0001553350-17-000320.txt : 20170330 0001553350-17-000320.hdr.sgml : 20170330 20170330081517 ACCESSION NUMBER: 0001553350-17-000320 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 46 CONFORMED PERIOD OF REPORT: 20161231 FILED AS OF DATE: 20170330 DATE AS OF CHANGE: 20170330 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Logicquest Technology, Inc. CENTRAL INDEX KEY: 0000768216 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-BUSINESS SERVICES, NEC [7389] IRS NUMBER: 760640970 STATE OF INCORPORATION: NV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-22711 FILM NUMBER: 17723821 BUSINESS ADDRESS: STREET 1: 410 PARK AVENUE STREET 2: 15TH FLOOR #31 CITY: NEW YORK STATE: NY ZIP: 10022 BUSINESS PHONE: 212-231-0033 MAIL ADDRESS: STREET 1: 410 PARK AVENUE STREET 2: 15TH FLOOR #31 CITY: NEW YORK STATE: NY ZIP: 10022 FORMER COMPANY: FORMER CONFORMED NAME: BLUEGATE CORP DATE OF NAME CHANGE: 20041124 FORMER COMPANY: FORMER CONFORMED NAME: CRESCENT COMMUNICATIONS INC DATE OF NAME CHANGE: 20010921 FORMER COMPANY: FORMER CONFORMED NAME: BERENS INDUSTRIES INC DATE OF NAME CHANGE: 19990823 10-K 1 logq_10k.htm ANNUAL REPORT Annual Report

 



 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

 

———————


FORM 10-K

   

þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended: December 31, 2016


OR


¨

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____ to ____


Commission file number: 000-22711

  

LOGICQUEST TECHNOLOGY, INC.

(Exact name of Registrant as Specified in Its Charter)

  

Nevada

76-0640970

(State or Other Jurisdiction of

Incorporation or Organization)

(IRS Employer

Identification No.)


5 Independence Way, Suite 300, Princeton, NJ, U.S.A.

08540

 

 

(Address of principal executive offices)

(Zip Code)


Registrant's telephone number, including area code 609-514-5136


Securities registered pursuant to Section 12(b) of the Act:


Title of each class

 

Name of each exchange on which registered

None

 

None


Securities registered pursuant to Section 12(g) of the Act:


Common Stock, $0.001 par value, listed on the Over-The-Counter Bulletin Board.

(Title of Class)

 

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.  Yes ¨  No þ


Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.  Yes ¨  No þ


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.  Yes þ  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 during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes þ  No ¨


Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  þ


Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):


Large accelerated filer

¨

Accelerated filer

¨

Non-accelerated filer

¨

Smaller reporting company

þ

 

 

 

 

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


As of June 30, 2016 the aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant computed by reference to the price at which the common equity was last sold based on the closing price on that date was approximately $205,191.


On March 30, 2017, the registrant had outstanding 2,301,968 shares of Common Stock, $0.001 par value per share.


Documents Incorporated by Reference


None

 

 




 



TABLE OF CONTENTS


 

 

PAGE

 

PART I

 

 

 

 

Item 1.

Business

1

Item 1A.

Risk Factors

3

Item 1B.

Unresolved Staff Comments

3

Item 2.

Properties

3

Item 3.

Legal Proceedings

3

Item 4.

Mine Safety Disclosures

3

                            

 

                            

 

PART II

 

 

 

 

Item 5.

Market For Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

4

Item 6.

Selected Financial Data

5

Item 7.

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

5

Item 7A.

Quantitative and Qualitative Disclosures About Market Risk

8

Item 8.

Financial Statements and Supplementary Data

F-1

Item 9.

Changes In and Disagreements with Accountants On Accounting and Financial Disclosure

9

Item 9A

Controls and Procedures

9

Item 9B.

Other Information

10

 

 

 

 

PART III

 

 

 

 

Item 10.

Directors, Executive Officers and Corporate Governance

11

Item 11.

Executive Compensation

13

Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

13

Item 13.

Certain Relationships and Related Transactions, and Director Independence

14

Item 14.

Principal Accountant Fees and Services

15

 

 

 

 

PART IV

 

 

 

 

Item 15.

Exhibits and Financial Statement Schedules

16

 

 

 

SIGNATURES

 

17











 


PART I


Item 1. Business.


INTRODUCTION


Logicquest Technology, Inc. (the “Company”) was originally incorporated as Solis Communications, Inc. on July 23, 2001 and adopted a name change to Crescent Communications Inc. upon completion of a reverse acquisition of Berens Industries, Inc. In 2004, we changed our name to Bluegate Corporation (“Bluegate”). On March 19, 2015, we changed our name to Logicquest Technology, Inc.


Logicquest is a Nevada corporation that previously consisted of the networking service (carrier/circuit) business, which provided internet connectivity to corporate clients on a subscription basis; essentially operating as a value added provider. During May 2014 the Board of Directors authorized an orderly wind down of the Company's internet connectivity business which ceased effective June 30, 2014.


In this Form 10-K, we refer to ourselves as "Logicquest," "We," Us," “the Company,” and "Our."


Our executive offices are located at: Logicquest Technology, Inc., 5 Independence Way, Suite 300, Princeton, NJ, U.S.A.; tel. voice: 609-514-5136, fax: 609-514-5104. Our website is logq-inc.com


Our growth is dependent on attaining profit from acquiring new operations and our raising capital through the sale of stock or debt. There is no assurance that we will be able to raise any equity financing or sell any of our products at a profit.


Our functional currency is the U.S. dollar. Our independent registered public accounting firm issued a going concern qualification in their report dated March 30, 2016, which raises substantial doubt about our ability to continue as a going concern.


Our stock is traded on the OTCQ Over-The-Counter market and our trading symbol is LOGQ.


CORPORATE HISTORY


In 1996, Congress passed the Health Insurance Portability and Accountability Act ("HIPAA"). Two of the many features of HIPAA were a mandate that the healthcare industry move toward using electronic communication technology to streamline and reduce the cost of healthcare, and a requirement that healthcare providers treat virtually all healthcare information as confidential, especially when electronically transmitted.


In 2001, Mr. Manfred Sternberg acquired effective control of the company and during 2002 and 2003 under his leadership, the company commenced development and completion of the necessary systems to offer integrated HIPAA compliant Medical Grade Network® to the health care community to provide electronic systems required by increasing U.S. public policy mandates to accelerate the movement to secure electronic health records.


In 2003, a minority amount of our revenue was related to our HIPAA business. In 2004, a majority of our revenue was related to our HIPAA business. In 2005, all of our revenues were related to our health care service model.


In 2004, to accelerate our movement into the electronic health record business, we sold our Internet Service Provider ("ISP") customer base effective June 21, 2004 to concentrate on our health care IT solutions model and its Medical Grade Network®.


In 2004, we contracted with the largest healthcare system in Texas to provide physicians with Internet bandwidth and managed security services using our Medical Grade Network®.


In March 2005 we acquired substantially all of the assets and assumed certain ongoing contractual obligations of TEKMedia Communications, Inc., a company that provided traditional IT consulting services.


In September 2005 we acquired substantially all of the assets and assumed certain ongoing contractual obligations of Trilliant Corporation, a company that provides assessment, design, vendor selection, procurement and project management for large technology initiatives, particularly in the healthcare arena.


Effective May 31, 2009, Mr. Koehler resigned as President from the company.




1



 


Effective July 29, 2009, Charles Leibold became a Director as a result of: (A) the June 12, 2009 written consent of a majority of our shareholders; (B) the June 22, 2009 filing of a Preliminary Information Statement; (C) the July 8, 2009 filing of a Definitive Information Statement; and, (D) the July 9, 2009 mailing of the Definitive Information Statement to our shareholders. The Definitive Information Statement had a record date of June 25, 2009.


Effective July 30, 2009, the titles of CEO and President were combined, and Stephen Sperco was appointed President. Mr. Sperco is our former CEO/President/Director. Stephen Sperco was appointed Chairman of the Board. The executive officer position of Chief Strategy Officer was eliminated and Mr. Sternberg’s employment was terminated.


Effective November 7, 2009, the Company entered into the following transactions: 1) disposed of certain Medical Grade Network (“MGN”) assets and business and the elimination of certain liabilities (consisting primarily of: a) furniture, computers and related software and peripherals with a $17,889 book value; b) contracts, agreements, lists of telephone and fax numbers, licenses, permits, intellectual properties, registered mark for MGN, and business name of Bluegate with a $0 net book value; c) eliminated liabilities of $43,607 principally related to customer product prepays which were assumed by the purchaser) to Sperco, LLC (“Sperco”) (an entity controlled by Stephen Sperco (“SS”), our former CEO/President/Director) for $200,000, with payment made by a combination of $100,000 cash and $100,000 forgiveness of debt to SAI Corporation (“SAIC”) (an entity controlled by SS), plus a net adjustment of $7,100 due to the Company from Sperco resulting from the Company’s collection of principally accounts receivable totaling $161,900 on behalf of Sperco for the period from November 8, 2009 through December 31, 2009, offset by Sperco’s payment of $169,000 to the Company for the personnel, facilities, tools, and resources necessary for the Company to support both the MGN and HIMS operations for Sperco for the same period; 2) entered into a Separation Agreement and Mutual Release in Full of all claims with Manfred Sternberg (“MS”) (former Director/Corporate Officer), which included the elimination of $28,499 of accrued director fees and vehicle allowances in exchange for repayment of a loan plus accrued interest totaling $44,369 to MS; and 3) entered into A Separation Agreement and Mutual Release in Full of all claims with William Koehler (“WK”) (former Director/Corporate Officer), which included the elimination of $28,499 of accrued director fees and vehicle allowances in exchange for repayment of a loan plus accrued interest totaling $44,374 with a direct payment to WK’s American Express account and a $1 payment to WK; and 4) disposed of certain Trilliant Technology Group, Inc.’s assets and business (consisting primarily of: a) Computers and related software and peripherals with a $0 net book value; b) lists of telephone and fax numbers and intellectual properties with a $0 net book value) to Trilliant Corporation (an entity controlled by WK) for a cash payment of $5,000; and 5) disposed of certain Bluegate Healthcare Information Management Systems (“HIMS”) assets and business (consisting primarily of: a) Contracts, agreements and intellectual properties with a $0 net book value) to SAIC in exchange for a Mutual Release in Full of certain claims and a $1 payment to SAIC; and 6) obtained a Fairness Opinion dated November 6, 2009 presented by Convergent Capital Appraisers.


Pursuant to the State of Nevada Revised Statutes, which authorizes the taking of action by written consent of the shareholders without a meeting, a super majority of the voting power of the shareholders of the Company gave their consent to the above actions. In April 2010, the Company filed a Definitive Information Statement on Schedule 14C with the SEC and mailed the notice to shareholders.


As a result of these transactions, the Company received $105,000 cash; reduced the secured note payable to SAIC by $100,000; paid off unsecured notes payable and accrued interest of $88,743 to MS and WK; eliminated $56,998 of accrued liabilities to MS and WK; recorded $24,234 of expenses (principally legal and professional); removed the remaining book value of fixed assets of $17,889, eliminated $43,607 of customer liabilities assumed by Sperco and the net effect of $263,484 as an increase to additional paid-in capital since the effect was treated as related party forgiveness of debt.


On December 27, 2010 our 100% owned subsidiary, Trilliant Technology Group, Inc. was dissolved.


