit cards, debit cards and online banking. Of these, the e-wallet mode is expected to grow the fastest over the next five years, according to IDC. Drivers for GSEAs e-wallet industry include the mismatch between internet penetration and banking penetration, which creates a structural opportunity for e-wallets; the increasing integration of e-wallets with use cases such as online games and e-commerce; and the opportunity to offer broader digital financial services using e-wallets as a foundation.
With the above strategy, we believe that the Company has been able to maintain a lower capital expenditure base due to the 'level-two' customer support vs. 'level-one' customer support, smaller sales and marketing teams, and the need to provide hosting services.
We note that level- one is where our partner/reseller supports the end customers and level-two is where we support the partner/reseller on training and technical support. The number of customer support people that the partner/resellers has is significantly higher and more costly to maintain. We have a small team of customer support to train/provide technical guidance to the partner/resellers team leaders which they then use as a baseplate to service larger end-user base. Smaller companies are unable to provide level-one support unless they bring on a major cost center and charge for it. We do not.
17
The Company recognizes revenue on a pay to use subscription basis when our customers use our platform.
For the territories licensed to our distributors and on a white label basis, we derive royalty income from the end user use of our platform on a white label basis.
Need for Additional Capital
To become profitable and competitive, and execute strategic transactions, we may have to raise additional capital. If we are unable to raise additional equity capital to develop our business and continue earning revenues, we might have to suspend or cease operations and our investors may lose their investment.
We have no assurance that future financings will be available to us on acceptable terms. If financing is not available on satisfactory terms, we may be unable to continue, develop, or expand our operations. Equity financing could result in additional dilution to existing shareholders.
For the Fiscal Year Ended December 31, 2017
Liquidity and Capital Resources
On December 31, 2017, we had working capital of $2,268,794 compared with a working capital of $1,217,947 on December 31, 2016. The increase in working capital is due to deposits paid for the development of our AtoZ digital wallet of $ 1,754,333 and the payments for software development in 2017 of $ 1,485,597. Net cash utilised from operation used ($332,071) in the twelve months ended December 31, 2017. Financing activities provided $384,546 in the twelve months ended December 31, 2017.
We expect to continue utilizing our personnel in Greater Asia, including ASEAN and India for servicing our customers. In order to accelerate the growth of the Company, we will also consider raising additional funding from investors.
We may not have enough working capital to complete our plan of operations. If it turns out that we have not raised enough capital to complete our anticipated business development, we will use our best efforts to raise additional funds from private placements or loans. There is no assurance that we will raise additional capital in the future or that future financings will be available to us on acceptable terms. If we require additional capital and are unable to raise it, we may have to suspend or cease operations.
Revenue Recognition
Weyland Techs CreateApp platform, offered as a Platform as a Service (PaaS), enables small-medium-sized businesses ("SMB) to create a mobile application ("app") without the need of technical knowledge, high investment or background in IT. The Company recognizes revenue on a pay to use subscription basis when our customers use our platform.
For the territories licensed to our distributors and on a white label basis, we derive royalty income from the end user use of our platform on a white label basis.
On September 1, 2015, Weyland Tech acquired the exclusive proprietary rights to the CreateApp M-commerce platform from Technopreneurs Resource Centre Private Limited, a Singapore Limited company ("TRC") which was satisfied by the issuance of shares in the Company in exchange for a Global Exclusive Licensing agreement. Weyland Tech, owns the rights to the 'CreateApp mobile applications ("apps") platform and have also registered the
www.createapp.com
domain name.
18
Results of Operation for the Fiscal Year ended December 31, 2017
Service Revenue
Service revenues were $ 15,578,171 and $12,942,353 for the twelve months ended December 31, 2017 and 2016, respectively. The increase is due to a push for market share for the CreateApp platform during 2017 in highly competitive emerging markets with reduced price points, as well as new subscriptions sold to existing customers and subscriptions sold directly to new customers.
Cost of Service
Cost of service was $11,267,879 and $7,817,973 for the twelve months ended December 31, 2017 and 2016, respectively. The increase reflects cost associated with an increase in our Service revenues from growth in clients served.
Other income comprise royalty fee income received from our Cooperation agreements for white label use of our CreateApp platform of $23,625 for the twelve months ended December 31, 2017 (2016: $181,391).
Operating Expenses
General and administrative: General and administrative expenses were $1,937,483 and $988,686 for the year ended December 31, 2017 and 2016, respectively. The increase reflects additional headcount to strengthen our management team hired during last quarter of 2016 as well as legal and professional costs in connection with our on-going shareholder dispute. Included in General and administrative expenses was Amortization of development cots capitalized of $351,933 (2016: $351,933)
Research and development written off was $1,889,304 during year 2017 (2016: $2,928,947).
