The accompanying notes are an integral part
of these interim financial statements
The accompanying notes are an integral part of these interim
financial statements.
The accompanying notes are an integral part
of these interim financial statements.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
|
1.
|
ORGANIZATION AND BUSINESS
|
Ho Wah Genting Group Limited (“HWGG”), a Nevada corporation
(formerly Computron, Inc.) through Ho Wah Genting Group SDN BHD (“Malaysia HWGG”), a Malaysia company and our wholly
owned subsidiary, is engaged to promote travel and entertainment services to members to our partnering resorts and cruises in the
Asia region and develop and invest in real estate property.
On September 2, 1985, Malaysia HWGG was incorporated under the laws
of Malaysia as a private company limited by shares with the name “Ho Wah Genting Holdings SDN. BHD” for the purpose
of functioning as a holding company to obtain ownership interests in Malaysian businesses across various industries. Throughout
the years, we have expanded our business operations and undergone multiple name changes and restructuring to fit our evolving business
objectives. First on February 17, 1989, the company changed its name to “Ho Wah Genting Group (M) SDN. BHD.” On October
2, 1990, the company changed its name to “Ho Wah Genting Group SDN. BHD.” On December 22, 1990 its name was changed
to “Ho Wah Genting Group Berhad” and was converted to a public company limited by shares. Lastly, on January 18, 1995,
the company converted back into a private company limited by shares and changed its name to “Ho Wah Genting Group Sdn. Bhd.”
From 1985 to 2005, Malaysia HWGG was involved in wire and cable,
taxi, travel agent and tour bus charterers and general insurance agent services. In August 2006, Malaysia HWGG shifted its operations
to primarily focus on commercial and residential property investment by purchasing a condominium in Kuala Lumpur, Malaysia and
renting it out for revenue.
In 2015, Malaysia HWGG entered the travel and entertainment services
business by launching the Exclusive Travel Membership program in Malaysia.
On June 25, 2015, Malaysia HWGG acquired 65% of the equity interests
of Beedo SDN BHD (“Beedo”). On July 7, 2015, Beedo increased its issued and paid-up shares from 2,500 to 1,000,000.
HWGG acquired an additional 508,375 shares on that date, making its balance of shares 510,000 and effectively diluting its shareholding
in Beedo from 65% to 51%. Beedo is mainly engaged in the provision of information technology services. On August 12, 2016, HWGG
completed the disposal of its subsidiary, Beedo, by wholly transferring the shares it owns to a related party, Dato’ Lim
Hui Boon, for the consideration of $ 118,881 (RM 510,000).
REVERSE MERGER
On October 28, 2016, Computron acquired all the issued and outstanding
shares of Malaysia HWGG, a privately held Malaysia corporation, pursuant to the Share Exchange Agreement and Malaysia HWGG became
the wholly owned subsidiary of Computron in a reverse merger, or the Merger. Pursuant to the Merger, all of the issued and outstanding
shares of Malaysia HWGG common stock were converted, at an exchange ratio of 0.56-for-1, into an aggregate of 799,680,000 (560,000
pre-reverse split) shares of Computron common stock and Malaysia HWGG became a wholly owned subsidiary of Computron. The holders
of Computron’s common stock as of immediately prior to the Merger held an aggregate of 200,375,532 (140,319 pre-reverse split)
shares of Computron’s common stock. The accompanying financial statements share and per share information has been retroactively
adjusted to reflect the exchange ratio in the Merger. Subsequent to the Merger, Computron’s name was changed from “Computron,
Inc.” to “Ho Wah Genting Group Limited.”.
On November 4, 2016, we completed and closed a share exchange (the
“Share Exchange”) under a Share Exchange Agreement (the “Share Exchange Agreement”) of the same date by
and among us, Malaysia HWGG and the shareholders of Malaysia HWGG pursuant to which Malaysia HWGG became a wholly owned subsidiary
of ours. In the Share Exchange, all of the outstanding shares of Malaysia HWGG were converted into shares of our Common Stock.
