UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
(Mark One)
x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||||||||||||||||
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For the quarterly period ended September 30, 2018 | ||||||||||||||||||||
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or | ||||||||||||||||||||
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¨ | TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||||||||||||||||
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For the transition period from _________ to___________ | ||||||||||||||||||||
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Commission File Number 333-219211 |
G-MES Holdings Inc. | ||||||||||||||||||||
(Exact name of registrant as specified in its charter) |
Nevada |
| 61-1801198 | ||||||||||||||||||
(State or other jurisdiction of incorporation or organization) |
| (IRS Employer Identification No.) | ||||||||||||||||||
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280 Woodlands Industrial Park E5, #09-44 Harvest @ Woodlands Building, Singapore |
| 757322 | ||||||||||||||||||
(Address of principal executive offices) |
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+65-6659-6808 | ||||||||||||||||||||
(Registrant’s telephone number, including area code) | ||||||||||||||||||||
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N/A | ||||||||||||||||||||
(Former name, former address and former fiscal year, if changed since last report) |
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 (§232.405 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, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer | ¨ |
| Accelerated filer | ¨ | ||||||||||||||||
Non-accelerated filer | ¨ | (Do not check if a smaller reporting company) | Smaller reporting company | x | ||||||||||||||||
| Emerging growth company | x |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) ¨ YES x NO
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Check whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by a court. ¨ YES ¨ 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.
34,793,000 common shares issued and outstanding as of November 14, 2018. |
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Management's Discussion and Analysis of Financial Condition or Plan of Operation |
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2 |
PART I - FINANCIAL INFORMATION
G-MES HOLDINGS INC.
INDEX TO UNAUDITED INTERIM FINANCIAL STATEMENTS
September 30, 2018
Consolidated Balance Sheets as of September 30, 2018 and December 31, 2017 | F-1 | ||
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F-2 | |||
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Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2018 and 2017 | F-3 | ||
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F-4 |
3 |
Table of Contents |
Consolidated Balance Sheets
(Unaudited)
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| September 30, |
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| December 31, |
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| 2018 |
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| 2017 |
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ASSETS |
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Current Assets |
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Cash and cash equivalents |
| $ | 145,046 |
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| $ | 22,850 |
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Accounts receivable, net |
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| 479,499 |
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| 487,067 |
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Inventory |
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| 17,935 |
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| 32,654 |
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Prepaid and other current assets |
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| 5,676 |
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| 6,473 |
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Total Current Assets |
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| 648,156 |
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| 549,044 |
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Property and equipment, net |
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| 614,251 |
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| 599,159 |
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TOTAL ASSETS |
| $ | 1,262,407 |
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| $ | 1,148,203 |
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LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) |
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Current Liabilities |
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Accounts payable and accrued liabilities |
| $ | 147,700 |
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| $ | 267,556 |
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Deferred revenue and customer deposits |
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| 563 |
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| 1,447 |
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Due to related party |
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| 32,827 |
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| 41,115 |
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Loans payable - current portion |
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| 102,441 |
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| 109,867 |
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Capital lease obligations - current portion |
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| 31,111 |
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| 20,013 |
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Convertible notes payable |
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| - |
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| 219,200 |
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Total Current Liabilities |
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| 314,642 |
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| 659,198 |
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Capital lease obligations – non-current portion |
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| 114,222 |
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| 103,230 |
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Loans payable – non-current portion |
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| 383,269 |
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| 434,947 |
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Total non-current liabilities |
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| 497,491 |
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| 538,177 |
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TOTAL LIABILITIES |
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| 812,133 |
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| 1,197,375 |
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Stockholders' Equity (Deficit) |
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Preferred stock: 20,000,000 authorized; $0.001 par value |
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no shares issued and outstanding |
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| - |
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| - |
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Common stock: 300,000,000 authorized; $0.001 par value |
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35,618,000 and 31,520,000 shares issued and outstanding, respectively |
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| 35,618 |
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| 31,520 |
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Additional paid in capital |
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| 631,658 |
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| 196,145 |
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Stock subscription receivable |
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| (5,000 | ) |
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| (5,000 | ) |
Accumulated other comprehensive loss |
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| (5,903 | ) |
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| 350 |
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Accumulated deficit |
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| (206,099 | ) |
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| (272,187 | ) |
Total Stockholders' Equity (Deficit) |
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| 450,274 |
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| (49,172 | ) |
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) |
| $ | 1,262,407 |
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| $ | 1,148,203 |
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The accompanying notes are an integral part of these financial statements.
F-1 |
Table of Contents |
Consolidated Statements of Operations and Comprehensive Income (Loss)
(Unaudited)
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| Three months ended |
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| Nine months ended |
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| September 30, |
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| September 30, |
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| 2018 |
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| 2017 |
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| 2018 |
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| 2017 |
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Revenues |
| $ | 294,378 |
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| $ | 324,377 |
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| $ | 816,832 |
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| $ | 781,255 |
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Retail sales |
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| 16,177 |
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| 19,100 |
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| 93,127 |
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| 49,381 |
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| 310,555 |
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| 343,477 |
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| 909,959 |
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| 830,636 |
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Cost of sales |
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| (5,509 | ) |
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| 23,321 |
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| 43,026 |
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| 61,599 |
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Gross profit |
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| 316,064 |
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| 320,156 |
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| 866,933 |
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| 769,037 |
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Operating Expenses |
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General and administration |
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| 243,393 |
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| 233,594 |
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| 632,842 |
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| 676,176 |
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Professional fees |
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| 11,201 |
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| 43,507 |
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| 69,411 |
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| 158,869 |
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Depreciation and amortization |
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| 20,991 |
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| 11,155 |
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| 63,184 |
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| 30,075 |
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Total operating expenses |
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| 275,585 |
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| 288,256 |
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| 765,437 |
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| 865,120 |
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Net income (loss) from operations |
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| 40,479 |
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| 31,900 |
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| 101,496 |
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| (96,083 | ) |
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Other income (expense) |
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Interest expense |
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| (13,488 | ) |
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| (10,406 | ) |
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| (43,797 | ) |
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| (27,228 | ) |
Other income |
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| 1,155 |
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| 859 |
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| 8,389 |
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| 70,461 |
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Total other income (expense) |
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| (12,333 | ) |
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| (9,547 | ) |
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| (35,408 | ) |
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| 43,233 |
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Net income (loss) before taxes |
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| 28,146 |
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| 22,353 |
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| 66,088 |
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| (52,850 | ) |
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Income tax expenses |
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| - |
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| 19,680 |
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| - |
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| 41,603 |
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Net income (loss) |
| $ | 28,146 |
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| $ | 2,673 |
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| $ | 66,088 |
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| $ | (94,453 | ) |
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Other comprehensive income (loss) |
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| (1,799 | ) |
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| 6,493 |
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| (6,253 | ) |
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| 17,788 |
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Comprehensive income (loss) |
| $ | 26,347 |
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| $ | 9,166 |
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| $ | 59,835 |
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| $ | (76,665 | ) |
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Income (loss) per common share |
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Basic |
| $ | 0.00 |
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| $ | 0.00 |
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| $ | 0.00 |
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| $ | (0.00 | ) |
Diluted |
| $ | 0.00 |
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| $ | 0.00 |
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| $ | 0.00 |
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| $ | (0.00 | ) |
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Weighted average number of common shares outstanding |
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Basic |
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| 34,523,261 |
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| 31,520,000 |
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| 32,528,394 |
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| 31,481,898 |
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Diluted |
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| 34,523,261 |
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| 34,880,235 |
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| 32,528,394 |
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| 31,481,898 |
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The accompanying notes are an integral part of these unaudited consolidated financial statements.
F-2 |
Table of Contents |
Consolidated Statements of Cash Flow
(Unaudited)
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| Nine months ended |
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| September 30, |
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| 2018 |
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| 2017 |
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CASH FLOWS FROM OPERATING ACTIVITIES |
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Net income (loss) |
| $ | 66,088 |
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| $ | (94,453 | ) |
Adjustments to reconcile net income (loss) to net cash from operating activities: |
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Depreciation and amortization |
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| 63,184 |
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| 30,075 |
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Stock-based compensation |
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| - |
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| 6,000 |
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Bad debt expenses |
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| 3,992 |
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| - |
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Changes in operating assets and liabilities: |
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Accounts receivable |
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| (7,246 | ) |
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| (169,399 | ) |
Inventory |
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| 14,303 |
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| 2,061 |
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Prepaid expenses and deposits |
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| 670 |
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| 2,558 |
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Accounts payable and accrued liabilities |
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| (107,065 | ) |
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| (33,270 | ) |
Accrued interest |
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| 4,780 |
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| 6,071 |
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Deferred revenue |
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| (871 | ) |
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| (838 | ) |
Net cash provided by (used in) continued operating activities |
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| 37,835 |
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| (251,195 | ) |
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CASH FLOWS FROM INVESTING ACTIVITIES |
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Purchase of property and equipment |
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| (45,838 | ) |
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| (116,856 | ) |
Net cash used in investing activities |
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| (45,838 | ) |
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| (116,856 | ) |
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CASH FLOWS FROM FINANCING ACTIVITIES |
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Proceeds from issuance of common stock |
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| 206,250 |
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| - |
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Proceeds from bank loans |
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| 33,797 |
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| 109,836 |
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Repayments bank loans |
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| (81,904 | ) |
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| (77,121 | ) |
Proceeds from related party |
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| 10,870 |
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| 40,119 |
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Repayment to related party |
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| (18,411 | ) |
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| - |
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Proceeds from convertible note payables |
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| - |
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| 99,000 |
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Repayments of capital lease obligation |
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| (20,931 | ) |
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| (10,256 | ) |
Net cash provided by financing activities |
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| 129,671 |
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| 161,578 |
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Effects on changes in foreign exchange rate |
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| 528 |
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| 11,925 |
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Net increase (decrease) in cash and cash equivalents |
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| 122,196 |
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| (194,548 | ) |
Cash and cash equivalents - beginning of period |
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| 22,850 |
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| 230,640 |
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Cash and cash equivalents - end of period |
| $ | 145,046 |
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| $ | 36,092 |
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Supplemental Cash Flow Disclosures |
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Cash paid for interest |
| $ | 27,955 |
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| $ | 16,564 |
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Non-Cash Investing and Financing Activity: |
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Equipment paid by capital lease |
| $ | 46,284 |
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| $ | 24,912 |
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Common stock issued for conversion of debt |
| $ | 233,361 |
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| $ | - |
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The accompanying notes are an integral part of these unaudited consolidated financial statements.
F-3 |
Table of Contents |
Notes to the Unaudited Consolidated Financial Statements
September 30, 2018
NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS
G-MES Holdings Inc. (“we”, “our”, and the “Company) was incorporated in Nevada on August 15, 2016. The Company, through its subsidiary, G-MES International Pte. Ltd., mainly engages in construction support and management, with particular specialization in provision of floor safety solutions.
Overview of Corporate Structure
Details of the Company’s subsidiary:
Company name | Place/ date of incorporation | Particulars of issued capital | Principal activities |
G-MES International Pte. Ltd. | Republic of Singapore December 18, 2014 | 100 ordinary shares of SDG1,000 each | Construction support and management, with particular specialization in provision of floor safety solutions |
Recent Developments
On or about September 15, 2016, the Company acquired 100% of the outstanding shares of G-MES International Pte. Ltd. (“G-MES International”) in a share exchange pursuant to the terms of a Share Exchange Agreement, dated September 15, 2016 (the “Share Exchange Agreement”), with the shareholders (including Saw Peng Hao, the Company’s current Chairman of the Board and Chief Executive Officer) of G-MES International, pursuant to which the Company issued an aggregate of 30,000,000 shares of common stock of the Company to the shareholders of G-MES International in exchange for all of the outstanding shares of G-MES International (the “Share Exchange”). As a result of the Share Exchange, G-MES International is now the wholly owned subsidiary of the Company, and the Company is engaged in the business of providing floor safety solutions to the public and residential housing sectors in the Republic of Singapore. In addition, as a result of the Share Exchange, the Company’s current Chief Executive Officer received 30,000,000 shares of common stock of the Company, constituting 96% of the issued and outstanding shares of common stock of the Company as of December 31, 2016.