Stock-based compensation
Stock-based compensation expenses for the twelve months ended December 31, 2017 was $ 388,650. (2016: Nil)
Net Income
The Company had a net loss of $74,282 for the twelve months ended December 31, 2017 as compared to a net profit $566,948 for the year ended December 31, 2016. The decrease in the net income is due to increase in legal and professional costs in connection with our on-going shareholder dispute, a lower margin being achieved as a result of targeting market share from second quarter in highly competitive emerging markets with reduced price points and recognition of Stock-based compensation expenses of $388,650 and a reversal of deferred tax benefits of $ 229,479.
Off-Balance Sheet Arrangements
We have no off-balance sheet arrangements.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
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WEYLAND TECH INC.
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INDEX TO FINANCIAL STATEMENTS
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Page
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Reports of Independent Registered Public Accounting Firms
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F-1
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Consolidated Balance Sheets at December 31, 2017 and 2016
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F-2
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Consolidated Statements of Operations for year ended December 31, 2017
and 2016
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F-3
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Consolidated Statements of Cash Flows for the year ended December 31, 2017 and 2016
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F-4
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Consolidated Statements of Stockholders' Equity for the year ended December 31, 2017 and 2016
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F-5
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Notes to Consolidated Financial Statements
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F-6
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20
Report of Independent Registered Public Accounting Firm
To the Board of Directors and Stockholders of Weyland Tech Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Weyland Tech Inc. (the Company) as of December 31, 2017 and 2016, and the related consolidated statements of operations and comprehensive loss, stockholders equity and cash flows for each of the two years in the period ended December 31, 2017, and the related notes (collectively referred to as the "financial statements"). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2017 and 2016, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2017 in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
/s/ Centurion ZD CPA Ltd.
Centurion ZD CPA Ltd.
Hong Kong
April 6, 2018
We have served as the Companys auditor since 2012
F-1
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WEYLAND TECH INC.
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Consolidated Balance Sheets
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December 31
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December 31
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ASSETS
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2017
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2016
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Non-current assets
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Investment in joint venture
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$
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-
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$
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-
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Intangible assets, net
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982,131
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1,334,064
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Total non-current assets
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982,131
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1,334,064
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Current assets
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Accounts receivables
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-
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-
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Prepayment, deposit and other receivables
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3,258,931
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828,411
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Deferred tax assets
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-
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229,479
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Cash and cash equivalents
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1,056,399
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1,003,924
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Total current assets
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4,315,330
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2,061,814
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Total assets
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$
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5,297,461
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$
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3,395,878
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LIABILITIES AND STOCKHOLDERS' EQUITY
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Current liabilities
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Accounts payable
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18,000
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652,330
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Accruals and other payables
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257,508
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191,537
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Stock subscription payables
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1,771,028
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-
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Total current liabilities
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2,046,536
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843,867
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Total liabilities
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2,046,536
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843,867
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STOCKHOLDERS' EQUITY
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Common stock, $0.0001 par value,
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250,000,000 shares authorized,
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23,460,628 and 20,778,128 shares issued and outstanding as of December 31, 2017 and 2016, respectively
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2,346
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2,078
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Additional paid-in capital
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40,221,873
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39,448,945
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Accumulated deficit brought forward
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(36,973,294)
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(36,899,012)
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Total stockholders equity
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3,250,925
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2,552,011
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Total liabilities and stockholders' equity
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$
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5,297,461
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$
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3,395,878
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The accompanying notes are an integral part of these financial statements.
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F-2
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WEYLAND TECH INC.
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Consolidated Statements of Operations
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For The Years Ended December 31,
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2017
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2016
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Service Revenue
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$
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15,578,171
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$
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12,942,353
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Cost of Service
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11,267,879
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7,817,973
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Gross Profit
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|
4,310,292
|
|
5,124,380
|
|
|
|
|
|
|
|
|
Other Income
|
|
|
23,625
|
|
181,391
|
Gross Income
|
|
|
4,333,917
|
|
5,305,771
|
|
|
|
|
|
|
|
|
Operating Expenses
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
351,933
|
|
351,933
|
|
Bad debt provision
|
|
|
-
|
|
698,736
|
|
Research and development
|
|
|
1,889,304
|
|
2,928,947
|
|
General and administrative
|
|
|
1,937,483
|
|
988,686
|
Total Operating Expenses
|
|
|
4,178,720
|
|
4,968,302
|
|
|
|
|
|
|
|
|
Profit from Operations
|
|
|
155,197
|
|
337,469
|
|
|
|
|
|
|
|
|
Income tax (expense)/ benefits
|
|
|
(229,479)
|
|
229,479
|
Net (Loss)/Profit
|
|
$
|
(74,282)
|
$
|
566,948
|
|
|
|
|
|
|
|
|
Net (loss) profit per common share - basic and fully diluted:
|
|
|
(0.003)
|
|
0.031
|
|
|
|
|
|
|
|
|
Weighted average number of basic and fully diluted common shares outstanding
|
|
|
22,072,569
|
|
18,510,393
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of these financial statements.
|
F-3
|
|
|
|
|
|
|
|
WEYLAND TECH INC.
