Note: There was a 1-for-10,000 reverse stock split of the Company’s common stock effective on
October 24, 2017.
Note: There was a 1-for-10,000
reverse stock split of the Company’s common stock effective on October 24, 2017.
Note: There was a 1-for-10,000 reverse
stock split of the Company’s common stock effective on October 24, 2017.
NOTES TO CONDENSED FINANCIAL
STATEMENTS
FOR THE PERIOD ENDED MARCH
31, 2018
(Unaudited)
1. Basis of presentation
The accompanying unaudited condensed financial
statements have been prepared by management in accordance with both accounting principles generally accepted in the United States
(“GAAP”), and the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Certain information and note disclosures
normally included in audited financial statements prepared in accordance with generally accepted accounting principles have been
condensed or omitted pursuant to those rules and regulations, although the Company believes that the disclosures made are adequate
to make the information not misleading.
In the opinion of management, the balance
sheet as of December 31, 2017 which has been derived from audited financial statements and these unaudited condensed financial
statements reflect all normal and recurring adjustments considered necessary to state fairly the results for the periods presented.
The results for the period ended March 31, 2018 are not necessarily indicative of the results to be expected for the entire fiscal
year ending December 31, 2018 or for any future period.
These unaudited condensed financial statements
and notes thereto should be read in conjunction with the Management’s Discussion and the audited financial statements and
notes thereto included in the Annual Report on Form 10-K for the year ended December 31, 2017.
2. Organization and business background
Mi1 Global Telco., Inc. (“the Company”),
formerly known as Domain Extremes Inc., was organized under the laws of the State of Nevada on January 23, 2006.
The Company was principally engaged in
advertisements on websites and applications. The Company’s original goal was to become a major network on travel, food, entertainment,
activities and city life. The Company launched the website www.drinkeat.com, which provides reviews of restaurants in Hong Kong. Due
to the drop in readership and advertising, the Company decided to terminate its website operation in May 2018. The Company
is actively looking for new investment opportunities and new source of revenue.
On May 1, 2017, the Company filed with
the Nevada Secretary of State a certificate of amendment (the “Amendment”) to the Company’s Articles of Incorporation.
The Amendment, previously approved by the Company’s board of directors on August 31, 2016 and stockholders on November 4,
2016, changed (a) the name of the Company from “Domain Extremes Inc.” to “Mi1 Global Telco., Inc.” and
(b) the authorized shares of common stock, par value $0.001, from 200,000,000 shares to 1,200,000,000 shares. The Amendment became
effective upon its filing. The name change will become effective with FINRA on July 19, 2017.
On October 24, 2017, the Company effectuated
a reverse split of the Company’s issued and outstanding common stock on a 1 for 10,000 (1:10,000) bases, pursuant to which
the authorized shares of common stock remained 1,200,000,000 shares and the par value remained $0.001. All share and earnings
per share information have been retroactively adjusted to reflect the stock split in the financial statements.
3. Going concern uncertainties
The accompanying condensed financial statements
have been prepared using the going concern basis of accounting, which contemplates the realization of assets and the satisfaction
of liabilities in the normal course of business.
As of March 31, 2018, the Company experienced
an accumulated deficit of $759,959 and net loss of $16,077 for the three months ended March 31, 2018. The continuation of the Company
as a going concern through December 31, 2018 is dependent upon the continued financial support from its stockholders. Management
believes the Company is currently pursuing additional financing for its operations. However, there is no assurance that the Company
will be successful in securing sufficient funds to sustain the operations.
These and other factors raise substantial
doubt about the Company’s ability to continue as a going concern. These condensed financial statements do not include any
adjustments to reflect the possible future effects on the recoverability and classification of assets and liabilities that may
result in the Company not being able to continue as a going concern.
4. Summary of significant accounting
policies
The accompanying condensed financial statements
reflect the application of certain significant accounting policies as described in this note and elsewhere in the accompanying
condensed financial statements and notes.
Basis of Presentation
The condensed financial statements of the
Company have been prepared in accordance with generally accepted accounting principles in the United States of America (“US
GAAP”) and are presented in US dollars.
Fiscal Year-End
The Company’s fiscal year is December
31.
Use of estimates
The preparation of the financial statements
in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements,
and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Cash and cash equivalents
The Company considers all short-term highly
liquid investments that are readily convertible to known amounts of cash and have original maturities of three months or less to
be cash equivalents.