As Saw Peng Hao founded and controlled the Company prior to the Share Exchange, and also was the sole owner of and controlled G-MES International prior to the Share Exchange, the Share Exchange transaction was between entities under common control, and G-MES International is now a wholly owned subsidiary of the Company after completion of the Share Exchange. Accordingly, the Company has reported its results of operations for the periods at issue in a manner similar to a pooling of interests and has consolidated financial results since the initial date that the Company and G-MES International were under common control. Assets and liabilities were combined based on their carrying values, and no recognition of goodwill was made. The Company has presented earnings per share based on parent Company shares issued to the former sole shareholder of the subsidiary, G-MES International.
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The consolidated financial statements and related disclosures have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The consolidated financial statements have been prepared using the accrual basis of accounting in accordance with Generally Accepted Accounting Principles (“GAAP”) of the United States.
Basis of Consolidation
These consolidated financial statements include the accounts of G-MES HOLDINGS INC. and its subsidiary. All material intercompany balances and transactions have been eliminated.
F-4 |
Table of Contents |
Use of Estimates
The preparation of financial statements in conformity with GAAP 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 amount of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Foreign Currency Translation and Re-measurement
The Company’s functional currency and reporting currency is U.S. dollar. The functional currency of the Company’s subsidiaries is Singapore dollars. All transactions initiated in Singapore dollars (“SGD”) are translated into U.S. dollars (“USD”) in accordance with ASC 830-30, ”Translation of Financial Statements,” as follows:
| i) | Assets and liabilities at the rate of exchange in effect at the balance sheet date. |
| ii) | Equities at historical rate |
| iii) | Revenue and expense items at the average rate of exchange prevailing during the period. |
Adjustments arising from such translations are included in accumulated other comprehensive income in shareholders’ equity.
| September 30, |
| December 31, |
| September 30, | ||||
2018 | 2017 | 2017 | |||||||
Spot SGD: USD exchange rate |
| $ | 0.73 |
| $ | 0.75 |
| $ | 0.74 |
Average SGD: USD exchange rate |
| $ | 0.75 |
| $ | 0.72 |
| $ | 0.72 |
Cash and Cash Equivalents
Cash and cash equivalents include cash in banks, money market funds, and certificates of term deposits with maturities of less than three months from inception, which are readily convertible to known amounts of cash and which, in the opinion of management, are subject to an insignificant risk of loss in value.
Accounts Receivable
The Company’s accounts receivable consists of trade receivables from customers. The Company evaluates the collectability of its accounts receivable on an on-going basis and write off the amount when it is considered to be uncollectible. The Company does not have allowance for doubtful accounts. As of September 30, 2018, and December 31, 2017, the Company recorded bad debt of $3,992 and $0, respectively.
Financial Instruments
The Company’s financial instruments consist primarily of cash, accounts receivable, inventory, prepaid expenses and deposits, accounts payable and accrued expenses, and debt. The carrying amounts of such financial instruments approximate their respective estimated fair value due to the short-term maturities and approximate market interest rates of these instruments.
F-5 |
Table of Contents |
Leases
Leases, on terms for which the Company assumes substantially all the risks and rewards of ownership, are accounted for as capital leases. Upon initial recognition, the leased asset is measured at an amount equal to the lower of its fair value and the present value of the minimum lease payments.
Operating leases are recognized in general and administrative expenses on a straight-line basis.
Concentrations of Credit Risks
The Company’s financial instruments that are exposed to concentrations of credit risk primarily consist of its cash and cash equivalents. The Company places its cash and cash equivalents with financial institutions of high credit worthiness. The Company’s management plans to assess the financial strength and credit worthiness of any parties to which it extends funds, and as such, it believes that any associated credit risk exposures are limited.
Related Parties
The Company follows ASC 850, ”Related Party Disclosures,” for the identification of related parties and disclosure of related party transactions. See note 6.
Inventories
Inventories comprises of mainly chemical solutions that are used for treatment of floorings to achieve slip resistance results. It consists entirely of ready-to-use finished goods directly imported from the principal vendor in United States, are stated at the lower of cost or market. Cost is computed using weighted average cost, which approximates actual cost. Inventories on hand are evaluated on an on-going basis to determine if any items are obsolete or in excess of future needs. Items determined to be obsolete are reserved for. The Company provides for the possible inability to sell its inventories by providing an excess inventory reserve. As at September 30, 2018 and December 31, 2017, the Company had inventory of $17,935 and $32,654, respectively, and determined that no reserve was required.
Long-Lived Assets
Long-lived assets are evaluated for impairment whenever events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable or that the useful lives of these assets are no longer appropriate. Each impairment test is based on a comparison of the undiscounted future cash flows to the recorded value of the asset. If impairment is indicated, the asset is written down to its estimated fair value.
Property and Equipment
Property and equipment are carried at cost less accumulated depreciation. Cost includes all direct costs necessary to acquire and prepare assets for use, including internal labor and overhead in some cases.
The costs of repairs and maintenance are expensed when incurred, while expenditures for refurbishments and improvements that significantly add to the productive capacity or extend the useful life of an asset are capitalized. When assets are retired or sold, the asset cost and related accumulated depreciation are eliminated with any remaining gain or loss recognized in net earnings.
F-6 |
Table of Contents |
Depreciation of plant and equipment, which includes assets under capital leases, is provided on the straight-line method over estimated useful lives, generally as follows:
Computer equipment and software |
| 3 years |
Equipment, Furniture and fixtures |
| 5 years |
Vehicles |
| 10 years |
Investment property is not depreciated since it is a purchased property before the construction is completed. As of the end of the years, the property was still under construction and not available for intended use.
Revenue Recognition
Revenues are recognized when control of the promised goods or services are transferred to a customer, in an amount that reflects the consideration that the Company expects to receive in exchange for those goods or services. The Company derives its revenues from the rendering of business advisory services, such as training, implementation, consulting, and other customer-specific services. The Company applies the following five steps in order to determine the appropriate amount of revenue to be recognized as it fulfills its obligations under each of its agreements:
· identify the contract with a customer;
· identify the performance obligations in the contract;
· determine the transaction price;
· allocate the transaction price to performance obligations in the contract; and
· recognize revenue as the performance obligation is satisfied.
Service income is derived progressively based on the amount of work rendered. A contract site typically comprises of hundreds to thousands of units that requires the application of the chemical solutions. Revenue from service income is recognized progressively based on the number of units completed.
Sales income is derived from direct sales of bottled chemical solutions only. It could be sold in bulk or in retail packs.
Cost of Sales
Cost of sales are direct costs incurred to earn revenue, which consists of purchase cost of floor safety chemical solutions for treatment to floorings to achieve slip resistance results.
Employee benefit costs
As required by law, the Company makes contributions to the Central Provident Fund (CPF), a defined contribution plan regulated and managed by the Government of Singapore. CPF contributions are recognized as expense in the same year to which the contribution relates.
Employee entitlements to annual leave are recognized when they accrue to the employees. An accrual is made for the estimated liability for annual leave as a result of services rendered by the employees up to the statement of financial position date.
A liability for bonus is recognized where the entity is contractually obliged or where there is constructive obligation based on past practice.
F-7 |
Table of Contents |
Income Taxes
The Company accounts for income taxes using the asset and liability method in accordance with ASC 740, ”Accounting for Income Taxes.” The asset and liability method provides that deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities and for operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using the currently enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company records a valuation allowance to reduce deferred tax assets to the amount that is believed more likely than not to be realized.
Earnings (Loss) per Share
The Company computes basic and diluted earnings per share amounts in accordance with ASC Topic 260, “Earnings per Share.” Basic earnings per share is computed by dividing net income (loss) available to common shareholders by the weighted average number of common shares outstanding during the reporting period. Diluted earnings per share reflects the potential dilution that could occur if stock options and other commitments to issue common stock were exercised or equity awards vest resulting in the issuance of common stock that could share in the earnings of the Company. As at September 30, 2018, the Company has no potentially dilutive securities, such as options or warrants, currently issued and outstanding.
Recent Accounting Pronouncements
The Company has considered all new accounting pronouncements and has concluded that there are no new pronouncements that may have a material impact on results of operations, financial condition, or cash flows, based on current information.
NOTE 3 – GOING CONCERN
As shown in the accompanying consolidated financial statements, the Company has an accumulated deficit of $206,099 as of September 30, 2018. The Company also experienced insufficient cash flows from operations and will be required continuous financial support from the shareholders. The Company will need to raise capital to fund its operations until it is able to generate sufficient revenue to support the future development. Moreover, the Company may be continuously raising capital through the sale of debt and equity securities.
The Company’s ability to achieve these objectives cannot be determined at this stage. If the Company is unsuccessful in its endeavors, it may be forced to cease operations. These consolidated financial statements do not include any adjustments that might result from this uncertainty which may include adjustments relating to the recoverability and classification of recorded asset amounts, or amounts and classifications of liabilities that might be necessary should the Company be unable to continue as a going concern.
These factors have raised substantial doubt about the Company’s ability to continue as a going concern. There can be no assurances that the Company will be able to obtain adequate financing or achieve profitability. These consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
NOTE 4 – PROPERTY AND EQUIPMENT
Property and equipment at September 30, 2018 and December 31, 2017 consisted of the following:
|
| September 30, |
|
| December 31, |
| ||
|
| 2018 |
|
| 2017 |
| ||
|
|
|
|
|
|
| ||
Investment property |
| $ | 413,425 |
|
| $ | 388,938 |
|
Motor vehicles |
|
| 300,757 |
|
|
| 283,527 |
|
Equipment and tools |
|
| 10,567 |
|
|
| 10,656 |
|
Computer and equipment |
|
| 32,009 |
|
|
| 25,995 |
|
|
|
| 756,758 |
|
|
| 709,116 |
|
Accumulated Depreciation |
|
| (142,507 | ) |
|
| (109,957 | ) |
Property and equipment, net |
| $ | 614,251 |
|
| $ | 599,159 |
|
F-8 |
Table of Contents |
During the nine months ended September 30, 2018 and 2017, the Company recognized depreciation of $63,184 and $30,075, respectively. Please see Note 7 and Note 8 for the carrying amounts of assets pledged.
The Company leases certain equipment under capital lease agreements that expire at various dates through October 2024 (see Note 8). Assets recorded under capital leases and included in property and equipment are:
|
| September 30, |
|
| December 31, |
| ||
|
| 2018 |
|
| 2017 |
| ||
Motor vehicles |
| $ | 177,371 |
|
| $ | 157,356 |
|
Less: Accumulated depreciation |
|
| (31,398 | ) |
|
| (34,771 | ) |
Net capital leases |
| $ | 145,973 |
|
| $ | 122,585 |
|
NOTE 5 – STOCKHOLDERS’ EQUITY
Authorized Stock
The Company has authorized 20,000,000 preferred shares with a par value of $0.001 per share.
The Company has authorized 300,000,000 common shares with a par value of $0.001 per share. Each common share entitles the holder to one vote, in person or proxy, on any matter on which action of the stockholders of the corporation is sought.
Preferred Share Issuances
As at September 30, 2018 and December 31, 2017, the Company did not have preferred shares issued and outstanding.
Common Share Issuances
During the nine months ended June 30 ,2018, the Company issued as follows:
· 3,273,000 shares of common stock for conversion of debt and accrued interest of $233,361.
· 825,000 shares of common stock for $206,250.
As at September 30, 2018 and December 31, 2017, the Company had 35,618,000 and 31,520,000 shares of common stock issued and outstanding, respectively.