Consolidated Statements of Cash Flows
|
|
|
|
|
|
Year Ended December 31
|
|
|
|
|
|
2017
|
|
2016
|
Cash flows from operations:
|
|
|
|
|
|
|
Profit/(Loss) from continuing operations
|
|
$
|
(74,282)
|
$
|
566,948
|
|
Adjustment to reconcile net profit to net cash used in operating activities:
|
|
|
Amortization of intangible assets
|
|
|
351,933
|
|
351,933
|
|
|
Issuance of common stock for service received
|
|
|
388,650
|
|
-
|
|
|
Bad debt provision
|
|
|
-
|
|
698,736
|
|
|
Deferred tax benefits
|
|
|
393,701
|
|
(229,479)
|
|
|
Valuation allowance
|
|
|
(164,222)
|
|
-
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
Accounts receivable
|
|
|
-
|
|
-
|
|
|
Deposits and other receivables
|
|
|
(1,759,254)
|
|
(14,081)
|
|
|
Prepayment
|
|
|
(671,266)
|
|
(814,330)
|
|
|
Accounts payable
|
|
|
(634,330)
|
|
(566,290)
|
|
|
Accruals and other payables
|
|
|
65,971
|
|
(110,138)
|
|
|
Stock subscription payables
|
|
|
1,771,028
|
|
(147,456)
|
Net cash (used in)/provided by operations
|
|
|
(332,071)
|
|
(264,157)
|
Investment activities:
|
|
|
|
|
|
|
Investments in Indian operations
|
|
|
-
|
|
20,230
|
|
Purchase of intangible assets
|
|
|
-
|
|
(1,019,330)
|
Net cash (used in) investment activities
|
|
|
-
|
|
(999,100)
|
Cash flows from financing activities:
|
|
|
|
|
|
|
Proceeds from stock issuance
|
|
|
384,546
|
|
1,434,963
|
Net cash provided by financing activities
|
|
|
384,546
|
|
1,434,963
|
Net increased in cash and cash equivalents
|
|
|
52,475
|
|
171,706
|
Cash and cash equivalents, beginning of year
|
|
|
1,003,924
|
|
832,218
|
Cash and cash equivalents, end of year
|
|
$
|
1,056,399
|
$
|
1,003,924
|
Supplemental cash flow disclosure:
|
|
|
|
|
|
Cash paid for interest expenses
|
|
$
|
-
|
$
|
-
|
Cash paid for income taxes
|
|
$
|
-
|
$
|
-
|
Non-cash transactions
|
|
|
|
|
|
|
Issuance of shares for services received
|
|
$
|
388,650
|
$
|
-
|
|
The accompanying notes are an integral part of these financial statements.
|
F-4
|
|
|
|
|
|
WEYLAND TECH, INC
|
Consolidated Statements of Stockholders' Equity
|
|
Common Stock *
|
Amount
|
Additional paid-in capital
|
Subscriptions received
|
Accumulated (Deficit)
|
Stockholders'
(Deficit)/Equity
|
|
|
|
|
|
|
|
Balance December 31, 2014
|
46,256,568
|
$
463
|
$
36,219,595
|
$
1,765,855
|
$
(38,199,681)
|
$
(213,768)
|
Effect of reverse split from 1,000 shares to 1 share
|
(625,697,147)
|
(58,407)
|
58,407
|
-
|
-
|
-
|
Shares issued for services
|
1,163,600
|
116
|
23,146
|
-
|
-
|
23,262
|
Issuance of Shares
|
590,905,667
|
59,091
|
(52,206)
|
-
|
-
|
6,885
|
Net profit for the year
|
-
|
-
|
-
|
-
|
733,721
|
733,721
|
|
|
|
|
|
|
|
Balance December 31, 2015
|
12,628,688
|
$
1,263
|
$
36,248,942
|
$
1,765,855
|
(37,465,960)
|
$
550,100
|
Issuance of Shares
|
9,747,440
|
975
|
3,200,003
|
(1,765,855)
|
-
|
1,435,123
|
Cancelation of shares
|
(1,598,000)
|
(160)
|
|
|
|
(160)
|
Net profit for the year
|
-
|
-
|
-
|
-
|
566,948
|
566,948
|
Balance December 31, 2016
|
20,778,128
|
$
2,078
|
$
39,448,945
|
$
-
|
$
(36,899,012)
|
$
2,552,011
|
Issuance of Shares
|
1,370,500
|
137
|
384,409
|
-
|
-
|
384,546
|
Cancelation of shares
|
(100,000)
|
(10)
|
10
|
-
|
-
|
-
|
Shares issued for services
|
1,412,000
|
141
|
388,509
|
-
|
--
|
388,650
|
Net loss for the year
|
-
|
-
|
-
|
-
|
(74,282)
|
(74,282)
|
Balance December 31, 2017
|
23,460,628
|
$
2,346
|
$
40,221,873
|
$
-
|
$
(36,973,294)
|
$
3,250,925
|
|
*The number of shares of common stock has been retroactively restated to reflect the 1 for 1,000 reverse stock split on September 1, 2015
The accompanying notes are an integral part of these financial statements.