On September 11, 2014, SAIC, the Company’s majority shareholder, sold to Mr. Ang Woon Han 24,070,250 shares of common stock (1,203,513 shares post reverse stock split), 48 shares of Series C Convertible preferred stock and 10 shares of Series D Convertible preferred stock. As a result, Mr. Ang owns 52% of our shares of common stock without taking into account the super voting power of the Preferred stock, and 78% when taking into account the super voting power of the Preferred Stock.


On January 2, 2015, the Company had filed a 14C for restructuring the Company. Actions taken included:


·

To change the name of the Company from “Bluegate Corporation” to “Logicquest Technology, Inc.”

·

To increase the number of authorized shares of Common Stock, par value $0.001 from fifty million (50,000,000) to two hundred million (200,000,000) (the “Authorized Increase”); and

·

To perform a reverse stock split of the Company’s issued and outstanding shares of Common Stock at a ratio of one post-split share per twenty pre-split shares (the “Reverse Stock Split”).


The above actions were effective on March 19, 2015.



2



 


OUR BUSINESS SUBSEQUENT TO THE NOVEMBER 7, 2009 DISPOSITION OF CERTAIN ASSETS AND BUSINESS


For the first half of 2014, Logicquest consisted of the networking service (carrier/circuit) business that provided internet connectivity to corporate clients on a subscription basis; essentially operating as a value added provider. During May 2014 the Board of Directors authorized an orderly wind down of the Company's internet connectivity business which ceased effective June 30, 2014.


LOGICQUEST STRATEGY


Following the name change and reverse split, we are in active search of some businesses in the high tech industry that will provide good value to shareholders.


EMPLOYEES


As a result of the cessation of internet connectivity business, our Company currently has no employees.


AVAILABLE INFORMATION ABOUT US


The public may read and copy any materials we file with the Securities and Exchange Commission (“SEC”) at the SEC’s Public Reference Room at 100 F Street, NE, Washington, D.C. 20549, on official business days during the hours of 10:00 am to 3:00 pm. The public may obtain information on the operation of the Public Reference Room by calling the Commission at 1-800-SEC-0330. The Commission maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the Commission at (http://www.sec.gov). Our website is logq-inc.com.


Item 1A. Risk Factors.


As a smaller reporting company, we are not required to provide the information required by this item.


Item 1B. Unresolved Staff Comments.


None


Item 2. Properties.


Our office is located at 5 Independence Way, Suite 300, Princeton, NJ, U.S.A. It is virtual office with a monthly rental of $155. The lease began on May 12, 2016 and will expire on either party’s termination. We lease this property on a month to month basis at a cost of $155 per month.


Item 3. Legal Proceedings.


None.


Item 4. Mine Safety Disclosures.


None






3



 


PART II


Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.


Our stock is traded on the OTCQB and our trading symbol is "LOGQ". The following table sets forth the quarterly high and low bid price per share for our common stock. These bid and asked price quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission, and may not represent actual prices. Our fiscal year ends December 31.


COMMON STOCK PRICE RANGE


 

2016

 

2015

 

HIGH

 

LOW

 

HIGH

 

LOW

First Quarter

$0.20

 

$0.15

 

$0.32

 

$0.01

Second Quarter

0.21

 

0.20

 

0.32

 

0.25

Third Quarter

0.56

 

0.20

 

0.40

 

0.25

Fourth Quarter

0.20

 

0.15

 

0.25

 

0.20


COMMON STOCK


On March 30, 2017, we had outstanding 2,301,968 shares of Common Stock, $0.001 par value per share.


On March 30, 2017, we had approximately 61 shareholders of record.


Our transfer agent is American Stock Transfer and Trust Company.


We have not paid any cash dividends and we do not expect to declare or pay any cash dividends in the foreseeable future. Payment of any cash dividends will depend upon our future earnings, if any, our financial condition, and other factors as deemed relevant by the Board of Directors.


SALE OF UNREGISTERED SECURITIES


None.


SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS


 

 

Number of securities to be issued upon exercise of outstanding options, warrants and rights

 

 

Weighted-average exercise price of outstanding options,

warrants and rights

 

 

Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))

 

PLAN CATEGORY:

    

(a)

 

 

(b)

 

 

(c)

 

Equity compensation plans approved by security holders

 

 

-

 

 

$

-

 

 

 

-

 

Equity compensation plans not approved by security holders

 

 

-

 

 

$

-

 

 

 

93,365

(1)

———————

(1) These shares are the remaining shares reserved and available for issuance under our 2005 Stock and Stock Option Plan (the 2005 Plan).


EMPLOYEE STOCK OPTION PLANS


The Company had adopted the 2002 Stock and Stock Option Plan under which incentive stock options for up to 22,500 common shares may be awarded to officers, directors and key employees. The plan was designed to attract and reward key executive personnel. As of December 31, 2007, we had granted all 22,500 options and the 2002 stock plan is not active. Stock options granted pursuant to the 2002 plan expire as determined by the board of directors, and all options granted under the 2002 stock plan have expired prior hereto. All of the options granted were at an option price equal to the fair market value of the common stock at the date of grant.




4



 


In 2005 we adopted the 2005 Stock and Stock Option Plan (the "2005 Plan"). The purpose of the 2005 Plan is to further our interests, our subsidiaries and our stockholders by providing incentives in the form of stock options to key employees, consultants, directors and others who contribute materially to our success and profitability. The grants recognize and reward outstanding individual performances and contributions and will give such persons a proprietary interest in us, thus enhancing their personal interest in our continued success and progress. The 2005 Plan also assists us and our subsidiaries in attracting and retaining key employees and Directors. The 2005 Plan is administered by the Board of Directors. The Board of Directors has the exclusive power to select the participants in the 2005 Plan, to establish the terms of the stock and options granted to each participant, provided that all options granted shall be granted at an exercise price equal to at least 85% of the fair market value of the common stock covered by the option on the grant date and to make all determinations necessary or advisable under the 2005 Plan. The maximum aggregate number of shares of common stock that may be granted or optioned and sold under the Plan is 150,000 shares. As of December 31, 2016, 56,635 shares of common stock have been granted pursuant to the 2005 Plan.


Item 6. Selected Financial Data.


Disclosure is not required as a result of our Company’s status as a smaller reporting company.


Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.


The following discussion and analysis of the financial condition and results of operations of the Company should be read in conjunction with the financial statements and the related notes and the discussions under “Application of Critical Accounting Policies,” which describes key estimates and assumptions we make in the preparation of our financial statements.


OVERVIEW


Logicquest consisted of the networking service (carrier/circuit) business that provides internet connectivity to corporate clients on a subscription basis; essentially operating as a value added provider. During 2014, our business volume was dropped sharply compared with 2013, and the management by then had decided to cease the business on June 30, 2014. Mr. Ang Woon Han took over the majority of Logicquest on September 11, 2014 through the purchase of shares from SAI Corporation, the then largest shareholder. Mr. Ang is exploring to acquire promising new businesses in 2017, either through the issuance of shares or through financing.


OUR CURRENT BUSINESS


We were previously engaged in the networking service (carrier/circuit) business that provides internet connectivity to corporate clients on a subscription basis; essentially operating as a value added provider. During May 2014 our board of directors authorized an orderly wind down our company’s internet connectivity business which ceased effective June 30, 2014.


On March 31, 2016, our Company entered a memorandum of understanding/letter of intent (“MOU)”) with Logicquest Technology Limited pursuant to which we intended to effect a business combination (the “Transaction”).  The Transaction was to be effected in one of several different ways, including by asset acquisition, by merger of our company and Logicquest Technology Limited, or by share purchase whereby we would purchase the shares of Logicquest from its shareholders for cash and/or for shares of our company.


The MOU provided that we would pay an aggregate of USD$3,000,000 to the shareholders of Logicquest Technology Limited for all issued and outstanding share of Logicquest Technology Limited, payable as follows:


(a)

$1,000,000 on closing of the Transaction;

(b)

$1,000,000 six months from closing of the Transaction; and

(c)

$1,000,000 on the first anniversary of the closing of the Transaction.



5



 


The MOU further provided that the parties would enter into a definitive agreement to complete the Transaction by June 30, 2016. The definitive agreement was to contain provisions that are customary for a transaction of this nature, including, but not be limited to,


(a)

approvals of the boards of directors of Logicquest and us and shareholders of Logicquest;

(b)

obtaining all required consents of third parties;

(c)

completion of all required audited and unaudited financial statements of Logicquest, prepared in accordance with US GAAP and audited and by a PCAOB registered audit firm;

(d)

no adverse material change in the business or financial condition of Logicquest or us since the execution of the Transaction Agreement; and

(e)

closing of Transaction by June 30, 2016.


On July 22, 2016 we entered into a letter of agreement with Logicquest Technology to extend the deadline for closing the Transaction from June 30, 2016 to October 31, 2016.  On October 31, 2016 the Letter of Intent expired prior to the completion of a definitive agreement to complete the Transaction.  


As at the date of this report, we have no additional plans to pursue a business combination with Logicquest Technology Limited.  Our management intends to seek and evaluate opportunities to create value for our shareholders through merger or acquisition.


RESULTS OF OPERATIONS


We had a net loss of $497,268 for the year ended December 31, 2016, which was $10,841 more than the net loss of $486,427 for the year ended December 31, 2015. The change in our results over the two periods is mainly a result of an increase in selling, general and administrative expenses.


The following table summarizes key items of comparison and their related increase for the year ended December 31, 2016 and 2015:


 

 

 

 

 

 

 

 

 

Increase (Decrease)

 

 

 

2016

 

 

2015

 

 

2016 from 2015

 

Revenue

 

$

-

 

 

$

-

 

 

$

-

 

Selling, general and administrative expenses

 

 

176,078

 

 

 

165,787

 

 

 

10,291

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss from operations

 

 

(176,078

)

 

 

(165,787

)

 

 

10,291

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

(321,190

)

 

 

(320,640

)

 

 

550

 

Net loss

 

$

(497,268

)

 

$

(486,427

)

 

$

10,841

 


Revenue


We have not earned any revenues during the year ended December 31, 2016.


LIQUIDITY AND CAPITAL RESOURCES


As of December 31, 2016, our cash and cash equivalents were nil; total current liabilities were $4,235,907 and total stockholders’ deficit was $4,207,930.


Working Capital


 

 

At
December 31,

2016

 

 

At
December 31,

2015

 

Current assets

 

$

7,394

 

 

$

29,032

 

Current liabilities

 

 

4,235,907

 

 

 

3,739,694

 

Working capital

 

$

(4,228,513

)

 

$

(3,710,662

)


We anticipate generating losses and, therefore, may be unable to continue operations further in the future.





6



 


FINANCIAL CONDITION


 

 

 

 

 

 

 

 

Increase (Decrease)

 

 

 

2016

 

 

2015

 

 

2016 from 2015

 

Net cash (used in) operating activities

 

$

-

 

 

$

-

 

 

$

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net cash provided by financing activities

 

 

-

 

 

 

-

 

 

 

-

 

Net increase (decrease) in cash

 

$

-

 

 

$

-

 

 

$

-

 

Cash balance at end of period

 

$

-

 

 

$

-

 

 

 

 

 


Operating Activities.


Net cash used in operating activities was nil during the year ended December 31, 2016 and 2015.


Financing Activities.