NOTE 6 – RELATED PARTY TRANSACTIONS
During the nine months ended September 30, 2018, the Company borrowed a total amount of $10,870 from the director of the Company and repaid $18,411. This loan is a non-interest bearing and due on demand. As of September 30, 2018, and December 31, 2017, the Company owed $32,827 and $41,115, respectively.
F-9 |
Table of Contents |
NOTE 7 – LOANS PAYABLE
The Company had the following loans payable outstanding as of September 30, 2018 and December 31, 2017:
Effective | ||||||||||
September 30, | December 31, | Interest | Repayment | |||||||
2018 | 2017 | rate | Terms | |||||||
United Overseas Bank - For 24-year Commercial Property Loan | $ | 306,341 | $ | 286,689 | 4.50% | 24 years from each drawdown | ||||
United Overseas Bank - For 3-year SME Working Capital Loan under Local Enterprise Financing Scheme | 14,344 | 23,853 | 7.50% | 36 monthly instalments from November 2016 to October 2019 | ||||||
United Overseas Bank - For 3-year BizMoney Loan | 15,089 | 24,351 | 11.38% | 36 monthly instalments from November 2016 to October 2019 | ||||||
United Overseas Bank - 5 years Commercial Vehicle Loan GBE8115A | 22,632 | 30,092 | 2.99% | 60 monthly instalments from April 2016 to March 2021 | ||||||
United Overseas Bank - 5 years Commercial Vehicle Loan GBE7867U | 31,715 | 40,751 | 2.99% | 60 monthly instalments from April 2016 to March 2021 | ||||||
DBS Bank - 3 years SME Working Capital Loan | 31,800 | 49,514 | 6.75% | 36 monthly instalments from November 2016 to October 2019 | ||||||
Citi Bank 4 years loan | 63,789 | 85,316 | 8.00% | 48 monthly instalments from October 2016 to September 2020 | ||||||
OCBC Bank 2 years loan | - | 4,248 | 2.98% | 24 monthly instalments from August 2016 to July 2018 | ||||||
485,710 | 544,814 | |||||||||
Less: current portion | 102,441 | 109,867 | ||||||||
Long-term loans payable | $ | 383,269 | $ | 434,947 |
As of September 30, 2018, investment property of carrying amount of $403,377 and three motor vehicles of carrying amount of $50,534 were pledged as security and personal guarantee by the director was provided for the loans.
As of December 31, 2017, investment property of carrying amount of $388,938 and three motor vehicles of carrying amount of $72,801 were pledged as security and personal guarantee by the director was pledged as security for the loans.
During the nine months ended September 30, 2018 and 2017, interest expense was $21,786 and $14,052, respectively.
NOTE 8 – CAPITAL LEASES
The Company leases commercial vehicles under non-cancellable capital lease arrangements. The term of those capital leases is 2 - 7 years and annual interest rate is 2.98 – 4.88%. At September 30, 2018 and December 31, 2017, capital lease obligations included in current liabilities were $31,111 and $20,013, respectively, and capital lease obligations included in long-term liabilities were $114,222 and $103,230, respectively.
At September 30, 2018, future minimum lease payments under the capital lease obligations, are as follows:
As at December 31, |
|
|
|
|
2018 |
| $ | 9,968 |
|
2019 |
|
| 39,873 |
|
2020 |
|
| 36,360 |
|
2021 |
|
| 31,505 |
|
2022 |
|
| 21,326 |
|
Thereafter |
|
| 31,335 |
|
Total |
|
| 170,367 |
|
Amount representing interest payments |
|
| 25,034 |
|
Present value of future minimum payments |
|
| 145,333 |
|
Less: current portion |
|
| 31,111 |
|
Capital leases classified as non-current liabilities |
| $ | 114,222 |
|
F-10 |
Table of Contents |
As of September 30, 2018, four motor vehicles of carrying amount of $145,972 were pledged as security for the loans.
As of December 31, 2017, five motor vehicles of carrying amount of $122,585 were pledged as security for the loans.
NOTE 9 – CONVERTIBLE NOTES PAYABLE
The Company had the following convertible notes payable outstanding as of September 30, 2018 and December 31, 2017:
|
| September 30, |
|
| December 31, |
| ||
|
| 2018 |
|
| 2017 |
| ||
|
|
|
|
|
|
| ||
Dated - September 2016 |
| $ | - |
|
| $ | 51,450 |
|
Dated - October 2016 |
|
| - |
|
|
| 38,750 |
|
Dated - November 2016 |
|
| - |
|
|
| 30,000 |
|
Dated - January, 2017 |
|
| - |
|
|
| 15,000 |
|
Dated - February, 2017 |
|
| - |
|
|
| 64,000 |
|
Dated - March, 2017 |
|
| - |
|
|
| 20,000 |
|
|
|
| - |
|
|
| 219,200 |
|
Less: current portion of convertible notes payable |
|
| - |
|
|
| 219,200 |
|
Long-term convertible notes payable |
| $ | - |
|
| $ | - |
|
During the year ended December 31, 2016, the Company issued a total of $120,200 notes with the following terms:
| · | Terms 12 months. |
| · | An annual interest rate of 4%. |
| · | Mandatory conversion of principal and accrued interest upon the effectiveness of a Company registration statement on Form S-1 filed with the Securities and Exchange Commission (“SEC”). The note holder is not permitted to convert prior to the SEC declaring a registration statement effective. |
| · | Conversion prices are fixed at $0.15 or $0.175 per share. |
During the year ended December 31, 2017, the Company issued a total of $99,000 notes with the following terms:
| · | Terms ranging from 6 months to 12 months. |
| · | An annual interest rate of 4%. |
| · | Mandatory conversion of principal and accrued interest upon the effectiveness of a Company registration statement on Form S-1 filed with the Securities and Exchange Commission (“SEC”). The note holder is not permitted to convert prior to the SEC declaring a registration statement effective. |
| · | Conversion prices are fixed at $0.01 or $0.175 per share. |
F-11 |
Table of Contents |
During the nine months ended September 30, 2018 and 2017, interest expense was $43,797 and $27,228, respectively. As of September 30, 2018, and December 31, 2017, accrued interest was $0 and $9,381, respectively.
During the nine months ended September 30, 2018, the Company converted notes with principal amounts and accrued interest of $233,361 into 3,273,000 shares of common stock.
NOTE 10 – COMMITMENTS AND CONTINGENCIES
From time to time the Company may become a party to litigation matters involving claims against the Company. Management believes that it is adequately insured for its operations and there are no current matters that would have a material effect on the Company’s financial position, cash flows or results of operations. The Company believes that the following matters will have no material effect on the Company’s financial position, cash flows and results of operations:
Rent
The Company leases the premise situated at 280 Woodlands Industrial Park E5 #09-44 Singapore 757322, for a fixed term of 24 months, with monthly lease rates of SGD$2,088 (approximately $1,480). Lease expenses for the nine months ended September 30, 2018 and 2017 were $11,673 and $16,305, respectively.
Legal proceeding
On or about November 1, 2017, the Company’s subsidiary, G-MES International Pte Ltd, was served with a statutory demand (the “Demand”) by a purported creditor, Koh Siew Min (the “Alleged Creditor”), alleging that it was owed approximately US$15,000. The Company denied the Demand. The Company subsequently took out an injunction (HC/OS 185/2018) with the High Court of the Republic of Singapore. The case was heard by High Court Judge, Justice Quentin Loh on July 16, 2018, an injunction was granted, and it was held that the demand was an abuse of process.
F-12 |
Table of Contents |
NOTE 11 – EARNINGS PER SHARE
The following is a reconciliation of the numerator and denominator used in the basic and diluted earnings per share ("EPS") calculations.
|
| Three months ended |
|
| Nine months ended |
| ||||||||||
|
| September 30, |
|
| September 30, |
| ||||||||||
|
| 2018 |
|
| 2017 |
|
| 2018 |
|
| 2017 |
| ||||
Numerator: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Net income |
| $ | 28,146 |
|
| $ | 2,673 |
|
| $ | 66,088 |
|
| $ | (94,453 | ) |
Earnings allocated to common stock equivalents |
|
| - |
|
|
| 2,210 |
|
|
| - |
|
|
| - |
|
Income available to common stockholders |
| $ | 28,146 |
|
| $ | 4,883 |
|
| $ | 66,088 |
|
| $ | (94,453 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Denominator: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average shares of common stock |
|
| 34,523,261 |
|
|
| 31,520,000 |
|
|
| 32,528,394 |
|
|
| 31,481,898 |
|
Dilutive effect of convertible instruments |
|
| - |
|
|
| 3,360,235 |
|
|
| - |
|
|
| - |
|
Diluted weighted-average of common stock |
|
| 34,523,261 |
|
|
| 34,880,235 |
|
|
| 32,528,394 |
|
|
| 31,481,898 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per common share from: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic: |
| $ | 0.00 |
|
| $ | 0.00 |
|
| $ | 0.00 |
|
| $ | (0.00 | ) |
Diluted: |
| $ | 0.00 |
|
| $ | 0.00 |
|
| $ | 0.00 |
|
| $ | (0.00 | ) |
Diluted earnings per share is calculated using net income available to common stockholders divided by the diluted weighted average number of common shares outstanding during each period determined using the treasury stock method and the if-converted method.
During the nine months ended September 30, 2018, all convertible notes were converted into common stock. As of September 30, 2018, the Company has no potentially dilutive securities, such as options or warrants, currently issued and outstanding.
NOTE 12 – SUBSEQUENT EVENTS
Management evaluated all events subsequent to the balance sheet date through the date the consolidated financial statements were available to be issued, and determined there were no events or transactions that require recognition or disclosure.
F-13 |
Table of Contents |
Item 2. Management’s Discussion and Analysis of Financial Condition or Plan of Operation
FORWARD-LOOKING STATEMENTS
This quarterly report on Form 10-Q contains forward-looking statements. All statements other than statements of historical or current facts contained in this quarterly report, including statements regarding our future results of operations and financial position, business strategy, proposed new products and services, research and development costs, timing and likelihood of success, plans and objectives of management for future operations and future results of anticipated products and services, are forward-looking statements. These statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements.
In some cases, forward-looking statements can be identified by terms such as “may,” “will,” “should,” “expect,” “plan,” “anticipate,” “could,” “would,” “intend,” “target,” “project,” “contemplate,” “believe,” “estimate,” “predict,” “potential” or “continue” or the negative of these terms or other similar expressions. The forward-looking statements in this quarterly report are only predictions. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition and results of operations. These forward-looking statements speak only as of the date of this quarterly report and are subject to a number of risks, and except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained herein, whether as a result of any new information, future events, changed circumstances or otherwise.
Because forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified and some of which are beyond our control, prospective investors should not rely on these forward-looking statements as predictions of future events. The events and circumstances reflected in our forward-looking statements may not be achieved or occur and actual results could differ materially from those projected in, or implied by, the forward-looking statements due to a variety of factors, including, but not limited to:
| · | our financial performance, including our history of operating losses; |
| · | our ability to obtain additional funding to continue our operations; |
| · | our ability to enter into agreements with potential customers, vendors and purchasers; |
| · | changes in the regulatory environments of countries in which we intend to operate; |
| · | our ability to attract and retain key management and other personnel; |
| · | competition from new market entrants and new technologies; |
| · | our ability to identify and pursue development of appropriate products; and |
| · | risks, uncertainties and assumptions described under “Risk Factors” in the Company’s Prospectus on Form 424(b)(3) dated July 19, 2018 and in any subsequent filings we make with the Securities and Exchange Commission (the “SEC”) and under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere in this quarterly report. |
Forward-looking statements are expressly qualified in their entirety by this cautionary statement. The forward-looking statements included in this document are made as of the date of this document and we do not undertake any obligation to update forward-looking statements to reflect new information, subsequent events or otherwise, except as required by law. Moreover, we operate in an evolving environment. New risk factors and uncertainties may emerge from time to time, and it is not possible for management to predict all risk factors and uncertainties. We qualify all of our forward-looking statements by these cautionary statements.