|
F-5
Weyland Tech Inc.
DECEMBER 31, 2017 AND 2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - ORGANIZATION AND BUSINESS DESCRIPTION
Weyland Tech, specializes in providing e-commerce solutions and services that facilitate multi-channel B2C (business-to-consumer) and B2B (business-to-business) transactions. Its solutions and services enabled e-commerce transactions with speed and efficiency, and allowed an interactive and engaging customer experience as well as targeted marketing and advertising.
The Company expects to continue development of its platform through a Cooperation agreement in Jaipur, India where costs are competitively lower than more developed countries.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
The financial statements have been prepared on a historical cost basis to reflect the financial position and results of operations of the Company in accordance with the accounting principles generally accepted in the United States of America (US GAAP).
USE OF ESTIMATES
The preparation of the Companys financial statements in conformity with generally accepted accounting principles of the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Management makes its best estimate of the ultimate outcome for these items based on historical trends and other information available when the financial statements are prepared. Actual results could differ from those estimates.
CERTAIN RISKS AND UNCERTAINTIES
The Company relies on cloud based hosting through a global accredited hosting provider. Management believes that alternate sources are available; however, disruption or termination of this relationship could adversely affect our operating results in the near-term.
SEGMENT REPORTING
Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by our chief operating decision maker, or decision making group, in deciding how to allocate resources and in assessing performance.
The Company specializes in providing e-commerce solutions and services that facilitate multi-channel B2C (business-to-consumer) and B2B (business-to-business) transactions. We identify our reportable segments as those customer groups that represent more than 10% of our combined revenue or gross profit or loss of all reported operating segments. We manage our business on the basis of the one reportable segment e-commerce solutions and service provider. The accounting policies for segment reporting are the same as for the Company as a whole. We do not segregate assets by segments since our chief operating decision maker, or decision making group, does not use assets as a basis to evaluate a segments performance.
F-6
IDENTIFIABLE INTANGIBLE ASSETS
Identifiable intangible assets are recorded at cost and are amortized over 3-10 years. Similar to tangible property and equipment, the Company periodically evaluates identifiable intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.
IMPAIRMENT OF LONG-LIVED ASSETS
The Company classifies its long-lived assets into: (i) computer and office equipment; (ii) furniture and fixtures, (iii) leasehold improvements, and (iv) finite lived intangible assets.
Long-lived assets held and used by the Company are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of such assets may not be fully recoverable. It is possible that these assets could become impaired as a result of technology, economy or other industry changes. If circumstances require a long-lived asset or asset group to be tested for possible impairment, the Company first compares undiscounted cash flows expected to be generated by that asset or asset group to its carrying value. If the carrying value of the long-lived asset or asset group is not recoverable on an undiscounted cash flow basis, an impairment is recognized to the extent that the carrying value exceeds its fair value. Fair value is determined through various valuation techniques, including discounted cash flow models, relief from royalty income approach, quoted market values and third-party independent appraisals, as considered necessary.
The Company makes various assumptions and estimates regarding estimated future cash flows and other factors in determining the fair values of the respective assets. The assumptions and estimates used to determine future values and remaining useful lives of long-lived assets are complex and subjective. They can be affected by various factors, including external factors such as industry and economic trends, and internal factors such as the Companys business strategy and its forecasts for specific market expansion.
