Quarterly Report (10-q)

Date : 08/10/2018 @ 9:01PM
Source : Edgar (US Regulatory)
Stock : Velt International Group Inc. (VIGC)
Quote : 0.5  0.0 (0.00%) @ 1:00AM

Quarterly Report (10-q)

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

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

 

For the quarterly period ended June 30, 2018  

 

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

 

For the transition period from __________ to _________

 

SEC File No. 333-179082

 

VELT INTERNATIONAL GROUP INC.
(Exact name of registrant as specified in its charter)

 

Nevada   7371   27-5159463

(State or other jurisdiction of
incorporation or organization)

 

(Primary Standard Industrial
Classification Code Number)

  (IRS I.D.)

  

1313 N Grand Ave. #16, Walnut, California   91789
(Address of principal executive offices)   (Zip Code)

 

Issuer’s telephone number: 626-262-7379

 

N/A

(Former name, former address and telephone number, if changed since last report)

 

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

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☐ No ☒

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer Accelerated filer
Non-accelerated filer Smaller Reporting Company
    Emerging growth company  

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

 

As of August 10, 2018, there were 1,886,575 shares issued and outstanding of the registrant’s common stock.

  

 

 

 

 

  

VELT INTERNATIONAL GROUP INC. AND SUBSIDIARY

(formerly A & C United Agriculture Developing Inc.)

 

Unaudited Condensed Consolidated Financial Statements

 

For the nine months ended June 30, 2018 and 2017

 

Table of Contents

 

Unaudited Condensed Consolidated Balance Sheets   2  
       
Unaudited Condensed Consolidated Statements of Operations   3  
       
Unaudited Condensed Consolidated Statements of Cash Flows   4  
       
Notes to Condensed Consolidated Financial Statements   5  

  

1

 

  

VELT INTERNATIONAL GROUP INC. AND SUBSIDIARY

( formerly A & C United Agriculture Developing Inc.)

  

CONDENSED CONSOLIDATED BALANCE SHEETS

   

    June 30,     September 30,  
    2018     2017  
    (Unaudited)        
ASSETS            
Current assets:            
Cash and cash equivalents   $ 5,965     $ 50,515  
Accounts receivable     2,000       -  
Escrow deposit     214,000       -  
                 
Total Current Assets     221,965       50,515  
                 
Noncurrent assets:                
Property and equipment, net     6,673       -  
Total Noncurrent Assets     6,673       -  
                 
TOTAL ASSETS   $ 228,638     $ 50,515  
                 
LIABILITIES AND STOCKHOLDERS’ DEFICIT                
Current liabilities:                
Loans from shareholders   $ 410,930     $ 86,158  
Accrued expenses     4,520       -  
Total Current Liabilities     415,450       86,158  
                 
TOTAL LIABILITIES     415,450       86,158  
                 
COMMITMENTS AND CONTNGENCIES                
                 
Stockholders’ Deficit:                
Common stock, $0.001 par value; 500,000,000 shares authorized; 1,886,575 shares issued and outstanding as of June 30, 2018 and September 30, 2017     1,887       1,887  
Additional paid-in capital     1,020,563       1,020,563  
Accumulated deficit     (1,209,261 )     (1,058,093 )
Accumulated other comprehensive loss     -       -  
TOTAL STOCKHOLDERS’ DEFICIT     (186,811 )     (35,643 )
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT   $ 228,638     $ 50,515  

   

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

  

2

 

 

VELT INTERNATIONAL GROUP INC. AND SUBSIDIARY

( formerly A & C United Agriculture Developing Inc.)