4 |
Table of Contents |
Overview
G-MES Holdings Inc., incorporated under the laws of the State of Nevada on August 15, 2016, is focused on providing home safety and floor safety products and services in Southeast Asia through its wholly owned Singapore subsidiary, G-MES International PTE Ltd (“G-MES International”). G-MES International is the exclusive Singapore distributor for the SlipDoctor™ range of products manufactured by SoftTec Products, LP (the “Supplier”) based in Carrollton, Texas, pursuant to an exclusive master distributor agreement with the Supplier permitting G-MES International to market, sell and distribute the Supplier’s products in Singapore until June of 2019, and obtain exclusivity to China, Hong Kong, Japan, Korea and the Southeast Asia region. The SlipDoctor™ range of products has been branded by the Company in Singapore as the “SlipMedic” range of products.
These products cover a wide range of slip resistance products that improve floor safety, and these products provide slip resistance that surpasses guidelines recommended by the ADA/OSHA for floor safety. The products include floor treatment formulas catering to different flooring materials and application requirements including home and residential, industrial, swimming pool, and marine applications.
Our Singapore subsidiary, G-MES International, was acquired by the Company in September of 2016 shortly after the Company’s incorporation. Our CEO, Mr. Saw Peng Hao, founded and controlled the Company prior to the acquisition of G-MES International, and he also was the sole owner of and controlled G-MES International prior to our acquisition of it. Since the acquisition transaction was between entities under common control, and G-MES International is now a wholly owned subsidiary of the Company after completion of the acquisition, the Company has reported its results of operations herein in a manner similar to a pooling of interests and has consolidated financial results since the initial date that the Company and G-MES International were under common control beginning in August 15, 2016. Our results of operations prior to the Company’s incorporation in August of 2016 include the results of operations of our Singapore subsidiary prior to that date.
The address of our principal executive office is 280 Woodlands Industrial Park E5, #09-44, Harvest @ Woodlands Building, Singapore 757322. Our telephone number is +65-6659-6808. Our website is www.gmesholdings.com.
We have not been subject to any bankruptcy, receivership or similar proceeding.
Plan of Operation
G-MES International is currently one of the largest floor safety solution providers in Singapore in terms of market share, and our plan is to acquire manufacturing rights to the Supplier’s products and expand the distribution of the products to the regional market, including other countries in Southeast Asia, Hong Kong, mainland China, and Japan. There is no assurance that we will be able to acquire those manufacturing rights, or that if we do so, that we will be able to expand distribution of the products outside of Singapore.
During the next 12 months, the Company intends to develop trade distribution channels with key retailers and strategic distribution partners outside of Singapore in order to grow into geographic markets outside of Singapore and increase the Company’s customer base. The Company plans to hire sales and field personnel to distribute the Company’s products outside of Singapore, specifically in more-developed regions like Hong Kong, commercial centers in mainland China and large cities in other Southeast Asian countries. The Company intends to initially focus its expansion efforts on the Hong Kong market as population demographics in Hong Kong are similar to those in Singapore. The Company also intends to conduct a marketing campaign internationally and explore expansion into the Americas, namely wetter geographic areas and commercial centers in Central and South America with markets for the Company’s anti-slip products and services. Finally, the Company plans to invest in product development, plant manufacturing, marketing, branding, and sales activities along with other operational support activities. Additional capital resources will be necessary to pursue these activities.
5 |
Table of Contents |
Results of Operations
Three months ended September 30, 2018 and 2017
The following summary of our results of operations should be read in conjunction with our consolidated financial statements for the three months ended September 30, 2018 and 2017, which are included herein.
Our operating results for the three months ended September 30, 2018 and 2017, and the changes between those periods for the respective items are summarized as follows:
|
| Three months ended |
|
|
|
|
|
| ||||||||
|
| September 30, |
|
| Change |
| ||||||||||
|
| 2018 |
|
| 2017 |
|
| Amount |
|
| Percentage |
| ||||
Revenue |
| $ | 310,555 |
|
| $ | 343,477 |
|
| $ | (32,922 | ) |
| (10 | %) | |
Cost of revenue |
| $ | (5,509 | ) |
| $ | 23,321 |
|
| $ | (28,830 | ) |
| (124 | %) | |
Gross profit |
| $ | 316,064 |
|
| $ | 320,156 |
|
| $ | (4,092 | ) |
| (1 | %) | |
Gross profit percentage |
|
| 102 | % |
|
| 93 | % |
|
| N/A |
|
|
| N/A |
|
Operating income |
| $ | 40,479 |
|
| $ | 31,900 |
|
| $ | 8,579 |
|
|
| 27 | % |
Other income (expense) |
| $ | (12,333 | ) |
| $ | (9,547 | ) |
| $ | (2,786 | ) |
|
| 29 | % |
Net income |
| $ | 28,146 |
|
| $ | 2,673 |
|
| $ | 25,473 |
|
| (953 | %) |
Revenue
The following table presents revenues for the three months ended September 30, 2018 and 2017:
|
| Three months ended |
|
|
|
|
| ||||||||
|
| September 30, |
|
| Change | ||||||||||
|
| 2018 |
|
| 2017 |
|
| Amount |
|
| Percentage | ||||
Service income |
| $ | 294,378 |
|
| $ | 324,377 |
|
| $ | (29,999 | ) |
| (9 | %) |
Retail sales |
| $ | 16,177 |
|
| $ | 19,100 |
|
| $ | (2,923 | ) |
| (15 | %) |
For the three months ended September 30, 2018, our total revenues decreased $32,922 or 10% due to reallocation of leads-generating marketing resources. We recognized revenues from both government and private sector projects, where customers use our services of performing anti-slip chemical treatments on floorings and tiles and purchase those treatment products directly.
Service income decreased $29,999 or 9% in 2018 from $324,377 in 2017. The decrease in service income was primarily due to reallocation of leads-generating marketing resources. Retail sales decreased $2,923 or 15% in 2018 from $19,100 in 2017. The decrease in retail sales is primarily due to reallocation of leads-generating marketing resources.
Gross Profit
Gross profit decreased $4,092 or 1% in 2018 from $320,156 in 2017. The reason for the change in gross profit was primarily due to a decrease in revenue. Cost of revenue consists of chemical solution costs and retail pack product packaging costs.
Cost of revenue decreased by 124% during 2018 compared to 2017. The change was primarily due to improvement in wastage control on the inventories.
6 |
Table of Contents |
Operating Income (Loss)
Operating income increased $8,579 or 27% during 2018 as compared to 2017. The following table presents operating expenses for the three months ended September 30, 2018 and 2017:
|
| Three months ended |
|
|
|
|
|
| ||||||||
|
| September 30, |
|
| Change |
| ||||||||||
|
| 2018 |
|
| 2017 |
|
| Amount |
|
| Percentage |
| ||||
General and administration |
| $ | 243,393 |
|
| $ | 233,594 |
|
| $ | 9,799 |
|
|
| 4 | % |
Professional fees |
|
| 11,201 |
|
|
| 43,507 |
|
|
| (32,306 | ) |
| (74 | %) | |
Depreciation |
|
| 20,991 |
|
|
| 11,155 |
|
|
| 9,836 |
|
|
| 88 | % |
Total operating expense |
| $ | 275,585 |
|
| $ | 288,256 |
|
| $ | (12,671 | ) |
| (4 | %) |
Other Income (Expense)
The following table presents other income and expenses for the three months ended September 30, 2018 and 2017:
|
| Three months ended |
|
|
|
|
| ||||||||
|
| September 30, |
|
| Change | ||||||||||
|
| 2018 |
|
| 2017 |
|
| Amount |
|
| Percentage | ||||
Interest expense |
| $ | (13,488 | ) |
| $ | (10,406 | ) |
| $ | (3,082 | ) |
| (30 | %) |
Other income |
|
| 1,155 |
|
|
| 859 |
|
|
| (296 | ) |
| (34 | %) |
Total other income (expense) |
| $ | (12,333 | ) |
| $ | (9,547 | ) |
| $ | 2,786 |
|
| (29 | %) |
Interest expense increased during 2018, as compared to 2017, due to increases in bank loans and capital leases during the three months ended September 30, 2018 as compared to 2017.
Other income consists mainly of employment credits provided by the Ministry of Manpower, rebates provided by vendors and interest income.
Net income
Net income increased by $25,473, during 2018, from $2,673 in 2017.
Nine months ended September 30, 2018 and 2017
The following summary of our results of operations should be read in conjunction with our consolidated financial statements for the nine months ended September 30, 2018 and 2017, which are included herein.
Our operating results for the nine months ended September 30, 2018 and 2017, and the changes between those periods for the respective items, are summarized as follows:
|
| Nine months ended |
|
|
|
|
|
| ||||||||
|
| September 30, |
|
| Change |
| ||||||||||
|
| 2018 |
|
| 2017 |
|
| Amount |
|
| Percentage |
| ||||
Revenue |
| $ | 909,959 |
|
| $ | 830,636 |
|
| $ | 79,323 |
|
|
| 10 | % |
Cost of revenue |
| $ | 43,026 |
|
| $ | 61,599 |
|
| $ | (18,573 | ) |
| (30 | %) | |
Gross profit |
| $ | 866,933 |
|
| $ | 769,037 |
|
| $ | 97,896 |
|
|
| 13 | % |
Gross profit percentage |
|
| 95 | % |
|
| 93 | % |
|
| N/A |
|
|
| N/A |
|
Operating income (loss) |
| $ | 101,496 |
|
| $ | (96,083 | ) |
| $ | 197,579 |
|
|
| 206 | % |
Other income (expense) |
| $ | (35,408 | ) |
| $ | 43,233 |
|
| $ | (78,641 | ) |
|
| 182 | % |
Net income (loss) |
| $ | 66,088 |
|
| $ | (94,453 | ) |
| $ | 160,541 |
|
|
| 170 | % |
7 |
Table of Contents |
Revenue
The following table presents revenues for the nine months ended September 30, 2018 and 2017:
|
| Nine months ended |
|
|
|
|
|
| ||||||||
|
| September 30, |
|
| Change |
| ||||||||||
|
| 2018 |
|
| 2017 |
|
| Amount |
|
| Percentage |
| ||||
Service income |
| $ | 816,832 |
|
| $ | 781,255 |
|
| $ | 35,577 |
|
|
| 5 | % |
Retail sales |
| $ | 93,127 |
|
| $ | 49,381 |
|
| $ | 43,746 |
|
|
| 89 | % |
For the nine months ended September 30, 2018, our total revenues increased $79,323 or 10% due to the continued marketing and advertising efforts. We recognized revenues from both government and private sector projects, where customers use our services of performing anti-slip chemical treatments on floorings and tiles and purchase those treatment products directly.
Service income increased $35,577 or 5% in 2018 from $781,255 in 2017. The increase in service income was primarily due to an increase in government tenders awarded. Retail sales increased $43,746 or 89% in 2018 from $93,127 in 2017. The increase in retail sales is primarily due to an introduction of social media marketing.
Gross Profit
Gross profit increased $97,896 or 13% in 2018 from $769,037 in 2017. The reason for the change in gross profit was primarily due to an increase in revenue. Cost of revenue consists of chemical solution costs and retail pack product packaging costs.
Cost of revenue decreased by $18,573 or 30% during 2018 compared to 2017. The change was primarily due to improvement in wastage control on the inventories.