Cash provided by financing activities was nil during the year ended December 31, 2016 and 2015.


To date we have relied on proceeds from the sale of our shares and on loans from officers and directors, related companies and an independent third party in order to sustain our basic, minimum operating expenses; however, we cannot guarantee that we will secure any further sales of our shares or that our officers and directors, related companies or the independent third party will provide us with any future loans.  We intend to use debt to cover the anticipated negative cash flows until we can operate at a break-even cash flow mode. We may seek additional capital to fund potential costs associated with possible expansion and/or acquisitions. We believe that future funding may be obtained from public or private offerings of equity securities, debt or convertible debt securities, or other sources. Stockholders should assume that any additional funding will likely be dilutive.


We are not aware of any known trends, demands, commitments, events or uncertainties that will result in or that are reasonably likely to result in our liquidity increasing or decreasing in any material way.


FORECAST


The internet connectivity business of our company ceased on June 30, 2014. The management is seeking potential merger or acquisition candidates.


CRITICAL ACCOUNTING POLICIES AND ESTIMATES


Our discussion and analysis of our financial condition and results of operations are based upon financial statements which have been prepared in accordance with generally accepted accounting principles in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, we evaluate these estimates. We base our estimates on historical experience and on assumptions that are believed to be reasonable. These estimates and assumptions provide a basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions, and these differences may be material.


We believe that the following critical accounting policies affect our more significant judgments and estimates used in the preparation of our financial statements.


Stock-Based Compensation


Accounting Standard 718, "Accounting for Stock-Based Compensation" ("ASC 718") established financial accounting and reporting standards for stock-based employee compensation plans. It defines a fair value based method of accounting for an employee stock option or similar equity instrument. In January 2006, we implemented ASC 718, and accordingly, we account for compensation cost for stock option plans in accordance with ASC 718.


We account for share based payments to non-employees in accordance with ASC 505-50 “Accounting for Equity Instruments Issued to Non-Employees for Acquiring, or in Conjunction with Selling, Goods or Services”. The final measurement date for the fair value of equity instruments with performance criteria is the date that each performance commitment for such equity instrument is satisfied or there is a significant disincentive for non-performance.



7



 


GOING CONCERN


We remain dependent on outside sources of funding for continuation of our operations. Our independent registered public accounting firm issued a going concern qualification in their report dated March 30, 2017, which raises substantial doubt about our ability to continue as a going concern.


During the years ended December 31, 2016 and 2015, we have been unable to generate cash flows sufficient to support our operations and have been dependent on debt raised from related parties and independent third parties. We experienced negative financial results as follows:

 

 

 

2016

 

 

2015

 

Net loss

 

$

(497,268

)

 

$

(486,427

)

Negative working capital

 

 

(4,228,513

)

 

 

(3,710,662

)

Stockholders’ deficit

 

 

(4,207,930

)

 

 

(3,710,662

)


These factors raise substantial doubt about our ability to continue as a going concern. The financial statements contained herein do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might be necessary should we be unable to continue in existence. Our ability to continue as a going concern is dependent upon our ability to generate sufficient cash flows to meet our obligations on a timely basis, to obtain additional financing as may be required, and ultimately to attain profitable operations. However, there is no assurance that profitable operations or sufficient cash flows will occur in the future.


Our current operations are primarily funded by Logicquest Technology Limited, a company controlled by the Company’s Chief Financial Officer, Mr. Cheng Yew Siong.


These steps have provided us with the cash flows to continue our business, but have not resulted in significant improvement in our financial position. We are considering alternatives to address our cash flow situation that include:


·

Raising capital through additional sale of our common stock and/or debt securities.

·

Reducing cash operating expenses to levels that are in line with current revenues.


These alternatives could result in substantial dilution of existing stockholders. There can be no assurance that our current financial position can be improved, that we can raise additional working capital or that we can achieve positive cash flows from operations. Our long-term viability as a going concern is dependent upon the following:


·

Our ability to locate sources of debt or equity funding to meet current commitments and near-term future requirements.

·

Our ability to achieve profitability and ultimately generate sufficient cash flow from operations to sustain our continuing operations.


Item 7A. Quantitative and Qualitative Disclosures About Market Risk.


As a smaller reporting company, we are not required to provide the information required by this Item.





8



 


Item 8. Financial Statements and Supplementary Data.


LOGICQUEST TECHNOLOGY, INC.

———————

FINANCIAL STATEMENTS

WITH REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015



TABLE OF CONTENTS

———————


 

PAGE

 

 

Report of Independent Registered Public Accounting Firm

F-2

Financial Statements:

 

Balance Sheets as of December 31, 2016 and 2015

F-3

Statements of Operations for the years ended December 31, 2016 and 2015

F-4

Statements of Changes in Stockholders' Deficit for the years ended December 31, 2016 and 2015

F-5

Statements of Cash Flows for the years ended December 31, 2016 and 2015

F-6

Notes to Financial Statements

F-7




F-1



 



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM



Board of Directors and Stockholders

Logicquest Technology, Inc.


We have audited the accompanying balance sheets of Logicquest Technology, Inc. (the “Company”) as of December 31, 2016 and 2015, and the related statements of operations, changes in stockholders’ deficit, and cash flows for the years then ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.


We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform an audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.


In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Logicquest Technology, Inc. as of December 31, 2016 and 2015, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.


The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company has suffered recurring losses from operations and has a net capital deficiency that raises substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.



/s/ MaloneBailey, LLP

www.malonebailey.com

Houston, Texas

March 30, 2017




 







F-2



 


LOGICQUEST TECHNOLOGY, INC.

BALANCE SHEETS


 

 

DECEMBER 31,

 

 

DECEMBER 31,

 

 

 

2016

 

 

2015

 

ASSETS

  

                          

  

  

                          

  

Current assets:

 

 

 

 

 

 

Prepaid expenses and other current assets

 

7,394

 

 

29,032

 

Total current assets

 

$

7,394

 

 

$

29,032

 

 

 

 

 

 

 

 

 

 

Intangible assets, net

 

 

20,583

 

 

 

-

 

Total assets

 

$

27,977

  

  

$

29,032

  

 

 

  

  

   

  

  

  

    

LIABILITIES AND STOCKHOLDERS’ DEFICIT

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accrued liabilities

 

 

2,518,111

 

 

 

2,197,507

 

Due to related party

 

 

380,196

 

 

 

204,587

 

Note payable

 

 

1,337,600

 

 

 

1,337,600

 

Total current liabilities

 

 

4,235,907

 

 

 

3,739,694

 

 

 

 

 

 

 

 

 

 

Stockholders’ deficit:

 

 

 

 

 

 

 

 

Undesignated preferred stock, $.001 par value, 9,999,942 shares authorized, none issued and outstanding

 

 

-

 

 

 

-

 

Series C Convertible Non-Redeemable preferred stock, $.001 par value, 48 shares authorized, issued and outstanding at December 31, 2016 and 2015; $12,500 per share liquidation preference ($600,000 aggregate liquidation preference at December 31, 2016)

 

 

-

 

 

 

-

 

Series D Convertible Non-Redeemable preferred stock, $.001 par value, 10 shares authorized, issued and outstanding at December 31, 2016 and 2015, respectively; $8,725 per share liquidation preference ($87,250 aggregate liquidation preference at December 31, 2016)

 

 

 

 

 

 

 

 

Common stock, $0.001 par value, 200,000,000 shares authorized, 2,301,968 shares issued and outstanding at December 31, 2016 and 2015(1)

 

 

2,302

 

 

 

2,302

 

Additional paid-in capital

 

 

22,487,937

 

 

 

22,487,937

 

Accumulated deficit

 

 

(26,698,169

)

 

(26,200,901

)

Total stockholders’ deficit

 

 

(4,207,930

)

 

(3,710,662

)

Total liabilities and stockholders’ deficit

 

$

27,977

 

 

$

29,032

 


(1)

On March 19, 2015, the Company executed a 1-for-20 reverse stock split of the Company’s common stock. All common stock data included in these financial statements has been restated to give effect to the reverse stock split.


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




F-3



 


LOGICQUEST TECHNOLOGY, INC.

STATEMENTS OF OPERATIONS


 

 

FOR THE YEARS ENDED

 

 

 

DECEMBER 31,

 

 

 

2016

 

 

2015

 

Operating expenses

 

 

 

 

 

 

 

 

Selling, general and administrative expenses

 

176,078

 

 

$

165,787

 

 

 

 

 

 

 

 

 

 

Loss from operations

 

 

(176,078

)

 

 

(165,787

)

 

 

 

 

 

 

 

 

 

Interest expense

 

 

(321,190

)

 

 

(320,640

)

 

 

 

 

 

 

 

 

 

Net loss

 

$

(497,268

)

 

$

(486,427

)

 

 

 

 

 

 

 

 

 

Net loss per share – basic and diluted(1)

 

$

(0.22

)

 

$

(0.21

)

 

 

 

 

 

 

 

 

 

Basic and diluted weighted average shares outstanding

 

 

2,301,968

 

 

 

2,301,968

 


(1)

On March 19, 2015, the Company executed a 1-for-20 reverse stock split of the Company’s common stock. All per share data included in these financial statements has been restated to give effect to the reverse stock split.


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







F-4



 


LOGICQUEST TECHNOLOGY, INC.

STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT

FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015


 

 

 

 

 

 

 

 

PREFERRED STOCK

 

 

ADDITIONAL

 

 

 

 

 

 

 

 

 

COMMON STOCK

 

 

SERIES C

 

 

SERIES D

 

 

PAID-IN

 

 

ACCUMULATED

 

 

 

 

 

 

SHARES

 

 

CAPITAL

 

 

SHARES

 

 

CAPITAL

 

 

SHARES

 

 

CAPITAL

 

 

CAPITAL

 

 

DEFICIT

 

 

TOTAL

 

Balance at December 31, 2014

 

 

2,301,849

 

 

$

2,302

 

 

 

48

 

 

$

-

 

 

 

10

 

 

$

-

 

 

$

22,487,937

 

 

 

(25,714,474

)

 

 

(3,224,235

)

Share adjustment

 

 

119

 

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

-

 

 

 

 

 

 

 

 

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(486,427

)

 

 

(486,427

)

Balance at December 31, 2015

 

 

2,301,968

 

 

 

2,302

 

 

 

48

 

 

 

-

 

 

 

10

 

 

 

-

 

 

 

22,487,937

 

 

 

(26,200,901

)

 

 

(3,710,662

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(497,268

)

 

 

(497,268

)

Balance at December 31, 2016

 

 

2,301,968

 

 

$

2,302

 

 

 

48

 

 

$

-

 

 

 

10

 

 

$

-

 

 

$

22,487,937

 

 

$

(26,698,169

)

 

$

(4,207,930

)


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





F-5



 


LOGICQUEST TECHNOLOGY, INC.

STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015

 

 

 

2016

 

 

2015

 

Cash flows from operating activities:

  

                          

  

  

                          

  

Net loss

 

$

(497,268

)

 

$

(486,427

)

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

 

 

 

 

 

 

 

 

Amortization

 

 

1,890

 

 

 

 

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Prepaid expenses and other current assets

 

 

13,219

 

 

 

5,585

 

Accrued liabilities

 

 

482,159

 

 

 

480,842

 

Net cash used in operating activities

 

 

-

 

 

 

-

 

 

 

 

 

 

 

 

 

 

Net decrease in cash and cash equivalents

 

 

-

 

 

 

-

 

Cash and cash equivalents at beginning of year

 

 

-

 

 

 

-

 

Cash and cash equivalents at end of year

 

$

-

 

 

$

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Supplemental Disclosure of Cash Flows Information:

 

 

 

 

 

 

 

 

Cash paid for interest

 

$

-

 

 

$

-

 

Cash paid for income taxes

 

$

-

 

 

$

-

 

 

 

 

 

 

 

 

 

 

Non-cash transactions:

 

 

 

 

 

 

 

 

Transfer of prepaid expenses to intangible assets

 

$

22,473

 

 

$

-

 

Prepayment and operating expenses directly paid by related party

 

$

175,609

 

 

$

186,587

 


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









F-6



 


LOGICQUEST TECHNOLOGY, INC.

NOTES TO FINANCIAL STATEMENTS


1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES


Logicquest Technology, Inc. (“we”, “our”, the “Company") is a Nevada Corporation that previously consisted of the networking service (carrier/circuit) business. It provided internet connectivity to corporate clients on a subscription basis; essentially operating as a value added provider until it ceased operations effective June 30, 2014.


The Company was originally incorporated as Solis Communications, Inc. on July 23, 2001 and adopted a name change to Crescent Communications Inc. upon completion of a reverse acquisition of Berens Industries, Inc. In 2004, we changed our name to Bluegate Corporation (“Bluegate”). On March 19, 2015, we changed our name to Logicquest Technology, Inc. (“Logicquest”).


Following is a summary of the Company's significant accounting policies:


SIGNIFICANT ESTIMATES


The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. 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 dates of the financial statements and the reported amounts of revenues and expenses during the periods. Actual results could differ from estimates making it reasonably possible that a change in the estimates could occur in the near term.


RELATED PARTY TRANSACTIONS


A related party is generally defined as (i) any person that holds 10% or more of the Company’s securities and their immediate families, (ii) the Company’s management, (iii) someone that directly or indirectly controls, is controlled by or is under common control with the Company, or (iv) anyone who can significantly influence the financial and operating decisions of the Company. A transaction is considered to be a related party transaction when there is a transfer of resources or obligations between related parties.


FAIR VALUE OF FINANCIAL INSTRUMENTS


For certain of the Company’s financial instruments, including prepaid expenses and other current assets and accrued liabilities, the carrying amounts approximate fair values due to their short maturities.


Transactions involving related parties cannot be presumed to be carried out on an arm's-length basis, as the requisite conditions of competitive, free-market dealings may not exist. Representations about transactions with related parties, if made, shall not imply that the related party transactions were consummated on terms equivalent to those that prevail in arm's-length transactions unless such representations can be substantiated.


It is not, however, practical to determine the fair value of amounts due to  related parties and lease and management arrangement with related parties, if any, due to their related party nature.


INCOME TAXES


The Company uses the liability method of accounting for income taxes. Under this method, deferred income taxes are recorded to reflect the tax consequences on future years of temporary differences between the tax basis of assets and liabilities and their financial amounts at year-end. The Company provides a valuation allowance to reduce deferred tax assets to their net realizable value.




F-7



LOGICQUEST TECHNOLOGY, INC.

NOTES TO FINANCIAL STATEMENTS, CONTINUED

 


The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such positions are then measured based on the largest benefit that has a greater than 50% likelihood of being realized upon settlement.


STOCK-BASED COMPENSATION


Accounting Standard 718, “Accounting for Stock-Based Compensation” (“ASC 718”) established financial accounting and reporting standards for stock-based employee compensation plans. It defines a fair value based method of accounting for an employee stock option or similar equity instrument. ASC 718 requires companies to recognize in the statement of operations the grant-date fair value of stock options and other equity based compensation. The Company accounts for compensation cost for stock option plans in accordance with ASC 718.


The Company accounts for share based compensation to non-employees in accordance with Accounting Standard 505-50 “Accounting for Equity Instruments Issued to Non-Employees for Acquiring, or in Conjunction with Selling, Goods or Services”. The final measurement date for the fair value of equity instruments with performance criteria is the date that each performance commitment for such equity instrument is satisfied or there is a significant disincentive for non-performance.


LOSS PER SHARE


Basic and diluted net loss per share is computed on the basis of the weighted average number of shares of common stock outstanding during each period. Potentially dilutive options that were outstanding during 2016 and 2015 were not considered in the calculation of diluted earnings per share because the Company's net loss rendered their impact anti-dilutive. Accordingly, basic and diluted losses per share were identical for the years ended December 31, 2016 and 2015.


RECLASSIFICATIONS


Certain prior year amounts have been reclassified to conform to the current period presentation. These reclassifications had no impact on net earnings and financial position.


RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS


The Company does not expect any recent accounting pronouncements to have a material impact to its financial position or result of operations.



2. GOING CONCERN CONSIDERATIONS


During the years ended December 31, 2016 and 2015, we have been unable to generate cash flows sufficient to support our operations and have been dependent on debt raised from a related party. We experienced negative financial results as follows:


 

 

2016

 

 

2015

 

Net loss

 

$

(497,268

)

 

$

(486,427

)

Negative working capital

 

 

(4,228,513

)

 

 

(3,710,662

)

Stockholders’ deficit

 

 

(4,207,930

)

 

 

(3,710,662

)


These factors raise substantial doubt about our ability to continue as a going concern. The financial statements contained herein do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might be necessary should we be unable to continue in existence. Our ability to continue as a going concern is dependent upon our ability to generate sufficient cash flows to meet our obligations on a timely basis, to obtain additional financing as may be required, and ultimately to attain profitable operations. However, there is no assurance that profitable operations or sufficient cash flows will occur in the future.



F-8



LOGICQUEST TECHNOLOGY, INC.

NOTES TO FINANCIAL STATEMENTS, CONTINUED

 


Our current operations are primarily funded by Logicquest Technology Limited, a company controlled by the Company’s Chief Financial Officer, Mr. Cheng Yew Siong.


3. ACCRUED LIABILITIES


The accrued liabilities are summarized below:


 

 

12/31/2016

 

 

12/31/2015

 

Accrued interest on note payable

 

$

1,667,083

 

 

$

1,345,893

 

Accrued general and administrative expenses

 

 

123,528

 

 

 

124,114

 

Other payable

 

 

727,500

 

 

 

727,500

 

 

 

$

2,518,111

 

 

$

2,197,507

 

 

The other payable balance represented accounts payable to related party owed to Sperco, LLC (“SLLC”) (an entity controlled by Stephen J. Sperco, the Company’s former CEO/President/Director). On September 11, 2014, in connection with the change in ownership, the payable to related party in the amount of $727,500 was assigned to Tang Chuan Choon, a third party.


4. NOTE PAYABLE


The Company’s note payable balance is $1,337,600 at December 31, 2016 and 2015. The note payable is unsecured, bears 15% interest per annum and is due on demand. The Company agreed to pay a late charge in the amount of $10,000 on any interest payment more than 15 days’ delinquent. During the year ended December 31, 2016 and 2015, the Company incurred interest expenses of $321,190 and $320,640, respectively. As of December 31, 2016 and 2015, the accrued interest balance was $1,667,083 and $1,345,893, respectively. The accrued interest and late charge are due on demand and are included in accrued liabilities.


5. RELATED PARTY TRANSACTIONS


Due to Relate Party


The due to related party is summarized below:


 

 

12/31/2016

 

 

12/31/2015

 

 

 

 

 

 

 

 

 Fees paid by Logicquest Technology Limited, a company controlled by the Company’s Chief Financial Officer, Cheng Yew Siong, on behalf of the Company

 

$

380,196

 

 

$

204,587

 


During the years ended December 31, 2016 and 2015, the Company recorded salary payment to Chief Executive Officer in the amount of $65,000 and $45,000, respectively. The entire amount was paid by Logicquest Technology Limited and was included in the ending balance of due to related party as of December 31, 2016 and 2015.


 Memorandum of Understanding with Logicquest Technology Limited


On March 31, 2016, the Company entered into a Memorandum of Understanding/Letter of Intent with Logicquest Technology Limited, pursuant to which the Company intended to effect a business combination (the "Transaction"). The Transaction was to be effected in one of several ways, whether by asset acquisition, by merger of Logicquest Technology Limited and the Company, or by share purchase whereby the Company would purchase the shares of Logicquest Technology Limited from its shareholders for cash and/or for shares of the Company. On July 22, 2016, the Company and Logicquest Technology Limited agreed to extend the closing deadline stipulated in the Letter of Intent from June 30, 2016 to October 31, 2016. On October 31, 2016 the Letter of Intent expired prior to the completion of a definitive agreement to complete the Transaction. As at the date of this report, we have no additional plans to pursue a business combination with Logicquest Technology Limited.





F-9



LOGICQUEST TECHNOLOGY, INC.

NOTES TO FINANCIAL STATEMENTS, CONTINUED

 


6. INTANGIBLE ASSETS


The following table presents the detail of intangible assets:


   

  

12/31/2016

  

  

12/31/2015

  

Trademarks

  

 

 

  

  

 

 

  

Gross Carrying Value

  

$

22,473

 

  

$

-

 

Less: Accumulated Amortization Total

  

 

(1,890

)

  

 

-

 

 

 

 

 

 

 

 

 

 

Trademarks, net

 

$

20,583

 

 

$

-

 


7. INCOME TAXES


The composition of deferred tax assets at December 31, 2016 and 2015 were as follows:


 

 

2016

 

 

2015

 

Deferred tax assets

 

 

 

 

 

 

Benefit from carryforward of net operating loss

 

$

2,917,000

 

 

$

2,748,000,

 

Less valuation allowance

 

 

(2,917,000

)

 

 

(2,748,000

)

Net deferred tax asset

 

$

-

 

 

$

-

 


The difference between the income tax benefit in the accompanying statement of operations and the amount that would result if the U.S. Federal statutory rate of 34% were applied to pre-tax loss for 2016 and 2015 is attributable to the valuation allowance.


At December 31, 2016, for federal income tax and alternative minimum tax reporting purposes, the Company has $8,581,000 in unused net operating losses available for carryforward to future years which will expire in various years through 2036.


8. STOCKHOLDERS’ DEFICIT


As of December 31, 2016, the Company has outstanding: (i) 2,301,968 shares of common stock and, (ii) preferred stock that are convertible into 72,500 shares of common stock, resulting in on a fully diluted basis, 2,374,468 shares of common stock. The Company has 200,000,000 shares of common stock authorized by our Articles of Incorporation.


On March 19, 2015, the Company executed a 1-for-20 reverse stock split of the Company’s common stock. As a result, there was an additional 119 shares of common stock issued due to the roundup feature of the reverse stock split. All common stock data included in these financial statements have been restated to give effect to the reverse stock split.


9. COMMITMENTS AND CONTINGENCIES


Lease Commitment


On May 27, 2016, the Company entered into an agreement for the lease of a virtual office in Princeton, NJ for monthly rental of $155. The lease began on May 12, 2016 in month to month basis and can be cancelled on either party’s discretion with a three months’ notice.






F-10



 


Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.


None.


Item 9A. Controls and Procedures.