ACCOUNTS RECEIVABLE AND CONCENTRATION OF RISK
Accounts receivable, net is stated at the amount the Company expects to collect, or the net realizable value. The Company provides a provision for allowances that includes returns, allowances and doubtful accounts equal to the estimated uncollectible amounts. The Company estimates its provision for allowances based on historical collection experience and a review of the current status of trade accounts receivable. It is reasonably possible that the Companys estimate of the provision for allowances will change.
The Companys CreateApp business effective 1 September 2015 is based on a nil accounts receivable balance as subscriptions are collected through a US based payment gateway on a usage basis.
As of December 31, 2017, sales included a concentration from a major customer although accounts receivable had a nil balance.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents represent cash on hand, demand deposits, and other short-term highly liquid investments placed with banks, which have original maturities of three months or less and are readily convertible to known amounts of cash.
F-7
EARNINGS PER SHARE
Basic (loss) earnings per share is based on the weighted average number of common shares outstanding during the period while the effects of potential common shares outstanding during the period are included in diluted earnings per share.
FASB Accounting Standard Codification Topic 260 (ASC 260), Earnings Per Share, requires that employee equity share options, non-vested shares and similar equity instruments granted to employees be treated as potential common shares in computing diluted earnings per share. Diluted earnings per share should be based on the actual number of options or shares granted and not yet forfeited, unless doing so would be anti-dilutive. The Company uses the treasury stock method for equity instruments granted in share-based payment transactions provided in ASC 260 to determine diluted earnings per share. Antidilutive securities represent potentially dilutive securities which are excluded from the computation of diluted earnings or loss per share as their impact was antidilutive.
REVENUE RECOGNITION
The Companys CreateApp Platform operates as a Platform as a Service (PaaS) by providing the infrastructure allowing users to develop their own applications and IT services, which users can access anywhere via a web or desktop browser. The Company recognizes revenue on a pay to use subscription basis when our customers use our platform. For the territories licensed to our distributors and on a white label basis, we derive royalty income from the end user use of our platform on a white label basis.
The Company maintains the CreateApp software platform at its own cost. Any enhancements and minor customization for our resellers/distributors are not separately billed. Major new proprietary features are billed to the customer separately as Development income while re-usable features are added to the features available to all customers on subsequent releases of our platform.
COST OF SERVICE
Cost of service results from 1) sales commissions to resellers 2) sourcing technical and engineering personnel in Asia on an hourly or project basis in order to customize multi-site SMB mobile apps and medium to large scale customized apps. 3) cloud based hosting services.
INCOME TAXES
The Company uses the asset and liability method of accounting for income taxes in accordance with Accounting Standards Codification (ASC) 740, Income Taxes (ASC 740). Under this method, income tax expense is recognized as the amount of: (i) taxes payable or refundable for the current year and (ii) future tax consequences attributable to differences between financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the results of operations in the period that includes the enactment date. A valuation allowance is provided to reduce the deferred tax assets reported if based on the weight of available evidence it is more likely than not that some portion or all of the deferred tax assets will not be realized.
F-8
RECENT ACCOUNTING PRONOUNCEMENTS
In January 2017, the FASB has issued Accounting Standards Update (ASU) No. 2017-01, Financial Instruments Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. The new guidance is intended to improve the recognition and measurement of financial instruments. The new guidance makes targeted improvements to existing U.S. GAAP by: (1) requiring equity investments (except those accounted for under the equity method of accounting, or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income. Requiring public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes; (2) Requiring separate presentation of financial assets and financial liabilities by measurement category and form of financial asset (i.e., securities or loans and receivables) on the balance sheet or the accompanying notes to the financial statements; (3) Eliminating the requirement for public business entities to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet; and. (4) Requiring a reporting organization to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk (also referred to as own credit) when the organization has elected to measure the liability at fair value in accordance with the fair value option for financial instruments. The new guidance is effective for public companies for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The Company does not anticipate that this adoption will have a significant impact on its financial position, results of operations, or cash flows.
In February 2017, the FASB issued ASU 2017-02, Leases (Topic 842), which supersedes the existing guidance for lease accounting, Leases (Topic 840). ASU 2017-02 requires lessees to recognize leases on their balance sheets, and leaves lessor accounting largely unchanged. The amendments in this ASU are effective for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years. Early application is permitted for all entities. ASU 2017-02 requires a modified retrospective approach for all leases existing at, or entered into after, the date of initial application, with an option to elect to use certain transition relief. he Company does not anticipate that this adoption will have a significant impact on its financial position, results of operations, or cash flows.