Operating Income (Loss)
Operating income increased $197,579 or 206% during 2018 as compared to 2017. The following table presents operating expenses for the nine months ended September 30, 2018 and 2017:
|
| Nine months ended |
|
|
|
|
|
| ||||||||
|
| September 30, |
|
| Change |
| ||||||||||
|
| 2018 |
|
| 2017 |
|
| Amount |
|
| Percentage |
| ||||
General and administration |
| $ | 632,842 |
|
| $ | 676,176 |
|
| $ | (43,334 | ) |
| (6 | %) | |
Professional fees |
|
| 69,411 |
|
|
| 158,869 |
|
|
| (89,458 | ) |
| (56 | %) | |
Depreciation |
|
| 63,184 |
|
|
| 30,075 |
|
|
| 33,109 |
|
|
| 110 | % |
Total operating expense |
| $ | 765,437 |
|
| $ | 865,120 |
|
| $ | (99,683 | ) |
| (12 | %) |
Other Income (Expense)
The following table presents other income and expenses for the nine months ended September 30, 2018 and 2017:
|
| Nine months ended |
|
|
|
|
|
| ||||||||
|
| September 30, |
|
| Change |
| ||||||||||
|
| 2018 |
|
| 2017 |
|
| Amount |
|
| Percentage |
| ||||
Interest expense |
| $ | (43,797 | ) |
| $ | (27,228 | ) |
| $ | (16,569 | ) |
|
| 61 | % |
Other income |
|
| 8,389 |
|
|
| 70,461 |
|
|
| 62,072 |
|
|
| 88 | % |
Total other income (expense) |
| $ | (35,408 | ) |
| $ | 43,233 |
|
| $ | 78,641 |
|
| (182 | %) |
8 |
Table of Contents |
Interest expense increased during 2018, as compared to 2017, due to increases in bank loans and capital leases during the nine months ended 2018 as compared to 2017.
Other income consists mainly of employment credits provided by the Ministry of Manpower, rebates provided by vendors and interest income.
Net income (loss)
Net income increased by $160,541 during 2018, from a loss of $94,453 in 2017.
Liquidity and Capital Resources
Working Capital
The following table presents our work capital position as at September 30, 2018 and December 31, 2017:
|
| September 30, |
|
| December 31, |
|
| Change |
| |||||||
|
| 2018 |
|
| 2017 |
|
| Amount |
|
| Percentage |
| ||||
Cash and cash equivalents |
| $ | 145,046 |
|
| $ | 22,850 |
|
| $ | 122,196 |
|
|
| 535 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets |
| $ | 648,156 |
|
| $ | 549,044 |
|
| $ | 99,112 |
|
|
| 18 | % |
Current liabilities |
|
| 314,642 |
|
|
| 659,198 |
|
|
| (344,556 | ) |
| (52 | %) | |
Working capital |
| $ | 333,514 |
|
| $ | (110,154 | ) |
| $ | 443,668 |
|
| (403 | %) |
The change in working capital during the nine months ended September 30, 2018, was primarily due to an increase in current assets of $99,112 and a decrease in liabilities of $344,556. Current assets increased primarily due to an increase in cash of $122,196 offset by a decrease in inventory of $14,719. Current liabilities decreased primarily due to a decrease in convertible notes payable of $219,200 and accounts payable of $119,856. The decrease in accounts payable is due to the decrease in operating expenses.
As of September 30, 2018, we had a working capital of $333,514 consisting of cash on hand of $145,046, as compared to a working capital deficit of $110,154 and cash of $22,850 as of December 31, 2017. This was due to an increase in manpower costs. Our Day Sales Outstanding (“DSO”) ratio for the period ended September 30, 2018, and for the year ended December 31, 2017, were 145 days and 150 days, respectively.
Cash Flow
We fund our operations with cash generated from sales, capital contributions, debt, and issuances of common stock.
The following tables presents our cash flow for the nine months ended September 30, 2018 and 2017:
|
| Nine months ended |
|
| Change 2018 |
| ||||||
|
| September 30, |
|
| Versus |
| ||||||
|
| 2018 |
|
| 2017 |
|
| 2017 |
| |||
Cash Flows Provided from (Used in) Operating Activities |
| $ | 37,835 |
|
| $ | (251,195 | ) |
| $ | 289,030 |
|
Cash Flows Used in Investing Activities |
|
| (45,838 | ) |
|
| (116,856 | ) |
|
| 71,018 |
|
Cash Flows Provided by Financing Activities |
|
| 129,671 |
|
|
| 161,578 |
|
|
| (31,907 | ) |
Effects on changes in foreign exchange rate |
|
| 528 |
|
|
| 11,925 |
|
|
| (11,397 | ) |
Net change in Cash During Period |
| $ | 122,196 |
|
| $ | (194,548 | ) |
| $ | 316,744 |
|
9 |
Table of Contents |
Cash Flows from Operating Activities
For the nine months ended September 30, 2018, net cash flows provided by operating activities consisted of a net income of $66,088, increased by depreciation of $63,184 and bad debt expenses of $3,992 and decreased by a net change in operating assets and liabilities of $95,429. For the nine months ended September 30, 2017, net cash flows used in operating activities consisted of a net loss of $94,453, reduced by depreciation of $30,075, stock-based compensation of $6,000, and increased by a net increase in change of operating assets and liabilities of $192,817.
Cash Flows from Investing Activities
For the nine months ended September 30, 2018 and 2017, we used $45,838 and $116,856, respectively, for purchases of property and equipment.
Cash Flows from Financing Activities
For the nine months ended September 30, 2018 and 2017, cash provided by financing activities was $129,671 and $161,578, respectively. For the nine months ended September 30, 2018, we received $206,250 from issuance of common stock, $33,797 from bank loans, $10,870 from proceeds from related party, and used $81,904 for repayments of bank loans, $18,411 for repayment to related party and $20,931 for repayments of capital lease obligations. For the nine months ended September 30, 2017, we received $99,000 from the issuance of convertible notes, $40,119 from loans from related party and $109,836 from bank loans and used $77,121 for net repayments in bank loans and $10,256 for repayment of capital lease obligations.
Off-Balance Sheet Arrangements
The Company does not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on the Company’s financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.
Critical Accounting Policies and Estimates
The preparation of financial statements and related disclosures in conformity with U.S. generally accepted accounting principles (“GAAP”) and the Company’s discussion and analysis of its financial condition and operating results require the Company’s management to make judgments, assumptions and estimates that affect the amounts reported in its consolidated financial statements and accompanying notes. Note 2, “Summary of Significant Accounting Policies,” of the Notes to Consolidated Financial Statements included in this Form 10-Q, describes the significant accounting policies and methods used in the preparation of the Company’s consolidated financial statements. Management bases its estimates on historical experience and on various other assumptions it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results may differ from these estimates, and such differences may be material.
Management believes the Company’s critical accounting policies and estimates are those related to revenue recognition. Management considers these policies critical because they are both important to the portrayal of the Company’s financial condition and operating results, and they require management to make judgments and estimates about inherently uncertain matters. The Company’s management has reviewed these critical accounting policies and related disclosures.
10 |
Table of Contents |
Revenue Recognition
Revenues are recognized when control of the promised goods or services are transferred to a customer, in an amount that reflects the consideration that the Company expects to receive in exchange for those goods or services. The Company derives its revenues from the rendering of business advisory services, such as training, implementation, consulting, and other customer-specific services. The Company applies the following five steps in order to determine the appropriate amount of revenue to be recognized as it fulfills its obligations under each of its agreements:
| · | identify the contract with a customer; |
| · | identify the performance obligations in the contract; |
| · | determine the transaction price; |
| · | allocate the transaction price to performance obligations in the contract; and |
| · | recognize revenue as the performance obligation is satisfied. |
Service income is derived progressively based on the amount of work rendered. A contract site typically comprises of hundreds to thousands of units that requires the application of the chemical solutions. Revenue from service income is recognized progressively based on the number of units completed.
Sales income is derived from direct sales of bottled chemical solutions only. It could be sold in bulk or in retail packs.
Emerging Growth Company
We are an “emerging growth company” under the federal securities laws and will be subject to reduced public company reporting requirements. In addition, Section 107 of the JOBS Act also provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We are choosing to take advantage of the extended transition period for complying with new or revised accounting standards. As a result, our financial statements may not be comparable to those of companies that comply with public company effective dates.
Recently Issued Accounting Pronouncements
We do not expect the adoption of any recently issued accounting pronouncements to have a significant impact on our net results of operations, financial position, or cash flows.
Seasonality
We do not expect our sales to be impacted by seasonal demands for our products and services.
11 |
Table of Contents |
Item 3. Quantitative and Qualitative Disclosures About Market Risk
As a “smaller reporting company”, we are not required to provide the information required by this Item.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our principal executive officer and principal financial officer, evaluated the effectiveness of our disclosure controls and procedures as of September 30, 2018. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on the evaluation of our disclosure controls and procedures as of September, 2018, our principal executive officer and principal financial officer concluded that, as of such date, our disclosure controls and procedures were not effective.
Changes in Internal Controls Over Financial Reporting
There have been no changes in our internal control over financial reporting during the fiscal quarter ended September 30, 2018 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
12 |
Table of Contents |
On or about November 1, 2017, the Company’s subsidiary, G-MES International Pte Ltd, was served with a statutory demand (the “Demand”) by a purported creditor, Koh Siew Min (the “Alleged Creditor”), alleging that it was owed approximately US$15,000. The Company denied the Demand. The Company subsequently took out an injunction (HC/OS 185/2018) with the High Court of the Republic of Singapore. The case was heard by High Court Judge, Justice Quentin Loh on July 16, 2018, an injunction was granted, and it was held that the demand was an abuse of process.
As a “smaller reporting company”, we are not required to provide the information required by this Item.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not Applicable.
None.
13 |
Table of Contents |
INCORPORATED BY REFERENCE | ||||||||
EXHIBIT NUMBER | Exhibit Description | Form | Exhibit | Filing Date | ||||
S-1 | 3.1 | 07/10/2017 | ||||||
S-1 | 3.2 | 07/10/2017 | ||||||
|
| S-1 |
| 3.3 |
| 07/10/2017 | ||
| Rule 13(a)-14(a)/15(d)-14(a) Certification of Chief Executive Officer and Chief Financial Officer |
| ||||||
| Section 1350 Certification of Chief Executive Officer and Chief Financial Officer |
| ||||||
101.INS* |
| XBRL Instance Document |
| |||||
101.SCH* |
| XBRL Taxonomy Extension Schema Document |
| |||||
101.CAL* |
| XBRL Taxonomy Extension Calculation Linkbase Document |
| |||||
101.DEF* |
| XBRL Taxonomy Extension Definition Linkbase Document |
| |||||
101.LAB* |
| XBRL Taxonomy Extension Label Linkbase Document |
| |||||
101.PRE* |
| XBRL Taxonomy Extension Presentation Linkbase Document |
_________
*Filed herewith.
14 |
Table of Contents |
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| G-MES HOLDINGS INC. |
| |
| (Registrant) |
| |
|
|
|
|
Dated: November 16, 2018 |
| /s/ Samuel Saw Peng Hao |
|
| Samuel Saw Peng Hao |
| |
| Chief Executive Officer, Chief Financial Officer and Director |
| |
| (Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer) |
|
15 |
EXHIBIT 31.1
CERTIFICATION PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Samuel Saw Peng Hao, certify that:
1. | I have reviewed this quarterly report on Form 10-Q of G-MES Holdings Inc.; |
|
|
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
|
|
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
|
|
4. | I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| (a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
|
|
|
| (b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
|
|
|
| (c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
|
|
|
| (d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; |
5. | I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| (a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
|
|
|
| (b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: November 16, 2018
/s/ Samuel Saw Peng Hao |
|
Samuel Saw Peng Hao Chief Executive Officer, Chief Financial Officer and Director (Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer) |
|
EXHIBIT 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
The undersigned, Samuel Saw Peng Hao, Chief Executive Officer and Chief Financial Officer, of G-MES Holdings Inc., hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
(1) | the quarterly report on Form 10-Q of G-MES Holdings Inc. for the period ended September 30, 2018 (the ”Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
|
|
(2) | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of G-MES Holdings Inc. |
Dated: November 16, 2018
/s/ Samuel Saw Peng Hao |
|
Samuel Saw Peng Hao Chief Executive Officer, Chief Financial Officer and Director (Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer) |
|
A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to G-MES Holdings Inc. and will be retained by G-MES Holdings Inc. and furnished to the Securities and Exchange Commission or its staff upon request.
