10-Q 1 weyl10q_093015apg.htm WEYL 10-Q 09/30/15 WEYL 10-Q 09/30/15




UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


FORM 10-Q


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


For the quarterly period ended September 30, 2015


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

20-1945139

(State or other jurisdiction of incorporation or organization)

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

 

 

Hong Kong HKSAR

9/F, The Wellington

198 Wellington Street

Central, Hong Kong SAR

(Address of principal executive offices, including Zip Code)

 

+852 9316 6780

(Registrant’s telephone number, including area code)


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 and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 229.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).     [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 [X]

(Do not check if a smaller reporting company)

 









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


APPLICABLE ONLY TO CORPORATE ISSUERS:


Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.


Class

Outstanding as of November 11, 2015

Common stock, $0.00001 par value

12,626,324





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TABLE OF CONTENTS

 

 

 

 

PART I – FINANCIAL INFORMATION

 

1

Item 1.

Financial Statements

 

1

Item 2.

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

 

11

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

 

15

Item 4.

Controls and Procedures

 

16

PART II – OTHER INFORMATION

 

17

Item 1.

Legal Proceedings

 

17

Item 1A.

Risk Factors

 

17

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

 

17

Item 3.

Exhibits

 

17

SIGNATURES

 

 

17



iii






PART I – FINANCIAL INFORMATION


ITEM 1. FINANCIAL STATEMENTS

WEYLAND TECH INC.

 

Condensed Balance Sheets

 

 

 

 

 

 

 

 

 

 

 

September 30

 

December 31

 

 

 

 

 

2015

 

2014

 

 

 

 

 

(Unaudited)

 

(Audited)

ASSETS

 

 

 

 

NON-CURRENT ASSETS

 

 

 

 

 

 

 

Property, plant and equipment

 

 

15,584 

 


 

 

Development costs

 

 

256,136 

 


 

 

    Total non-current assets

 

 

271,720 

 


 

 

 

 

 

 

 

 

 

CURRENT ASSETS

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

41,038 

 


 

 

Accounts receivables

 

 

3,951,345 

 

202,700 

 

 

Temporary payment and prepayments

 

 

19,314 

 


 

 

    Total current assets

 

 

4,011,697 

 

202,700 

 

 

 

   Total assets

 

 $

4,283,417

 

202,700 

LIABILITIES AND STOCKHOLDERS' DEFICIT

 

 

 

 

 

 

CURRENT LIABILITIES

 

 

 

 

 

 

 

Accrued expenses and other payable

 

$

116,644 

 

112,977 

 

 

Accounts payable

 

 

506,458 

 

 

 

 

CEO payables

 

 

179,719 

 

 

 

 

Development cost

 

 

1,417,142 

 

 

 

 

Other payables

 

 

132,874 

 

303,491 

 

 

Provision for taxation

 

 

560,189 

 

 

 

 

    Total current liabilities

 

 

2,913,026 

 

416,468 

 

 

    Total liabilities

 

 

2,913,026 

 

416,468 

 

STOCKHOLDERS' EQUITY

 

 

 

 

 

 

 

Common stock

 

 

 

 

 

 

 

 

Authorized 250,000,000 shares at par value of $0.00001 each

 

 

 

 

 

 

 

Issued and outstanding 12,626,024 shares as of September 30, 2015 and 46,256,568 shares as of December 31, 2014

 

 

139,177

 

139,177 

 

Additional paid-in capital

 

 

36,080,882 

 

36,080,882 

 

 

Subscriptions received

 

 

1,765,855 

 

1,765,855 

 

 

Accumulated deficit

 

 

(36,615,523)

 

(38,199,681)

 

 

 

Total stockholders' equity / (deficit)

 

 

1,370,391

 

(213,767)

 

 

 

 

 

 

 

 

 

Total liabilities and stockholders' equity

 

$

4,283,417 

 

202,700 

 

 

 

 

 

 

 

 

 

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

 




1






WEYLAND TECH INC.

