Quarterly Report (10-q)

Date : 08/14/2019 @ 10:11AM
Source : Edgar (US Regulatory)
Stock : Weyland Tech Inc. (QX) (WEYL)
Quote : 0.455  0.011 (2.48%) @ 7:48PM

Quarterly Report (10-q)


UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


FORM 10-Q



[X]  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


For the fiscal years ended  June 30, 2019

or


[  ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


For the transition period from to  ______ to ______

 

Commission File Number:   000-51815


WEYLAND TECH INC.

(Exact name of registrant as specified in its charter)



Delaware

46-5057897

(State or other jurisdiction of incorporation

or organization)

(I.R.S. Employer Identification No.)

 

 

85 Broad Street, 16-079

New York, NY 10004

(Address of principal executive offices, including Zip Code)

 

 

(808) 829-1057

(Registrant’s telephone number, including area code)


 Securities registered pursuant to Section 12(b) of the Act:


Title of each class

Trading Symbol(s)

Name of each exchange on which registered

None

N/A

N/A


Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 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.

[X] Yes  [  ] No






Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 229.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

[X] 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” and “smaller reporting 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 Act).

[  ] Yes   [X] No


As of August 14, 2019, the registrant had 51,689,152 shares of common stock issued and outstanding.




2



TABLE OF CONTENTS

PART I – FINANCIAL INFORMATION

 

4

Item 1.

Financial Statements

 

4

 

Unaudited condensed Consolidated Balance sheets as of June 30, 2019 and Audited condensed Balance sheet as of December 31, 2018.

 

4

 

Unaudited condensed Consolidated statements of operations and comprehensive loss for the six months ended June 30, 2019 and 2018.

 

5

 

Unaudited condensed Consolidated statements of cash flows for the six months ended June 30, 2019 and 2018.

 

6

 

Notes to Unaudited Condensed Consolidated Financial Statements

 

7

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

15

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

 

18

Item 4.

Controls and Procedures

 

19

PART II – OTHER INFORMATION

 

20

Item 1.

Legal Proceedings

 

20

Item 1A.

Risk Factors

 

20

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

 

20

Item 3.

Defaults Upon Senior Securities

 

20

Item 4.

Mine Safety Disclosures

 

20

Item 5.

Other Information

 

20

Item 6.

Exhibits

 

21

SIGNATURES

 

 

22




3



PART I – FINANCIAL INFORMATION


ITEM 1. Financial Statements


WEYLAND TECH INC.

Consolidated Balance Sheets

 

 

 

 

 

 

June 30

 

December 31

 

 

 

2019

 

2018

ASSETS

 

 

(Unaudited)

 

(Audited)

Intangible assets, net

$

662,565 

$

713,531 

Investment in Associate

 

Total non-current assets

 

 

662,565 

 

713,531 

Current assets

 

 

 

 

 

Amount due from Associate

 

 

1,455,250 

 

862,000 

Prepayment, deposit and other receivables

 

3,181,651 

 

3,181,651 

Cash and cash equivalents

 

5,302,919 

 

731,355 

Total current assets

 

9,939,820 

 

4,775,006 

Total assets

$

10,602,385 

$

5,488,537 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

Current liabilities

 

 

 

 

 

Accounts payable

 

 

87,016 

 

18,000 

Accruals and other payables

 

 

257,987 

 

283,795 

Deposits received for share to be issued

 

 

4,838,301 

 

Loan from director

 

 

19,000 

 

Amount due to director

 

 

77,500 

 

77,500 

Total current liabilities

 

 

5,279,803 

 

379,295 

Total liabilities

 

 

5,279,803 

 

379,295 

 

 

 

 

 

 

STOCKHOLDERS' EQUITY

 

 

 

 

 

Common stock, $0.0001 par value,

 

 

 

250,000,000 shares authorized, 52,002,152 and

 

 

36,915,343 shares issued and outstanding as of

 

 

 

June 30, 2019 and December 31, 2018, respectively

5,200 

 

3,692 

Additional paid-in capital

 

48,087,318 

 

46,177,521 

Accumulated deficit brought forward

 

(42,769,937)

 

(41,071,971)

Total stockholder’s equity

 

5,322,582 

 

5,109,242 

Total liabilities and stockholders' equity

$

10,602,385 

$

5,488,537 

 

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



4




WEYLAND TECH INC.