Document and Entity Information - shares |
9 Months Ended | |
---|---|---|
Sep. 30, 2018 |
Nov. 14, 2018 |
|
Document And Entity Information | ||
Entity Registrant Name | G-MES HOLDINGS INC. | |
Entity Central Index Key | 0001706945 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2018 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Is Entity's Reporting Status Current? | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 34,793,000 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2018 | |
Entity Emerging Growth Company | true | |
Entity Small Business | true | |
Entity Ex Transition Period | false |
Consolidated Balance Sheets (Parenthetical) - $ / shares |
Sep. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Stockholders' Deficit | ||
Preferred stock, Par value | $ 0.001 | $ 0.001 |
Preferred stock, Authorized | 20,000,000 | 20,000,000 |
Preferred stock, Issued | ||
Preferred stock, Outstanding | ||
Common stock, Par value | $ 0.001 | $ 0.001 |
Common stock, Authorized | 300,000,000 | 300,000,000 |
Common stock, Issued | 35,618,000 | 31,520,000 |
Common stock, Outstanding | 35,618,000 | 31,520,000 |
Consolidated Statements of Operations and Comprehensive Income (Loss) (Unaudited) - USD ($) |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
|
Consolidated Statements Of Operations And Comprehensive Income Loss | ||||
Revenues | $ 294,378 | $ 324,377 | $ 816,832 | $ 781,255 |
Retail sales | 16,177 | 19,100 | 93,127 | 49,381 |
Revenues Net | 310,555 | 343,477 | 909,959 | 830,636 |
Cost of sales | (5,509) | 23,321 | 43,026 | 61,599 |
Gross profit | 316,064 | 320,156 | 866,933 | 769,037 |
Operating Expenses | ||||
General and administration | 243,393 | 233,594 | 632,842 | 676,176 |
Professional fees | 11,201 | 43,507 | 69,411 | 158,869 |
Depreciation and amortization | 20,991 | 11,155 | 63,184 | 30,075 |
Total operating expenses | 275,585 | 288,256 | 765,437 | 865,120 |
Net income (loss) from operations | 40,479 | 31,900 | 101,496 | (96,083) |
Other income (expense) | ||||
Interest expense | (13,488) | (10,406) | (43,797) | (27,228) |
Other income | 1,155 | 859 | 8,389 | 70,461 |
Total other income (expense) | (12,333) | (9,547) | (35,408) | 43,233 |
Net income (loss) before taxes | 28,146 | 22,353 | 66,088 | (52,850) |
Income tax expenses | 19,680 | 41,603 | ||
Net income (loss) | 28,146 | 2,673 | 66,088 | (94,453) |
Other comprehensive income (loss) | (1,799) | 6,493 | (6,253) | 17,788 |
Comprehensive income (loss) | $ 26,347 | $ 9,166 | $ 59,835 | $ (76,665) |
Income (loss) per common share | ||||
Basic | $ 0.00 | $ 0.00 | $ 0.00 | $ (0.00) |
Diluted | $ 0.00 | $ 0.00 | $ 0.00 | $ (0.00) |
Weighted average number of common shares outstanding | ||||
Basic | 34,523,261 | 31,520,000 | 32,528,394 | 31,481,898 |
Diluted | 34,523,261 | 34,880,235 | 32,528,394 | 31,481,898 |
ORGANIZATION AND DESCRIPTION OF BUSINESS |
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Sep. 30, 2018 | |||||||||
Notes to Financial Statements | |||||||||
NOTE 1. ORGANIZATION AND DESCRIPTION OF BUSINESS |
G-MES Holdings Inc. (“we”, “our”, and the “Company) was incorporated in Nevada on August 15, 2016. The Company, through its subsidiary, G-MES International Pte. Ltd., mainly engages in construction support and management, with particular specialization in provision of floor safety solutions.
Overview of Corporate Structure
Details of the Company’s subsidiary:
Recent Developments
On or about September 15, 2016, the Company acquired 100% of the outstanding shares of G-MES International Pte. Ltd. (“G-MES International”) in a share exchange pursuant to the terms of a Share Exchange Agreement, dated September 15, 2016 (the “Share Exchange Agreement”), with the shareholders (including Saw Peng Hao, the Company’s current Chairman of the Board and Chief Executive Officer) of G-MES International, pursuant to which the Company issued an aggregate of 30,000,000 shares of common stock of the Company to the shareholders of G-MES International in exchange for all of the outstanding shares of G-MES International (the “Share Exchange”). As a result of the Share Exchange, G-MES International is now the wholly owned subsidiary of the Company, and the Company is engaged in the business of providing floor safety solutions to the public and residential housing sectors in the Republic of Singapore. In addition, as a result of the Share Exchange, the Company’s current Chief Executive Officer received 30,000,000 shares of common stock of the Company, constituting 96% of the issued and outstanding shares of common stock of the Company as of December 31, 2016.
As Saw Peng Hao founded and controlled the Company prior to the Share Exchange, and also was the sole owner of and controlled G-MES International prior to the Share Exchange, the Share Exchange transaction was between entities under common control, and G-MES International is now a wholly owned subsidiary of the Company after completion of the Share Exchange. Accordingly, the Company has reported its results of operations for the periods at issue in a manner similar to a pooling of interests and has consolidated financial results since the initial date that the Company and G-MES International were under common control. Assets and liabilities were combined based on their carrying values, and no recognition of goodwill was made. The Company has presented earnings per share based on parent Company shares issued to the former sole shareholder of the subsidiary, G-MES International. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
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NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
Basis of Presentation
The consolidated financial statements and related disclosures have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The consolidated financial statements have been prepared using the accrual basis of accounting in accordance with Generally Accepted Accounting Principles (“GAAP”) of the United States.
Basis of Consolidation
These consolidated financial statements include the accounts of G-MES HOLDINGS INC. and its subsidiary. All material intercompany balances and transactions have been eliminated.
Use of Estimates
The preparation of financial statements in conformity with GAAP 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 amount of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Foreign Currency Translation and Re-measurement
The Company’s functional currency and reporting currency is U.S. dollar. The functional currency of the Company’s subsidiaries is Singapore dollars. All transactions initiated in Singapore dollars (“SGD”) are translated into U.S. dollars (“USD”) in accordance with ASC 830-30, ”Translation of Financial Statements,” as follows:
Adjustments arising from such translations are included in accumulated other comprehensive income in shareholders’ equity.
Cash and Cash Equivalents
Cash and cash equivalents include cash in banks, money market funds, and certificates of term deposits with maturities of less than three months from inception, which are readily convertible to known amounts of cash and which, in the opinion of management, are subject to an insignificant risk of loss in value.
Accounts Receivable
The Company’s accounts receivable consists of trade receivables from customers. The Company evaluates the collectability of its accounts receivable on an on-going basis and write off the amount when it is considered to be uncollectible. The Company does not have allowance for doubtful accounts. As of September 30, 2018, and December 31, 2017, the Company recorded bad debt of $3,992 and $0, respectively.
Financial Instruments
The Company’s financial instruments consist primarily of cash, accounts receivable, inventory, prepaid expenses and deposits, accounts payable and accrued expenses, and debt. The carrying amounts of such financial instruments approximate their respective estimated fair value due to the short-term maturities and approximate market interest rates of these instruments.
Leases
Leases, on terms for which the Company assumes substantially all the risks and rewards of ownership, are accounted for as capital leases. Upon initial recognition, the leased asset is measured at an amount equal to the lower of its fair value and the present value of the minimum lease payments.
Operating leases are recognized in general and administrative expenses on a straight-line basis.
Concentrations of Credit Risks
The Company’s financial instruments that are exposed to concentrations of credit risk primarily consist of its cash and cash equivalents. The Company places its cash and cash equivalents with financial institutions of high credit worthiness. The Company’s management plans to assess the financial strength and credit worthiness of any parties to which it extends funds, and as such, it believes that any associated credit risk exposures are limited.
Related Parties
The Company follows ASC 850, ”Related Party Disclosures,” for the identification of related parties and disclosure of related party transactions. See note 6.
Inventories
Inventories comprises of mainly chemical solutions that are used for treatment of floorings to achieve slip resistance results. It consists entirely of ready-to-use finished goods directly imported from the principal vendor in United States, are stated at the lower of cost or market. Cost is computed using weighted average cost, which approximates actual cost. Inventories on hand are evaluated on an on-going basis to determine if any items are obsolete or in excess of future needs. Items determined to be obsolete are reserved for. The Company provides for the possible inability to sell its inventories by providing an excess inventory reserve. As at September 30, 2018 and December 31, 2017, the Company had inventory of $17,935 and $32,654, respectively, and determined that no reserve was required.
Long-Lived Assets
Long-lived assets are evaluated for impairment whenever events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable or that the useful lives of these assets are no longer appropriate. Each impairment test is based on a comparison of the undiscounted future cash flows to the recorded value of the asset. If impairment is indicated, the asset is written down to its estimated fair value.
Property and Equipment
Property and equipment are carried at cost less accumulated depreciation. Cost includes all direct costs necessary to acquire and prepare assets for use, including internal labor and overhead in some cases.
The costs of repairs and maintenance are expensed when incurred, while expenditures for refurbishments and improvements that significantly add to the productive capacity or extend the useful life of an asset are capitalized. When assets are retired or sold, the asset cost and related accumulated depreciation are eliminated with any remaining gain or loss recognized in net earnings.
Depreciation of plant and equipment, which includes assets under capital leases, is provided on the straight-line method over estimated useful lives, generally as follows:
Investment property is not depreciated since it is a purchased property before the construction is completed. As of the end of the years, the property was still under construction and not available for intended use.
Revenue Recognition
Revenues are recognized when control of the promised goods or services are transferred to a customer, in an amount that reflects the consideration that the Company expects to receive in exchange for those goods or services. The Company derives its revenues from the rendering of business advisory services, such as training, implementation, consulting, and other customer-specific services. The Company applies the following five steps in order to determine the appropriate amount of revenue to be recognized as it fulfills its obligations under each of its agreements:
· identify the contract with a customer;
· identify the performance obligations in the contract;
· determine the transaction price;
· allocate the transaction price to performance obligations in the contract; and
· recognize revenue as the performance obligation is satisfied.
Service income is derived progressively based on the amount of work rendered. A contract site typically comprises of hundreds to thousands of units that requires the application of the chemical solutions. Revenue from service income is recognized progressively based on the number of units completed.
Sales income is derived from direct sales of bottled chemical solutions only. It could be sold in bulk or in retail packs.
Cost of Sales
Cost of sales are direct costs incurred to earn revenue, which consists of purchase cost of floor safety chemical solutions for treatment to floorings to achieve slip resistance results.
Employee benefit costs
As required by law, the Company makes contributions to the Central Provident Fund (CPF), a defined contribution plan regulated and managed by the Government of Singapore. CPF contributions are recognized as expense in the same year to which the contribution relates.
Employee entitlements to annual leave are recognized when they accrue to the employees. An accrual is made for the estimated liability for annual leave as a result of services rendered by the employees up to the statement of financial position date.
A liability for bonus is recognized where the entity is contractually obliged or where there is constructive obligation based on past practice.
Income Taxes
The Company accounts for income taxes using the asset and liability method in accordance with ASC 740, ”Accounting for Income Taxes.” The asset and liability method provides that deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities and for operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using the currently enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company records a valuation allowance to reduce deferred tax assets to the amount that is believed more likely than not to be realized.