In April 2017, the FASB released ASU 2017-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. The ASU includes multiple provisions intended to simplify various aspects of the accounting for share-based payments. While aimed at reducing the cost and complexity of the accounting for share-based payments, the amendments are expected to significantly impact net income, EPS, and the statement of cash flows. Implementation and administration may present challenges for companies with significant share-based payment activities. The ASU is effective for public companies in annual periods beginning after December 15, 2017, and interim periods within those years. The Company does not anticipate that this adoption will have a significant impact on its financial position, results of operations, or cash flows.
In April 2017, FASB issued Accounting Standards Update No. 2017-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing. The amendments clarify the following two aspects of Topic 606: (a) identifying performance obligations; and (b) the licensing implementation guidance. The amendments do not change the core principle of the guidance in Topic 606. The effective date and transition requirements for the amendments are the same as the effective date and transition requirements in Topic 606. Public entities should apply the amendments for annual reporting periods beginning after December 15, 2017, including interim reporting periods therein (i.e., January 1, 2018, for a calendar year entity). Early application for public entities is permitted only as of annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period. The Company does not anticipate that this adoption will have a significant impact on its financial position, results of operations, or cash flows.
F-9
In May 2017, the FASB issued ASU No. 2017-11 Revenue Recognition (Topic 605) and Derivatives and Hedging (Topic 815); Rescission of SEC Guidance Because of Accounting Standards Updates 2014-09 and 2014-16 Pursuant to Staff Announcements at the March 3, 2017 EITF Meeting, which is rescinding certain SEC Staff Observer comments that are codified in Topic 605, Revenue Recognition, and Topic 932, Extractive ActivitiesOil and Gas, effective upon adoption of Topic 606. The Company does not anticipate that this adoption will have a significant impact on its financial position, results of operations, or cash flows.
In May 2017, FASB issued ASU No. 2017-12Revenue from Contracts with Customers (Topic 606); Narrow-Scope Improvements and Practical Expedients, which is intended to not change the core principle of the guidance in Topic 606, but rather affect only the narrow aspects of Topic 606 by reducing the potential for diversity in practice at initial application and by reducing the cost and complexity of applying Topic 606 both at transition and on an ongoing basis. The Company does not anticipate that this adoption will have a significant impact on its financial position, results of operations, or cash flows.
In August 2017, the FASB issued ASU No. 2017-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments, to provide guidance on the presentation and classification of certain cash receipts and cash payments on the statement of cash flows. The guidance specifically addresses cash flow issues with the objective of reducing the diversity in practice. The guidance will be effective for the Company in fiscal year 2018, but early adoption is permitted. The Company does not anticipate that this adoption will have a significant impact on its financial position, results of operations, or cash flows.
In October 2017, the FASB issued ASU No. 2017-17, Consolidation (Topic 810): Interest Held through Related Parties That Are under Common Control, to provide guidance on the evaluation of whether a reporting entity is the primary beneficiary of a VIE by amending how a reporting entity, that is a single decision maker of a VIE, treats indirect interests in that entity held through related parties that are under common control. The amendments are effective for public business entities 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 does not anticipate that this adoption will have a significant impact on its financial position, results of operations, or cash flows.
In November 2017, the FASB issued ASU No. 2017-18, "Statement of Cash Flows: Restricted Cash". The amendments address diversity in practice that exists in the classification and presentation of changes in restricted cash on the statement of cash flows. The amendment is effective for public companies for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The Company does not anticipate that this adoption will have a significant impact on its financial position, results of operations, or cash flows.
The Company has considered all new accounting pronouncements and has concluded that there are no new pronouncements that may have a material impact on results of operations, financial condition, or cash flows, based on current information.
NOTE 3 - INTANGIBLE ASSETS
As of December 31, 2017 and 2016, the company has the following amounts related to intangible assets:
F-10
|
|
|
|
|
|
|
As of December 31,
|
|
|
2017
|
|
2016
|
Software acquired
|
$
|
1,764,330
|
$
|
1,764,330
|
Other intangible assets
|
|
5,000
|
|
5,000
|
|
|
1,769,330
|
|
1,769,330
|
Less: accumulated amortization
|
|
(787,199)
|
|
(435,266)
|
Net intangible assets
|
$
|
982,131
|
$
|
1,334,064
|
No significant residual value is estimated for these intangible assets. Amortization expense for the years ended December 31, 2017 and 2016 totaled $351,933 and $351,933, respectively.