 

Condensed Statements of Operations

 

 

 

 

 

 

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

 

 

 

 

2015

 

2014

 

 

2015

 

2014

 

 

 

 

 

(Unaudited)

 

(Unaudited)

 

 

(Unaudited)

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

Service Revenue

 

$

648,159

$

383,821 

 

$

1,228,159

$

2,432,842 

 

Cost of Service

 

 

264,740

 

398,240 

 

 

834,740

 

2,048,264 

 

Gross Profit/(loss)

 

 

383,419

 

(14,419)

 

 

393,419

 

384,578 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Expenses

 

 

 

 

 

 

 

 

 

 

 

 

General and administrative

 

 

57,016

 

175,435 

 

 

86,007

 

732,345 

 

 

Depreciation

 

 

-

 

833 

 

 

-

 

2,500 

 

 

Amortization of dev. costs

 

 

7,318

 

 

 

7,318

 

 

Total Operating Expenses

 

 

64,334

 

176,268 

 

 

93,32

5

734,845 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Profit/(Loss) from Operations

 

 

319,085

 

(190,687)

 

 

300,094

 

(350,267)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Provision for income taxes

 

 

-

 

 

 

-

 

 

Net Profit/(Loss)

 

$

319,085

 $

(190,687)

 

$

300,094

 $

(350,267)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 Net Profit/ (Loss) for the year

 

 

0.08

 

(0.02)

 

 

0.23

 

(0.07)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of basic and fully diluted common shares outstanding

 

 

3,938,845

 

8,325,823 

 

 

1,316,555

 

4,932,523 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 



2








WEYLAND TECH INC.

 

Condensed Statements of Cash Flows

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended September 30,

Nine Months Ended September 30,

 

 

 

 

 

2015

 

2014

 

 

 

 

 

(Unaudited)

 

(Unaudited)

 

 

 

 

 

 

 

 

Cash flows from operations:

 

 

 

 

 

 

 

Profit/(Loss)  from continuing operations

 

$

307,412 

$

(350,267)

 

 

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

 

 

 

Development cost amortization

 

 

7,318 

 

 

 

Depreciation expense

 

 

 

2,500 

 

 

Convertible debentures

 

 

 

362,874 

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Accounts receivable increase

 

 

(520,000)

 

 

 

Temporary payment increase

 

 

(8,000)

 

 

 

Accrued expenses and other payables increase

 

 

(3,667)

 

 

 

Accounts payable increase

 

 

506,667 

 

(8,000)

 

 

Other payables decrease

 

 

106,000 

 

 

 

Increase in development cost payables

 

 

 

 

 

Amounts due to CEO increase

 

 

179,719 

 

 

Net assets of subsidiary acquired

 

 

1,384,076 

 

 

 

Elimination of non-cash effects of net assets acquired

 

 

(1,918,487)

 

 

Net cash provided from operations

 

 

41,038 

 

7,107 

 

 

 

 

 

 

 

 

 

Net cash used in investment activities

 

 

 

 

 

 

 

 

 

 

 

 

Net cash used financing activities

 

 

 

 

 

 

 

 

 

 

 

 

Net increase in cash

 

 

41,038 

 

7,107 

 

 

 

 

 

 

 

 

 

Balances per prior period balance sheet

 

 

 

 

296,916 

 

Ending balances

 

$

41,038 

$

304,023 

 

 

 

 

 

 

 

 

 

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

 




3






Note on effects of Subsidiary acquired.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net assets acquired Sep 1, 2015.

 

 

 

 

 

1,284,065

 

 

 

 

 

 

 

 

 

 

 

Fixed assets

 

 

 

 

 

 

15,584

 

Current assets

 

 

 

 

 

 

3,280,997

 

Current Liabilities

 

 

 

 

 

 

(1,912,505)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,384,076

 

 

 

 

 

 

 

 

 

 

 

Less profit incurred for Sep 2015

 

 

 

 

(100,011)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net assets acquired Sep 1, 2015.

 

 

 

 

1,284,065

 

 

 

 

 

 

 

 

 

 

 

Consideration in shares issued in exchange for assets acquired

 

nil

 

 

 

 

 

 

 

 

 

 

 

Capital reserve arising

 

 

 

 

 

1,284,065




4





Weyland Tech INC.