Earnings (Loss) per Share
The Company computes basic and diluted earnings per share amounts in accordance with ASC Topic 260, “Earnings per Share.” Basic earnings per share is computed by dividing net income (loss) available to common shareholders by the weighted average number of common shares outstanding during the reporting period. Diluted earnings per share reflects the potential dilution that could occur if stock options and other commitments to issue common stock were exercised or equity awards vest resulting in the issuance of common stock that could share in the earnings of the Company. As at September 30, 2018, the Company has no potentially dilutive securities, such as options or warrants, currently issued and outstanding.
Recent Accounting Pronouncements
The Company has considered all new accounting pronouncements and has concluded that there are no new pronouncements that may have a material impact on results of operations, financial condition, or cash flows, based on current information. |
GOING CONCERN |
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Sep. 30, 2018 | |
Notes to Financial Statements | |
NOTE 3. GOING CONCERN |
As shown in the accompanying consolidated financial statements, the Company has an accumulated deficit of $206,099 as of September 30, 2018. The Company also experienced insufficient cash flows from operations and will be required continuous financial support from the shareholders. The Company will need to raise capital to fund its operations until it is able to generate sufficient revenue to support the future development. Moreover, the Company may be continuously raising capital through the sale of debt and equity securities.
The Company’s ability to achieve these objectives cannot be determined at this stage. If the Company is unsuccessful in its endeavors, it may be forced to cease operations. These consolidated financial statements do not include any adjustments that might result from this uncertainty which may include adjustments relating to the recoverability and classification of recorded asset amounts, or amounts and classifications of liabilities that might be necessary should the Company be unable to continue as a going concern.
These factors have raised substantial doubt about the Company’s ability to continue as a going concern. There can be no assurances that the Company will be able to obtain adequate financing or achieve profitability. These consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. |
PROPERTY AND EQUIPMENT |
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NOTE 4. PROPERTY AND EQUIPMENT |
Property and equipment at September 30, 2018 and December 31, 2017 consisted of the following:
During the nine months ended September 30, 2018 and 2017, the Company recognized depreciation of $63,184 and $30,075, respectively. Please see Note 7 and Note 8 for the carrying amounts of assets pledged.
The Company leases certain equipment under capital lease agreements that expire at various dates through October 2024 (see Note 8). Assets recorded under capital leases and included in property and equipment are:
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STOCKHOLDER'S EQUITY |
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Sep. 30, 2018 | |
Notes to Financial Statements | |
NOTE 5. STOCKHOLDERS EQUITY |
Authorized Stock
The Company has authorized 20,000,000 preferred shares with a par value of $0.001 per share.
The Company has authorized 300,000,000 common shares with a par value of $0.001 per share. Each common share entitles the holder to one vote, in person or proxy, on any matter on which action of the stockholders of the corporation is sought.
Preferred Share Issuances
As at September 30, 2018 and December 31, 2017, the Company did not have preferred shares issued and outstanding.
Common Share Issuances
During the nine months ended June 30 ,2018, the Company issued as follows:
· 3,273,000 shares of common stock for conversion of debt and accrued interest of $233,361. · 825,000 shares of common stock for $206,250.
As at September 30, 2018 and December 31, 2017, the Company had 35,618,000 and 31,520,000 shares of common stock issued and outstanding, respectively. |
RELATED PARTY TRANSACTIONS |
9 Months Ended |
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Sep. 30, 2018 | |
Notes to Financial Statements | |
NOTE 6. RELATED PARTY TRANSACTIONS |
During the nine months ended September 30, 2018, the Company borrowed a total amount of $10,870 from the director of the Company and repaid $18,411. This loan is a non-interest bearing and due on demand. As of September 30, 2018, and December 31, 2017, the Company owed $32,827 and $41,115, respectively. |
LOANS PAYABLE |
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NOTE 7. LOANS PAYABLE |
The Company had the following loans payable outstanding as of September 30, 2018 and December 31, 2017:
As of September 30, 2018, investment property of carrying amount of $403,377 and three motor vehicles of carrying amount of $50,534 were pledged as security and personal guarantee by the director was provided for the loans.
As of December 31, 2017, investment property of carrying amount of $388,938 and three motor vehicles of carrying amount of $72,801 were pledged as security and personal guarantee by the director was pledged as security for the loans.
During the nine months ended September 30, 2018 and 2017, interest expense was $21,786 and $14,052, respectively. |
CAPITAL LEASES |
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NOTE 8. CAPITAL LEASES | The Company leases commercial vehicles under non-cancellable capital lease arrangements. The term of those capital leases is 2 - 7 years and annual interest rate is 2.98 – 4.88%. At September 30, 2018 and December 31, 2017, capital lease obligations included in current liabilities were $31,111 and $20,013, respectively, and capital lease obligations included in long-term liabilities were $114,222 and $103,230, respectively.
At September 30, 2018, future minimum lease payments under the capital lease obligations, are as follows:
As of September 30, 2018, four motor vehicles of carrying amount of $145,972 were pledged as security for the loans.
As of December 31, 2017, five motor vehicles of carrying amount of $122,585 were pledged as security for the loans. |
CONVERTIBLE NOTES PAYABLE |
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NOTE 9. CONVERTIBLE NOTES PAYABLE | The Company had the following convertible notes payable outstanding as of September 30, 2018 and December 31, 2017:
During the year ended December 31, 2016, the Company issued a total of $120,200 notes with the following terms:
During the year ended December 31, 2017, the Company issued a total of $99,000 notes with the following terms:
During the nine months ended September 30, 2018 and 2017, interest expense was $43,797 and $27,228, respectively. As of September 30, 2018, and December 31, 2017, accrued interest was $0 and $9,381, respectively.
During the nine months ended September 30, 2018, the Company converted notes with principal amounts and accrued interest of $233,361 into 3,273,000 shares of common stock. |
COMMITMENTS AND CONTINGENCIES |
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Sep. 30, 2018 | |
Notes to Financial Statements | |
NOTE 10. COMMITMENTS AND CONTINGENCIES |
From time to time the Company may become a party to litigation matters involving claims against the Company. Management believes that it is adequately insured for its operations and there are no current matters that would have a material effect on the Company’s financial position, cash flows or results of operations. The Company believes that the following matters will have no material effect on the Company’s financial position, cash flows and results of operations:
Rent
The Company leases the premise situated at 280 Woodlands Industrial Park E5 #09-44 Singapore 757322, for a fixed term of 24 months, with monthly lease rates of SGD$2,088 (approximately $1,480). Lease expenses for the nine months ended September 30, 2018 and 2017 were $11,673 and $16,305, respectively.
Legal proceeding
On or about November 1, 2017, the Company’s subsidiary, G-MES International Pte Ltd, was served with a statutory demand (the “Demand”) by a purported creditor, Koh Siew Min (the “Alleged Creditor”), alleging that it was owed approximately US$15,000. The Company denied the Demand. The Company subsequently took out an injunction (HC/OS 185/2018) with the High Court of the Republic of Singapore. The case was heard by High Court Judge, Justice Quentin Loh on July 16, 2018, an injunction was granted, and it was held that the demand was an abuse of process. |
EARNINGS PER SHARE |
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NOTE 11 - EARNINGS PER SHARE |
The following is a reconciliation of the numerator and denominator used in the basic and diluted earnings per share ("EPS") calculations.
Diluted earnings per share is calculated using net income available to common stockholders divided by the diluted weighted average number of common shares outstanding during each period determined using the treasury stock method and the if-converted method.
During the nine months ended September 30, 2018, all convertible notes were converted into common stock. As of September 30, 2018, the Company has no potentially dilutive securities, such as options or warrants, currently issued and outstanding. |
SUBSEQUENT EVENTS |
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Sep. 30, 2018 | |
Notes to Financial Statements | |
NOTE 12. SUBSEQUENT EVENTS | Management evaluated all events subsequent to the balance sheet date through the date the consolidated financial statements were available to be issued, and determined there were no events or transactions that require recognition or disclosure. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policy) |
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Basis of Presentation | The consolidated financial statements and related disclosures have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The consolidated financial statements have been prepared using the accrual basis of accounting in accordance with Generally Accepted Accounting Principles (“GAAP”) of the United States. |
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Basis of Consolidation | These consolidated financial statements include the accounts of G-MES HOLDINGS INC. and its subsidiary. All material intercompany balances and transactions have been eliminated. |
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Use of Estimates | The preparation of financial statements in conformity with GAAP 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 amount of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
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Foreign Currency Translation and Re-measurement | The Company’s functional currency and reporting currency is U.S. dollar. The functional currency of the Company’s subsidiaries is Singapore dollars. All transactions initiated in Singapore dollars (“SGD”) are translated into U.S. dollars (“USD”) in accordance with ASC 830-30, ”Translation of Financial Statements,” as follows:
Adjustments arising from such translations are included in accumulated other comprehensive income in shareholders’ equity.
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Cash and Cash Equivalents | Cash and cash equivalents include cash in banks, money market funds, and certificates of term deposits with maturities of less than three months from inception, which are readily convertible to known amounts of cash and which, in the opinion of management, are subject to an insignificant risk of loss in value. |
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Accounts Receivable | The Company’s accounts receivable consists of trade receivables from customers. The Company evaluates the collectability of its accounts receivable on an on-going basis and write off the amount when it is considered to be uncollectible. The Company does not have allowance for doubtful accounts. As of September 30, 2018, and December 31, 2017, the Company recorded bad debt of $3,992 and $0, respectively. |
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Financial Instruments | The Company’s financial instruments consist primarily of cash, accounts receivable, inventory, prepaid expenses and deposits, accounts payable and accrued expenses, and debt. The carrying amounts of such financial instruments approximate their respective estimated fair value due to the short-term maturities and approximate market interest rates of these instruments. |
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Leases |
Leases, on terms for which the Company assumes substantially all the risks and rewards of ownership, are accounted for as capital leases. Upon initial recognition, the leased asset is measured at an amount equal to the lower of its fair value and the present value of the minimum lease payments.
Operating leases are recognized in general and administrative expenses on a straight-line basis. |
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Concentrations of Credit Risks | The Company’s financial instruments that are exposed to concentrations of credit risk primarily consist of its cash and cash equivalents. The Company places its cash and cash equivalents with financial institutions of high credit worthiness. The Company’s management plans to assess the financial strength and credit worthiness of any parties to which it extends funds, and as such, it believes that any associated credit risk exposures are limited. |
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Related Parties |
The Company follows ASC 850, ”Related Party Disclosures,” for the identification of related parties and disclosure of related party transactions. See note 6. |
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Inventories | Inventories comprises of mainly chemical solutions that are used for treatment of floorings to achieve slip resistance results. It consists entirely of ready-to-use finished goods directly imported from the principal vendor in United States, are stated at the lower of cost or market. Cost is computed using weighted average cost, which approximates actual cost. Inventories on hand are evaluated on an on-going basis to determine if any items are obsolete or in excess of future needs. Items determined to be obsolete are reserved for. The Company provides for the possible inability to sell its inventories by providing an excess inventory reserve. As at September 30, 2018 and December 31, 2017, the Company had inventory of $17,935 and $32,654, respectively, and determined that no reserve was required. |
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Long-Lived Assets |
Long-lived assets are evaluated for impairment whenever events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable or that the useful lives of these assets are no longer appropriate. Each impairment test is based on a comparison of the undiscounted future cash flows to the recorded value of the asset. If impairment is indicated, the asset is written down to its estimated fair value. |
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Property and Equipment | Property and equipment are carried at cost less accumulated depreciation. Cost includes all direct costs necessary to acquire and prepare assets for use, including internal labor and overhead in some cases.
The costs of repairs and maintenance are expensed when incurred, while expenditures for refurbishments and improvements that significantly add to the productive capacity or extend the useful life of an asset are capitalized. When assets are retired or sold, the asset cost and related accumulated depreciation are eliminated with any remaining gain or loss recognized in net earnings.