 

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

  

(Unaudited)

  

   

Nine Months
Ended

   

Nine Months
Ended  

   

Three Months
Ended  

   

Three Months
Ended  

 
    June 30,     June 30,     June 30,     June 30,  
    2018     2017     2018     2017  
                         
Revenues   $ 17,048     $ 854,839     $ 2,000     $ 297,932  
Cost of good sold     -       712,580       -       231,073  
Gross profit     17,048       142,259       2,000       66,859  
Operating expenses:                                
                                 
Research and development     -       1,404       -       799  
Selling, general and administrative expenses     129,992       240,892       34,853       81,033  
Depreciation expense     705       4,081       369       1,360  
Total operating expenses     130,697       246,377       35,222       83,192  
                                 
Operating loss     (113,649 )     (104,118 )     (33,222 )     (16,333 )
                                 
Other income (loss), net     (37,520 )     74       (37,520 )     25  
Loss before income taxes     (151,169 )     (104,044 )     (70,742 )     (16,308 )
Income tax expense     -       -       -       -  
Net loss     (151,169 )     (104,044 )     (70,742 )     (16,308 )
                                 
Other comprehensive income (loss), net of tax:                                
Foreign currency translation adjustments     -       (499 )     -       429  
Other comprehensive income (loss)             (499 )             429  
Comprehensive loss   $ (151,169 )   $ (104,543 )   $ (70,742 )   $ (15,879 )
Weighted average shares, basic and diluted     1,886,575       1,886,575       1,886,575       1,886,575  
Net loss per common share, basic and diluted   $ (0.08 )   $ (0.06 )   $ (0.04 )   $ (0.01 )

   

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

  

3

 

 

VELT INTERNATIONAL GROUP INC. AND SUBSIDIARY

( formerly A & C United Agriculture Developing Inc.)

  

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

 

(Unaudited)

  

    Nine Months
Ended
    Nine Months
Ended
 
    June 30,     June 30,  
    2018     2017  
             
Operating Activities:            
Net loss   $ (151,169 )   $ (104,044 )
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:                
Depreciation expense     705       4,081  
Loss on cancellation of escrow contract     36,000       -  
Changes in operating assets and liabilities:                
Inventory     -       357,448  
Accounts receivable     (2,000 )     (203,133 )
Prepaid expense     -       74,993  
Accrues expenses     4,520       (64 )
Unearned income     -       (156,030 )
Accounts payable     -       27,747  
Credit card payable     -       1,594  
Net cash (used in) provided by operating activities     (111,944 )     2,592  
                 
Investing Activities:                
Purchases of property and equipment     (7,378 )     -  
Payment of escrow deposit     (250,000 )     -  
Net cash used in investing activities     (257,378 )     -  
                 
Financing Activities:                
Loans from shareholders     324,772       -  
Repayment of loans from shareholders     -       (3,387 )
Net cash provided by (used in) financing activities     324,772       (3,387 )
Effect of exchange rate on cash     -       (499 )
Net decrease in cash and cash equivalents     (44,550 )     (1,294 )
Cash and cash equivalents at beginning of the period     50,515       114,508  
Cash and cash equivalents at end of the period   $ 5,965     $ 113,214  
                 
SUPPLEMENTAL DISCLOSURE:                
Interest paid   $ -     $ -  
Income tax paid   $ -     $ -  

  

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

  

4

 

  

VELT INTERNATIONAL GROUP INC. AND SUBSIDIARY

( formerly A & C United Agriculture Developing Inc.)

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

NOTE 1 - ORGANIZATION AND BUSINESS DESCRIPTION

 

Velt International Group Inc. (formerly A & C United Agriculture Developing Inc., or “Velt” or the “Company”) is a Nevada corporation formed on February 7, 2011. Our current principal executive office is located at 1313 N. Grand Ave. #16, Walnut, CA 91789. Tel: 626-262-7379. The Company’s common stock are currently traded on the Over the Counter Bulletin Board (“OTCQB”) under the symbol “VIGC”.

 

In addition to the U.S. operation, the Company established a subsidiary, A & C Agriculture Developing (Europe) AB (“A&C Europe” or the “Subsidiary”) in Stockholm, Sweden on October 24, 2013, which is located at Gamla Sodertaljevagen 134A, 141 70 Segeltorp, Sweden. On August 5, 2017, the Company sold all of its equity interest in the Subsidiary to the prior President of A&C Europe.

 

The Company has started to set up a completed and mature mobile application system (the “mobile app”) which supports third party payment function, online booking and other management functions. This mobile app allows users to get special discounts when the users purchase from merchants listed in the app through its online payment systems and will rely on big data management to create a large consumer base that will mostly connect with traditional retailers and some of the online stores.