The remaining amortization period of the Companys amortizable intangible assets is approximately 2.67 years as of December 31, 2017. The estimated future amortization of the intangible assets is as follows:
|
|
For the years ending December 31,
|
Estimated Amortization Expenses
|
2018
|
$268,600
|
2019
|
101,933
|
2020
|
101,933
|
2021
|
101,933
|
Thereafter
|
407,732
|
Total
|
982,131
|
NOTE 4 - THE JOINT VENTURE
On November 26, 2015, the Company and Ranosys Technologies Pvt. Ltd (Ranosys) agreed to enter into the Joint Venture through CreateApp India Pvt Ltd. (CreateApp), an India limited liability company of which the Company and Ranosys are 50% members. The results of operations of CreateApp from November 26, 2015 were not material. The Joint Venture was claimed to be not successful subsequently and changed into strategic software development cooperation.
NOTE 5 ACCRUALS AND OTHER PAYABLE
Accruals and other payable consisted of the following:
|
|
|
|
|
|
|
|
As of December 31,
|
|
|
2017
|
|
2016
|
Accruals
|
$
|
247,449
|
$
|
177,949
|
Other payables
|
|
10,059
|
|
13,588
|
|
$
|
257,508
|
$
|
191,537
|
F-11
NOTE 6 - STOCKHOLDERS EQUITY
Common Shares
As of December 31, 2017 and 2016, authorized common shares of the Company consists of 250,000,000 shares with par value of $0.0001 each.
Issuance of Common Stock
During the period from January 1, 2015 to June 8, 2015, 580,067,155 shares with par value of $0.0001 per share were issued to various stockholders.
During the period from September 2, 2015 to December 31, 2015, 1,163,600 shares with par value of $ 0.0001 per share were issued for legal and professional services, and 10,838,764 shares with par value of $ 0.0001 per share were issued to various stockholders.
During the year ended December 31, 2016, 9,747,440 shares with par
value of $ 0.0001 per share were issued to various stockholders.
During the year ended December 31, 2017, 1,412,000 shares with par value of $ 0.0001 per share were issued for consultancy services received and 1,370,500 shares with par value of $0.0001 per share were issued to various stockholders.
Cancellation of Common Stock
During the year ended December 31, 2016, 1,598,000 shares with par value of $0.0001 per share were cancelled by various stockholders.
During the year ended December 31, 2017, 100,000 shares with par value of $0.0001 per share were cancelled by various stockholders.
Employee Stock Option Plan
The Company has a stock option and incentive plan, the Stock Option Plan. The exercise price for all equity awards issued under the Stock Option Plan is based on the fair market value of the common share price which is the closing price quoted on the Pink Sheets on the last trading day before the date of grant. The stock options generally vest on a monthly basis over a two-year to three-year period, and have a five year life.
Stock-Based Compensation
A summary of the Companys stock option activity during the year ended December 31, 2017 is presented below:
F-12
|
|
|
|
|
|
|
|
|
Number of options
|
Weighted Average Exercise Price
|
Weighted Average Grant-date Fair Value
|
Weighted Average Remaining Contractual Life (Years)
|
Aggregate Intrinsic Value
|
Options Outstanding
, December 31, 2014
|
|
250,000
|
0.6
|
2.8
|
0.67
|
$0
|
Less: Option expired
|
|
(250,000)
|
0.6
|
2.8
|
|
|
Options Outstanding , December 31, 2015
|
|
-
|
-
|
-
|
-
|
-
|
Options Outstanding , December 31, 2016
|
|
-
|
-
|
-
|
-
|
-
|
Options Outstanding , December 31, 2017
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|
-
|
-
|
-
|
-
|
-
|
All options outstanding are fully expired as of December 31, 2017. No new options were granted in the fiscal year 2017 or 2016.
NOTE 7 (LOSS)/EARNINGS PER SHARE
The following table sets forth the computation of basic and diluted earnings per common share for the year ended December 31, 2017 and 2016, respectively:
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|
|
|
|
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|
|
|
|
For the Years Ended December 31, 31,
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|
|
|
|
2017
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|
|
2016
|
|
Numerator - basic and diluted
|
|
|
|
|
|
|
|
Net (loss)/profit
|
|
$
|
(74,282)
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|
$
|
566,948
|
|
Denominator
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|
|
|
|
|
|
Weighted average number of common shares outstanding basic and diluted
|
|
|
22,072,569
|
|
|
18,510,393
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|
(Loss) Profit per common share basic and diluted
|
|
$
|
(0.003)
|
|
$
|
0.031
|
|
NOTE 8 - INCOME TAXES
The Company and its subsidiaries file separate income tax returns.
The United States of America
Weyland Tech, Inc. is incorporated in the State of Delaware in the U.S., and is subject to a gradual U.S. federal corporate income tax of 21%. The Company generated taxable income for the year ended December 31, 2017 and 2016, and which is subject to U.S. federal corporate income tax rate of 21% and 34%, respectively.
