WEYL 10-Q 03/31/16

10-Q 1 weyl10q_033116apgf.htm WEYL 10-Q 03/31/16 WEYL 10-Q 03/31/16

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 March 31, 2016

[ ] 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 March 31, 2016
Common stock, $0.00001 par value	16,442,963

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		5
Item 3.	Quantitative and Qualitative Disclosures About Market Risk		9
Item 4.	Controls and Procedures		9
PART II – OTHER INFORMATION			10
Item 1.		Legal Proceedings	10
Item 1A.		Risk Factors	10
Item 2.		Unregistered Sales of Equity Securities and Use of Proceeds	10
Item 3.		Exhibits	10
SIGNATURES			10

iii

PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS


WEYLAND TECH INC.

INDEX TO FINANCIAL STATEMENTS

								Page

Balance Sheets at March 31, 2016 and December 31, 2015								2

Statements of Operations for three months ended March 31, 2016 and 2015								3

Statements of Cash Flows for the three months ended March 31, 2016 and 2015								4


WEYLAND TECH INC.
*Balance Sheets*
				March 31		December 31
ASSETS				2016		2015
Non-current assets
Investment in joint venture				120,320		20,230
Development costs, net of accumulated amortization				583,333		666,667
Trademark				5,000		-
				708,563		686,897
Current assets
Accounts receivable, deposit and prepayments				739,701		730,700

Cash and cash equivalents				2,379,562		832,218
Total current assets				3,119,263		1,562,918
Total assets			$	3,827,826	$	2,249,815
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable, accruals and other payables				1,394,637		1,431,078


CEO payables				88,220		121,181
Deposit for stock to be issued				424,887		147,456
Total current liabilities				1,907,744		1,699,715
Total liabilities				1,907,744		1,699,715
STOCKHOLDERS' EQUITY
Common stock
	Authorized 250,000,000 shares at par value of $ 0.00001 each
Issued and outstanding 16,442,963 shares as of March 31, 2016 and 46,256,568 shares as of December 31, 2015				146,179		146,179
Additional paid-in capital				36,104,037		36,104,037
Subscriptions received				1,765,855		1,765,855
Accumulated deficit brought forward				(36,095,989)		(37,465,971)
Total stockholder’s equity				1,920,082		550,100
Total liabilities and stockholders' equity		$		3,827,826		2,249,815


WEYLAND TECH INC.
*Statements of Operations*

			Quarter Ended March 31,
			2016		2015
Service Revenue		$	2,261,455	$	480,000
Cost of Service			634,331		475,000
Gross Profit			1,627,124		5,000

Other Income			-		-
Gross Income			1,627,124		5,000

Operating Expenses
	General and administrative		173,809		14,616
	Depreciation and amortization		83,333		-
Total Operating Expenses			257,142		14,616

Profit/(Loss) from Operations			1,369,982		(9,616)

Provision for income taxes			-		-
Net Profit/(Loss)		$	1,369,982	$	(9,616)

Net profit/(loss) per common share - basic and fully diluted:			0.0890		(0.000692)

Weighted average number of basic and fully diluted common shares outstanding			15,397,248		13,898,299


WEYLAND TECH INC.
*Statements of Cash Flows*
				Quarter Ended March31
				2016		2015
Cash flows from operations:
	Profit/(Loss) from continuing operations		$	1,369,982	$	(9,616)
	Adjustment to reconcile net loss to net cash used in operating activities:
		Amortization of development costs		83,333		-

	Changes in operating assets and liabilities:
		Accounts receivable, deposit and prepayment		9,000		-

		Accounts payable, accruals and other payables		(36,440)		9,616
		CEO payable		(32,961)		-


Net cash generated from/(used in) operations				1,392,914		-
Investment activities:
	Investments in joint venture			(100,000)		-
	Development cost incurred			-		-
Net cash (used in) investment activities				(100,000)		-
Financing activities:
	Deposits received			254,430		-
	Share issuance			-		-
Net cash provided by financing activities				1,547,344		-

Net (decreased) / increased in cash				1,547,344		-
Balances per prior period balance sheet				832,218		-
Ending balances			$	2,379,562	$	-

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;

- “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’s CreateApp platform is offered in twelve languages and enables small-medium-sized businesses ("SMBs") to create a mobile application ("app") without the need of technical knowledge, high investment and background in IT.

SMB'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.

On January 19, 2016 the company signed a Software Licensing Agreement ("SLA") with Info Zone Development Limited ("Info Zone") to provide a 'white label' rollout of the Company's CreateApp platform in the Hong Kong and China market.

On January 21, 2016 the company signed an exclusive Software Licensing Agreement ("SLA") with Silver Ridge-Tangerine Sdn Bhd ("Silver Ridge") to provide a 'white label' rollout of the Company's CreateApp platform in Malaysia.

On February 11, 2016 the company signed an exclusive Software Licensing Agreement ("SLA") with Augicom S.A., ("Augicom") to distribute the Company's CreateApp platform in the Euro-Zone except Russia, Turkey, Armenia and Azerbaijan.

On February 24, 2016 the company signed a Term Sheet ("TS") with Meta 4 Group SarL ("Meta4") to form a joint venture partnership for the rollout of Meta4's 'Worldfriend's' network platform in the greater Indonesia market.