Depreciation of plant and equipment, which includes assets under capital leases, is provided on the straight-line method over estimated useful lives, generally as follows:
Investment property is not depreciated since it is a purchased property before the construction is completed. As of the end of the years, the property was still under construction and not available for intended use. |
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Revenue Recognition | Revenues are recognized when control of the promised goods or services are transferred to a customer, in an amount that reflects the consideration that the Company expects to receive in exchange for those goods or services. The Company derives its revenues from the rendering of business advisory services, such as training, implementation, consulting, and other customer-specific services. The Company applies the following five steps in order to determine the appropriate amount of revenue to be recognized as it fulfills its obligations under each of its agreements:
· identify the contract with a customer;
· identify the performance obligations in the contract;
· determine the transaction price;
· allocate the transaction price to performance obligations in the contract; and
· recognize revenue as the performance obligation is satisfied.
Service income is derived progressively based on the amount of work rendered. A contract site typically comprises of hundreds to thousands of units that requires the application of the chemical solutions. Revenue from service income is recognized progressively based on the number of units completed.
Sales income is derived from direct sales of bottled chemical solutions only. It could be sold in bulk or in retail packs. |
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Cost of Sales | Cost of sales are direct costs incurred to earn revenue, which consists of purchase cost of floor safety chemical solutions for treatment to floorings to achieve slip resistance results. |
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Employee benefit costs | As required by law, the Company makes contributions to the Central Provident Fund (CPF), a defined contribution plan regulated and managed by the Government of Singapore. CPF contributions are recognized as expense in the same year to which the contribution relates.
Employee entitlements to annual leave are recognized when they accrue to the employees. An accrual is made for the estimated liability for annual leave as a result of services rendered by the employees up to the statement of financial position date.
A liability for bonus is recognized where the entity is contractually obliged or where there is constructive obligation based on past practice. |
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Income Taxes | The Company accounts for income taxes using the asset and liability method in accordance with ASC 740, ”Accounting for Income Taxes.” The asset and liability method provides that deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities and for operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using the currently enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company records a valuation allowance to reduce deferred tax assets to the amount that is believed more likely than not to be realized. |
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Earnings (Loss) per Share | The Company computes basic and diluted earnings per share amounts in accordance with ASC Topic 260, “Earnings per Share.” Basic earnings per share is computed by dividing net income (loss) available to common shareholders by the weighted average number of common shares outstanding during the reporting period. Diluted earnings per share reflects the potential dilution that could occur if stock options and other commitments to issue common stock were exercised or equity awards vest resulting in the issuance of common stock that could share in the earnings of the Company. As at September 30, 2018, the Company has no potentially dilutive securities, such as options or warrants, currently issued and outstanding. |
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Recent Accounting Pronouncements | The Company has considered all new accounting pronouncements and has concluded that there are no new pronouncements that may have a material impact on results of operations, financial condition, or cash flows, based on current information. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) |
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Summary Of Significant Accounting Policies Tables Abstract | |||||||||||||||||||||||||||||||||||||||||
Accumulated other comprehensive income |
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Estimated useful lives |
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PROPERTY AND EQUIPMENT (Tables) |
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Sep. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property And Equipment | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property and equipment |
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Capital lease agreements |
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LOANS PAYABLE (Tables) |
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Loans payable outstanding |
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CAPITAL LEASES (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Capital Leases | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Future minimum lease payments |
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CONVERTIBLE NOTES PAYABLE (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Convertible notes payable outstanding |
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EARNINGS PER SHARE (Tables) |
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Schedule of Earning per share basic and diluted |
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ORGANIZATION AND DESCRIPTION OF BUSINESS (Details Narrative) - shares |
9 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2018 |
Dec. 31, 2016 |
Dec. 31, 2017 |
Sep. 15, 2016 |
|
State of incorporation | Nevada | |||
Incorporation date | Aug. 15, 2016 | |||
Common stock, issued | 35,618,000 | 31,520,000 | ||
G-MES International [Member] | ||||
Acquired outstanding shares, percentage | 100.00% | |||
Common stock, issued | 30,000,000 | |||
Chief Executive Officer [Member] | ||||
Common stock, issued | 30,000,000 | |||
Percentage of common stock shares issue and outstanding | 96.00% |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - SGD: USD [Member] |
9 Months Ended | 12 Months Ended | |
---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Dec. 31, 2017 |
|
Spot SGD: USD exchange rate | 0.73 | 0.74 | 0.75 |
Average SGD: USD exchange rate | 0.75 | 0.72 | 0.72 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 1) |
9 Months Ended |
---|---|
Sep. 30, 2018 | |
Equipment, Furniture and Fixtures [Member] | |
Estimated useful lives | 5 years |
Motor Vehicles [Member] | |
Estimated useful lives | 10 years |
Computer Equipment and Software [Member] | |
Estimated useful lives | 3 years |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) |
Sep. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Summary Of Significant Accounting Policies Details Narrative Abstract | ||
Bad debt | $ 3,992 | $ 0 |
Inventory | $ 17,935 | $ 32,654 |
GOING CONCERN (Details Narrative) - USD ($) |
Sep. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Going Concern | ||
Accumulated deficit | $ (206,099) | $ (272,187) |
PROPERTY AND EQUIPMENT (Details) - USD ($) |
Sep. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Property and equipment | $ 756,758 | $ 709,116 |
Accumulated Depreciation | (142,507) | (109,957) |
Property and equipment, net | 614,251 | 599,159 |
Equipment and tools [Member] | ||
Property and equipment | 10,567 | 10,656 |
Motor Vehicles [Member] | ||
Property and equipment | 300,757 | 283,527 |
Computer Equipment [Member] | ||
Property and equipment | 32,009 | 25,995 |
Investment property [Member] | ||
Property and equipment | $ 413,425 | $ 388,938 |
PROPERTY AND EQUIPMENT (Details 1) - Motor Vehicles [Member] - USD ($) |
Sep. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Capital leases | $ 177,371 | $ 157,356 |
Less: Accumulated depreciation | (31,398) | (34,771) |
Net capital leases | $ 145,973 | $ 122,585 |
PROPERTY AND EQUIPMENT (Details Narrative) - USD ($) |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
|
Property And Equipment Details Narrative Abstract | ||||
Depreciation and amortization | $ 20,991 | $ 11,155 | $ 63,184 | $ 30,075 |
STOCKHOLDER'S EQUITY (Details Narrative) - USD ($) |
9 Months Ended | |
---|---|---|
Sep. 30, 2018 |
Dec. 31, 2017 |
|
Stockholders Equity | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, authorized | 20,000,000 | 20,000,000 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, authorized | 300,000,000 | 300,000,000 |
Common stock, issued | 35,618,000 | 31,520,000 |
Common stock, outstanding | 35,618,000 | 31,520,000 |
Conversion of debt, shares issued | 3,273,000 | |
Accrued interest payable | $ 233,361 | |
Stock issued during period, shares | 825,000 | |
Stock issued during period, value | $ 206,250 |
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) |
9 Months Ended | ||
---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Dec. 31, 2017 |
|
Proceeds from related party | $ 10,870 | $ 40,119 | |
Repayment to related party | 18,411 | ||
Due to related party | 32,827 | $ 41,115 | |
Director [Member] | |||
Proceeds from related party | 10,870 | ||
Repayment to related party | $ (18,411) |
LOANS PAYABLE (Details Narrative) - USD ($) |
9 Months Ended | ||
---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Dec. 31, 2017 |
|
Carrying amount of pledged | $ 403,377 | $ 388,938 | |
Interest expense | 21,786 | $ 14,052 | |
Three Motor Vehicles [Member] | Director [Member] | |||
Carrying amount of pledged | $ 50,534 | $ 72,801 |
CAPITAL LEASES (Details) - USD ($) |
Sep. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Capital Leases Details Abstract | ||
2018 | $ 9,968 | |
2019 | 39,873 | |
2020 | 36,360 | |
2021 | 31,505 | |
2022 | 21,326 | |
Thereafter | 31,335 | |
Total | 170,367 | |
Amount representing interest payments | 25,034 | |
Present value of future minimum payments | 145,333 | |
Less: current portion | 31,111 | $ 20,013 |
Capital leases classified as non-current liabilities | $ 114,222 | $ 103,230 |
CAPITAL LEASES (Details Narrative) - USD ($) |
9 Months Ended | ||
---|---|---|---|
Sep. 30, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Annual interest rate | 4.00% | 4.00% | |
Capital lease obligations - current portion | $ 31,111 | $ 20,013 | |
Long-term capital lease obligations | 114,222 | 103,230 | |
Carrying amount of pledged | 403,377 | 388,938 | |
Four Motor Vehicles [Member ] | |||
Carrying amount of pledged | $ 145,972 | ||
Five Motor Vehicles [Member ] | |||
Carrying amount of pledged | $ 122,585 | ||
Minimum [Member] | |||
Capital leases term | 2 years | ||
Annual interest rate | 2.98% | ||
Maximum [Member] | |||
Capital leases term | 7 years | ||
Annual interest rate | 4.88% |
CONVERTIBLE NOTES PAYABLE (Details) - USD ($) |
Sep. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Convertible notes payable | $ 219,200 | |
Less: current portion of convertible notes payable | 219,200 | |
Long-term convertible notes payable | ||
Dated - September 2016 [Member] | ||
Convertible notes payable | 51,450 | |
Dated - October 2016 [Member] | ||
Convertible notes payable | 38,750 | |
Dated - November 2016 [Member] | ||
Convertible notes payable | 30,000 | |
Dated - January, 2017 [Member] | ||
Convertible notes payable | 15,000 | |
Dated - February, 2017 [Member] | ||
Convertible notes payable | 64,000 | |
Dated - March, 2017 [Member] | ||
Convertible notes payable | $ 20,000 |
CONVERTIBLE NOTES PAYABLE (Details Narrative) - USD ($) |
3 Months Ended | 9 Months Ended | 12 Months Ended | |||
---|---|---|---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Convertible debt issued amount | $ 99,000 | $ 120,200 | ||||
Convertible debt term | 12 months | |||||
Annual interest rate | 4.00% | 4.00% | ||||
Interest expense | $ 13,488 | $ 10,406 | $ 43,797 | $ 27,228 | ||
Accrued interest | 0 | $ 0 | $ 9,381 | |||
Conversion of debt, shares issued | 3,273,000 | |||||
Accrued interest payable | $ 233,361 | $ 233,361 | ||||
Minimum [Member] | ||||||
Convertible debt term | 6 months | |||||
Annual interest rate | 2.98% | 2.98% | ||||
Conversion prices | $ 0.01 | $ 0.15 | ||||
Maximum [Member] | ||||||
Convertible debt term | 12 months | |||||
Annual interest rate | 4.88% | 4.88% | ||||
Conversion prices | $ 0.175 | $ 0.175 |
COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($) |
9 Months Ended | ||
---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Dec. 31, 2017 |
|
Lease expenses | $ 11,673 | $ 16,305 | |
Lease fixed term description | 24 months | ||
Monthly lease | $ 1,480 | ||
Due to related party | 32,827 | $ 41,115 | |
November 1, 2017 [Member] | KohSiew Min [Member] | |||
Due to related party | $ 15,000 |
EARNINGS PER SHARE (Details) - USD ($) |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
|
Numerator: | ||||
Net income | $ 28,146 | $ 2,673 | $ 66,088 | $ (94,453) |
Earnings allocated to common stock equivalents | 2,210 | |||
Income available to common stockholders | $ 28,146 | $ 4,883 | $ 66,088 | $ (94,453) |
Denominator: | ||||
Weighted-average shares of common stock | 34,523,261 | 31,520,000 | 32,528,394 | 31,481,898 |
Dilutive effect of convertible instruments | 3,360,235 | |||
Diluted weighted-average of common stock | 34,523,261 | 34,880,235 | 32,528,394 | 31,481,898 |
Net income per common share from: | ||||
Basic: | $ 0.00 | $ 0.00 | $ 0.00 | $ (0.00) |
Diluted: | $ 0.00 | $ 0.00 | $ 0.00 | $ (0.00) |
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