HO WAH GENTING GROUP LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
In connection with the Share Exchange and pursuant to the Split-Off
Agreement (defined below), we transferred our pre-Share Exchange assets and liabilities to our pre-Share Exchange majority stockholder,
in exchange for the surrender by him and cancellation of 5,000,000 shares of our Common Stock.
Under generally accepted accounting principles in the United States,
(“U.S. GAAP”) because Malaysia HWGG’s former stockholders received the greater portion of the voting rights in
the combined entity and Malaysia HWGG’s senior management represents all of the senior management of the combined entity,
the Merger was accounted for as a recapitalization effected by a share exchange, wherein Malaysia HWGG is considered the acquirer
for accounting and financial reporting purposes. The assets and liabilities of Malaysia HWGG have been brought forward at their
book value and no goodwill has been recognized. Accordingly, the assets and liabilities and the historical operations that are
reflected in Malaysia HWGG's consolidated financial statements are those of Malaysia HWGG and are recorded at the historical cost
basis of Malaysia HWGG.
|
2.
|
SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES
|
Basis of presentation
The accompanying unaudited consolidated financial
statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of
America (“U.S. GAAP”) for interim financial information article 8 of Regulation S-X.
This basis of accounting involves the application
of accrual accounting and consequently, revenues and gains are recognized when earned, and expenses and losses are recognized when
incurred. The Company’s financial statements are expressed in U.S. dollars.
Principles of consolidation
The unaudited consolidated financial statements
include the accounts of HWGG and its subsidiary, Beedo, collectively referred to within as the Company. All material intercompany
accounts, transactions, and profits have been eliminated in consolidation.
Use of estimates
The preparation of financial statements in
conformity with accounting principles generally accepted in the United States of America requires management to make estimates
and assumptions that affect certain 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 periods. Actual
results could differ from those estimates.
Foreign currency translation and transactions
The functional currency of the Company is the
Malaysian Ringgit (“MYR”) and reporting currency of the Company is the United States Dollar (“USD”). The
financial statements of the Company are translated into USD using the exchange rate as of the balance sheet date for assets and
liabilities and average exchange rate for the year for income and expense items. Translation gains and losses are recorded in accumulated
other comprehensive income or loss as a component of shareholders’ equity.
Cash and cash equivalents
The Company considers highly-liquid investments
with maturities of three months or less, when purchased, to be cash equivalents.
HO WAH GENTING GROUP LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
Investments
The Company invests its excess cash primarily
in equity instruments of high-quality corporate issuers listed on the Main Board of Bursa Malaysia. Such securities are classified
as short-term investments and are valued at the last reported sales price on the balance sheet date. If no sale price was reported
on that date, they are valued at the last reported bid price. Changes in the value of these investments are recognized as unrealized
gain or loss in the statement of income and other comprehensive income.
Fair value of financial instruments
FASB ASC 820, “Fair Value Measurement,”
specifies a hierarchy of valuation techniques based upon whether the inputs to those valuation techniques reflect assumptions other
market participants would use based upon market data obtained from independent sources (observable inputs). In accordance with
ASC 820, the following summarizes the fair value hierarchy:
Level 1 Inputs – Unadjusted quoted market
prices for identical assets and liabilities in an active market that the Company has the ability to access.
Level 2 Inputs – Inputs other than the
quoted prices in active markets that are observable either directly or indirectly.
Level 3 Inputs – Inputs based on prices
or valuation techniques that are both unobservable and significant to the overall fair value measurements.
ASC 820 requires the use of observable market
data, when available, in making fair value measurements. When inputs used to measure fair value fall within different levels of
the hierarchy, the level within which the fair value measurement is categorized is based on the lowest level input that is significant
to the fair value measurements. Valuation techniques used need to maximize the use of observable inputs and minimize the use of
unobservable inputs. As of March 31, 2017 and December 31, 2016, short term investments classified as held-for-trading were required
to be reported at fair value on a recurring basis. Carrying values of non-derivative financial instruments, including cash, accounts
receivables, payables and accrued liabilities, approximate their fair values due to the short term nature of these financial instruments.