Condensed Consolidated Statements of Operations

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months

Ended June 30,

 

 

Six Months

Ended June 30,

 

 

 

 

 

2019

 

2018

 

 

2019

 

2018

 

 

 

 

 

(Unaudited)

 

(Unaudited)

 

 

(Unaudited)

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

Service Revenue

 

$

7,141,932 

$

4,658,980 

 

$

15,633,624 

$

8,838,686 

Cost of Service

 

 

5,874,249 

 

570,735 

 

 

12,858,676 

 

1,082,758 

Gross Profit

 

 

1,267,683 

 

4,088,245 

 

 

2,774,948 

 

7,755,928 

 

 

 

 

 

 

 

 

 

 

 

Operating Expenses

 

 

 

 

 

 

 

 

 

 

 

General and administrative

 

 

1,280,869 

 

547,116 

 

 

1,921,791 

 

1,543,790 

 

Research and development

 

 

1,242,833 

 

2,403,854 

 

 

2,110,548 

 

3,612,971 

 

Sales and marketing

 

 

389,610 

 

2,096,541 

 

 

389,610 

 

3,977,409 

 

Depreciation &amortization

 

 

25,483 

 

87,983 

 

 

50,967 

 

175,966 

Total Operating Expenses

 

 

2,938,795 

 

5,135,494 

 

 

4,472,915 

 

9,310,136 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Loss) from Operations

 

 

(1,671,112)

 

(1,047,249)

 

 

(1,697,967)

 

(1,554,208)

 

 

 

 

 

 

 

 

 

 

 

Provision for income taxes

 

 

 

 

 

 

Net (Loss)

 

$

(1,671,112)

$

(1,047,249)

 

$

(1,697,967)

$

(1,554,208)

 

 

 

 

 

 

 

 

 

 

 

 

 

Net (Loss) per common share - basic and fully diluted:

 

(0.0352)

 

(0.0332)

 

 

(0.0498)

 

(0.0623)

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of basic and fully diluted common shares outstanding

 

 

47,411,032 

 

29,186,966 

 

 

34,086,114 

 

      24,951,557 

 

 

 

 

 

 

 

 

 

 

 

 

 

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



5




WEYLAND TECH INC.

Consolidated Statements of Cash Flows

 

 

 

 

 

Six Months Ended June 30

 

 

 

 

 

2019

 

2018

 

 

 

(Unaudited)

 

(Unaudited)

Cash flows from operations:

 

 

 

 

 

 

(Loss) from continuing operations

 

$

(1,697,967)

$

(1,554,208)

 

Adjustment to reconcile net profit to net cash used in operating activities:

 

 

Amortization of intangible assets

 

 

50,967

 

175,967 

 

 

Impairment loss on associate

 

 

 

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

Amount due from Associates

 

 

(593,250)

 

(542,000) 

 

 

Deposits and other receivables

 

 

 

86,195

 

 

Prepayments

 

 

 

(876,567)

 

 

Accounts payable, accruals and other payables

 

 

43,207

 

(32,010)

 

 

Stock subscription payables

 

 

4,838,301

 

1,753,438 

 

 

Loan from director

 

 

19,000 

 

Net cash from (used) in operations

 

 

2,660,258 

 

(989,185)

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

 

Proceeds from stock issuance

 

 

1,911,306 

 

699,877

Net cash provided by financing activities

 

 

1,911,306 

 

699,877

Net increase/(decrease) in cash and cash equivalents

 

 

4,571,564 

 

(289,308)

Cash and cash equivalents, beginning of year

 

 

731,355 

 

1,056,399

Cash and cash equivalents, end of year

 

$

5,302,919 

$

767,091

Supplemental cash flow disclosure:

 

 

 

 

 

Cash paid for interest expenses

 

$

$

Cash paid for income taxes

 

$

$

Non-cash transactions

 

 

 

 

 

 

Issuance of shares for services received

 

$

1,247,056 

$

699,877

 

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



6



NOTES TO UNAUDITED CONDENSED

CONSOLIDATED FINANCIAL STATEMENTS


NOTE 1 - ORGANIZATION AND BUSINESS DESCRIPTION


Weyland Tech is a global provider of mobile business applications. Its Platform-as-a-Service (“PaaS”) platform offers a mobile presence to businesses in emerging markets, with partnerships on 3 continents and growing. This Do It Yourself (“DIY”) mobile application platform, offered in 14 languages with over 70 integrated modules, enables small and medium sized businesses (“SMB’s”) to create native mobile applications (“apps”) for Apple’s iOS and Google Android without technical knowledge or background, empowering SMB’s to increase sales, reach more customers and promote their products and services in an easy, affordable and efficient manner.