 

The Board of the Directors approved the reverse stock split (the “stock split”) of the Company’s issued and outstanding common stock whereby each twenty shares of common stock will be converted into one share of common stock. The stock split became effective with the Financial Industry Regulatory Authority (“FINRA”) on May 21, 2018. All share and per share amounts in the financial statements and notes thereto have been restated for all periods presented to give retroactive effect to the stock split.

 

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Basis of Presentation

 

The unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) for interim financial information and the rules of the Securities and Exchange Commission, and should be read in conjunction with the audited financial statements and notes thereto contained in the Company’s most recent Annual Financial Statements filed with the SEC on Form 10-K. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim period presented have been reflected herein. The results of operations for the interim period are not necessarily indicative of the results to be expected for the full year. Notes to the unaudited interim financial statements which would substantially duplicate the disclosures contained in the audited financial statements for the most recent fiscal period, as reported in the Form 10-K, have been omitted. 

 

5

 

 

Use of Estimates

 

The preparation of consolidated financial statements in conformity with US GAAP requires management to make estimates, judgements and assumptions that affect certain amounts reported in the financial statements and footnotes. Accordingly, actual results could differ from those estimates.

 

Recent Accounting Pronouncements

 

In May 2014, the Financial Accounting Standards Board (FASB) issued a new accounting standard update on revenue recognition from contracts with customers (Topic 606). The new guidance replaces all current GAAP guidance on this topic and requires entities to recognize revenue when control of the promised goods or services is transferred to customers at an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. The Company elected to early adopt the new accounting standard on October 1, 2017 using the modified retrospective method, applied to those contracts which were not completed as of October 1, 2017. The adoption of Topic 606 did not have a material impact as of October 1, 2017 and therefore no cumulative adjustment was recorded.

 

Management believes that other than disclosed above, none of the recently issued accounting pronouncements will have a material impact on the consolidated financial statements. 

 

Concentration of Credit Risk

 

The Company maintains its cash in bank accounts which, at times, may exceed the federally insured limits. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk on cash in bank.

 

6

 

 

Cash and Cash Equivalents

 

The Company considers all highly-liquid investments with an original maturity of three months or less when purchased to be cash equivalents. As of June 30, 2018 and September 30, 2017, the Company had cash and cash equivalents of $5,965 and $50,515, respectively.

 

Earnings Per Share

 

Basic earnings per share is computed by dividing net income (loss) attribute to stockholders of common stock by the weighted-average number of common shares outstanding for the period. Diluted net earnings per share is computed by dividing net income (loss) by the weighted average number of common shares outstanding plus equivalent shares.

 

The Company only issued one type of shares, i.e., common shares and does not have any potentially dilutive instrument as of June 30, 2018 and 2017.

 

Property and equipment

 

Property and equipment are carried at cost and, less accumulated depreciation. Depreciation has been determined using a straight-line method over the estimated useful lives of the related assets, which are 5 years. The cost of repairs and maintenance is expensed as incurred; major replacements and improvements are capitalized. When assets are retired or disposed of, the cost and accumulated depreciation are removed from the accounts, and any resulting gains or losses are included in income in the year of disposal. The Company examines the possibility of decreases in the value of property and equipment when events or changes in circumstances reflect the fact that their recorded value may not be recoverable.

 

As of June 30, 2018, the Company’s property and equipment consists of computer equipment with a cost of $7,378 and accumulated depreciation of $705. During the nine months ended June 30, 2018 and 2017, the depreciation expenses were $705 and $4,081, respectively.

 

Revenue Recognition

 

Revenue is recognized upon transfer of control of promised products or services to customers in an amount that reflects the consideration we expect to be entitled to in exchange for those products and services. We enter into contracts that include products and services, which are generally capable of being distinct and accounted for as separate performance obligations. Revenue is recognized net of allowances for returns and any taxes collected from customers.