Notes to interim Financial Statements

 (Unaudited)


 

1.  BASIS OF PRESENTATION –GOING CONCERN

 

The Company specializes in providing e-commerce solutions and services that facilitate multi-channel B2C (business-to-consumer) and B2B (business-to-business) transactions.  Its solutions and services enable e-commerce transactions with speed and efficiency, and allow an interactive and engaging customer experience as well as targeted marketing and advertising.


The Company’s revenues are generated from one-time integration fees for the implementation of e-commerce solutions as well as recurring license and service fees.  The Company currently hosts two e-commerce solutions.


These financial statements of Weyland Tech Inc. (the “Company”) have been prepared on a going-concern basis which assumes that the Company will be able to realize assets and discharge liabilities in the normal course of business for the foreseeable future.


The Company experienced losses during fiscal year ended December 31, 2014 amounting to $255,693, which raises substantial doubt about the Company's ability to continue as a going concern.  The ability of the Company to meet its commitments as they become payable is dependent on the ability of the Company to obtain necessary financing or achieving a profitable level of operations.  There are no assurances that the Company will be successful in achieving these goals.


The Company believes that it can continue to receive revenues from its customers.  The Company expects to continue utilizing its cost structure by sourcing personnel in Asia for servicing its customers.  In order to accelerate the growth of the Company, it will also consider raising additional funding from investors.


These financial statements do not give effect to adjustments to the amounts and classifications to assets and liabilities that would be necessary should the Company be unable to continue as a going concern.


We have prepared the unaudited condensed financial statements included herein pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) for interim periods.  The unaudited condensed financial statements included herein reflect all normal recurring adjustments, which are, in the opinion of our management, necessary to state fairly the results of operations and financial position for the periods presented.  The results for the six month period ended September 30, 2015 are not necessarily indicative of the results to be expected for the entire fiscal year ending December 31, 2015 or for any interim or future period.


These unaudited condensed financial statements should be read in conjunction with Management’s Discussion and Analysis of Financial Condition and Results of Operations and the audited financial statements and notes thereto included in our Annual Report on Form 10-KA for the fiscal year ended December 31, 2014.


1.2

Acquisition of Technopreneurs Resource Centre Private Limited


On September 1st, the Company completed the acquisition of Technopreneurs Resources Center Private Limited, based in Singapore ("TRC") and added an additional business line to its products and services offering via TRC's 'CreateApp' platform.


Given that the acquisition of TRC closed on September 1st, 2015, the additional contribution to revenues only included one month of TRC operations.



5






In connection with the acquisition, we acquired TRC at a benchmark valuation of $36,000,000 and issued 12,000,000 shares of our common stock in exchange.


2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES


CONSOLIDATED STATEMENTS


These consolidated management accounts include the management accounts of the Company and that of its wholly owned subsidiary, Technopreneurs Resource Centre Private Limited , as referred to in note 1 above.


The results of subsidiaries acquired during the year are included from the effective date of acquisition.

All material intra group transactions and balances have been eliminated on consolidation.


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 leased hardware and software from third parties to offer its e-commerce solutions and services.  Management believes that alternate sources are available; however, disruption or termination of these relationships could adversely affect our operating results in the near-term.  The Company currently has two customers who provide all of the Company’s recurring revenue.  Loss of any one of these customers would have a significant impact on the Company’s revenue.


CASH AND CASH EQUIVALENTS


Cash equivalents comprise certain highly liquid instruments with a maturity of three months or less when purchased.  


EQUIPMENT


Equipment is carried at cost less a provision for depreciation on a straight-line basis over their estimated useful lives. Estimated useful life of the computer equipment is 3 years.


RECLASSIFICATION


Certain prior year amounts have been reclassified to conform with current year presentation.


STOCK-BASED COMPENSATION


The Company accounts for stock based compensation by recognizing the fair value of stock compensation as an expense in the calculation of net income (loss). The Company recognizes stock compensation expense in the period in which the employee is required to provide service, which is generally over the vesting period of the individual equity instruments. Stock options issued in lieu of cash to non-employees for services performed are recorded at the fair value of the options at the time they are issued and are expensed as service is provided.