We maintain disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) that are designed to ensure that information required to be disclosed by us in reports that we file under the Exchange Act are recorded, processed, summarized and reported as specified in the SEC’s rules and forms and that such information required to be disclosed by us in reports that we file under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer, or CEO, and our Chief Financial Officer, CFO, to allow timely decisions regarding required disclosure. Management, with the participation of our CEO and CFO, performed an evaluation of the effectiveness of our disclosure controls and procedures as of December 31, 2016. Based on that evaluation and as described below under “Management’s Report on Internal Control over Financial Reporting,” we have identified material weaknesses in our internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f)). These weaknesses involve our lack of experience with U.S. GAAP requirements, as described in more detail in the next section. Solely as a result of these material weaknesses, our management, including our CEO and CFO, concluded that our disclosure controls and procedures were not effective as of December 31, 2016.


Management’s Annual Report on Internal Control Over Financial Reporting.


Our management is responsible for establishing and maintaining adequate internal control over financial reporting. The Company’s internal control over financial reporting is a process designed 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.


The Company’s internal control over financial reporting included policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect transactions and dispositions of assets; (2) provide reasonable assurances that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures are being made only in accordance with authorizations of management and the directors of Logicquest Technology, Inc.; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of Logicquest Technology, Inc.’ assets that could have a material effect on our financial statements.


Because of its inherent limitation, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.


Management assessed the effectiveness of Logicquest Technology, Inc.’s internal control over financial reporting as of December 31, 2016. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework (2013). Based on that evaluation, our management concluded that, due to the material weaknesses described below, our internal control over financial reporting was not effective as of December 31, 2016.


A “material weakness” is a deficiency, or combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements would not be prevented or detected on a timely basis.


Based on management’s assessment of the effectiveness of our internal controls over financial reporting, management concluded that our internal controls over financial reporting were not effective as of December 31, 2016, due to insufficiently qualified accounting and other finance personnel with an appropriate level of U.S. GAAP knowledge and experience, and lack of segregation of duties. Management believes that our lack of experience with U.S. GAAP and lack of segregation of duties constitute material weaknesses in our internal control over financial reporting.


This annual report does not include an attestation report of the Company's registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by the Company's registered public accounting firm pursuant to rules of the Securities Exchange Commission that permit the company to provide only management's report in this annual report.



9



 


Remediation Plan


We consider the following remediation options, or some combination thereof: (i) hiring additional personnel with sufficient U.S. GAAP experience and (ii) implementing ongoing training in U.S. GAAP requirements for our CFO and accounting and other finance personnel.


Changes in Internal Controls Over Financial Reporting


There were no changes that occurred during the fourth quarter of the fiscal year covered by the Annual Report on Form 10-K that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

 

Item 9B. Other Information.


None.



10



 


PART III


Item 10. Directors, Executive Officers and Corporate Governance.


EXECUTIVE OFFICERS AND DIRECTORS


The following table sets forth the name, age, positions and offices or employments as of December 31, 2016, of our executive officers and directors. Members of the Board of Directors are elected and hold office until their successors are elected and qualified. All of the officers serve at the pleasure of the Board of Directors of the Company.


NAME

     

AGE

 

POSITION

Ang Woon Han (a)

 

33

 

Director/Chief Executive Officer/President

 

 

 

 

 

Cheng Yew Siong (b)

 

39

 

Director/Chief Financial Officer


(a)

Effective September 13, 2014, Mr. Ang Woon Han was appointed by the Board of Directors to the offices of Chief Executive Officer.

(b)

Effective September 13, 2014, Mr. Cheng Yew Siong was appointed by the Board of Directors to the offices of Chief Financial Officer


Mr. Ang, Woon Han was appointed as director, CEO and President on September 13, 2014. He served 5 full years as a military officer in both combat and staff positions, and left the force in 2007 to start his first PR and Marketing firm in Singapore, which helped him amass his first pot of gold. He then moved to Hong Kong, where he served as the Marketing Communications and IT Manager for a HK based group of companies. In 2009, he was engaged by China Trends Holdings Limited to take the position of CEO (China Region), heading BOSS Education Limited and its 4 subsidiaries to spearhead the development and sales of the company’s 3C Products. In early 2010, Mr. Ang left BOSS Education to start Wupoxi Group Limited, a career and entrepreneurship services company. The company grew from a small staff of 3 people to over 35 people in 2 years, with 8 business departments and products and services in areas of Publishing, Game Development, Media Production, Training, IT Platforms and Business Networking. The company was valued at close of 100 million RMB by September 2011. In 2012, Mr. Ang was offered the position of CEO (China Region) by IKARI, a Japanese environmental management company and one of the three (3) market leaders in China. Mr. Ang led the company to develop a new range of intelligent products, while helping three (3) of the eight (8) branch offices triple their revenues. In 2013, Mr. Ang joined UTAAP, a Shanghai-based game development company focusing on mobile gaming, as their Vice President for global business development. The company was later successfully sold to Shanda Investments. With a vast experience in the area of business management in multiple industries spanning from Marketing, Media, Information Technology, Education, Environmental Management and Corporate Investments, Mr. Ang now takes the helm as Chairman and CEO of Cheung Sheng Group, He leads the board of directors in the strategic charting of the group’s businesses, as well as the global management body in the implementation of all business operations and projects.


Mr. Cheng, Yew Siong was appointed director and CFO on September 13, 2014. After completing his education in Singapore, Mr. Cheng served two (2) years in the Singapore Police Force as an officer, before leaving the force to start his private sector career path. Mr. Cheng started off as a hardware store manager, providing fixture and interior renovation products and services to the mass consumers. Through hard work and perseverance, he managed to achieve a sales track record of 700 households per annum. From April 2009, Mr. Cheng used his savings to start a Japanese restaurant in Singapore, and maintained the business and its steady revenues and profits until 2013. In 2014, Mr. Cheng was invited by Hong Kong partners to become the co-founder and current managing director of Asia Prestige Limited, a marketing consultancy company based on Hong Kong with an annual turnover of more than 5 million USD.


COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT.


Section 16(a) of the Exchange Act requires our officers, directors and persons who beneficially own more than 10% of our common stock to file reports of ownership and changes in ownership with the SEC. These reporting persons also are required to furnish us with copies of all Section 16(a) forms they file. While the beneficial ownership by our officers and directors has been disclosed in this Form 10-K and other SEC filings, our officers have not filed the required Section 16(a) reports.  Until our officers and directors do so, we are not in compliance with Section 16(a) of the Exchange Act.


CODE OF ETHICS.


We have a Code of Ethics that applies to our principal executive officers and our principal financial officers. We undertake to provide to any person, without charge, upon request, a copy of our Code of Ethics. You may request a copy of our Code of Ethics by mailing your written request to us. Your written request must contain the phrase "Request for a Copy of the Code of Ethics of Logicquest Technology, Inc." Our address is: Logicquest Technology, Inc., 5 Independence Way, Suite 300, Princeton, NJ, U.S.A.



11



 


DIRECTOR INDEPENDENCE.


In June 2007, we increased the size of our Board of Directors to consist of five Directors. We currently have two members of our Board of Directors, who were elected and hold office until their successors are elected and qualified. Three board positions are vacant. The two members of the Board of Directors are Mr. Ang Woon Han and Mr. Cheng Yew Siong. Mr. Ang is the Chairman of the Board of Directors and the Company’s Chief Executive Officer and President. Mr. Cheng is the Company’s Chief Financial Officer. Executive officers are appointed by the Board of Directors and serve until their successors have been duly elected and qualified. There is no family relationship between any of our directors and executive officers.


BOARD OF DIRECTORS MEETINGS.


During the fiscal year ended December 31, 2016, the Board of Directors did not hold any meetings.


NOMINATING COMMITTEE.


We do not have any nominating committee of the Board, or committee performing a similar function. Shareholders may recommend nominees for Director by sending written communications to the company’s Board of Directors to the attention of the Chairman of the Board, Mr. Ang Woon Han at Logicquest Technology, Inc., 5 Independence Way, Suite 300, Princeton, NJ, U.S.A. Every director will participate in the consideration of director nominees.


AUDIT COMMITTEE.


In March 2005, our Board adopted our Audit Committee Charter (the "Charter") which established our Audit Committee. There are no current members of the audit committee and our Board of Directors serves as the audit committee. We do not have an audit committee financial expert serving on its audit committee. We are currently pursuing the recruitment of an independent director who is also a financial expert to be the audit committee.


Members of the Board of Directors acting in the capacity of the Audit Committee have (1) reviewed and discussed the audited financial statements with management; (2) discussed with the independent auditors the matters required to be discussed by the statement on Auditing Standards No. 61, as amended, as adopted by the Public Accounting Oversight Board in Rule 3200T; (3) have received the written disclosures and the letter from the independent accountant required by applicable requirements of the Public Company Accounting Oversight Board regarding the independent accountant’s communications with the audit committee concerning independence, and (4) have discussed with the independent accountant the independent accountant's independence; and based on the review and discussions referred to above, the audit committee recommended to the board of directors that the audited financial statements be included in the company’s annual report on Form 10-K for the last fiscal year for filing with the Commission. The entire Board of Directors acting in the capacity of the Audit Committee is Mr. Ang Woon Han and Mr. Cheng Yew Siong.


COMPENSATION COMMITTEE.


In August 2007, our Board adopted our Compensation Committee with Dale Geary serving as its sole member. The Compensation Committee administers the Company’s incentive plans, sets policies that govern executives’ annual compensation and long-term incentives. Effective October 28, 2009, Mr. Geary resigned as Director and the compensation committee did not hold any meetings during 2016.


SHAREHOLDER COMMUNICATIONS.


Shareholders may send written communications to the company’s Board of Directors to the attention of the Chairman of the Board, Mr. Ang Woon Han. Persons wishing to write to the Board or to a specified director or committee of the Board should send correspondence to the Corporate Secretary at Logicquest Technology, Inc., 5 Independence Way, Suite 300, Princeton, NJ, U.S.A. Electronic submissions of shareholder correspondence will not be accepted.




12



 


Item 11. Executive Compensation.


The following table sets forth the aggregate compensation paid for services rendered to the Company during the last two fiscal years by the Named Executive Officers:


SUMMARY COMPENSATION TABLE


Name and principal position

 

Year

 

Salary ($)

 

All Other
Compensation ($)

 

Total ($)

Ang Woon Han (1)

 

2016

 

65,000

 

-

 

65,000

President/Director

 

2015

 

45,000

 

-

 

45,000

 

 

 

 

 

 

 

 

 

Stephen Sperco

 

2016

 

-

 

-

 

-

Former President/Director

 

2015

 

-

 

-

 

-

 

 

 

 

 

 

 

 

 

Cheng Yew Siong (2)

 

2016

 

-

 

-

 

-

CFO/Director

 

2015

 

-

 

-

 

-

 

 

 

 

 

 

 

 

 

Charles Leibold

 

2016

 

-

 

-

 

-

Former CFO (PFO), Secretary/Director

 

2015

 

-

 

-

 

-

———————

(1)

Effective from May 1, 2015, Mr. Ang Woon Han began receiving a monthly salary of $5,000 and is entitled to an annual wage supplement equivalent to one month’s base salary.

(2)

Mr. Cheng Yew Siong had agreed that until the company begins to attain a balance in cash flow he will not receive any salary.

 

 


OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END DECEMBER 31, 2016


Our Named Executive Officers did not hold any outstanding equity awards as at the year ended December 31, 2016


Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.