In May 2018, the Company expanded its portfolio to fintech applications with the launch of its AtozPay mobile payments platform. The mobile wallet launched in Indonesia, the world’s 4th most populous country, Indonesia, and is experiencing rapid transaction growth on the AtozPay platform.



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 Company’s 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 is focused on mobile commerce enablement via our enhanced platform built in 2017, and offered on a Platform-as-a-Service (“PaaS”) basis, and the company’s e-wallet initiative.  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



7



segregate assets by segments since our chief operating decision maker, or decision-making group, does not use assets as a basis to evaluate a segment’s performance.


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-life assets into: (i) computer and office equipment; (ii) furniture and fixtures, (iii) leasehold improvements, and (iv) finite – life intangible assets.


Long-life 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-life 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 Company’s business strategy and its forecasts for specific market expansion.


ASSOCIATES


Associates are all entities over which the group has significant influence but not control or joint control, generally accompanying a shareholding of between 20% and 50% of the voting rights. Investments in associates are accounted for using the equity method of accounting, after initially being recognized at cost. The group’s investment in associates includes goodwill identified on acquisition. The group’s share of its associates’ post-acquisition profits or losses is recognized in profit or loss, and its share of post-acquisition other comprehensive income is recognized in other comprehensive income. The cumulative post-acquisition movements are adjusted against the carrying amount of the investment. Dividends receivable from associates are recognized as a reduction in the carrying amount of the investment. Where the group’s share of losses in an associate equals or exceeds its interest in the associate, including any other unsecured long-term receivables, the group does not recognize further losses, unless it has incurred obligations or made payments on behalf of the associate. Unrealized gains on transactions between the group and its associates are eliminated to the extent of the group’s interest in the associates. Unrealized losses are also eliminated, unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of associates have been changed, where necessary, to ensure consistency with the policies adopted by the group.


ACCOUNTS RECEIVABLE AND CONCENTRATION OF RISK


Accounts receivable, net is stated at the amount the Company expects to collect, or the net realizable



8



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 Company’s estimate of the provision for allowances will change.


The Company’s CreateApp business effective 1 September 2015 is based on a nil accounts receivable balance as subscriptions are collected 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 twelve months or less and are readily convertible to known amounts of cash.


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 Company’s Platform as a Service (“PaaS”) provides 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 PaaS 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 comprises fees from third party 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



9



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.


RECENT ACCOUNTING PRONOUNCEMENTS


On October 2, 2017, the FASB has issued Accounting Standards Update (ASU) No. 2017-13, “Revenue Recognition (Topic 605), Revenue from Contracts with Customers (Topic 606), Leases (Topic 840), and Leases (Topic 842): Amendments to SEC Paragraphs Pursuant to the Staff Announcement at the July 20, 2017 EITF Meeting and Rescission of Prior SEC Staff Announcements and Observer Comments.” The ASU adds SEC paragraphs to the new revenue and leases sections of the Codification on the announcement the SEC Observer made at the 20 July 2017 Emerging Issues Task Force (EITF) meeting. The SEC Observer said that the SEC staff would not object if entities that are considered public business entities only because their financial statements or financial information is required to be included in another entity’s SEC filing use the effective dates for private companies when they adopt ASC 606, Revenue from Contracts with Customers, and ASC 842, Leases. This would include entities whose financial statements are included in another entity’s SEC filing because they are significant acquirees under Rule 3-05 of Regulation S-X, significant equity method investees under Rule 3-09 of Regulation S-X and equity method investees whose summarized financial information is included in a registrant’s financial statement notes under Rule 4-08(g) of Regulation S-X. The ASU also supersedes certain SEC paragraphs in the Codification related to previous SEC staff announcements and moves other paragraphs, upon adoption of ASC 606 or ASC 842. The Company does not expect that the adoption of this guidance will have a material impact on its condensed consolidated financial statements.