On March 9, 2016 the company signed an exclusive Software Licensing Agreement ("SLA") with Aurum Digital, Inc. ("Aurum") to distribute CreateApp in the Americas, covering North, Central and South Americas.

On March 14, 2016 the company signed an exclusive Software Licensing Agreement ("SLA") with IAM, Inc. ("IAM") to distribute CreateApp in the Republic of Korea.

On March 22, 2016 the company signed the joint venture agreement ("JV") with Meta 4 Group SarL ("Meta4") for the rollout of Meta4's 'Worldfriend's' network platform in the greater Indonesia market.

Plan of Operations

Although Weyland Tech's CreateApp platform originally focused on the ASEAN and Pan-Asia markets, we have partners that work with us to develop the EU and North American markets. The CreateApp platform is offered in twelve languages and enables small-medium-sized businesses

("SMB's") to create a mobile application ("app") without the need of technical knowledge, high investment and background in IT.

SMB'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.

Weyland Tech currently offers the CreateApp platform directly, in the following key markets:

Singapore:

www.createappsingapore.com

India (Jaipur):

www.aapkiapp.in

US/Canada:

www.createappamericas.com

Weyland Tech currently offers a DIY App builder through a 'white label' platform, in the following markets:

EU (excluding Russia, Turkey, Armenia, Azerbaijan) via a Strategic Partnership with Augicom S.A. www.augicom.ch

Malaysia via a Strategic Partnership with Silver Ridge Tangerine Sdn Bhd www.silverridge.com.my

Hong Kong/ South China via a Strategic Partnership with Info Zone Ltd.

Indonesia via a Strategic Partnership with Worldfriend's Network www.worldfriends.com

North America via a Strategic Partnership with Aurum Digital Inc. www.createappamericas.com

Korea via IAM, Inc. www.createapp.kr (launches June 1, 2016)

The Company believes that the strategic partnerships that were structured in late 2015 and early 2016, represent a large enough addressable market opportunity to generate sales and profits in a scalable manner, grow the Company's business and enhance shareholder value.

Subsequent Events

On April 12, 2016 the Company’s partner, Aurum Digital, signed an exclusive customer agreement with World Black Belt, Inc. (“WBB”), to rollout the CreateApp platform within WBB’s 5,035-Direct member network and marketing to WBB’s Affiliate Network of 33,000 Martial Art’s Schools.

On April 15, 2016, the Company applied for uplisting to the OTC Markets Group’s ‘OTCQB Marketplace’ which is a higher tier market for publicly traded companies. It is expected that the Company’s uplisting will be effective before June 1^st, 2016.

Need for Additional Capital

To become profitable and competitive, and execute strategic transactions, we may have to raise additional capital. If we are unable to raise additional equity capital to develop our business and continue earning revenues, we might have to suspend or cease operations and our investors may lose their investment.

We have no assurance that future financings will be available to us on acceptable terms. If financing is not available on satisfactory terms, we may be unable to continue, develop, or expand our operations. Equity financing could result in additional dilution to existing shareholders.

For the Quarter Ended March 31, 2016

Liquidity and Capital Resources

On March 31, 2016, we had working capital arising from changes in operating assets and liabilities of $ 1,392,914 compared with $740,247 on December 31, 2015. The increase is due to the contribution from CreateApp operations effective September 1, 2015 and our net profit arising thereon. Net cash generated from operations provided $ 1,369,982 for the three months ended March 31, 2016 compared to $1,595,563 for the twelve months ended December 31, 2015. Investing activities used $100,000 for our joint venture operations in India.

We expect to continue utilizing our personnel in Greater Asia, including ASEAN and India for servicing our customers. In order to accelerate the growth of the Company, we will also consider raising additional funding from investors.

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 use our best efforts 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

The Company's CreateApp platform generates sales to SMB's on a monthly licensing basis (direct sales model) as well as through 'resellers of the platform (reseller model) and country/market specific partnerships whereby the partner rebrands the CreateApp platform under their own branding (white label sales model).

Results of Operation for the Quarter ended March 31, 2016

Service Revenue

Service Revenues were $ 2,261,455 and $480,000 for the three months ended March 31, 2016 and 2015, respectively. The increase is due to the significant contribution from the CreateApp platform effective September 1, 2015.

Cost of Service

Cost of Service was $634,331 and $475,000 for the three months ended March 31, 2016 and 2015, respectively. The movement is due to costs and increased scale of service operation in connection with the CreateApp platform effective September 1, 2015.

Operating Expenses

General and administrative expenses: General and administrative expenses were $ 257,142 and $14,616 for the three months ended March 31, 2016 and 2015, respectively. The increase is mainly due to the change in cost structure incorporating the CreateApp platform effective September 1, 2015 and an increased scale of operation of our business. Included in General and administrative expenses were Amortization of development costs capitalized of $ 83,333 (2015: Nil).

Net Income (Loss)

The Company had a net income of $1,369,982 for the three months ended March 31, 2016 as compared to a net loss of $9,616 for the three months ended March 31, 2015. The significant increase in net income is mainly due to the contribution from the services offered through the CreateApp platform effective September 1, 2015.

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.

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.

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.

May 23, 2016

/s/ Brent Y Suen

Brent Y Suen

President, Chief Executive Officer

(Principal Executive Officer)