Income taxes
Income taxes are determined in accordance
with the provisions of ASC Topic 740, “Income Taxes” (“ASC 740”). Under this method, deferred tax assets
and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying
amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using
enacted income tax rates expected to apply to taxable income in the years in which those temporary differences are expected to
be recovered or settled. Any effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in
the period that includes the enactment date.
ASC 740 prescribes a comprehensive model
for how companies should recognize, measure, present, and disclose in their financial statements uncertain tax positions taken
or expected to be taken on a tax return. Under ASC 740, tax positions must initially be recognized in the financial statements
when it is more likely than not the position will be sustained upon examination by the tax authorities. Such tax positions must
initially and subsequently be measured as the largest amount of tax benefit that has a greater than 50% likelihood of being realized
upon ultimate settlement with the tax authority assuming full knowledge of the position and relevant facts.
Comprehensive income
ASC Topic 220, “Comprehensive Income”,
establishes standards for reporting and display of comprehensive income, its components and accumulated balances. Comprehensive
income as defined includes all changes in equity during a period from non-owner sources. Accumulated other comprehensive income,
as presented in the accompanying statement of stockholders’ equity, consists of changes in unrealized gains and losses on
foreign currency translation. This comprehensive income is not included in the computation of income tax expense or benefit.
Foreign currencies translation
The functional currency of the Company
is Hong Kong dollars (“HK$”). The Company maintains its financial statements in the functional currency. Monetary assets
and liabilities denominated in currencies other than the functional currency are translated into the functional currency at rates
of exchange prevailing at the balance sheet dates. Transactions denominated in currencies other than the functional currency are
translated into the functional currency at the exchanges rates prevailing at the dates of the transaction. Exchange gains or losses
arising from foreign currency transactions are included in the determination of net income for the respective periods.
For financial reporting purposes, the financial
statements of the Company which are prepared using the functional currency have been translated into United States dollars. Assets
and liabilities are translated at the exchange rates at the balance sheet dates and revenue and expenses are translated at the
average exchange rates and stockholders’ equity is translated at historical exchange rates. Any translation adjustments resulting
are not included in determining net income but are included in foreign exchange adjustment to other comprehensive income, a component
of stockholders’ equity.
Fair value of financial instruments
The carrying value of the Company’s
financial instruments (excluding short-term bank borrowing): cash and cash equivalents, accounts and retention receivable, prepayments
and other receivables, accounts payable, income tax payable, amount due to a related party, other payables and accrued liabilities
approximate at their fair values because of the short-term nature of these financial instruments.
Management believes, based on the current
market prices or interest rates for similar debt instruments, the fair value of its obligation under finance lease and short-term
bank borrowing approximate the carrying amount.
The Company also follows the guidance of
the ASC Topic 820-10, “Fair Value Measurements and Disclosures” ("ASC 820-10"), with respect to financial
assets and liabilities that are measured at fair value. ASC 820-10 establishes a three-tier fair value hierarchy that prioritizes
the inputs used in measuring fair value as follows:
• Level 1 : Inputs are based upon
unadjusted quoted prices for identical instruments traded in active markets;
• Level 2 : Inputs are based upon
quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are
not active, and model-based valuation techniques (e.g. Black-Scholes Option-Pricing model) for which all significant inputs are
observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
Where applicable, these models project future cash flows and discount the future amounts to a present value using market-based
observable inputs; and
• Level 3 : Inputs are generally
unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the
asset or liability. The fair values are therefore determined using model-based techniques, including option pricing models and
discounted cash flow models.
Fair value estimates are made at a specific
point in time based on relevant market information about the financial instrument. These estimates are subjective in nature and
involve uncertainties and matters of significant judgment and, therefore, cannot be determined with precision. Changes in assumptions
could significantly affect the estimates.
Revenue recognition
The Company recognized revenues from advertising
insertion revenue in the period in which the advertisement is displayed, provided that evidence of an arrangement exists, the fees
are fixed or determinable and collection of the resulting receivable is reasonably assured. If fixed-fee advertising is displayed
over a term greater than one month, revenues are recognized ratably over the period as described below. The majority of insertion
orders have terms that begin and end in a quarterly reporting period. In the cases where at the end of a quarterly reporting period
the term of an insertion order is not complete, the Company recognizes revenue for the period by pro-rating the total arrangement
fee to revenue and deferred revenue based on a measure of proportionate performance of its obligation under the insertion order.
The Company measures proportionate performance by the number of placements delivered and undelivered as of the reporting date.