6






EARNINGS /(LOSS) PER SHARE


Basic earnings (loss) per share of common stock is computed by dividing the net earnings (loss) by the weighted average number of common shares outstanding during the period.  Diluted earnings (loss) per share of common stock is computed by dividing the net earnings (loss) by the weighted average number of common shares outstanding during the period, including vested and unvested stock options that are in the money.


FAIR VALUE OF FINANCIAL INSTRUMENTS


The Company’s financial instruments consist of cash, accounts payable, interest payable, shareholder loans and other current liabilities. The carrying values of financial instruments reflected in these financial statements approximate their fair values due to the short-term maturity of the instruments.


REVENUE RECOGNITION


The Company recognizes revenue from providing hosting and integration services and licensing the use of its technology platform to its customers.  The Company recognizes revenue when all of the following conditions are satisfied:  (1) there is persuasive evidence of an arrangement; (2) the service has been provided to the customer (for licensing, revenue is recognized when the Company’s technology is used to provide hosting and integration services); (3) the amount of fees to be paid by the customer is fixed or determinable; and (4) the collection of fees is probable.  We account for our multi-element arrangements, such as instances where we design a custom website and separately offer other services such as hosting, which are recognized over the period for when services are performed.


COST OF SERVICE


Cost of service results from sourcing technical and engineering personnel in Asia on an hourly or project basis in order to develop e-commerce solutions and provide ongoing hosting service to individual customers.  The Company utilizes an outsourced staffing firm with offices in China.


CAPITALIZATION OF SOFTWARE


The Company accounts for internal-use software and website development costs, including the development of its partner marketplaces in accordance with ASC 350-50 ( Intangibles – Website cost ).  The Company capitalizes internal costs consisting of payroll and direct payroll-related costs of employees who devote time to the development of internal-use software, as well as any external direct costs. It amortizes these costs over their estimated useful lives, which typically range between three to five years. The Company’s judgment is required in determining the point at which various projects enter the stages at which costs may be capitalized, in assessing the ongoing value of the capitalized costs, and in determining the estimated useful lives over which the costs are amortized. The estimated life is based on management’s judgment as to the product life cycle.  Development cost of various platforms is being expensed.  The Company cannot separate internal cost on a reasonably cost-effective basis between maintenance and upgrades, and cannot assess the ongoing value of its various projects, thus all project costs are expensed as such costs are incurred.


DEVELOPMENT COSTS


Expenditure on research activities is expensed in the period in which it is incurred.


The development cost of CreateApp Version 2 has been capitalized as the following has been demonstrated by TTechnopreneurs Resource Centre Private Limited :


·

Technical feasibility of application of CreateApp Version 2 is proven with additional



7





functionality being added and enhanced;

·

Launched in August 2015 and currently in use by existing customers;

·

Ability to measure reliably the total expenditure required.


The development costs of CreateApp Version 2 are amortized on a straight line basis over an estimated useful life of 3 years.


INCOME TAXES


Income taxes are provided for using the asset and liability method whereby deferred tax assets and liabilities are recognized using current tax rates on the difference between the financial statement carrying amounts and the respective tax basis of the assets and liabilities. The Company provides a valuation allowance on deferred tax assets when it is more likely than not that such assets will not be realized.


The Company recognizes the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting this standard, the amount recognized in the financial statements is the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement with the relevant tax authority. The Company recognized interest and penalties related to unrecognized tax benefits within the income tax expense line in the accompanying statements of operation. Accrued interest and penalties are included within the related tax liability in the balance sheets.


NEW ACCOUNTING PRONOUNCEMENTS


There were various other accounting standards and interpretations recently issued, none of which is expected to have a material impact on the Company's financial position, operations or cash flows.


3. STOCKHOLDERS’ EQUITY/(DEFICIT)


Common Shares


Authorized common shares of the Company consist of 250,000,000 shares with a par value of $0.00001 each.