 

The Company’s contracts with customers may include multiple performance obligations. Revenue relating to agreements that provide more than one performance obligation is recognized based upon the relative fair value to the customer of each performance obligation as each obligation is earned. The Company derives its revenues the follows:

 

Mobile Apps:

 

Revenue from the mobile apps is recognized when control has transferred to the customer which typically occurs when the mobile apps either upon delivery of the key code to the customer or upon the deployment of the mobile app to the App Store.

 

Maintenance Services:

 

The Company offers maintenance and function improvements services related to the mobile apps for customers. Maintenance service is considered distinct and is recognized ratably over the maintenance term.

 

During the nine months ended June 30, 2018, the Company recognized revenue from the mobile apps and maintenance services in the amount of $15,084 and $2,000, respectively.

 

7

 

 

Going Concern Assessment

 

Pursuant to ASC 205-40-50, The Company’s financial statements are prepared using US GAAP applicable to a going concern that contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company demonstrates adverse conditions that raise substantial doubt about the Company’s ability to continue as a going concern. These adverse conditions are negative financial trends, specifically negative working capital, recurring operating losses, accumulated deficit and other adverse key financial ratios.

 

The Company did not generate sufficient revenues to cover its operating expense during the nine months ended June 30, 2018. The Company plans to loan from Mr. Chin Kha Foo who is the majority shareholder and the President of the Company to support the Company’s normal business operating. There is no assurance, however, that the Company will be successful in raising the needed capital and, if funding is available, that it will be available on terms acceptable to the Company.

 

The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classification of liabilities that might be necessary in the event that the Company cannot continue as a going concern.

 

NOTE 3 - RELATED PARTY TRANSACTIONS

 

Loans from shareholders

 

On May 24, 2018, the Company issued a promissory note of $249,975, bearing interest rate at 6% and due in twelve months, to Mr. Chin Kha Foo in exchange for cash. During the nine months ended June 30, 2018, the interest expense was $1,520.

 

The Company also borrowed loans with no interest and due on demand from the shareholders to support its operation. The outstanding balance, including promissory note, as of June 30, 2018 and September 30, 2017 were $410,930 and $86,158, respectively.

 

NOTE 4 - INCOME TAXES

 

The Company recorded no income tax expense or benefit during the nine months ended June 30, 2018 and 2017 since the Company incurred net operating losses and recorded a full valuation allowance against net deferred tax assets for all periods presented. As of June 30, 2018 and September 30, 2017, the aggregate balances of our gross unrecognized tax benefits were $198 thousand and $248 thousand, respectively, of which a valuation allowance recognized against the unrecognized tax benefits.

 

In December 2017, the Tax Reform Act was signed into law making significant changes to the Internal Revenue Code. Changes include, but are not limited to, a corporate tax rate decrease from 35% to 21 % effective for tax years beginning after December 31, 2017, the transition of U.S. international taxation from a worldwide tax system to a territorial system, and a one-time transition tax on the mandatory deemed repatriation of cumulative foreign earnings as of December 31, 2017. The management does not believe that there will be any material impact on its consolidated financial statements as a result of the Tax Reform Act.

 

8

 

 

NOTE 5 - COMMITMENTS AND CONTINGENCIES

 

The Company has no commitment or contingency as of June 30, 2018.

 

NOTE 6 - COMMON STOCK

 

The Board of the Directors approved the stock split of the Company’s issued and outstanding common stock whereby each twenty shares of common stock will be converted into one share of common stock. The stock split became effective FINRA on May 21, 2018. Pursuant to the stock split, each issued and outstanding share of the common stock was exchanged for one-twentieth of a share. As a result, each stockholder now owns a reduced number of shares of the Company’s common stock. The number of the Company’s authorized shares of common stock was not affected by the stock split and t he shares of common stock retain a par value of $0.001 per share.

 

NOTE 7 – escrow deposit

 

The Company borrowed a promissory note of $249,975 from Chin Kha Foo, the majority shareholder and the President of the Company, and then deposited a total amount of $250,000 in an escrow account for the purpose of purchasing a piece of land, valued at $1,750,000, from Anchor Alliance Development Inc., a California Corporation (“Anchor”). On June 20, 2018, the Company and Anchor agreed to cancel the transaction. The amount of $214,000 was recorded as escrow deposit, net of the loss on the cancellation of the escrow contract of $36,000, in the balance sheet as of June 30, 2018.