Net loss per share
The Company calculates net loss per share
in accordance with ASC Topic 260, “Earnings per Share.” Basic income per share is computed by dividing the net income
by the weighted-average number of common shares outstanding during the period. Diluted income per share is computed similar to
basic income per share except that the denominator is increased to include the number of additional common shares that would have
been outstanding if the potential common stock equivalents had been issued and if the additional common shares were dilutive.
Recently issued accounting pronouncements
In May 2014, the Financial Accounting Standards
Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers.
The standard provides companies with a single model for accounting for revenue arising from contracts with customers and supersedes
current revenue recognition guidance, including industry-specific revenue guidance. The core principle of the model is to recognize
revenue when control of the goods or services transfers to the customer, as opposed to recognizing revenue when the risks and rewards
transfer to the customer under the existing revenue guidance. The guidance permits companies to either apply the requirements retrospectively
to all prior periods presented, or apply the requirements in the year of adoption, through a cumulative adjustment. In August 2015,
the FASB issued ASU 2015-14, Deferral of the Effective Date, which defers the required adoption date of ASU 2014-09 by one year.
As a result of the deferred effective date, ASU 2014-09 is effective for the Company in its first quarter of fiscal 2018.
The following ASUs were subsequently issued
by the FASB to clarify the implementation guidance in some areas and add practical expedients: In March 2016, ASU 2016-08, Revenue
from Contracts with Customers: Principal versus Agent Considerations; in April 2016, ASU 2016-10, Revenue from Contracts with Customers:
Identifying Performance Obligations and Licensing; in May 2016, ASU 2016-12, Revenue from Contracts with Customers: Narrow Scope
Improvements and Practical Expedients; and in December 2016, ASU 2016-20, Technical Corrections and Improvements to Revenue from
Contracts with Customers .
The Company has
finalized its evaluation of standard product sales arrangements and has identified an adoption impact related to revenue from certain
distributor agreements which was deferred until the period in which the distributor sells through the inventory to the end customer.
In connection with the adoption of ASU 2014-09, the Company will change the recognition of sales to these distributors whereby
revenue will be estimated and recognized in the period in which the Company transfers control of the product to the distributor;
the adoption impact is not material. Other than this impact, the Company has not identified any expected impact on the timing and
measurement of revenue for standard product sales arrangements from the adoption of the standard.
In February 2016,
the FASB issued ASU No. 2016-02, Leases. The standard requires that a lessee recognize the assets and liabilities that arise from
operating leases. A lessee should recognize in its balance sheet a liability to make lease payments (the lease liability) and a
right-of-use asset representing its right to use the underlying asset for the lease term. For leases with a term of 12 months or
less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and
lease liabilities. In transition, lessees and lessors are required to recognize and measure leases at the beginning of the earliest
period presented using a modified retrospective approach. The guidance in ASU 2016-02 is effective for annual and interim reporting
periods beginning after December 15, 2018.
In November 2016,
the FASB issued ASU No. 2016-18, Statement of Cash Flows - Restricted Cash, which requires entities to show the changes in the
total of cash, cash equivalents, restricted cash and restricted cash equivalents in the statement of cash flows. The guidance is
effective for the Company in its first quarter of fiscal 2018.
In January 2017,
the FASB issued ASU No. 2017-04, Intangibles - Goodwill and Other, which eliminates step two of the quantitative goodwill impairment
test. Step two required determination of the implied fair value of a reporting unit, and then a comparison of this implied fair
value with the carrying amount of goodwill for the reporting unit, in order to determine any goodwill impairment. Under the new
guidance, an entity is only required to complete a one-step quantitative test, by comparing the fair value of a reporting unit
with its carrying amount, and any goodwill impairment charge is determined by the amount by which the carrying amount exceeds the
reporting unit’s fair value. However, the loss should not exceed the total amount of goodwill allocated to the reporting
unit. The standard is effective for the Company in the first quarter of 2020, with early adoption permitted as of January 1, 2017,
and is to be applied on a prospective basis.
In March 2017,
the FASB issued ASU No. 2017-07, Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit
Cost , which changes how employers that sponsor defined benefit pension or other postretirement benefit plans present the net periodic
benefit cost in the statement of operations. The new guidance requires entities to report the service cost component in the same
line item or items as other compensation costs. The other components of net benefit cost are required to be presented in the statement
of operations separately from the service cost component and outside the subtotal of loss from operations. ASU 2017-07 also provides
that only the service cost component is eligible for capitalization. The standard is effective for the Company in the first quarter
of 2018, with adoption to be applied on a retrospective basis.