There were no changes in methods or assumptions during the periods presented.
Property and equipment, net
Property and equipment are carried at cost
less accumulated depreciation. Depreciation is calculated on a straight-line basis over the following estimated useful lives:
Leasehold building
|
50 years
|
|
|
Computer and software
|
5 years
|
|
|
Furniture and fixtures
|
5 years
|
|
|
Leasehold improvement
|
10 years
|
Revenue recognition
The Company provides rental, Information technology
and junket operation services to customer. The Company has recognized lease revenue based upon its annual rental over the life
of the operating lease. Lease revenue is recognized using the straight-line method in accordance with ASC Topic 970-605, “Real
Estate – General – Revenue Recognition” (“ASC Topic 970-605”). Revenue from the provision of information
technology services is recognized when (a) there is persuasive evidence that an arrangement exists, (b) delivery has occurred,
(c) the vendor’s fee is fixed or determinable and (d) collectability is probable in accordance with ASC Topic 985-605, “Software
– Revenue Recognition” (“ASC 985-605”). Junket operation revenue is recognized when service is performed,
vendor’s fee is fixed or determinable and collectability is probable.
HO WAH GENTING GROUP LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
Income taxes
Current income taxes are provided for in accordance
with the laws of the relevant tax authorities. Deferred income taxes are recognized when temporary differences exist between the
tax bases of assets and liabilities and their reported amounts in the combined financial statements.Net operating loss carry forwards
and credits are applied using enacted statutory tax rates applicable to future years. Deferred tax assets are reduced by a valuation
allowance when, in the opinion of management, it is more-likely-than-not that a portion of or all of the deferred tax assets will
not be realized. The components of the deferred tax assets and liabilities are individually classified as current and non-current
based on their characteristics.
The impact of an uncertain income tax position
on the income tax return is recognized at the largest amount that is more-likely-than-not to be sustained upon audit by the relevant
tax authority. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained.
Interest and penalties on income taxes are classified as a component of the provisions for income taxes. The Company did not recognize
any income tax due to uncertain tax positions or incur any interest and penalties related to potential underpaid income tax expense
as of March 31, 2017 and 2016, respectively.
Comprehensive loss
Comprehensive loss includes net loss and cumulative
foreign currency translation adjustments and is reported in the Consolidated Statement of Comprehensive Loss.
Loss per share
The loss per share is computed using the weighted
average number of shares outstanding during the fiscal years. For the three and nine months ended March 31, 2017 and 2016, there
is no dilutive effect due to net loss for the periods.
Segment reporting
ASC Topic 280 requires use of the “management
approach” model for segment reporting. The management approach model is based on the way a company’s management organizes
segments within the company for making operating decisions and assessing performance. Reportable segments are based on products
and services, geography, legal structure, management structure, or any other manner in which management disaggregates a company.
During the period ended March 31, 2017, the Company operated in three reportable business segments: (1) investment property holding
which generates rental income from the leasing out of its leasehold building, (2) exclusive travel membership (ETM) and junket
operations (3) information technology services, which generates revenue from the provision of information technology services.
The others which comprise of general operating
and administrative expenses, and other income/expenses not directly attributable to the sources of revenue of the Company for the
three months ended March 31, 2017 and 2016.
Related party transactions
A related party is
generally defined as:
(i) any person that
holds the Company’s securities including such person’s immediate families,
(ii) the Company’s management,
(iii) someone that directly or indirectly controls,
is controlled by or is under common control with the Company, or
(iv) anyone who can significantly influence
the financial and operating decisions of the Company.
HO WAH GENTING GROUP LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
A transaction is considered to be a related
party transaction when there is a transfer of resources or obligations between related parties.
Recently issued accounting pronouncements
Revenue Recognition:
In
May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606). The amendments in ASU 2015-14 defer
the effective date of ASU 2014-09 for all entities by one year. Public business entities, certain not-for-profit entities, and
certain employee benefit plans should apply the guidance in ASU 2014-09 to annual reporting periods beginning after December 15,
2017, including interim reporting periods within that reporting period. Earlier application is permitted only as of annual reporting
periods beginning after December 15, 2016, including interim reporting periods within that reporting period.