The following table sets forth as of information concerning the number of shares of common stock owned beneficially as of March 30, 2017 which was 2,301,968 shares of common stock issued and outstanding that is held by: (i) each person (including any group) known by us to own more than five (5%) of any class of our voting securities, (ii) each of our directors and executive officers, and (iii) our officers and directors as a group. Unless otherwise indicated, the shareholders listed possess sole voting and investment power with respect to the shares shown.


TITLE OR CLASS

 

NAME AND ADDRESS OF
BENEFICIAL OWNER

 

AMOUNT AND
NATURE OF
BENEFICIAL
OWNERSHIP

 

PERCENT
OF CLASS (1)

Common Stock

 

Ang Woon Han

 

1,276,013 Indirect (2)

 

55.4%

Common Stock

 

Cheng Yew Siong

 

0

 

0%

 

 

All executive officers and directors as a group

 

1,276,013

 

55.4%

Common Stock

 

William Koehler

1602 Lynnview Drive, Houston, Texas 77055

 

127,891 Direct

 

5.56%

———————

(1)

The percentage of beneficial ownership of Common Stock is based on 2,301,968 shares of Common Stock outstanding as of March 30, 2017 and includes all shares of Common Stock issuable upon the exercise of outstanding options, warrants or conversion of preferred shares to purchase Common Stock.

(2)

Of the 1,276,013 shares beneficially owned by Mr. Ang Woon Han, our Director, CEO and President (i) 1,203,513 are common shares owned indirectly by Mr. Ang through AST Exchange Agent Co., who is the transfer agent holding shares to be exchanged upon the surrender of the pre-reverse stock split certificates, and (ii) 72,500 are common shares issuable upon the conversion of preferred shares.

 

 

On September 11, 2014, SAIC, the Company’s majority shareholder, sold to Mr. Ang Woon Han 1,203,513 shares of common stock, 48 shares of Series C Convertible preferred stock and 10 shares of Series D Convertible preferred stock. As a result, Mr. Ang owns 52% of our common stock without taking into account the super voting power of the Preferred stock, and 78% when taking into account the super voting power of the Preferred Stock.



13



 


On March 19, 2015, the Company’s outstanding shares had changed from 46,033,565 to 2,301,968 following a reverse stock split of 1:20.


Item 13. Certain Relationships and Related Transactions, and Director Independence.


During the years ended December 31, 2016 and 2015, the Company engaged in related party transactions as follows:


Accrued liabilities to related parties:


As of December 31, 2016 and as of December 31, 2015, $380,196 and $204,587 are payable by us to Logicquest Technology Limited in regards to expenses that were paid on our behalf by Logicquest Technology Limited, a company controlled by the Company’s Chief Financial Officer, Mr. Cheng Yew Siong.


During the year ended December 31, 2016 and 2015, total salary paid to chief executive officer is $65,000 and $45,000, respectively. The entire amount was paid by Logicquest Technology Limited and was included in the ending balance of due to related party as of December 31, 2016 and 2015.


Memorandum of Understanding with Logicquest Technology Limited


On March 31, 2016, the Company entered into a Memorandum of Understanding/Letter of Intent with Logicquest Technology Limited, pursuant to which the Company intended to effect a business combination (the "Transaction"). The Transaction was to be effected in one of several ways, whether by asset acquisition, by merger of Logicquest Technology Limited and the Company, or by share purchase whereby the Company would purchase the shares of Logicquest Technology Limited from its shareholders for cash and/or for shares of the Company. On July 22, 2016, the Company and Logicquest Technology Limited agreed to extend the closing deadline stipulated in the Letter of Intent from June 30, 2016 to October 31, 2016. On October 31, 2016 the Letter of Intent expired prior to the completion of a definitive agreement to complete the Transaction. As at the date of this report, we have no additional plans to pursue a business combination with Logicquest Technology Limited.


Equity Related:


As of December 31, 2016, the Company has outstanding: (i) 2,301,968 shares of common stock and, (ii) preferred stock that are convertible into 72,500 shares of common stock, resulting in on a fully diluted basis, 2,374,468 shares of common stock. The Company has 200,000,000 shares of common stock authorized by our Articles of Incorporation.


DIRECTOR INDEPENDENCE.


In June 2007, we increased the size of our Board of Directors to consist of five Directors. We currently have two members of our Board of Directors, who were elected and hold office until their successors are elected and qualified. There are three vacancies. The two members of the Board of Directors are Mr. Ang Woon Han and Mr. Cheng Yew Siong. Effective Sep 11, 2014, Mr. Ang Woon Han was appointed Chairman of the Board and the titles of CEO and President were combined, and Mr. Cheng Yew Siong was appointed CFO. There is no family relationship between any of our directors and executive officers.

 

In March 2005, our Board adopted our Audit Committee Charter which established our Audit Committee. There are no current members of the audit committee and our Board of Directors serves as the audit committee.


In August 2007, our Board adopted our Compensation Committee. There are no current members of the compensation committee and our Board of Directors serves as the compensation committee.




14



 


Item 14. Principal Accountant Fees and Services.


OUR INDEPENDENT ACCOUNTANT


In 2005, our Board of Directors selected as our independent accountant the CPA firm of Malone & Bailey, PC ("MB") of Houston, Texas. MB audited our financial statements for the years ended December 31, 2016 and 2015.


1. AUDIT FEES.


Our audit fees for the years ended December 31, 2016 and 2015 were as follows:


2016

 

 

2015

 

$

8,500

 

 

$

8,500

 


2. TAX FEES.


Our tax return fees for the years ended December 31, 2016 and 2015 were as follows:


2016

 

 

2015

 

$

-

 

 

$

-

 


3. ALL OTHER FEES.


2016

 

 

2015

 

$

-

 

 

$

-

 


5(I). PRE-APPROVAL POLICIES.


Our Audit Committee (or the members of the board of directors acting in the capacity of the Audit Committee) does not pre-approve any work of our independent registered public accounting firm, but rather approves independent auditor engagements before each engagement. The work of our Audit Committee commenced on June 1, 2005.


5(II). PERCENTAGE OF SERVICES APPROVED BY OUR AUDIT COMMITTEE.


There were no services performed by our independent registered public accounting firm of the type described in Item 9(e)(2) of Schedule 14A. Our Audit Committee (or the members of the board of directors acting in the capacity of the Audit Committee) considers that the work done for us by MB is compatible with maintaining MB's independence.





15



 


PART IV


Item 15. Exhibits and Financial Statement Schedules.


Exhibit

 

Exhibit

Number

 

Description

 

 

 

31.1

 

Certification pursuant to Section 13a-14 of CEO

31.2

 

Certification pursuant to Section 13a-14 of CFO

32.1

 

Certification pursuant to Section 1350 of CEO

32.2

 

Certification pursuant to Section 1350 of CFO

101

 

XBRL





16



 



SIGNATURES


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 in Houston, Texas.


 

LOGICQUEST TECHNOLOGY, INC.

 

 

 

March 30, 2017

By:

/s/ Ang Woon Han

 

 

Ang Woon Han

 

 

Director, Chief Executive Officer and President


In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.


March 30, 2017

By:

/s/ Ang Woon Han

 

 

Ang Woon Han

 

 

Director, Chief Executive Officer and President

 

 

 

March 30, 2017

By:

/s/ Cheng Yew Siong

 

 

Cheng Yew Siong  

 

 

Director, Chief Financial Officer and Principal Accounting Officer









17



 


EXHIBIT INDEX


Exhibit

 

Exhibit

Number

 

Description

 

 

 

31.1

 

Certification pursuant to Section 13a-14 of CEO

31.2

 

Certification pursuant to Section 13a-14 of CFO

32.1

 

Certification pursuant to Section 1350 of CEO

32.2

 

Certification pursuant to Section 1350 of CFO

101

 

XBRL











EX-31.1 2 logq_ex31z1.htm CERTIFICATION Certification

EXHIBIT 31.1


Certification of

Principal Executive Officer

Of Logicquest Technology, Inc.

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002


I, Ang Woon Han, certify that:


1. I have reviewed this Annual Report on Form 10-K, of Logicquest Technology, Inc. for the year ended December 31, 2016;


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 Quarterly 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. The registrant’s other certifying officer(s) and I are 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 we 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 Quarterly 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 Quarterly 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 quarter in the case of an Annual Report) that has materially affected, or is likely to materially affect, the registrant’s internal control over financial reporting; and


5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of small business issuer’s board of directors (or persons performing the equivalent function):


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.


Dated: March 30, 2017


By /s/ Ang Woon Han

Ang Woon Han

Chief Executive Officer

(Principal Executive Officer)


 



EX-31.2 3 logq_ex31z2.htm CERTIFICATION Certification

EXHIBIT 31.2


Certification of

Principal Financial Officer

Of Logicquest Technology, Inc.

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002


I, Cheng Sew Siong, certify that:


1. I have reviewed this Annual Report on Form 10-K of Logicquest Technology, Inc. for the year ended December 31, 2016;


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 Quarterly 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. The registrant’s other certifying officer(s) and I are 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 we 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 Quarterly 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 Quarterly 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 quarter in the case of an Annual Report) that has materially affected, or is likely to materially affect, the registrant’s internal control over financial reporting; and


5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of small business issuer’s board of directors (or persons performing the equivalent function):


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.



Dated: March 30, 2017


By: /s/ Cheng Yew Siong

Cheng Yew Siong

Chief Financial Officer

(Principal Financial Officer)


 



EX-32.1 4 logq_ex32z1.htm CERTIFICATION Certification

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



In connection with the Annual Report of Logicquest Technology, Inc. (the “Company”) on Form 10-K for the year ended December 31, 2016, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), each of the undersigned officers of the Company certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to such officer’s knowledge:


 

(1) 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 the Company as of the dates and for the periods expressed in the Report.

 




Dated:  March 30, 2017


By: /s/Ang Woon Han

Ang Woon Han

Chief Executive Officer

(Principal Executive Officer)






EX-32.2 5 logq_ex32z2.htm CERTIFICATION Certification

EXHIBIT 32.2

 

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002



In connection with the Annual Report of Logicquest Technology, Inc. (the “Company”) on Form 10-K for the year ended December 31, 2016, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), each of the undersigned officers of the Company certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to such officer’s knowledge:


 

(1) 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 the Company as of the dates and for the periods expressed in the Report.