On November 22, 2017, the FASB ASU No. 2017-14, “Income Statement-Reporting Comprehensive Income (Topic 220), Revenue Recognition (Topic 605), and Revenue from Contracts with Customers (Topic 606): Amendments to SEC Paragraphs Pursuant to Staff Accounting Bulletin No. 116 and SEC Release 33-10403.” The ASU amends various paragraphs in ASC 220, Income Statement - Reporting Comprehensive Income; ASC 605, Revenue Recognition; and ASC 606, Revenue From Contracts With Customers, that contain SEC guidance. The amendments include superseding ASC 605-10-S25-1 (SAB Topic 13) as a result of SEC Staff Accounting Bulletin No. 116 and adding ASC 606-10-S25-1 as a result of SEC Release No. 33-10403. The Company does not expect that the adoption of this guidance will have a material impact on its condensed consolidated financial statements.


In February 2018, the FASB issued ASU No. 2018-02, “Reclassification of Certain Tax Effects From Accumulated Other Comprehensive Income.” The ASU amends ASC 220, Income Statement - Reporting Comprehensive Income, to “allow a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act.” In addition, under the ASU, an entity will be required to provide certain disclosures regarding stranded tax effects. The ASU is effective for all entities for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. The Company does not expect that the adoption of this guidance will have a material impact on its condensed consolidated financial statements.


In March 2018, the FASB issued ASU 2018-05 - Income Taxes (Topic 740): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118 (“ASU 2018-05”), which amends the FASB Accounting Standards Codification and XBRL Taxonomy based on the Tax Cuts and Jobs Act (the “Act”) that was signed into law on December 22, 2017 and Staff Accounting Bulletin No. 118 (“SAB 118”) that was released by the Securities and Exchange Commission. The Act changes



10



numerous provisions that impact U.S. corporate tax rates, business-related exclusions, and deductions and credits and may additionally have international tax consequences for many companies that operate internationally. The Company does not believe this guidance will have a material impact on its condensed consolidated financial statements.


In July 2018, the FASB issued ASU 2018-10, “Codification Improvements to Topic 842, Leases.” The ASU addresses 16 separate issues which include, for example, a correction to a cross reference regarding residual value guarantees, a clarification regarding rates implicit in lease contracts, and a consolidation of the requirements about lease classification reassessments. The guidance also addresses lessor reassessments of lease terms and purchase options, variable lease payments that depend on an index or a rate, investment tax credits, lease terms and purchase options, transition guidance for amounts previously recognized in business combinations, and certain transition adjustments, among others. For entities that early adopted Topic 842, the amendments are effective upon issuance of this Update, and the transition requirements are the same as those in Topic 842. For entities that have not adopted Topic 842, the effective date and transition requirements will be the same as the effective date and transition requirements in Topic 842. The Company does not believe this guidance will have a material impact on its condensed consolidated financial statements.


In July 2018, the FASB issued ASU 2018-11 - Leases (Topic 842): Targeted Improvements. The ASU simplifies transition requirements and, for lessors, provides a practical expedient for the separation of non-lease components from lease components. Specifically, the ASU provides: (1) an optional transition method that entities can use when adopting ASC 842 and (2) a practical expedient that permits lessors to not separate non-lease components from the associated lease component if certain conditions are met. For entities that have not adopted Topic 842 before the issuance of this Update, the effective date and transition requirements for the amendments in this Update are the same as the effective date and transition requirements in Update 2016-02. For entities that have adopted Topic 842 before the issuance of this Update, the transition and effective date of the amendments in this Update are as follows: 1) The practical expedient may be elected either in the first reporting period following the issuance of this Update or at the original effective date of Topic 842 for that entity. 2) The practical expedient may be applied either retrospectively or prospectively. All entities, including early adopters, that elect the practical expedient related to separating components of a contract in this Update must apply the expedient, by class of underlying asset, to all existing lease transactions that qualify for the expedient at the date elected. The Company does not believe this guidance will have a material impact on its condensed consolidated financial statements.


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 June 30, 2019, and 2018, the company has the following amounts related to intangible assets:


 

 

As of June 30,

 

 

2019

 

2018

Software acquired

$

1,764,330 

$

1,764,330 

Other intangible assets

 

5,000 

 

5,000 

 

 

1,769,330 

 

1,769,330 

Less: accumulated amortization

 

(1,106,765)

 

(963,166)

Net intangible assets

$

662,565 

$

806,164 




11



No significant residual value is estimated for these intangible assets. Amortization expense for the six months ended June 30, 2019 and 2018 totaled $50,967 and $175,967, respectively.