 

NOTE 8 - SUBSEQUENT EVENTS

 

On July 20, 2018, the escrow deposit of $214,000 was returned to the Company due to the cancellation of the escrow contract.

 

The Company has evaluated all other subsequent events through the date the financial statements were issued and determined that there were no other subsequent events or transactions that require recognition or disclosures in the financial statements.

 

9

 

 

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

 

The following discussion of our financial condition and results of operations should be read in conjunction with our financial statements and the related notes, and other financial information included in this Form 10-Q.

 

Our Management’s Discussion and Analysis contains not only statements that are historical facts, but also statements that are forward-looking. Forward-looking statements are, by their very nature, uncertain and risky. These risks and uncertainties include international, national, and local general economic and market conditions; our ability to sustain, manage, or forecast growth; our ability to successfully make and integrate acquisitions; new product development and introduction; existing government regulations and changes in, or the failure to comply with, government regulations; adverse publicity; competition; the loss of significant customers or suppliers; fluctuations and difficulty in forecasting operating results; change in business strategy or development plans; business disruptions; the ability to attract and retain qualified personnel; the ability to protect technology; the risk of foreign currency exchange rate; and other risks that might be detailed from time to time in our filings with the Securities and Exchange Commission.

 

Although the forward-looking statements in this Report reflect the good faith judgment of our management, such statements can only be based on facts and factors currently known by them. Consequently, and because forward-looking statements are inherently subject to risks and uncertainties, the actual results and outcomes may differ materially from the results and outcomes discussed in the forward-looking statements. You are urged to carefully review and consider the various disclosures made by us in this report as we attempt to advise interested parties of the risks and factors that may affect our business, financial condition, and results of operations and prospects.

 

Overview

 

Velt International Group Inc. (formerly A & C United Agriculture Developing Inc., or “Velt” or the “Company”) is a Nevada corporation formed on February 7, 2011. Our current principal executive office is located at 1313 N. Grand Ave. #16, Walnut, CA 91789. Tel: 626-262-7379.

 

On March 13, 2017, Yidan (Andy) Liu and Jun (Charlie) Huang, the principal stockholders of the Company (“Sellers”), entered into a Stock Purchase Agreement (the “Agreement”) with Chin Kha Foo, the assignee of Choa-Jung Lee, and his assigns (the “Buyers”). Pursuant to the Agreement, Sellers agreed to sell to the Buyers and the Buyers agreed to purchase from Sellers a total of 24,000,000 shares of common stock of the Company Purchased Shares, which represented approximately 64% of the Company’s issued and outstanding shares of common stock. As a result, the transaction led to a change of the control and the management team of the Company.

 

On August 5, 2017, the Company entered into a Stock Purchase Agreement (the “SPA”) to sell its equity interest in its subsidiary, A & C Agriculture Developing (Europe) AB, to its former officer. Although the sale was not arms-length, the Board believes the purchase price was reasonable and that it was at a price no less than it would receive from an independent third party.

 

Prior to the change of the management team, the Company’s long-term goal was focus on solving some of the major challenges in China, such as pollution and food safety issues for the general public, as well as raising funds to grow the business. The Company has changed its focus to develop mobile application system (the “mobile app”) which supports third party payment, online booking and other management functions. This mobile app allows users to get special discounts when the users purchase from merchants listed in the mobile app through its online payment system.

 

The mobile app relies on big data management to create a large consumer base that mostly connects with traditional retailers and some of the online stores. Although internet consumption is very popular at present, the management believes that traditional offline businesses continue to have a very large market demand. This is because the traditional offline stores can directly bring visual senses to the customers and stimulate customer desires as well as consumer confidences.

 

The Board of the Directors approved the reverse split of the Company’s issued and outstanding common stock whereby each twenty shares of common stock will be converted into one share of common stock. The stock split became effective with the Financial Industry Regulatory Authority (“FINRA”) on May 21, 2018.

 

10

 

 

The Company continues to look for other opportunities which could potentially increase the profits of the Company in the year of 2018.