Debt-to-Equity Conversions


As the terms of conversion to equity of the convertible debentures outstanding at December 31, 2014 of $303,491 have lapsed, these have been reclassified as Other Payables.


Employee Stock Option Plan


The Company has a stock option and incentive plan, the “Stock Option Plan”. The exercise price for all equity awards issued under the Stock Option Plan is based on the fair market value of the common share price which is the closing price quoted on the Pink Sheets on the last trading day before the date of grant. The stock options generally vest on a monthly basis over a two-year to three-year period, and have a five year life.


The Stock Option Plan allows for the issuance of stock options, stock awards, or other incentives.  An aggregate of 25,000,000 shares are authorized under the Stock Option Plan. As of September 30, 2015, there are 24,590,000 shares reserved for future grants under the Stock Option Plan.


Stock-Based Compensation


All options outstanding are fully vested as of December 31, 2014 and have all expired at September



8





30, 2015.  No new options were granted in during the three months ended September 30, 2015.


4. RELATED PARTY TRANSACTIONS


Accounts payable and other accruals include $11,000 of accrued salaries due to the Company’s Chief Executive Officer as of September 30, 2015 compared to $22,000 due to the former Chief Executive Officer as of December 31, 2014.


5. SUBSEQUENT EVENTS


In accordance with ASC Topic 855, “Subsequent Events”, which establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued, we have evaluated significant events and transactions that occurred after September 30, 2015 through the date of the condensed consolidated financial statements were issued and filed with this Form 10-Q. During the period, the Company had material recognizable subsequent events described below:


Effective October 27, 2015 Jason Chang, aged 44, was appointed as a new member of our board of directors.


Jason Chang began his career in Silicon Valley and has been in the technology, product management, sales and marketing sector for over 20 years.  He has co-founded, incubated and personally invested into start-ups and led the transformation from hyper growth to exit.


Jason is now the Regional Head for National Sales in Groupon Asia, a NASDAQ listed company, where he oversees the sales, partnerships and business development for strategic accounts for Groupon.  He has been with Groupon Asia for over 3 years and is directly responsible in achieving double digit year on year revenue growth since he took over this vertical.  He was voted as the top performer and top manager, 2 years in a row at Groupon Asia.  He has also grown and led sales and marketing teams in Singapore, Malaysia, Indonesia, Taiwan and Hong Kong.


Before Groupon, Jason was in senior management roles in marketing, product management and operations for several start-ups in the advertising, media and online publishing space in Asia.  Before coming back to Asia in 2001, Jason worked with several Silicon Valley companies, most notable of which was Cybersource, where he was an early employee and involved in engineering and technical roles.  Cybersource went IPO and was later acquired by VISA.


Jason was a pre-medical student in University of California, Berkeley, where he graduated with a Bachelor’s degree in Biology.


Effective October 30, 2015 Ross O'Brien, aged 44, was appointed as a new member of our board of directors.


Ross O'Brien is an analyst, writer, presenter, and consultant focused on the economies and business environments of the Asia-Pacific, with over 25 years of experience in the region. His analysis surrounds Asia’s Innovation Economy—the intersection of information technology and the region’s broader society and economy. For nine years he was Director of the Economist Corporate Network, a membership-based business advisory programme for senior executives of multinationals in Asia.


Based in Hong Kong for over 17 years, Ross has an AB in Asian Studies and Anthropology from Dartmouth College (1989), and an MBA from the University of California at Berkeley’s Haas School (1996). He is conversant and literate in Mandarin and Indonesian.


Currently, and beginning in 2003, Ross was Managing Director of the Hong Kong operations of Intercedent Asia, a region-wide partnership of B2B market consultants, which provides research-



9





based market entry and positioning advice in several verticals across Asia. Ross' practice focuses on market entry strategies for telecoms and IT companies, in managed services and wireless solutions. His client work involved extensive research work in over a dozen economies in Asia, including extended field research in China, Indonesia, Vietnam and Bangladesh.


Ross was also for many years an analyst and Asian research director for Pyramid Research (once a subsidiary of the Economist Intelligence Unit, now a division of Progressive Digital Media) a telecoms advisory firm providing forecasts and analysis on infrastructure and services markets in emerging markets. Ross worked for Pyramid in the US, Singapore and Hong Kong.  