NOTE 4 – INVESTMENT IN ASSOCIATE


On April 23, 2018, the Company participated in the incorporation of a company in Indonesia, PT Weyland Indonesia Perkasa (“WIP’), an Indonesian limited liability company of which the Company held a 49% equity interest with the option to purchase an additional 31% equity interest at a later date.  On October 12, 2018, the Company’s interest was distributed as a dividend in specie to its shareholders at that date.  The results of operations of WIP from April 23, 2018 to June 30, 2019 has not been included as the amount had been fully impaired.


The Company currently holds a 31% unexercised option in WIP as at June 30, 2019. Due to the continuing legal restructuring in Indonesia, all the conditions precedent had not been satisfied and the 31% option had not been exercised as at June 30, 2019.



NOTE 5 – AMOUNT DUE FROM ASSOCATE


The amount due from Associate is interest free, unsecured with no fixed repayment terms.



NOTE 6 -PREPAYMENTS , DEPOSIT AND OTHER RECEIVABLES


The following amounts are outstanding at June 30, 2019:


 

 

As of June 30,

 

 

2019

 

2018

Deposit and other receivables

$

1,599,389

 

1,687,139

Prepayments

 

1,582,262

 

2,362,164

 

 

3,181,651

 

4,049,303



Included in deposit and other receivables, is an amount of $1,524,372 was held in an escrow account at a bank for the provisioning of ePayment Systems and our AtoZ platform as at December 31, 2018.



NOTE 7 – ACCRUALS AND OTHER PAYABLE


Accruals and other payable consist of the following:


 

 

As of June 30,

 

 

2019

 

2018

Accruals

$

45,649

 

219,985

Other payables

 

212,338

 

5,513

 

$

257,987

 

225,498





12



NOTE 8 - STOCKHOLDERS’ EQUITY


Common Shares


As of June 30, 2019 and 2018, 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.


During the year ended December 31, 2018, a total of 9,197,104 shares with par value of $ 0.0001 per share were issued for consultancy services received including shares issued to Senior Management, Directors, Operational Staff, Legal Consultants, Strategy Advisors and Technology Consultants received and 4,320,575 shares with par value of $0.0001 per share were issued to various stockholders.


During the period from January 1, 2019 to June 30, 2019, a total of 15,086,809 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.


During the year ended December 31, 2018, 62,964 shares with par value of $0.0001 per share were cancelled by various stockholders.


Stock-Based Compensation


For the six months ended June 30, 2019, a total of 10,624,309 shares of common stock were issued as stock-based compensation to consultants, advisors and other professional parties.



NOTE 9 – (LOSS) PER SHARE


The following table sets forth the computation of basic and diluted earnings per common share for the six months ended June 30, 2019 and 2018, respectively:





13





 

 

 

For the six months ended June 30,

 

 

 

 

2019

 

 

2018

 

  Numerator - basic and diluted

  

 

 

  

 

 

 

        Net (Loss)

  

$

(1,697,967)

 

$

(1,554,208)

 

  Denominator

  

 

 

  

 

 

 

        Weighted average number of common

        shares outstanding —basic and diluted

  

 

34,086,114 

  

 

24,951,557 

 

  (Loss) per common share — basic and diluted

 

$

(0.0498)

 

$

(0.0623)

 



NOTE 10 – COMMITMENTS AND CONTINGENCIES


Operating lease


The Company’s current executive offices are currently leased for $820 per month.


Legal proceedings


As of March 16, 2019, all outstanding lawsuits and disputes previously reported in the Company’s 10-Q and 10-K filings have been settled and the Company has no further material legal proceedings outstanding.



NOTE 11 – SUBSEQUENT EVENTS


On April 9, 2019, the Company announced today the signing of a non-binding Letter of Intent (“LOI”) with Silver Wave International Pte. Ltd., a holding company organized under the laws of Myanmar (“Silver Wave”), setting forth the proposed terms for a joint venture (“JV”) in Myanmar for the purpose of introducing the Company’s mobile and e-money services through Silver Wave’s merchant channels.


On April 16, 2019, the Company’s management met with the senior management of Silver Wave in New York and the potential for both companies going forward.


After further internal discussions between Weyland’s Board of Directors and senior management, combined with expanded interest from potential investors, partners and merger candidates in Indonesia, the decision was made to discontinue further discussions with Silver Wave.



14




Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations.