 

Current Operational Activities

 

On December 6, 2017, the Company entered into a Mobile Application Development and Maintenance Agreement (the “Mobile Agreement”). Pursuant to the Mobile Agreement, the Company develops and designs a mobile application (the “Mobile App”) for a third-party company in Hong Kong. The Mobile App allows users to book airline ticket, train ticket and taxi cabs, play online games, facilitate payments for utilities and other services, and to facilitate shipping services and so forth.

 

We will continue to develop our customer resources in Asia and U.S. markets.

 

Results of Operations

 

For the nine months ended June 30, 2018 and 2017

 

Revenue

 

There was $17,048 and $854,839 revenue generated for the nine months ended June 30, 2018 and 2017. The decrease was attributable to the intentions to expand other business lines due to the change of the management team of the Company and the shrinking of the Company’s seed business.

 

Cost of Goods Sold

 

There was $nil and $712,580 cost of goods sold incurred for the nine months ended June 30, 2018 and 2017, respectively. The cost of goods sold decreased due to the different revenue stream.

 

Operating Expense  

 

Our expenses consist of selling, general and administrative expenses and depreciation expense as follows:

 

For the nine months ended June 30, 2018 and 2017, there was a total of $130,697 and $246,377 operating expenses, respectively. The decrease was primarily due to the limited operation activities incurred in this period.

 

11

 

 

Net Loss

 

We incurred net loss of $151,169 and $104,044 for the nine months ended June 30, 2018 and 2017.

 

For the three months ended June 30, 2018 and 2017

 

Revenue

 

There was $2,000 and $297,932 revenue generated for the three months ended June 30, 2018 and 2017. The decrease was attributable to the intentions to expand other business lines due to the change of the management team of the Company and the shrinking of the Company’s seed business.

 

Cost of Goods Sold

 

There was $nil and $231,073 cost of goods sold incurred for the three months ended June 30, 2018 and 2017, respectively. The cost of goods sold decreased due to the different revenue stream.

 

Operating Expense  

 

Our expenses consist of selling, general and administrative expenses and depreciation expense as follows:

 

For the three months ended June 30, 2018 and 2017, there was a total of $35,222 and $83,192 operating expenses, respectively. The decrease was primarily due to the change of control, leading to limited operation activities started.

 

Net Loss

 

We incurred net loss of $70,742 and $16,308 for the three months ended June 30, 2018 and 2017.

 

Taxation

 

On December 22, 2017, the United States Congress and the Administration have approved a bill reforming the US corporate income tax code which will reduce corporate tax rate from 35% to 21%. The rate reduction would generally take effect on January 1, 2018. The carrying value of our deferred tax assets is also determined by the enacted US corporate income tax rate. Consequently, any changes in the US corporate income tax rate will impact the carrying value of our deferred tax assets. The net effect of the tax reform enactment on financial statements is $nil for the nine months ended June 30, 2018.

 

Equity and Capital Resources

 

We have incurred losses for the nine months ended June 30, 2018 and 2017, and had an accumulated deficit of $1,209,261 as of June 30, 2018. As of June 30, 2018, we had cash of $5,965 and a negative working capital of $193,485, compared to cash of $50,515 and a negative working capital of $35,643 as of September 30, 2017. The decrease in the working capital was primarily due to loan from shareholders to disburse the operating expense or support the Company’s business.

 

We had no material commitments for capital expenditures as of June 30, 2018. We expect our expenses will continue to increase during the foreseeable future as a result of increased operational expenses and the development of potential business opportunities. However, we do not anticipate that the Company will generate revenue sufficient to cover its planned operating expenses in the foreseeable future, and we are dependent on the proceeds from future debt or equity investments to sustain our operations and implement our business plan. If we are unable to raise sufficient capital, we will be required to delay or forego some portion of our business plan, which would have a material adversely effect on our anticipated results from operations and financial condition. There is no assurance that we will be able to obtain necessary amounts of additional capital or that our estimates of our capital requirements will prove to be accurate. As of the date of this Report, we did not have any commitments from any source to provide such additional capital. Even if we are able to secure outside financing, it may not be available in the amounts or the times when we require. Furthermore, such financing would likely take the form of bank loans, private placement of debt or equity securities or some combination of these. The issuance of additional equity securities would dilute the stock ownership of current investors while incurring loans, leases or debt would increase our capital requirements and possible loss of valuable assets if such obligations were not repaid in accordance with their terms.

