|
|
|
|
|
|
|
|
|
|
|
For the three months ended March 31,
|
|
|
|
2013
|
|
|
2012
|
|
|
|
U.S.$
|
|
|
U.S.$
|
|
CASH FLOWS FROM OPERATING ACTIVITIES
|
|
|
|
|
|
|
|
|
Net income/(loss)
|
|
|
(2,580
|
)
|
|
|
(1,000
|
)
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
|
|
|
Depreciation
|
|
|
|
|
|
|
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
Prepayments, deposits and other receivables
|
|
|
|
|
|
|
|
|
Accrued expenses and other current liabilities
|
|
|
(4,429
|
)
|
|
|
(100
|
)
|
Surcharge on taxes
|
|
|
|
|
|
|
|
|
Income tax payable
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET CASH USED IN OPERATING ACTIVITIES
|
|
|
(7,009
|
)
|
|
|
(1,100
|
)
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM INVESTING ACTIVITIES
|
|
|
|
|
|
|
|
|
NET CASH USED IN INVESTING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
|
Repayment of long-term debt
|
|
|
|
|
|
|
|
|
Advance from related parties
|
|
|
7,009
|
|
|
|
1,100
|
|
Repayment to related parties
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET CASH PROVIDED BY FINANCING ACTIVITIES
|
|
|
7,009
|
|
|
|
1,100
|
|
|
|
|
|
|
|
|
|
|
NET DECREASE IN CASH AND CASH EQUIVALENTS
|
|
|
|
|
|
|
|
|
Cash and cash equivalents, beginning of period
|
|
|
|
|
|
|
|
|
Foreign currency translation on cash and cash equivalents
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH AND CASH EQUIVALENTS, END OF PERIOD
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
|
|
|
|
|
|
|
|
|
Cash paid for interest
|
|
|
|
|
|
|
|
|
NOTES TO FINANCIAL STATEMENTS
1. Basis of Presentation
The accompanying financial statements present the financial position of Chinawe.com Inc. (Chinawe or the
Company) as of March 31, 2013 and December 31, 2012, and its results of operations for the three months ended March 31, 2013 and 2012. All inter-company accounts and transactions have been eliminated on consolidation.
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting
principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting
principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three months ended
March 31, 2013 are not necessarily indicative of the results that may be expected for the year ending December 31, 2013.
The
balance sheet at December 31, 2012 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial
statements. These financial statements should be read in conjunction with the consolidated financial statements included in the Companys Annual Report on Form 10-K for the year ended December 31, 2012.
Adoption of recently issued accounting pronouncements
In April, 2011, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2011-02 Receivables (Topic 310). The purpose of this
Update is to help creditors in determining whether a creditor has granted a concession and whether a debtor is experiencing financial difficulties for purposes of determining whether a restructuring constitutes a troubled debt restructuring.
Diversity in practice could adversely affect the comparability of information for users about restructurings of receivables. This pronouncement has no current application to the Company.
In September, 2011, the FASB issued ASU No. 2011-09 CompensationRetirement Benefits Multiemployer Plans (Subtopic 715-80). The purpose of this Update is to address concerns
from various users of financial statements on the lack of transparency about an employers participation in a multiemployer pension plan. A unique characteristic of a multiemployer plan is that assets contributed by one employer may be used to
provide benefits to employees of other participating employers. This is because the assets contributed by an employer are not specifically earmarked only for its employees. If a participating employer fails to make its required contributions, the
unfunded obligations of the plan may be borne by the remaining participating employers. Similarly, in some cases, if an employer chooses to stop participating in a multiemployer plan, the withdrawing company may be required to pay to the plan a
final payment (the withdrawal liability). Users of financial statements have requested additional disclosure to increase awareness of the commitments and risks involved with participating in multiemployer pension plans. The amendments in this Update
will require additional disclosures about an employers participation in a multiemployer pension plan. Previously, disclosures were limited primarily to the historical contributions made to the plans. In developing the new guidance, the
FASBs goal was to help users of financial statements assess the potential future cash flow implications relating to an employers participation in multiemployer pension plans.
2. Organization
Chinawe was incorporated under the laws of the State of California. Chinawes principal business activity was providing
professional management services relating to non-performing loans in the Peoples Republic of China, as well as other consulting services. During the first quarter of 2009, the Companys sole customer, Huizhou One Limited, issued a notice
of termination to terminate the services contracts with effect from March 26 and March 27, 2009. Effective from March 27, 2009, the Company became a non-operating company.
7
The consolidated financial statements include the accounts of Chinawe and the following subsidiary
(collectively referred to as the Company):
Officeway Technology Limited, a company incorporated in the British Virgin Islands in
December 1999, which was formed for the purpose of acquiring (in March 2000) its wholly-owned subsidiary, Chinawe Asset Management Limited (CAM (HK)). CAM (HK) was disposed of as of July 26, 2010.
3. Going concern consideration
The Companys financial statements have been prepared on a going concern basis, which contemplates the realization of assets and
the settlement of liabilities and commitments in the normal course of business. As of March 31, 2013, the Company had negative working capital and stockholders deficit of U.S.$375,022 and U.S.$375,022, respectively, which raise
substantial doubt about its ability to continue as a going concern.
The Company has relied on private financing by cash inflows from the
principal stockholders of the Company, who have agreed not to demand repayment of amounts due to them as long as the Company has negative working capital. These stockholders have indicated their intention to finance the Company for a reasonable
period of time to enable the Company to continue as a going concern, assuming that in such a period of time the Company would not be able to raise additional capital to support its continuation. However, it is uncertain for how long or to what
extent such a period of time would be reasonable and there can be no assurance that the financing from these stockholders will be continued. The accompanying financial statements do not include or reflect any adjustments that might
result from the outcome of these uncertainties.
4. Due to related parties
The balances with related parties are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note
|
|
|
As of
March 31, 2013
|
|
|
As of
December 31, 2012
|
|
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
U.S.$
|
|
|
U.S.$
|
|
Advances from stockholders
|
|
|
(a
|
)
|
|
|
370,987
|
|
|
|
363,978
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
The amounts due are unsecured, non-interest bearing and repayable on demand. During the three months ended March 31, 2013 and 2012, the Company received advances
from related parties of U.S.$7,009 and U.S.$1,100, respectively. In addition, during the three months ended March 31, 2013 and 2012, the Company repaid advances of U.S.$0 and U.S.$0, respectively, to related parties.
|
5. Income tax expenses
It is managements intention to reinvest all the income attributable to the Company earned by its operations outside the U.S.
Accordingly, no U.S. corporate income taxes are provided for in these financial statements.
The Company is subject to income taxes on an
entity basis on income arising in or derived from the tax jurisdiction in which each entity is domiciled.
Under the current laws of the
British Virgin Islands (the BVI), dividends and capital gains arising from the Companys investments in the BVI are not subject to income taxes and no withholding tax is imposed on payments of dividends to the Company.
6. Contingencies
The Company is currently suspended in the State of California due to failure to file reports with the Franchise Tax Board. The Company
is also delinquent in filing its U.S. Federal tax returns. The Company has decided not to pursue reinstatement in California or prepare and file past due U.S. Federal tax returns until it has formulated a plan for once again becoming an operating
company.
8