Ross has also served as a Research Director of Advisory Services for Strategic Intelligence, a venture-funded economic analysis firm with an emphasis on Internet-based delivery of analysis and forecasts on ‘new economy’ industries and markets in Asia. From 1996 to 1998, he was a consultant in AT&T Solutions' operational process improvement practice, serving financial services and telecoms clients in China and Indonesia, including a yearlong project overseeing customer care service process improvement for PT Telkom, based in Bandung.



10





ITEM 2.  MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION


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;


-

the efforts and success of expanding the geographical reach of CreateApp to new  territories; and


-

general economic conditions in the Asia-Pacific Region.


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 periodic 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 Tech” 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;



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


“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 specializes in providing e-commerce solutions and services that facilitate multi-channel B2C (business-to-consumer) and B2B (business-to-business) transactions.  Its solutions and services enable e-commerce transactions with speed and efficiency, and allow an interactive and engaging customer experience as well as targeted marketing and advertising.


The Company’s revenues are generated from one-time integration fees for the implementation of e-commerce solutions as well as recurring license and service fees.  


On September 1st, the Company completed the acquisition of Technopreneurs Resource Center Private Limited ("TRC") and added an additional business line to its products and services offering via TRC's 'CreateApp' platform.


Given that the acquisition of TRC closed on September 1st, 2015, the additional contribution to revenues only included one month of TRC operations.


Significant Transactions

 

Acquisition of acquisition of Technopreneurs Resource Centre Private Limited.

 

On September 1, 2015, we completed the acquisition of Technopreneurs Resource Centre Private Limited ("TRC") based in Singapore.  


In connection with the acquisition, the consideration included the issuance of 12,000,000 shares of our common stock.


TRC's CreateApp platform was marketed and sold predominantly in Singapore with less than 1% of sales attributable to ex-Singapore customers.


The CreateApp platform is offered in eleven languages and enables small-medium-sized businesses ("SMBs") to create a mobile application ("app") without the need of technical knowledge and background. 


SME's can increase sales, reach more customers and promote their products and services via a simple easy to build mobile app at an affordable and cost-effective manner.


Management  plans for expansion into other markets by repurposing the CreateApp platform into the target countries predominant languages as well as establishing a small base of operations in each target country. The goal is to replicate the early success of TRC in its 2014 year of operations and scale the business to a greater level.



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From January 2015 until August 2015, TRC concentrated product development efforts towards developing a fully-hosted Software-as-a-Service ("SaaS"), monthly paid service offering versus the business model of an annual licensing fee paid up front as in fiscal year 2014.


To increase our revenue, we must execute on our strategy of offering the CreateApp platform to SMB's and resellers with an affordable monthly fee, free upgrades, and expansion into new markets.

 

However, for us to successfully execute on our strategy, we must identify and structure strategic partnerships in new markets which requires additional funding which management will seek to obtain through the issuance of shares or debt financings.


During the quarter, the following corporate actions were completed:

 

On July 21, 2015, the Company announced that it had appointed Mr. Lionel Choong, age 53, as acting Chief Financial Officer of the Company. Mr. Choong has a track record of experience in corporate finance with an emphasis on branding, supply chain restructuring & public company work. Since November 2013 Mr. Choong currently serves as Board director with internal designation as vice chairman of the board for Emerson Radio Corp. Inc. (NYSE: MSN) overseeing strategic issues including supply chain and coordinated and led the branding initiative to improve branding awareness and implementation initiatives to reach customers through emerging touch points in social media, digital marketing and other digital initiatives


Between 2008 and June 2014, Mr. Choong was acting CFO for Global Regency Ltd based in Shenzhen China, (www.globalregency.com) an ideal partner for large retailers, handling annual FOB turnover exceeding USD 150 million, for wholesalers and distributors worldwide looking for complete solutions to OEM, private label brands and general factory dealings in China.