Financial instrument
: In January
2016, the FASB issued ASU No. 2016-01, “Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of
Financial Assets and Financial Liabilities” (“ASU 2016-01”). The standard addresses certain aspects of recognition,
measurement, presentation, and disclosure of financial instruments. ASU 2016-01 is effective for fiscal years, and interim periods
within those years, beginning after December 15, 2017, and early adoption is not permitted. Accordingly, the standard is effective
for us on January 1, 2018. We are currently evaluating the impact that the standard will have on our consolidated financial statements.
Leases
: In February 2016, the
FASB issued ASU No. 2016-02, Leases (Topic 842) (“ASU 2016-2”), which provides guidance on lease amendments to the
FASB Accounting Standard Codification. This ASU will be effective for us beginning in January 1, 2019. We are currently in the
process of evaluating the impact of the adoption of ASU 2016-2 on our consolidated financial statements.
Financial Instruments - Credit Losses:
In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): The amendments in this Update
require a financial asset (or a group of financial assets) measured at amortized cost basis to be presented at the net amount expected
to be collected. The amendments broaden the information that an entity must consider in developing its expected credit loss estimate
for assets measured either collectively or individually. The use of forecasted information incorporates more timely information
in the estimate of expected credit loss, which will be more decision useful to users of the financial statements. ASU 2016-13 is
effective for the Company for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years.
Early adoption is allowed as of the fiscal years beginning after December 15, 2018, including interim periods within those fiscal
years. The Company is still evaluating the effect that this guidance will have on the Company’s consolidated financial statements
and related disclosures.
The Financial Accounting Standards Board and other entities issued
new or modifications to, or interpretations of, existing accounting guidance during 2017. Management has carefully considered the
new pronouncements that altered generally accepted accounting principles and does not believe that any other new or modified principles
will have a material impact on the Company’s reported financial position or operations in the near term.
|
3.
|
GOING CONCERN UNCERTAINTIES
|
These consolidated financial statements have been prepared assuming
that the Company will continue as a going concern, which contemplates the realization of assets and the discharge of liabilities
in the normal course of business for the foreseeable future.
For the period ended March 31, 2017, the Company reported a net
loss of $173,212 and working capital deficit of $588,777. The Company had an accumulated deficit of $706,494 as of March 31, 2017.
HO WAH GENTING GROUP LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
The continuation of the Company as a going concern is dependent
upon improving the profitability and the continuing financial support from its stockholders or other capital sources. Management
believes that the continuing financial support from the existing shareholders or external debt financing will provide the additional
cash to meet the Company’s obligations as they become due.
These consolidation financial statements do not include any adjustments
to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of
liabilities that may result from the outcome of the Company’s ability to continue as a going concern.
4. HELD FOR TRADING SECURITIES
|
|
Estimated
|
|
|
|
Fair Value
|
|
|
|
As of
March 31, 2017
(Unaudited)
|
|
|
As of
December 31, 2016
|
|
|
|
|
|
|
|
|
Short-term investments:
|
|
|
|
|
|
|
|
|
Quoted shares in Malaysia
|
|
$
|
12,833
|
|
|
$
|
12,660
|
|
R
ealized
gains and realized losses were not significant for either of the period ended March 31, 2017 or year ended December 31, 2016.
As of March 31, 2017 unrealized gain or loss on investment was immaterial. As of December 31, 2016 unrealized loss on investment
was $2,745.
|
5.
|
OTHER RECEIVABLES, NET
|
Other receivables consist of the following:
|
|
|
|
|
As of
March 31,
2017
|
|
|
As of
December 31,
2016
|
|
|
|
|
|
|
|
|
|
|
|
Deposits
|
|
|
(1
|
)
|
|
$
|
1,341,623
|
|
|
$
|
746,386
|
|
Prepayment
|
|
|
(2
|
)
|
|
|
94,442
|
|
|
|
1,165
|
|
|
|
|
|
|
|
$
|
1,436,065
|
|
|
$
|
747,551
|
|
|
(1)
|
Deposits represented payments
for telephone, electricity, water, maintenance fee, rental & utility and parking.