Other accounting
standards that have been issued or proposed by the FASB or other standards-setting bodies that do not require adoption until a
future date are not expected to have a material impact on the Company’s consolidated financial statements upon adoption.
5. Stockholders’
deficit
On March 7, 2017, the Company issued 40
shares of common stock to Azari Bin A Ghani, Mazlan Bin Muhammad, Syed Mokhtar Bin Syed Agil and Tengku Faikah Binti Tengku Ismail
(10 shares each) for a consideration of $400.
On April 13, 2017, the Company issued 70
shares of common stock to Romli Bin Che Noh, Suhaila Binti Md Arsid Arshad, Yu Ming Ngee, Ritha Tumiar Situmorang, Norizan Binti
A Latif, Mohammad Zamri Bin Wan Chik and Adicandra Manurung (10 shares each) for a consideration of $700.
On June 30, 2017, the Company issued 60
shares of common stock to Mohd Afidi Bin Abdullah, Den Wijaya, Ching Yang Det and Mohd Zaki Bin Ahmadl (10 shares each) and Johanes
Abednego (20 shares) for a consideration of $600.
On August 7, 2017, the Company filed a
certificate of change with the Secretary of State of Nevada to effectuate a reverse stock split (the “Stock Split”)
of its issued and outstanding shares of common stock on a 1-for-10,000 basis. The number of its authorized shares of common stock
will remain at 1,200,000,000 shares, par value $0.001. The Stock Split became effective with FINRA on October 24, 2017 (the “Effective
Date”). As of that date, every 10,000 shares of issued and outstanding common stock were converted into one share of common
stock. No fractional shares were issued in connection with the Stock Split. Instead, any fractional shares were rounded up
to the next whole share and a holder of record of old common stock on the Effective Date who would otherwise be entitled to a fraction
of a share were, in lieu thereof, issued one whole share. All share and earnings per share information have been retroactively
adjusted to reflect the Stock Split in the financial statements.
During the year ended December 31, 2017,
the Company has received the proceeds of $87 for subscription of common stock and no common stock was issued.
During the quarter ended March 31, 2018,
there were no share issuances.
The Company has no stock option plan, warrants
or other dilutive securities.
The Company has the authority to issue
1,200,000,000 shares of common stock, $0.001 par value. The total number of shares of the Company’s common stock outstanding
as of March 31, 2018 and December 31, 2017 were 20,000 and 20,000 respectively.
6. Accrued
expenses and other payables
Accrued expenses and other payables as
of March 31, 2018 and December 31, 2017 are summarized as follows:
|
|
At March 31,
|
|
|
At December 31,
|
|
|
|
2018
|
|
|
2017
|
|
|
|
(unaudited)
|
|
|
(audited)
|
|
|
|
$
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
Accrued audit fee
|
|
|
6,650
|
|
|
|
5,000
|
|
Other payables
|
|
|
52,557
|
|
|
|
48,557
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
59,207
|
|
|
|
53,557
|
|
7. Amount due to related parties
The amounts due to related parties as of
March 31, 2018 and December 31, 2017 represent temporary advances from the Company’s directors. The amounts are interest
free, unsecured and no fixed repayment term. Imputed interest from related party loan is not significant.
8. Related party transactions
During the three months ended March 31,
2018, Mr. Kok Seng Yeap, has advanced $10,350 to pay operating expenses on behalf of the Company.
As of March 31, 2018 and December 31, 2017,
the Company owed to Mr. Kok Seng Yeap $166,843 and $156,493, respectively, which was unsecured, interest-free and had no fixed
terms of repayments. Imputed interest from related party loan is not significant.
As of March 31, 2018 and December 31, 2017,
the Company owed to Fintel (USA) Limited $192,408, which was unsecured, interest-free and had no fixed terms of repayments. Imputed
interest from related party loan is not significant.
9. Commitments and
contingencies
From time to time the Company may become
a party to litigation matters involving claims against the Company. Management believes that it is adequately insured for its operations
and there are no current matters that would have a material effect on the Company's financial position or results of operations.
10. Subsequent Events
On January 30, 2019, HKCM CPA & Co
(Predecessor firm: HKCMCPA Company Limited) (“HKCMCPA”) resigned as the independent registered public accounting firm
of the Company. Effective upon the resignation of HKCMCPA, the Company, as authorized by the Board of Directors, engaged RH, CPA
as the new independent registered public accounting firm of the Company.