10-Q 1 weyl10q_063016apg.htm WEYL 10-Q 06/30/16 WEYL 10-Q 06/30/16


 

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 June 30, 2016


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.)

 

 

198 Wellington Street,

9/F The Wellington,

Central, Hong Kong SAR.

Hong Kong HKSAR

(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 August 10, 2016

Common stock, $0.0001 par value

17,412,261




ii



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

 

4

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

 

8

Item 4.

Controls and Procedures

 

8

PART II – OTHER INFORMATION

 

9

Item 1.

Legal Proceedings

 

9

Item 1A.

Risk Factors

 

9

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

 

9

Item 3.

Exhibits

 

9

SIGNATURES

 

 

10




iii



PART I – FINANCIAL INFORMATION


ITEM 1. FINANCIAL STATEMENTS


WEYLAND TECH INC.

Condensed Balance Sheets

 

 

 

 

 

 

 

 

 

 

 

 

 

June 30

 

December 31

 

 

 

 

 

2016

 

2015

 

 

 

 

 

(Unaudited)

 

(I)

ASSETS

 

 

 

Current assets

 

 

 

 

 

 

Account Receivables

 

 

1,734,281 

 

722,700 

 

Cash and Bank

 

 

1,763,046 

 

832,218 

 

Temporary Payment

 

 

8,000 

 

8,000 

 

    Total current assets

 

 

3,505,327 

 

1,562,918 

 

Non-Current Assets

 

 

 

 

 

 

 

Investment in Joint Venture

 

 

180,000 

 

20,230 

 

 

Software development cost

 

 

541,667 

 

666,667 

 

 

Software development cost (incomplete)

 

 

38,838 

 

 

 

Trademark

 

 

5,000 

 

 

  Total Non-Current Assets

 

 

765,505 

 

686,897 

 

    Total assets

 

 

4,270,832 

 

2,249,815 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' DEFICIT

 

 

 

 

 

CURRENT LIABILITIES

 

 

 

 

 

 

Accounts Payables

 

 

830,868 

 

1,250,584 

 

Accrued expenses and other payable

 

 

85,651 

 

301,675 

 

Deposit received for share to be issued

 

 

544,887 

 

147,456 

 

    Total current liabilities

 

 

1,461,405 

 

1,699,715 

 

 

 

 

 

 

 

 

 

    Net assets

 

 

2,809,427 

 

550,100 

 

 

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

STOCKHOLDERS' DEFICIT

 

 

 

 

 

 

Common stock

 

 

 

 

 

 

 

Authorized 250,000,000 shares at par value of $ 0.0001 each

 

 

 

 

 

 

 

Issued and outstanding 17,412,261shares as of June 30, 2016 and 12,628,688 shares as of December 31, 2015

 

 

146,179 

 

147,179 

 

Additional paid-in capital

 

 

36,104,037 

 

36,104,037 

 

Subscriptions received

 

 

1,765,855 

 

1,765,855 

 

Accumulated deficit

 

 

(35,206,644)

 

(37,465,971)

 

 

Total stockholders' funds

 

 

2,809,427 

 

550,100 

 

 

 

 

 

 

 

 

 

Total liabilities and stockholders' equity

 

$

4,270,832 

 

2,249,815 

 

 

 

 

 

 

 

 

(I) Derived from the audited financial statements included in the Company’s Annual Report on

Form 10-K for the year ended December 31, 2015.




1




WEYLAND TECH INC.

Condensed Statements of Operations

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months

Ended June 30,

 

 

Six Months

Ended June 30,

 

 

 

 

 

2016

 

2015

 

 

2016

 

2015

 

 

 

 

 

(Unaudited)

 

(Unaudited)

 

 

(Unaudited)

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

Service Revenue

 

$

4,133,529

$

100,000 

 

$

6,394,984

$

580,000 

Cost of Service

 

 

2,993,361

 

95,000 

 

 

3,673,639

 

570,000 

Gross Profit (Loss)

 

 

1,140,168

 

5,000 

 

 

2,721,345

 

10,000 

 

 

 

 

 

 

 

 

 

 

 

Other income

 

 

167,273

 

 

 

 

156,170

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Expenses

 

 

 

 

 

 

 

 

 

 

 

General and administrative

 

 

325,407

 

14,375 

 

 

493,188

 

28,991 

 

Depreciation

 

 

62,500

 

 

 

125,000

 

Total Operating Expenses

 

 

387,907

 

14,375 

 

 

618,188

 

28,991 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Loss) profit from Operations

 

 

919,534

 

(9,375)

 

 

2,259,327

 

(18,991)

 

 

 

 

 

 

 

 

 

 

 

 

 

Provision for income taxes

 

 

-

 

 

 

-

 

Net Income (Loss)

 

$

919,534

 $

(9,375)

 

$

2,259,327

 $

(18,991)

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

0.0574

 

(0.0001)

 

 

0.1822

 

(0.0002)

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of basic and fully diluted common shares outstanding

 

 

16,010,381

 

125,146,384 

 

 

12,398,867

 

96,916,712 

 

 

 

 

 

 

 

 

 

 

 

 

 




2




WEYLAND TECH INC.