|
|
(2)
|
Prepayment represented prepayments
for maintenance fee, sinking fund and fire assurance.
|
HO WAH GENTING GROUP LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
|
6.
|
PROPERTY AND EQUIPMENT,
NET
|
Property and equipment, net consist of the following:
|
|
As of
March
31, 2017
|
|
|
As of
December
31, 2016
|
|
|
|
|
|
|
|
|
Leasehold building
|
|
$
|
71,508
|
|
|
$
|
70,543
|
|
Computer and software
|
|
|
4,034
|
|
|
|
3,979
|
|
Furniture and fixtures
|
|
|
512
|
|
|
|
505
|
|
|
|
|
|
|
|
|
|
|
|
|
|
76,054
|
|
|
|
75,027
|
|
|
|
|
|
|
|
|
|
|
Less: Accumulated depreciation
|
|
|
(15,753
|
)
|
|
|
(14,963
|
)
|
|
|
|
|
|
|
|
|
|
Balance at end of period
|
|
$
|
60,301
|
|
|
$
|
60,064
|
|
Depreciation expenses was $2,537 and $53,486
for the three months ended March 31, 2017 and 2016, respectively.
|
7.
|
OTHER PAYABLES AND ACCRUALS
|
|
|
As of
March 31, 2017
|
|
|
As of
December
31, 2016
|
|
|
|
|
|
|
|
|
Other payables
|
|
|
3,055,882
|
|
|
|
2,440,117
|
|
Accruals
|
|
|
5,220
|
|
|
|
4,454
|
|
|
|
$
|
3,061,102
|
|
|
$
|
2,444,571
|
|
The Company and its subsidiary are Malaysia
incorporated companies and required to pay corporate income tax at 25% of taxable income.
Income tax expenses for the Company are summarized
as follows:
|
|
For the three months ended
|
|
|
|
March
31, 2017
|
|
|
March
31, 2016
|
|
|
|
|
|
|
|
|
Current:
|
|
|
|
|
|
|
|
|
Provision for Malaysian income tax
|
|
$
|
-
|
|
|
$
|
717
|
|
Provision for U.S. income tax
|
|
|
-
|
|
|
|
-
|
|
Deferred:
|
|
|
|
|
|
|
|
|
Provision for Malaysian income tax
|
|
|
-
|
|
|
|
-
|
|
Provision for U.S. income tax
|
|
|
-
|
|
|
|
-
|
|
|
|
$
|
-
|
|
|
$
|
717
|
|
Malaysia
Malaysia HWGG recorded a loss before income tax of $173,212 and
$65,432 for the period ended March 31, 2017 and 2016, respectively. A reconciliation of the provision for income taxes with amounts
determined by applying the Malaysian income tax rate of 25% and 25% for the period ended March 31, 2017 and 2016, respectively,
to income before income taxes are as follows:
HO WAH GENTING GROUP LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
|
|
For the three months ended
|
|
|
|
March
31, 2017
|
|
|
March
31, 2016
|
|
|
|
|
|
|
|
|
Profit (loss) before income tax
|
|
$
|
(173,212
|
)
|
|
$
|
(65,432
|
)
|
Permanent difference
|
|
|
173,212
|
|
|
|
68,300
|
|
Taxable income
|
|
$
|
-
|
|
|
$
|
(2,868
|
)
|
Malaysian income tax rate
|
|
|
24
|
%
|
|
|
24
|
%
|
Current tax expenses
|
|
$
|
-
|
|
|
$
|
717
|
|
Less: Valuation allowance
|
|
|
-
|
|
|
|
-
|
|
Income tax expenses
|
|
$
|
-
|
|
|
$
|
717
|
|
United States of America
HWGG is a company incorporated in State of Nevada and recorded a
loss before income tax of $ and for the period ended March 31, 2017 and 2016, respectively. A reconciliation of the provision for
income taxes with amounts determined by applying the United States Federal income tax rate of 34% for the period ended March 31,
2017 and 2016, respectively, to income before income taxes are as follows:
|
|
For the period ended
|
|
|
|
March
31, 2017
|
|
|
March
31, 2016
|
|
|
|
|
|
|
|
|
Profit (loss) before income tax
|
|
$
|
(3,906
|
)
|
|
$
|
-
|
|
Permanent difference
|
|
|
3,906
|
|
|
|
-
|
|
Taxable income
|
|
$
|
-
|
|
|
$
|
-
|
|
USA income tax rate
|
|
|
34
|
%
|
|
|
34
|
%
|
Current tax expenses
|
|
$
|
-
|
|
|
$
|
-
|
|
Less: Valuation allowance
|
|
|
|
|
|
|
-
|
|
Income tax expenses
|
|
$
|
-
|
|
|
$
|
-
|
|
No deferred tax has been provided as there are no material temporary
differences arising during the periods ended March 31, 2017 and 2016.