 

Off-Balance Sheet Arrangements  

 

We do not have any off-balance sheet arrangements that we are required to disclose pursuant to these regulations.

 

12

 

 

Item 3. Quantitative and Qualitative Disclosure about Market Risk

 

Not applicable.

 

Item 4. Controls and Procedures.

 

Evaluation of Disclosure Controls and Procedures

 

The Company has established disclosure controls and procedures to ensure that information required to be disclosed in this quarterly report on Form 10-Q was properly recorded, processed, summarized and reported within the time periods specified in the Commission’s rules and forms. The Company’s controls and procedures are designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Act is accumulated and communicated to the Company’s management, including its principal executive and principal financial officer to allow timely decisions regarding required disclosure.

 

We carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) at March 31, 2018 based on the evaluation of these controls and procedures required by paragraph (b) of Rule 13a-15 or Rule 15d-15 under the Exchange Act. This evaluation was carried out under the supervision and with the participation of our Chief Executive Officer/Chief Financial Officer. Based upon that evaluation, our Chief Executive Officer/Chief Financial Officer concluded that, at June 30, 2018, our disclosure controls and procedures were not effective.

 

Changes in Internal Control over Financial Reporting

 

There have been no changes in the Company’s internal control over financial reporting that occurred during the Company’s last fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

 

13

 

 

PART II - OTHER INFORMATION

 

Item 1. Legal Proceedings.

 

None.

 

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

 

None.

 

Item 3. Defaults Upon Senior Securities.

 

None.

 

Item 4. Mine Safety Disclosure.

 

Not applicable.

 

Item 5. Other Information.

 

Not Applicable.

  

Item 6. Exhibits.

 

(a) Exhibits.

 

Exhibit No.   Document Description
     
31.1*   CERTIFICATION of CEO/CFO PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 302(a) OF THE SARBANES-OXLEY ACT OF 2002
     
32.1 *   CERTIFICATION of CEO/CFO PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEYACT OF 2002
     
101.INS   XBRL Instance Document
     
101.SCH   XBRL Taxonomy Extension Schema Document
     
101.CAL   XBRL Taxonomy Extension Calculation Linkbase Document
     
101.DEF   XBRL Taxonomy Extension Definition Linkbase Document
     
101.LAB   XBRL Taxonomy Extension Label Linkbase Document
     
101.PRE   XBRL Taxonomy Extension Presentation Linkbase Document

 

* Filed herewith.

 

14

 

 

SIGNATURES

 

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

Velt International Group Inc.,

a Nevada corporation

 

Title   Name   Date   Signature
             
Principal Executive Officer   Chin Kha Foo   August 10, 2018   /s/ Chin Kha Foo

 

In accordance with the Exchange Act, this Report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

 

SIGNATURE   NAME   TITLE   DATE
             
/s/ Chin Kha Foo   Chin Kha Foo   Principal Executive Officer,   August 10, 2018
        Principal Financial Officer and
Principal Accounting Officer
   

 

15

 

 

EXHIBIT INDEX

  

Exhibit No.   Document Description
     
31.1*   CERTIFICATION of CEO/CFO PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 302(a) OF THE SARBANES-OXLEY ACT OF 2002
     
32.1 *   CERTIFICATION of CEO/CFO PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEYACT OF 2002
     
101.INS   XBRL Instance Document
     
101.SCH   XBRL Taxonomy Extension Schema Document
     
101.CAL   XBRL Taxonomy Extension Calculation Linkbase Document
     
101.DEF   XBRL Taxonomy Extension Definition Linkbase Document
     
101.LAB   XBRL Taxonomy Extension Label Linkbase Document
     
101.PRE   XBRL Taxonomy Extension Presentation Linkbase Document

 

* Filed herewith.

16

 

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