Condensed Statements of Cash Flows

 

 

 

 

 

 

 

 

 

Six Months

Ended June 30,

 

 

 

 

 

2016

 

2015

 

 

 

 

 

(Unaudited)

 

(Unaudited)

 

 

 

 

 

 

 

 

Cash flows from operations:

 

 

 

 

 

 

(Loss) profit from continuing operations

 

$

2,259,327 

$

(18,991)

 

Adjustment to reconcile net loss to net cash

used in operating activities:

 

 

 

 

 

 

 

Depreciation expense/amortization development costs

 

 

125,000 

 

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

Accounts receivable increase

 

 

(1,011,581)

 

(420,000)

 

 

Accounts payable and other accruals

 

 

(635,741)

 

(402,167)

Net cash provided (used) in operations

 

 

693,168 

 

(841,159)

 

 

 

 

 

 

 

 

Investment activities:

 

 

 

 

 

Net cash provided by / (used in) investment activities

 

 

(159,770)- 

 

 

 

 

 

 

 

 

 

Financing activities:

 

 

 

 

 

 

Share subscriptions received

 

 

397,430 

 

 

 

 

 

 

Net cash provided by financing activities

 

 

397,430 

 

 

 

 

 

 

 

 

 

Net (decreased) / increased in cash

 

 

930,828 

 

(841,159)

 

 

 

 

 

 

 

 

Balances per prior period balance sheet

 

 

832,218 

 

Ending balances

 

$

1,763,046 

 

(841,159)

 

 

 

 

 

 

 

 




3



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; 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:



4



?

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


?

“SEC” are to the Securities and Exchange Commission;


?

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


?

“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 or background in IT.


We believe that 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 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. WBB’s rebranded website, with the CreateApp back-end is www.worldblackbeltpro.com.


On April 15, 2016, the Company applied for listing to the OTC Markets Group’s ‘OTCQB Marketplace’ which is a higher tier market for publicly traded companies. The listing was effective on June 13th, 2016.


On June 23, 2016, the Company entered into a memorandum of understanding (MOU) with 2C2P, the leading Southeast Asian payments services company.


2C2P and Weyland Tech have agreed to work together on an m-commerce solution that enables Small-Medium-sized-Businesses to provide multi-payment options to consumers in the Southeast Asia region.


On June 30, 2016, the Company signed a Master Service Agreement ("MSA") with Orient Asia Pacific Limited. ("OAP"), for the Indonesia market.


Our Growth Strategy


Although Weyland Tech's CreateApp platform originally focused on the and Pan-Asia markets, we have partners that work with us to develop the EU and North American markets.



5



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 or background in IT.


We believe that 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 and Orient Asia Pacific Limited.


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


Korea via IAM, Inc. http://www.iamyourapp.co.kr/


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


None


Results of Operation


Service Revenue


Service Revenue was $4,133,529 and $100,000 for the three months ended June 30, 2016 and 2015, respectively.  The increase is due to service income from our customers, together with development income from a strategic partner for the development of a master Createapp application of $2,000,000. (2015: Nil).




6




Cost of Service


Cost of Service was $2,993,361 and $95,000 for the three months ended June 30, 2016 and 2015, respectively.  The increase was due to service costs paid to an integration/customization partner corresponding with increase in our service income, together with development cost for our European customer for the development of a master Createapp application of $1,750,000. (2015: Nil).


License fees


Included in other income are license fees from our Hong Kong partner of $120,309 and a one- time fee from a Singapore company of $ 35,750. (2015: Nil)


Operating Expenses


General and administrative:  General and administrative expenses were $325,407 and $14,375 and for the three months ended June 30, 2016 and 2015, respectively.  The increase was due to increased personnel costs, travel and professional costs as a result of the increased level of business and contribution from our Createapp business.


Net Profit(Loss)


The Company had a net profit of $919,534 and a net loss of $9,375 for the three months ended June, 2016 and 2015, respectively.  The net profit for the period was due to the increased level of business and contribution from our Createapp business. 


Included in Net profit was amortization of $62,500 for for the three months ended June, 2016.


Off-Balance Sheet Arrangements


The Company has no off-balance sheet arrangements.


Liquidity and Capital Resources


On June 30, 2016, we had working capital of $693,168.  The increase in working capital is due to profit for the period.  Operating activities provided $693,168 for the six months ended June 30, 2016.  There was a further in Investment in our Indian operations of $159,770 and there were share subscription proceeds of $397,430 during the six months ended June 30, 2016.


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).




7



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


During the period, we have increased control in our accounting function with the implementation of a cloud based computerized accounting and reporting system.  This has reduced the cycle time of our quarterly results, provided increased financial transparency and enhanced our segregation of duties with our bookkeeper maintaining the accounts and our CFO reviewing these for the CEO and COO and the audit committee and our board.


In addition, our auditors have been engaged to review our interim results for the six months ended June 30, 2016.


Other than the above, there has 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.



8



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


During the six months ended June 30, 2016, the Company received proceeds of $397,430 for the private placement of the company's common shares to professional investors at prices ranging from $0.75 - $1.48. These shares were issued pursuant to Regulation D under the Securities Act of 1933, as amended, are exempt from registration by reason of Section 4(2) of the Securities Act of 1933, as amended (the "Act"), and bear an appropriate restrictive legend.


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.




9




SIGNATURES


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


 

Weyland Tech Inc.

August 12, 2016

/s/ Brent Y Suen

President, Chief Executive Officer

(Principal Executive Officer)



 

 

 

 


 

10