HO WAH GENTING GROUP LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
|
9.
|
RELATED PARTY TRANSACTIONS
|
As of March 31, 2017 and December 31, 2016, amounts due from related
parties were as follows:
|
|
As of
March
31, 2017
|
|
|
As of
December
31, 2016
|
|
|
|
|
|
|
|
|
Ho Wah Genting Berhad
|
|
$
|
-
|
|
|
$
|
544,096
|
|
Vitaxel SDN BHD
|
|
|
675,237
|
|
|
|
585,619
|
|
Vitaxel Online Mall SDN BHD
|
|
|
22,604
|
|
|
|
22,299
|
|
|
|
$
|
697,841
|
|
|
$
|
1,152,014
|
|
Our President. Dato Lim Hui Boon,
is also the Group President and shareholder of
Ho Wah Genting Berhad. Liew Jenn Lim, one of
our directors since March 1, 2017, has also been a director of Vitaxel Online Mall Sdn Bhd since January 25, 2016. Lim Chun Hoo,
our Chief Executive Officer, Chief Financial Officer, Chief Operating Officer and director, was a director of Vitaxel Group Limited,
parent company of its wholly owned subsidiary Vitaxel SDN BHD, until his resignation from that position on March 31, 2017.
The amounts due from related companies are unsecured, interest-free
and repayable on demand.
As of March 31, 2017 and December 31, 2016, amounts due from directors
were as follows:
|
|
As of
March
31, 2017
|
|
|
As of
December
31, 2016
|
|
|
|
|
|
|
|
|
Lim Chun Hoo
|
|
$
|
|
|
|
$
|
23,503
|
|
The amounts due from a director were unsecured, interest-free and
repayable on demand.
As of March 31, 2017 and December 31, 2016, amounts due to related
parties were as follows:
|
|
As of
March
31, 2017
|
|
|
As of
December
31, 2016
|
|
|
|
|
|
|
|
|
Dato' Lim Boon Hui
|
|
$
|
208,830
|
|
|
$
|
208,830
|
|
Ho Wah Genting Holiday Bhd
|
|
|
9,182
|
|
|
|
-
|
|
Beedo SDN BHD
|
|
|
53,119
|
|
|
|
57,977
|
|
|
|
$
|
271,131
|
|
|
$
|
266,807
|
|
During the periods ended March 31, 2017 and
2016, the Company recognized rental income of $ 1,350 and $1,434 respectively from Ho Wah Genting Berhad. The president of the
Company, Dato’ Lim Hui Boon, is also the Group President of Ho Wah Genting Berhad. In addition, two sons of Dato’ Lim
Hui Boon are directors of Ho Wah Genting Berhad.
During the periods ended March 31, 2017 and
2016, the Company recognized junket commission revenue from Ho Wah Genting Holiday SDN BHD was $54,804 and nill.