Since June 2013, Mr. Choong has been appointed Board advisor, incumbent alternate and board director, to the foreign shareholder of China joint venture of Sports retail operator, REALLY SPORTS CO., LTD, Shanghai, China, with revenue of Chinese RMB 2 billion (USD 327 million), over 500 retail outlets and over 3,500 staff representing global brands such as Nike, Adidas and Puma.


Further, between April 2012-May 2015 Mr. Choong was retained by the Hong Kong buying office for the US California Body Glove apparel brand as financial accounting consultant.


On September 1, 2015, the Company completed corporate actions including a 1:1000 reverse share split, a name and stock symbol change to Weyland Tech and WEYL respectively, and a reduction in shares authorized from 10 billion shares to 250 million shares.


On September 1, 2015 Matthew Burlage aged 52 was appointed as a new member of our board of directors.


Matthew Burlage has spent the last three decades involved in financing and advising Asia’s leading corporations, government enterprises and financial institutions and has been involved in some of the most ground-breaking transactions in Asia, particularly in the telecom, media and technology (TMT) sectors.

 

In 2000, Mr. Burlage co-founded IRG, a boutique financial advisory and investment firm focused on the core growth sectors in Asia. Mr. Burlage advises Asian and global corporates, private equity funds, hedge funds and sovereign wealth funds on a range of transactions including mergers, acquisitions, corporate restructurings, and debt capital and equity capital financings. Mr. Burlage is also responsible for the firm’s investment strategy and management of its proprietary capital.

 

Before co-founding IRG, Mr. Burlage was a Managing Director and Head of Industry Groups at Lehman Brothers in Hong Kong where he created the first and largest dedicated TMT industry group



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at an investment bank in Asia in the early 1990s. He has been an adviser on capital raisings, equity/debt financings and merger and acquisition strategy to Asia’s leading companies in Japan, Singapore, Hong Kong, Indonesia, China, Thailand, Taiwan, and South Korea, as well as to global telecommunications operators in Europe and the US.


Mr. Burlage was ranked Number One in ex-Japan Corporate Asia, and Number Two in Corporate Asia, by Institutional Investor, and is a member of Institutional Investor’s Top 20 Global E-Finance Elite for Asia and Europe.

 

Mr. Burlage has a MBA from Harvard Business School and a Bachelor of Arts from Yale University, and attended the Japanese Language Institute of Sophia University.


On September 24, 2015 the company signed a Memorandum of Understanding ("MOU") with Ranosys Technologies Pvt. Ltd. ("Ranosys") to form a joint venture partnership for the rollout of the Company's CreateApp platform in the greater India market.


Between September 15th - 20th, Executives of the Company, met with Ranosys in Jaipur, India to discuss terms and memorialize this agreement in the form of the MOU.


The MOU calls for a fifty-fifty (50/50) partnership between Weyland Tech. Incorporated and Ranosys to roll out the CreateApp platform in India, beginning with the city of Jaipur and expanding into Mumbai and Delhi over the next twelve months.


Jaipur has a population base of over six million people and Small-Medium-sized Businesses ("SMB's") numbering close to 500,000.


Ranosys, founded in 2009, is based in Singapore with operations in San Francisco, CA and Jaipur, India and has worked with clients such as Axa Insurance, Epson Corp., D-Link, Swatch and many others.


Ranosys is a leading software development company providing expert IT solutions to its global clients, focusing on enterprise solutions, mobile apps development and Magento-based e-commerce solutions.


A formal agreement is being finalized currently and expected to be signed by November 26, 2015.


Results of Operations


Service Revenue


Service Revenue was $648,159 and $383,821 for the three months ended September 30, 2015 and 2014, respectively.  The increase is due to recognizing higher revenue from the consolidation of results of CreateApp and HRM360 Platform from September 1, 2015.