Forward Looking Statements


This quarterly report on Form 10-Q and other reports that we file with the SEC contain statements that are considered forward-looking statements. Forward-looking statements give the Company’s current expectations, plans, objectives, assumptions or forecasts of future events.  All statements other than statements of current or historical fact contained in this quarterly report, including statements regarding the Company’s future financial position, business strategy, budgets, projected costs and plans and objectives of management for future operations, are forward-looking statements.  In some cases, you can identify forward-looking statements by terminology such as “anticipate,” “estimate,” “plans,” “potential,” “projects,” “ongoing,” “expects,” “management believes,” “we believe,” “we intend,” and similar expressions.  These statements are based on the Company’s current plans and are subject to risks and uncertainties, and as such the Company’s actual future activities and results of operations may be materially different from those set forth in the forward-looking statements. Any or all of the forward-looking statements in this periodic report may turn out to be inaccurate and as such, you should not place undue reliance on these forward-looking statements.  The Company has based these forward-looking statements largely on its current expectations and projections about future events and financial trends that it believes may affect its financial condition, results of operations, business strategy and financial needs.  The forward-looking statements can be affected by inaccurate assumptions or by known or unknown risks, uncertainties and assumptions due to a number of factors, including:


dependence on key personnel;


competitive factors;


degree of success of research and development programs;


the operation of our business; and


general economic conditions in the ASEAN, Asia-Pacific Region and in the Unit States.


These forward-looking statements speak only as of the date on which they are made, and except to the extent required by federal securities laws, we undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events. In addition, we cannot assess the impact of each factor on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. All subsequent written and oral forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by the cautionary statements contained in this annual report.


Use of Terms


Except as otherwise indicated by the context and for the purposes of this report only, references in this report to:


“Weyland” the “Company,” “we,” “us,” or “our,” are to the business of Weyland Tech Inc., a Delaware corporation;


“SEC” are to the Securities and Exchange Commission;


“Securities Act” are to the Securities Act of 1933, as amended;



15




“Exchange Act” are to the Securities Exchange Act of 1934, as amended;


“U.S. dollars,” “dollars” and “$” are to the legal currency of the United States.


You should read the following plan of operation together with our financial statements and related notes appearing elsewhere in this quarterly report and the most recent Form 10-K and Form 10-Q.  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 Tech’s 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.  At present, the Company does not charge for use of the PaaS platform. The Company recognizes revenue on a pay to use subscription basis when our customers use our platform.


We believe that SMB can increase sales, reach more customers and promote their products and services via a simple easy to build mobile app at an affordable price and in a cost-effective manner.


Weyland Tech, Inc. is focused on mobile commerce enablement via our enhanced platform built in 2017 and, offered on a Platform-as-a-Service (“PaaS”) basis, and the company’s e-wallet initiative AtoZPay.  Recent product launches with our strategic partners DPEX (Indonesia), BGT (Thailand), Augicom/Orange (France) are representative of the PaaS platform strategy and product offering.


Results of Operation


Three Months Ended June 30, 2019 Compared With Three Months Ended June 30, 2018


Revenue


Revenue was $7,141,932 and $4,658,980 for the three months ended June 30, 2019 and 2018, respectively.  The increase is due to the service income from our customers in targeted emerging markets at lower price points.


Cost of Revenue


Cost of revenue was $5,874,249 and $570,735 for the three months ended June 30, 2019 and 2018, respectively. The increase reflects re-classification of certain Research and Development and Sales and Marketing expense previously included in Cost of Service for three months ended June 30, 2018.


Operating Expenses


General and administrative:  General and administrative expenses were $1,280,869 and $547,115 for the three months ended June 30, 2019 and 2018, respectively.  The increase was due to $873,416 was shares issuance to consultancy fee.


Research and Development: Research and Development expense were $1,242,833 and $2,403,854 for the three months ended June 30, 2019 and 2018, respectively. The decrease reflects re-classification of certain Research and Development and Sales and Marketing expense previously included in Cost of Service for three months ended June 30, 2018.





16



Sales and Marketing: Sales and Marketing expenses were $389,610 and $2,096,541 for the three months ended June 30, 2019 and 2018, respectively. The decrease reflects classification of certain Research and Development and Sales and Marketing expense previously included in Cost of Service for three months ended June 30, 2018.


Net (Loss)


The Company reports a net loss of ($1,671,112) for the three months ended June 30, 2019 as compared to a net loss ($1,047,249) for the three months ended June 30, 2018.


Six Months Ended June 30, 2019 Compared With Six Months Ended June 30, 2018


Revenue


Revenue was $15,633,624 and $8,838,686 for the six months ended June 30, 2019 and 2018, respectively.  The increase is due to the service income from our customers in targeted emerging markets at lower price points.