HO WAH GENTING GROUP LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
From January 1, 2016 to March 31, 2016, the
Company, through its subsidiary Beedo SDN BHD recognized revenue from the provision of information technology services of $9,558
from Ho Wah Genting Holiday SDN BHD and $29,023 from Vitaxel SDN BHD. Beedo SDN BHD was disposed of by the Company after August
12, 2016 and stopped earning revenue from the provision of information technology services.
|
10.
|
EARNINGS (LOSS) PER SHARE
|
The Company has adopted ASC Topic No. 260,
“Earnings
Per Share,”
(“EPS”) which requires presentation of basic and diluted EPS on the face of the income statement,
and requires a reconciliation of the numerator and denominator of the basic EPS computation to the numerator and denominator of
the diluted EPS computation. In the accompanying financial statements, basic earnings (loss) per share is computed by dividing
net income (loss) by the weighted average number of shares of common stock outstanding during the year.
The following table sets forth the computation
of basic and diluted earnings per share:
|
|
For the period ended
|
|
|
|
March
31, 2017
|
|
|
March
31, 2016
|
|
|
|
|
|
|
|
|
Net loss applicable to common shares
|
|
$
|
(173,212
|
)
|
|
|
(66,149
|
)
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding (Basic) / (Diluted)
|
|
|
1,000,055,532
|
|
|
|
200,375,532
|
|
|
|
|
|
|
|
|
|
|
Loss per share
|
|
$
|
0.00
|
|
|
|
0.00
|
|
The Company has no potentially dilutive securities,
such as options or warrants, currently issued and outstanding.
The Company’s operating businesses are
organized based on the business activities from which the Company earns revenues. Our reported segments for the period ended March
31, 2017 and year ended December 31, 2016 are described as follows:
Investment property holding
The Company generates rental income from the
leasing out of its leasehold building.
Information technology services
The Company generates revenue from the provision of information
technology services. This line of business commenced in the year 2015. This line of business ended on August 12, 2016 when the
Company completed the disposal of its subsidiary, Beedo.
Exclusive Travel Membership
The company generates revenue from management
fee billing on the member 10% for the deposit that put into the account.
Junket income
The company generates revenue from junket commission
provided by Ho Wah Genting Malaysia Berhad.
Others
These comprise of general operating and administrative
expenses, and other income/expenses not directly attributable to the sources of revenue of the Company for the periods ended March
31, 2017 and 2016.
The Company’s reportable segments are
managed separately based on the fundamental differences in their operations.
HO WAH GENTING GROUP LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
Information with
respect to these reportable business segments for the periods ended March 31, 2017 and 2016 was as follows:
|
|
For the three months
ended
|
|
|
|
March
31, 2017
|
|
|
March
31, 2016
|
|
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
Investment property holding
|
|
$
|
1,350
|
|
|
$
|
1,434
|
|
Information technology services
|
|
|
-
|
|
|
|
45,176
|
|
ETM and junket operations
|
|
|
54,804
|
|
|
|
-
|
|
Others
|
|
|
-
|
|
|
|
-
|
|
|
|
$
|
56,154
|
|
|
$
|
46,610
|
|
|
|
|
|
|
|
|
|
|
Cost of revenues:
|
|
|
|
|
|
|
|
|
Investment property holding
|
|
$
|
-
|
|
|
$
|
-
|
|
Information technology services
|
|
|
-
|
|
|
|
5,687
|
|
ETM and junket operations
|
|
|
661
|
|
|
|
-
|
|
Others
|
|
|
-
|
|
|
|
-
|
|
|
|
$
|
661
|
|
|
$
|
5,687
|
|
|
|
|
|
|
|
|
|
|
Depreciation:
|
|
|
|
|
|
|
|
|
Investment property holding
|
|
$
|
237
|
|
|
$
|
378