Hong Kong
F-13
Weyland Tech Limited is incorporated in Hong Kong and Hong Kongs profits tax rate is 16.5%. Weyland Tech Limited did not earn any income that was derived in Hong Kong for the years ended December 31, 2017 and 2016, and therefore, Weyland Tech Limited was not subject to Hong Kong profits tax.
The Companys effective income tax rates were 21% and 34% for the years ended December 31, 2017 and 2016, respectively. Income tax mainly consists of foreign income tax at statutory rates and the effects of permanent and temporary differences.
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|
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|
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|
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|
|
For the year ended December 31,
|
|
|
2017
|
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
U.S. statutory tax rate
|
|
|
21.0%
|
|
|
|
34.0%
|
|
Hong Kong profit tax rate
|
|
|
16.5%
|
|
|
|
16.5%
|
|
Foreign income not registered in the Hong Kong
|
|
|
(16.5%)
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|
|
|
(16.5%)
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|
Others
|
|
|
0.0%
|
|
|
|
0.0%
|
|
Effective tax rate
|
|
|
21.0%
|
|
|
|
34.0%
|
|
As of December 31, 2017 and 2016, the Company has a deferred tax asset of nil and $229,479, resulting from certain net operating losses in U.S., respectively. The ultimate realization of deferred tax assets depends on the generation of future taxable income during the periods in which those net operating losses are available. The Company considers projected future taxable income and tax planning strategies in making its assessment. At present, the Company concludes that it is more-likely-than-not that the Company will be able to realize all of its tax benefits in the near future and therefore a valuation allowance has been provided for the full value of the deferred tax asset. A valuation allowance will be maintained until sufficient positive evidence exists to support the reversal of any portion or all of the valuation allowance. As of December 31, 2017 and 2016, the valuation allowance was $550,741 and $714,964, respectively. Change of -$164,223 and $714,964 in the valuation allowance for the year ended December 31, 2017 and 2016 respectively.
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|
|
|
|
|
|
|
|
|
|
As of December 31,
|
|
|
|
|
2017
|
|
|
|
2016
|
|
Deferred tax asset from operating losses carry-forwards
|
|
$
|
550,741
|
|
|
$
|
944,443
|
|
Valuation allowance
|
|
|
(550,741)
|
|
|
|
(714,964)
|
|
Deferred tax asset, net
|
|
$
|
-
|
|
|
$
|
229,479
|
|
F-14
NOTE 9 COMMITMENTS AND CONTINGENCIES
Operating lease
Other than the lease of the Companys current executive offices are located at, 85 Broad Street, 16-079, New York, NY 10004. at $820 per month, the Company did not have any operating lease as of December 31, 2017.
Legal proceedings
Other than as disclosed in Part I, Item 3 of the Companys 10-K above, as of December 31, 2017, the Company is not aware of any material outstanding claim and litigation against them.
NOTE 10 SUBSEQUENT EVENTS
On March 14, 2018 The Company confirmed that it has received a non-binding acquisition proposal from its recently announced strategic partner, Chinas DDBill Payment Co., Ltd (DDBill) which operates Chinas fourth largest payments gateway Dinpay (www.dinpay.com, English: us.dinpay.com) and Dinpay Technology Group Ltd. (DTG).
The two companies, having spent the past three months working with Weyland on joint collaboration on expanding DDBill and DTGs product and service offering beyond Chinas borders and evaluating the Indonesia e-Wallet market, have concluded that an acquisition of the Company would benefit all groups, including Weyland Shareholders.
DDBill and DTGs Core business coverage is third-party payment technology / solution provider for :
1. Cross border WeChat business / solution provider
2. Cross border Alipay business / solution provider
3. VISA / master card products & solutions
4. Online payment gateway solutions
The Board of Directors will carefully evaluate this proposal and other potential alternatives, including continued operations as an independent organization, in alignment with its longstanding commitment to maximize shareholder value. The Company cautions its shareholders and others considering trading in its securities that there can be no assurance that any definitive offer will be made by DDBill and DTG, if made, at what price or other terms, that any agreement will be executed or that a transaction in response to these proposals or that any other transaction will be approved or consummated. The Company does not undertake any obligation to provide any updates with respect to these proposals or any other proposal, except as required under applicable law.
On March 28, 2018 the Company announced the launch of the ENable mobile commerce and logistics platform with its Strategic Partner, DPEX Worldwide (DPEX). The result of the strategic partnership announced in December 2016, the official launch of ENable is the culmination of over a year of integration of Weylands CreateApp technologies with DPEXs logistics and shipping platform.
F-15