Cost of Revenue


Cost of revenue was $12,858,676 and $1,082,758 for the six months ended June 30, 2019 and 2018, respectively. The increase reflects re-classification of certain Research and Development and Sales and Marketing expense previously included in Cost of Service for six months ended June 30, 2018.


Operating Expenses


General and administrative:  General and administrative expenses were $1,921,791 and $1,543,790 and for the six months ended June 30, 2019 and 2018, respectively.  The increase was due to $1,247,056 was shares issued as stock compensation to consultants and investor relations.


Research and Development: Research and Development expense were $2,110,548 and $3,612,971 for the six months ended June 30, 2019 and 2018, respectively. The decrease reflects re-classification of certain Research and Development and Sales and Marketing expense previously included in Cost of Service for six months ended June 30, 2018.


Sales and Marketing: Sales and Marketing expenses were $389,610 and $3,977,409 for the six months ended June 30, 2019 and 2018, respectively. The decrease reflects classification of certain Research and Development and Sales and Marketing expense previously included in Cost of Service for six months ended June 30, 2018.


Net (Loss)


The Company reports a net loss of ($1,697,967) for the six months ended June 30, 2019 as compared to a net loss ($1,554,208) for the six months ended June 30, 2018. The increase in the net loss is due to a increase in consultancy fees and stock-based compensation.


Liquidity and Capital Resources


Six Months Ended June 30, 2019 Compared With Six Months Ended June 30, 2018


As of June 30, 2019, we had total assets of $10,602,385 and $5,279,803 in liabilities. Thus, we had a total stockholders’ equity of $5,322,582 as of June 30, 2019.  As of June 30, 2018, we had total assets of $6,164,558 and $3,767,964 in liabilities. Thus, we had a total stockholders’ equity of $2,396,594 as of June 30, 2018.

 



17



As of June 30, 2019, we had a cash balance of $5,302,919. Operating activities used $ 2,660,258 in cash for the six months ended June 30, 2019. Financing activities provided $1,911,306 in cash for the six months ended June 30, 2019. As of June 30, 2018, we had a cash balance of $767,091. Operating activities used $(989,186) in cash for the six months ended June 30, 2018. Financing activities during the six months ended June 30, 2018 provided $_699,877.


The cash balance increase from $767,091 to $5,302,919 from June 30, 2018 to June 30, 2019 is due to $5,185,601 share placements in six months ended June 30, 2019.

 

As reflected in the financial statements, the Company had net cash in operations of $_4,571,564 and has a net loss of $1,697,967 and an accumulated deficit of $ 42,769,937 as at June 30, 2019.


We estimate that based on current plans and assumptions, that our available cash will be sufficient to satisfy our cash requirements under our present operating expectations, without further financing, for up to 36 months. We have sufficient working capital to fund the expansion of our operations and to provide working capital necessary for our ongoing operations and obligations. We may continue to raise significant additional capital to fund our operating expenses, pay our obligations, diversify our geographical reach and grow our company.


Critical Accounting Policies

 

For a description of our critical accounting policies, see Note 2 – Summary of Significant Accounting Policies in Part 1, Item 1 of this Quarterly Report on Form 10-Q.


Recently Issued Accounting Pronouncements

 

For a description of our recently issued accounting pronouncements, see Note 2 – Summary of Significant Accounting Policies in Part 1, Item 1 of this Quarterly Report on Form 10-Q.


Off-Balance Sheet Arrangements


The Company has no off-balance sheet arrangements.



Item 3. Quantitative and Qualitative Disclosures About Market Risk


We are not required to provide the information required by this Item because we are a smaller reporting company.



Item 4. Controls and Procedures.


Evaluation of Disclosure Controls and Procedures


Our management is responsible for establishing and maintaining a system of disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). that is designed to ensure that information required to be disclosed by the Company in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time specified in the Commission's rules and forms.  Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer's management, including its principal executive officer or officers and principal financial officer or officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.




18



As of the end of the period covered by this report, we have carried out an evaluation of the effectiveness of the design and operation of our company’s disclosure controls and procedures, and our current procedures are in full compliance with disclosure controls and procedures.


Changes in Internal Control over Financial Reporting

 

Management has reported to the Audit Committee the content of the material weaknesses identified in our assessment. Addressing these weaknesses is a priority of management and we are in the process of remediating the cited material weaknesses. For example, the Company is actively evaluating its internal control structure to identify the need for additional resources to ensure appropriate segregation of duties.