Cost of Service


Cost of Service was $264,740 and $398,240 for the three months ended September 30, 2015 and 2014, respectively.  The decrease was caused by lower personnel costs required for the development and hosting of e-commerce solutions for our customers and the CreateApp and HRM360 platforms' digital distribution solution


Operating Expenses


General and administrative:   General and administrative expenses were $57,016 and $175,435 for the three months ended September 30, 2015 and 2014, respectively.  The decrease was caused by lower



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personnel costs required for the development and hosting of e-commerce solutions for our customers 


Net Loss


The Company had a net profit of $319,085 and net loss of $190,687 for the three months ended September 30, 2015 and 2014, respectively.  The net profit was due to the contribution effective September 1, 2015 from CreateApp and HRM360 platforms.


Off-Balance Sheet Arrangements


The Company has no off-balance sheet arrangements.


Liquidity and Capital Resources


Our registered independent auditors for the year ended December 31, 2014 have issued a going concern opinion as per our most recent Form 10-K and the Company experienced losses during fiscal year 2014 amounting to $255,693.  This means that there is substantial doubt that we can continue as an on-going business for the next 12 months unless we obtain additional capital or generate revenues to pay our bills.  We believe that we can generate revenues as a provider of e-commerce solutions and services.  Our other source for cash at this time is investments by others in the Company.  We may need to raise cash to fully implement our projects and stay in business.  These financial statements do not give effect to adjustments to the amounts and classifications to assets and liabilities that would be necessary should the Company be unable to continue as a going concern.


On September 30, 2015, we had working capital of $1,098,671 compared with negative working capital of $213,768 on September , 2015 The increase in working capital is due to the consolidation of our subsidiary and our net profit for the period.  Operating activities provided $41,038 in cash for operating expenses in the three months ended September 30, 2015 as the operations were on open account basis.  There was no movement in Investment activities or Financing activities in the three months ended September 30, 2015.  


We may not have enough working capital to complete our plan of operations.  If it turns out that we have not raised enough capital to complete our anticipated business development, we will try to raise additional funds from private placements or loans.  There is no assurance that we will raise additional capital in the future or that future financings will be available to us on acceptable terms.  If we require additional capital and are unable to raise it, we may have to suspend or cease operations.


Revenue Recognition


We earned revenue from providing hosting and integration services to 4-GS, Ltd., ZBL Cybermarketing, Ltd. and i-Media, Ltd.  For all customers, we provide e-commerce solutions with our engineering team and personnel in Asia.  We charge 4-GS, ZBL Cybermarketing and i-Media monthly integration and hosting fees plus additional professional fees for project management and consulting.  The fee arrangement with those three companies is covered under the strategic partnership agreement with Soconison Technology Ventures, dated July 11, 2011.  Soconison Technology Ventures is a shareholder in 4-GS, ZBL Cybermarketing and i-Media. 


Additionally, the CreateApp and HRM360 platforms added to revenues due to customer renewals from one-year contracts signed in August and September 2014.


ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK


As a smaller reporting company” (as defined by §229.10(f)(1)), the Company is not required to provide the information required by this Item.




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ITEM 4. CONTROLS AND PROCEDURES


Disclosure Controls and Procedures


Our management is responsible for establishing and maintaining a system of disclosure controls and procedures (as defined in Rule 13a-415(e)) under 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.


Changes in Internal Controls Over Financial Reporting


There have been no changes in our internal controls over financial reporting that occurred during our fiscal quarter of the period covered by this quarterly report on Form 10-Q that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.




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PART II – OTHER INFORMATION


ITEM 1. LEGAL PROCEEDINGS


From time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business. We are currently not aware of any such legal proceedings or claims that we believe will have a material adverse effect on our business, financial condition or operating results.



ITEM 1A. RISK FACTORS


The Company, as a “smaller reporting company” (as defined by §229.10(f)(1)), is not required to provide the information required by this Item.



ITEM 2. RECENT UNREGISTERED SALES OF EQUITY SECURITIES


None



ITEM 3. EXHIBITS


Exhibit No.

 

Description

 

 

 

31.1

 

Certifications of Principal Executive Officer filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2

 

Certifications of Principal Financial Officer filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1

 

Certifications of Principal Executive Officer furnished pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2

 

Certifications of Principal Financial Officer furnished pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.




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.

 

November 23, 2015

/s/ Brent Y Suen

Brent Y Suen

President, Chief Executive  Officer

(Principal Executive Officer)




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