 




Dated:  March 30, 2017


By: /s/ Cheng Yew Siong

Cheng Yew Siong

Acting Principal Financial Officer

(Principal Executive and Financial Officer)



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The financial statements contained herein do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might be necessary should we be unable to continue in existence. Our ability to continue as a going concern is dependent upon our ability to generate sufficient cash flows to meet our obligations on a timely basis, to obtain additional financing as may be required, and ultimately to attain profitable operations. However, there is no assurance that profitable operations or sufficient cash flows will occur in the future.</p> <p style="margin: 0px"><br /></p> <p style="margin: 0px">Our current operations are primarily funded by Logicquest Technology Limited, a company controlled by the Company&#146;s Chief Financial Officer, Mr. Cheng&#160;Yew Siong.</p> <p style="margin: 0px">6. <u>INTANGIBLE ASSETS</u></p> <p style="margin: 0px"><br /></p> <p style="margin: 0px">The following table presents the detail of intangible assets:</p> <p style="margin: 0px"><br /></p> <table cellpadding="0" cellspacing="0" style="margin-top: 0px; font-size: 10pt; width: 100%"><tr style="height: 0px; font-size: 0"><td></td><td style="width: 8.26px"></td><td style="width: 8.46px"></td><td style="width: 75.46px"></td><td style="width: 8.33px"></td><td style="width: 8.46px"></td><td style="width: 8.46px"></td><td style="width: 70.53px"></td><td style="width: 4.53px"></td></tr> <tr><td style="margin-top: 0px; vertical-align: bottom"><p style="margin: 0px; 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(&#147;we&#148;, &#147;our&#148;, the &#147;Company&#34;) is a Nevada Corporation that previously consisted of the networking service (carrier/circuit) business. It provided internet connectivity to corporate clients on a subscription basis; essentially operating as a value added provider until it ceased operations effective June 30, 2014.</p> <p style="margin: 0px"><br /></p> <p style="margin: 0px">The Company was originally incorporated as Solis Communications, Inc. on July 23, 2001 and adopted a name change to Crescent Communications Inc. upon completion of a reverse acquisition of Berens Industries, Inc. In 2004, we changed our name to Bluegate Corporation (&#147;Bluegate&#148;). On March 19, 2015, we changed our name to Logicquest Technology, Inc. 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Is Entity a Voluntary Filer? Is Entity's Reporting Status Current? 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[Member] Asset Sale and Purchase Agreement [Member] Member of Board of Directors [Member] Chief Executive Officer of the Company [Member] Former Member of Board of Directors [Member] General and Administrative Fees [Member] Late charge owed on any late interest payments. Logicquest Technology Ltd. [Member] Monthly rent payment owed on property. Number of common shares sold by majority shareholder to Chief Executive Officer. Number of common shares sold expressed as percentage of all issued and outstanding common stock. Number of Series C Convertible Preferred Stock sold to Chief Executive Officer. Number of Series D Convertible Preferred Stock sold to Chief Executive Officer. Number of shares authorized by Articles of Incorporation. The amount of the limitations on the use of all operating loss carryforwards available to reduce future taxable income. The accounting policy for related party transactions. Rent [Member] Rent Payable [Member] SAI Corporation (SAIC), a corporation controlled by Bluegate's CEO [Member] Sperco, LLC (SLLC) an entity controlled by Bluegate's CEO [Member] Tabular disclosure of financial results having a going concern impact on the company. Series C Convertible Non-Redeemable preferred stock Series D Convertible Non-Redeemable preferred stock 2005 Stock Option Plan [Member] Undesignated preferred stock The amount by which current liabilities exceed current assets. Prepayment and operating expenses directly paid by related party. Transfer of prepaid expenses to intangible assets. Assets, Current Assets Liabilities, Current Liabilities and Equity Operating Income (Loss) Interest Expense Shares, Outstanding Costs and Expenses Increase (Decrease) in Accrued Liabilities Net Cash Provided by (Used in) Operating Activities Cash and Cash Equivalents, Period Increase (Decrease) Cash and Cash Equivalents, at Carrying Value Rent Payable Income Tax, Policy [Policy Text Block] WorkingCapitalDeficit Finite-Lived Intangible Assets, Accumulated Amortization Deferred Tax Assets, Valuation Allowance Deferred Tax Assets, Net of Valuation Allowance EX-101.PRE 11 logq-20161231_pre.xml XBRL PRESENTATION FILE XML 12 R1.htm IDEA: XBRL DOCUMENT v3.7.0.1
Document and Entity Information - USD ($)
12 Months Ended
Dec. 31, 2016
Mar. 30, 2017
Jun. 30, 2016
Document And Entity Information      
Entity Registrant Name Logicquest Technology, Inc.    
Entity Central Index Key 0000768216    
Document Type 10-K    
Document Period End Date Dec. 31, 2016    
Amendment Flag false    
Current Fiscal Year End Date --12-31    
Is Entity a Well-known Seasoned Issuer? No    
Is Entity a Voluntary Filer? Yes    
Is Entity's Reporting Status Current? Yes    
Entity Filer Category Smaller Reporting Company    
Entity Public Float     $ 205,191
Entity Common Stock, Shares Outstanding   2,301,968  
Document Fiscal Period Focus FY    
Document Fiscal Year Focus 2016    
XML 13 R2.htm IDEA: XBRL DOCUMENT v3.7.0.1
BALANCE SHEETS - USD ($)
Dec. 31, 2016
Dec. 31, 2015
Current assets:    
Prepaid expenses and other current assets $ 7,394 $ 29,032
Total current assets 7,394 29,032
Intangible assets, net 20,583
Total assets 27,977 29,032
Current liabilities:    
Accrued liabilities 2,518,111 2,197,507
Due to related party 380,196 204,587
Note payable 1,337,600 1,337,600
Total current liabilities 4,235,907 3,739,694
Stockholders' deficit:    
Preferred stock
Common stock, $0.001 par value, 200,000,000 shares authorized, 2,301,968 shares issued and outstanding at December 31, 2016 and 2015 [1] 2,302 2,302
Additional paid-in capital 22,487,937 22,487,937
Accumulated deficit (26,698,169) (26,200,901)
Total stockholders' deficit (4,207,930) (3,710,662)
Total liabilities and stockholders' deficit 27,977 29,032
Undesignated preferred stock [Member]    
Stockholders' deficit:    
Preferred stock
Series C Convertible Non-Redeemable preferred stock [Member]    
Stockholders' deficit:    
Preferred stock
Series D Convertible Non-Redeemable preferred stock [Member]    
Stockholders' deficit:    
Preferred stock
[1] On March 19, 2015, the Company executed a 1-for-20 reverse stock split of the Company's common stock. All common stock data included in these financial statements has been restated to give effect to the reverse stock split.
XML 14 R3.htm IDEA: XBRL DOCUMENT v3.7.0.1
BALANCE SHEETS (Parenthetical) - USD ($)
Dec. 31, 2016
Dec. 31, 2015
Common stock, par value per share $ 0.001 $ 0.001
Common stock, shares authorized 200,000,000 200,000,000
Common stock, shares issued 2,301,968 2,301,968
Common stock, shares outstanding 2,301,968 2,301,968
Undesignated preferred stock [Member]    
Preferred stock, par value per share $ 0.001 $ 0.001
Preferred stock, shares authorized 9,999,942 9,999,942
Preferred stock, shares issued 0 0
Preferred stock, shares outstanding 0 0
Series C Convertible Non-Redeemable preferred stock [Member]    
Preferred stock, par value per share $ 0.001 $ 0.001
Preferred stock, shares authorized 48 48
Preferred stock, shares issued 48 48
Preferred stock, shares outstanding 48 48
Preferred stock, per share liquidation preference $ 12,500 $ 12,500
Preferred stock, aggregate liquidation value $ 600,000  
Series D Convertible Non-Redeemable preferred stock [Member]    
Preferred stock, par value per share $ 0.001 $ 0.001
Preferred stock, shares authorized 10 10
Preferred stock, shares issued 10 10
Preferred stock, shares outstanding 10 10
Preferred stock, per share liquidation preference $ 8,725 $ 8,725
Preferred stock, aggregate liquidation value $ 87,250  
XML 15 R4.htm IDEA: XBRL DOCUMENT v3.7.0.1
STATEMENTS OF OPERATIONS - USD ($)
12 Months Ended
Dec. 31, 2016
Dec. 31, 2015
Operating expenses    
Selling, general and administrative expenses $ 176,078 $ 165,787
Loss from operations (176,078) (165,787)
Interest expense (321,190) (320,640)
Net loss $ (497,268) $ (486,427)
Net loss per share - basic and diluted [1] $ (0.22) $ (0.21)
Basic and diluted weighted average shares outstanding 2,301,968 2,301,968
[1] On March 19, 2015, the Company executed a 1-for-20 reverse stock split of the Company's common stock. All per share data included in these financial statements has been restated to give effect to the reverse stock split.
XML 16 R5.htm IDEA: XBRL DOCUMENT v3.7.0.1
STATEMENTS OF STOCKHOLDERS' DEFICIT - USD ($)
Common Stock [Member]
Series C Preferred Stock [Member]
Series D Preferred Stock [Member]
Additional Paid-In Capital [Member]
Accumulated Deficit [Member]
Total
Balance at Dec. 31, 2014 $ 2,302 $ 22,487,937 $ (25,714,474) $ (3,224,235)
Balance, shares at Dec. 31, 2014 2,301,849 48 10      
Share adjustment        
Share adjustment, shares 119          
Net loss         (486,427) (486,427)
Balance at Dec. 31, 2015 $ 2,302 22,487,937 (26,200,901) (3,710,662)
Balance, shares at Dec. 31, 2015 2,301,968 48 10      
Net loss         (497,268) (497,268)
Balance at Dec. 31, 2016 $ 2,302 $ 22,487,937 $ (26,698,169) $ (4,207,930)
Balance, shares at Dec. 31, 2016 2,301,968 48 10      
XML 17 R6.htm IDEA: XBRL DOCUMENT v3.7.0.1
STATEMENTS OF CASH FLOWS - USD ($)
12 Months Ended
Dec. 31, 2016
Dec. 31, 2015
Cash flows from operating activities:    
Net loss $ (497,268) $ (486,427)
Adjustments to reconcile net loss to net cash used in operating activities:    
Amortization 1,890
Changes in operating assets and liabilities:    
Prepaid expenses and other current assets 13,219 5,585
Accrued liabilities 482,159 480,842
Net cash used in operating activities
Net decrease in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
Supplemental Disclosure of Cash Flows Information:    
Cash paid for interest
Cash paid for income taxes
Non-cash transactions:    
Transfer of prepaid expenses to intangible assets 22,473
Prepayment and operating expenses directly paid by related party $ 175,609 $ 186,587
XML 18 R7.htm IDEA: XBRL DOCUMENT v3.7.0.1
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
12 Months Ended
Dec. 31, 2016
Accounting Policies [Abstract]  
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES


Logicquest Technology, Inc. (“we”, “our”, the “Company") is a Nevada Corporation that previously consisted of the networking service (carrier/circuit) business. It provided internet connectivity to corporate clients on a subscription basis; essentially operating as a value added provider until it ceased operations effective June 30, 2014.


The Company was originally incorporated as Solis Communications, Inc. on July 23, 2001 and adopted a name change to Crescent Communications Inc. upon completion of a reverse acquisition of Berens Industries, Inc. In 2004, we changed our name to Bluegate Corporation (“Bluegate”). On March 19, 2015, we changed our name to Logicquest Technology, Inc. (“Logicquest”).


Following is a summary of the Company's significant accounting policies:


SIGNIFICANT ESTIMATES


The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. 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 dates of the financial statements and the reported amounts of revenues and expenses during the periods. Actual results could differ from estimates making it reasonably possible that a change in the estimates could occur in the near term.


RELATED PARTY TRANSACTIONS


A related party is generally defined as (i) any person that holds 10% or more of the Company’s securities and their immediate families, (ii) the Company’s management, (iii) someone that directly or indirectly controls, is controlled by or is under common control with the Company, or (iv) anyone who can significantly influence the financial and operating decisions of the Company. A transaction is considered to be a related party transaction when there is a transfer of resources or obligations between related parties.


FAIR VALUE OF FINANCIAL INSTRUMENTS


For certain of the Company’s financial instruments, including prepaid expenses and other current assets and accrued liabilities, the carrying amounts approximate fair values due to their short maturities.