 

Except as disclosed in the preceding paragraphs, there have been no changes in our internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act, that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect our internal control over financial reporting.


Limitations on Effectiveness of Controls and Procedures

 

In designing and evaluating the disclosure controls and procedures and internal control over financial reporting, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures and internal control over financial reporting must reflect the fact that there are resource constraints and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs.




19




PART II – OTHER INFORMATION


Item 1. Legal Proceedings


We are currently not involved in any litigation that we believe could have a material adverse effect on our financial condition or results of operations, except as set forth below. There is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive officers of our company or any of our subsidiaries, threatened against or affecting our company, our common stock, any of our subsidiaries or of our companies or our subsidiaries’ officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect.



Item 1A. Risk Factors


We believe there are no changes that constitute material changes from the risk factors previously disclosed in our annual report on Form 10-K for the year ended December 31, 2018, as amended, filed with the SEC on April 18, 2019.



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


During the six months ended June 30, 2019, the Company received proceeds of $664,250 for the private placement of the company's common shares to professional investors at prices ranging from $0.20 $-0.65 These shares were issued pursuant to Regulation D under the Securities Act of 1933, as amended, are exempt from registration by reason of Section 4(2) of the Securities Act of 1933, as amended (the "Act"), and bear an appropriate restrictive legend.


During the period from January 1, 2019 to June 30, 2019, a total of 15,086,809 shares with par value of $ 0.0001 per share were issued to various stockholders.



Item 3.  Defaults Upon Senior Securities


None



Item 4.  Mine Safety Disclosures.


Not applicable.



Item 5. Other Information.

 

There is no other information required to be disclosed under this item which was not previously disclosed.




20



Item 6. Exhibits

 

Exhibit No.

 

 

Description of Exhibit

 

3.1

 

Certificate of Amendment to the Certificate of Incorporation of the Company (incorporated by reference to Schedule 14C Information of the Company filed with the Securities and Exchange Commission on September 1, 2015)

3.2

 

Bylaws (incorporated by reference to Form SB-2 of the Company filed with the Securities and Exchange Commission on September 19, 2005)

4.1

 

Common Share Purchase Agreement, dated July 3, 2017, by and between Weyland Tech, Inc. and Escape Pixel Pte. Ltd, and certain individuals. ((incorporated by reference to the Form 8-K the Company filed with the Securities and Exchange Commission on August 6, 2018)

4.2

 

Common Stock Purchase Agreement, dated November 7, 2018, by and between Weyland Tech Inc., and RedDiamond Partners LLC (incorporated by reference to the Form S-1 of the Company filed with the Securities and Exchange Commission on December 17, 2018)

4.3

 

Registration Rights Agreement, dated November 7, 2018, by and between Weyland Tech Inc., a Delaware corporation, and RedDiamond Partners LLC, a Delaware limited liability company (incorporated by reference to the Form S-1 of the Company filed with the Securities and Exchange Commission on December 17, 2018) 

10.1

 

Form of License Agreement, dated August 9, 2016, between. Weyland Tech, Inc and BGT Corporation Public Company Limited. (incorporated by reference to Form 8-K of the Company filed with the Securities and Exchange Commission on September 9, 2016)  

31.1*

 

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER PURSUANT TO EXCHANGE ACT RULE 13a-14(a)/15d-14(a)   AS ADOPTED PURSUANT TO SECTION 302 OF   THE SARBANES-OXLEY ACT OF 2002


31.2*

 

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER PURSUANT TO EXCHANGE ACT RULE 13a-14(a)/15d-14(a)   AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

32.1*

 

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER PURSUANT TO 18 U.S.C. SECTION 1350,   AS ADOPTED PURSUANT TO SECTION 906 OF  

THE SARBANES-OXLEY ACT OF 2002

32.2*

 

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER PURSUANT TO 18 U.S.C. SECTION 1350,   AS ADOPTED PURSUANT TO SECTION 906 OF  

THE SARBANES-OXLEY ACT 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




21



SIGNATURES


Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


 

Weyland Tech Inc.

August 14, 2019

/s/ Brent Y Suen

President, Chief Executive Officer

(Principal Executive Officer

and Principal  Financial Officer)

 

 

 

/s/ Lionel Choong

 

Lionel Choong

 

Chief Accounting Officer




22


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