|
|
Information technology services
|
|
|
-
|
|
|
|
-
|
|
ETM and junket operations
|
|
|
-
|
|
|
|
-
|
|
Others
|
|
|
2,300
|
|
|
|
53,108
|
|
|
|
$
|
2,537
|
|
|
$
|
53,486
|
|
|
|
|
|
|
|
|
|
|
Net income (loss):
|
|
|
|
|
|
|
|
|
Investment property holding
|
|
$
|
1,113
|
|
|
$
|
1,056
|
|
Information technology services
|
|
|
-
|
|
|
|
39,489
|
|
ETM and junket operations
|
|
|
54,143
|
|
|
|
-
|
|
Others
|
|
|
(228,349
|
)
|
|
|
(106,694
|
)
|
|
|
$
|
(173,212
|
)
|
|
$
|
(66,149
|
)
|
|
|
March 31, 2017
|
|
|
|
Investment
property
holding
|
|
|
Information
technology
services
|
|
|
Junket
operation
|
|
|
Others
|
|
|
Total
|
|
Identifiable long-lived assets, net
|
|
$
|
56,729
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
3,572
|
|
|
$
|
60,301
|
|
HO WAH GENTING GROUP LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
|
|
December 31, 2016
|
|
|
|
Investment
property
holding
|
|
|
Information
technology
services
|
|
|
Junket
operation
|
|
|
Others
|
|
|
Total
|
|
Identifiable long-lived assets, net
|
|
$
|
56,317
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
3,747
|
|
|
$
|
60,064
|
|
The Company does not allocate any operating
and administrative expenses, other income/expenses to its reportable segments because these activities are managed at a corporate
level. In addition, the specified amounts for income tax expense are not included in the measure of segment profit or loss reviewed
by the chief operating decision maker and these specified amounts are not regularly provided to the chief operating decision maker.
Therefore, the Company has not disclosed income tax expense for each reportable segment.
Asset information
by reportable segment is not reported to or reviewed by the chief operating decision maker and, therefore, the Company has not
disclosed asset information for each reportable segment. The Company’s operations are located in Malaysia. All revenues are
derived from customers in Malaysia. All of the Company’s operating assets are located in Malaysia.
|
12.
|
FAIR VALUE MEASUREMENTS
|
Fair Value of Financial Assets
The Company’s financial assets measured
at fair value on a recurring basis subject to disclosure requirements at March 31, 2017and December 31, 2016 were as follows:
|
|
Balance at
March 31,
2017
(Unaudited)
|
|
|
Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1)
(Unaudited)
|
|
|
Significant
Other
Observable
Inputs
(Level 2)
(Unaudited)
|
|
|
Significant
Unobserved
Inputs
(Level 3)
(Unaudited)
|
|
Short-term investments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quoted shares in Malaysia
|
|
$
|
12,833
|
|
|
$
|
12,833
|
|
|
$
|
-
|
|
|
$
|
-
|
|
Total short-term investments
|
|
|
12,833
|
|
|
|
12,833
|
|
|
|
-
|
|
|
|
-
|
|
Total financial assets measured at fair value
|
|
$
|
12,833
|
|
|
$
|
12,833
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
|
|
|
|
Quoted Prices
|
|
|
|
|
|
|
|
|
|
|
|
|
in Active
|
|
|
Significant
|
|
|
|
|
|
|
|
|
|
Markets for
|
|
|
Other
|
|
|
Significant
|
|
|
|
Balance at
|
|
|
Identical
|
|
|
Observable
|
|
|
Unobserved
|
|
|
|
December 31,
|
|
|
Assets
|
|
|
Inputs
|
|
|
Inputs
|
|
|
|
2016
|
|
|
(Level 1)
|
|
|
(Level 2)
|
|
|
(Level 3)
|
|
Short-term investments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quoted shares in Malaysia
|
|
$
|
12,660
|
|
|
$
|
12,660
|
|
|
$
|
-
|
|
|
$
|
-
|
|
Total short-term investments
|
|
|
12,660
|
|
|
|
12,660
|
|
|
|
-
|
|
|
|
-
|
|
Total financial assets measured at fair value
|
|
$
|
12,660
|
|
|
$
|
12,660
|
|
|
$
|
-
|
|
|
$
|
-
|
|
In accordance with ASC 855-10, Company management
reviewed all material events through the date of this report and determined that there are no additional material subsequent events
to report.