Transactions involving related parties cannot be presumed to be carried out on an arm's-length basis, as the requisite conditions of competitive, free-market dealings may not exist. Representations about transactions with related parties, if made, shall not imply that the related party transactions were consummated on terms equivalent to those that prevail in arm's-length transactions unless such representations can be substantiated.


It is not, however, practical to determine the fair value of amounts due to  related parties and lease and management arrangement with related parties, if any, due to their related party nature.


INCOME TAXES


The Company uses the liability method of accounting for income taxes. Under this method, deferred income taxes are recorded to reflect the tax consequences on future years of temporary differences between the tax basis of assets and liabilities and their financial amounts at year-end. The Company provides a valuation allowance to reduce deferred tax assets to their net realizable value.


The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such positions are then measured based on the largest benefit that has a greater than 50% likelihood of being realized upon settlement.


STOCK-BASED COMPENSATION


Accounting Standard 718, “Accounting for Stock-Based Compensation” (“ASC 718”) established financial accounting and reporting standards for stock-based employee compensation plans. It defines a fair value based method of accounting for an employee stock option or similar equity instrument. ASC 718 requires companies to recognize in the statement of operations the grant-date fair value of stock options and other equity based compensation. The Company accounts for compensation cost for stock option plans in accordance with ASC 718.


The Company accounts for share based compensation to non-employees in accordance with Accounting Standard 505-50 “Accounting for Equity Instruments Issued to Non-Employees for Acquiring, or in Conjunction with Selling, Goods or Services”. The final measurement date for the fair value of equity instruments with performance criteria is the date that each performance commitment for such equity instrument is satisfied or there is a significant disincentive for non-performance.


LOSS PER SHARE


Basic and diluted net loss per share is computed on the basis of the weighted average number of shares of common stock outstanding during each period. Potentially dilutive options that were outstanding during 2016 and 2015 were not considered in the calculation of diluted earnings per share because the Company's net loss rendered their impact anti-dilutive. Accordingly, basic and diluted losses per share were identical for the years ended December 31, 2016 and 2015.


RECLASSIFICATIONS


Certain prior year amounts have been reclassified to conform to the current period presentation. These reclassifications had no impact on net earnings and financial position.


RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS


The Company does not expect any recent accounting pronouncements to have a material impact to its financial position or result of operations.


XML 19 R8.htm IDEA: XBRL DOCUMENT v3.7.0.1
GOING CONCERN CONSIDERATIONS
12 Months Ended
Dec. 31, 2016
Going Concern Considerations  
GOING CONCERN CONSIDERATIONS

2. GOING CONCERN CONSIDERATIONS


During the years ended December 31, 2016 and 2015, we have been unable to generate cash flows sufficient to support our operations and have been dependent on debt raised from a related party. We experienced negative financial results as follows:


 

 

2016

 

 

2015

 

Net loss

 

$

(497,268

)

 

$

(486,427

)

Negative working capital

 

 

(4,228,513

)

 

 

(3,710,662

)

Stockholders’ deficit

 

 

(4,207,930

)

 

 

(3,710,662

)


These factors raise substantial doubt about our ability to continue as a going concern. The financial statements contained herein do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might be necessary should we be unable to continue in existence. Our ability to continue as a going concern is dependent upon our ability to generate sufficient cash flows to meet our obligations on a timely basis, to obtain additional financing as may be required, and ultimately to attain profitable operations. However, there is no assurance that profitable operations or sufficient cash flows will occur in the future.


Our current operations are primarily funded by Logicquest Technology Limited, a company controlled by the Company’s Chief Financial Officer, Mr. Cheng Yew Siong.

XML 20 R9.htm IDEA: XBRL DOCUMENT v3.7.0.1
ACCRUED LIABILITIES
12 Months Ended
Dec. 31, 2016
Payables and Accruals [Abstract]  
ACCRUED LIABILITIES

3. ACCRUED LIABILITIES


The accrued liabilities are summarized below:


 

 

12/31/2016

 

 

12/31/2015

 

Accrued interest on note payable

 

$

1,667,083

 

 

$

1,345,893

 

Accrued general and administrative expenses

 

 

123,528

 

 

 

124,114

 

Other payable

 

 

727,500

 

 

 

727,500

 

 

 

$

2,518,111

 

 

$

2,197,507

 

 

The other payable balance represented accounts payable to related party owed to Sperco, LLC (“SLLC”) (an entity controlled by Stephen J. Sperco, the Company’s former CEO/President/Director). On September 11, 2014, in connection with the change in ownership, the payable to related party in the amount of $727,500 was assigned to Tang Chuan Choon, a third party.

XML 21 R10.htm IDEA: XBRL DOCUMENT v3.7.0.1
NOTE PAYABLE
12 Months Ended
Dec. 31, 2016
Debt Disclosure [Abstract]  
NOTE PAYABLE

4. NOTE PAYABLE


The Company’s note payable balance is $1,337,600 at December 31, 2016 and 2015. The note payable is unsecured, bears 15% interest per annum and is due on demand. The Company agreed to pay a late charge in the amount of $10,000 on any interest payment more than 15 days’ delinquent. During the year ended December 31, 2016 and 2015, the Company incurred interest expenses of $321,190 and $320,640, respectively. As of December 31, 2016 and 2015, the accrued interest balance was $1,667,083 and $1,345,893, respectively. The accrued interest and late charge are due on demand and are included in accrued liabilities.

XML 22 R11.htm IDEA: XBRL DOCUMENT v3.7.0.1
RELATED PARTY TRANSACTIONS
12 Months Ended
Dec. 31, 2016
Related Party Transactions [Abstract]  
RELATED PARTY TRANSACTIONS

5. RELATED PARTY TRANSACTIONS


Due to Relate Party


The due to related party is summarized below:


 

 

12/31/2016

 

 

12/31/2015

 

 

 

 

 

 

 

 

 Fees paid by Logicquest Technology Limited, a company controlled by the Company’s Chief Financial Officer, Cheng Yew Siong, on behalf of the Company

 

$

380,196

 

 

$

204,587

 


During the years ended December 31, 2016 and 2015, the Company recorded salary payment to Chief Executive Officer in the amount of $65,000 and $45,000, respectively. The entire amount was paid by Logicquest Technology Limited and was included in the ending balance of due to related party as of December 31, 2016 and 2015.


 Memorandum of Understanding with Logicquest Technology Limited


On March 31, 2016, the Company entered into a Memorandum of Understanding/Letter of Intent with Logicquest Technology Limited, pursuant to which the Company intended to effect a business combination (the "Transaction"). The Transaction was to be effected in one of several ways, whether by asset acquisition, by merger of Logicquest Technology Limited and the Company, or by share purchase whereby the Company would purchase the shares of Logicquest Technology Limited from its shareholders for cash and/or for shares of the Company. On July 22, 2016, the Company and Logicquest Technology Limited agreed to extend the closing deadline stipulated in the Letter of Intent from June 30, 2016 to October 31, 2016. On October 31, 2016 the Letter of Intent expired prior to the completion of a definitive agreement to complete the Transaction. As at the date of this report, we have no additional plans to pursue a business combination with Logicquest Technology Limited.

XML 23 R12.htm IDEA: XBRL DOCUMENT v3.7.0.1
INTANGIBLE ASSETS
12 Months Ended
Dec. 31, 2016
Goodwill and Intangible Assets Disclosure [Abstract]  
INTANGIBLE ASSETS

6. INTANGIBLE ASSETS


The following table presents the detail of intangible assets:


   

  

12/31/2016

  

  

12/31/2015

  

Trademarks

  

 

 

  

  

 

 

  

Gross Carrying Value

  

$

22,473

 

  

$

-

 

Less: Accumulated Amortization Total

  

 

(1,890

)

  

 

-

 

 

 

 

 

 

 

 

 

 

Trademarks, net

 

$

20,583

 

 

$

-

 

XML 24 R13.htm IDEA: XBRL DOCUMENT v3.7.0.1
INCOME TAXES
12 Months Ended
Dec. 31, 2016
Income Tax Disclosure [Abstract]  
INCOME TAXES

7. INCOME TAXES


The composition of deferred tax assets at December 31, 2016 and 2015 were as follows:


 

 

2016

 

 

2015

 

Deferred tax assets

 

 

 

 

 

 

Benefit from carryforward of net operating loss

 

$

2,917,000

 

 

$

2,748,000,

 

Less valuation allowance

 

 

(2,917,000

)

 

 

(2,748,000

)

Net deferred tax asset

 

$

-

 

 

$

-

 


The difference between the income tax benefit in the accompanying statement of operations and the amount that would result if the U.S. Federal statutory rate of 34% were applied to pre-tax loss for 2016 and 2015 is attributable to the valuation allowance.


At December 31, 2016, for federal income tax and alternative minimum tax reporting purposes, the Company has $8,581,000 in unused net operating losses available for carryforward to future years which will expire in various years through 2036.

XML 25 R14.htm IDEA: XBRL DOCUMENT v3.7.0.1
STOCKHOLDERS' DEFICIT
12 Months Ended
Dec. 31, 2016
Stockholders' Equity Note [Abstract]  
STOCKHOLDERS' DEFICIT

8. STOCKHOLDERS’ DEFICIT


As of December 31, 2016, the Company has outstanding: (i) 2,301,968 shares of common stock and, (ii) preferred stock that are convertible into 72,500 shares of common stock, resulting in on a fully diluted basis, 2,374,468 shares of common stock. The Company has 200,000,000 shares of common stock authorized by our Articles of Incorporation.


On March 19, 2015, the Company executed a 1-for-20 reverse stock split of the Company’s common stock. As a result, there was an additional 119 shares of common stock issued due to the roundup feature of the reverse stock split. All common stock data included in these financial statements have been restated to give effect to the reverse stock split.

XML 26 R15.htm IDEA: XBRL DOCUMENT v3.7.0.1
COMMITMENTS AND CONTINGENCIES
12 Months Ended
Dec. 31, 2016
Commitments and Contingencies Disclosure [Abstract]  
COMMITMENTS AND CONTINGENCIES

9. COMMITMENTS AND CONTINGENCIES


Lease Commitment


On May 27, 2016, the Company entered into an agreement for the lease of a virtual office in Princeton, NJ for monthly rental of $155. The lease began on May 12, 2016 in month to month basis and can be cancelled on either party’s discretion with a three months’ notice.

XML 27 R16.htm IDEA: XBRL DOCUMENT v3.7.0.1
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)
12 Months Ended
Dec. 31, 2016
Accounting Policies [Abstract]  
SIGNIFICANT ESTIMATES

SIGNIFICANT ESTIMATES


The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. 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 dates of the financial statements and the reported amounts of revenues and expenses during the periods. Actual results could differ from estimates making it reasonably possible that a change in the estimates could occur in the near term.

RELATED PARTY TRANSACTIONS

RELATED PARTY TRANSACTIONS


A related party is generally defined as (i) any person that holds 10% or more of the Company’s securities and their immediate families, (ii) the Company’s management, (iii) someone that directly or indirectly controls, is controlled by or is under common control with the Company, or (iv) anyone who can significantly influence the financial and operating decisions of the Company. A transaction is considered to be a related party transaction when there is a transfer of resources or obligations between related parties.

FAIR VALUE OF FINANCIAL INSTRUMENTS

FAIR VALUE OF FINANCIAL INSTRUMENTS


For certain of the Company’s financial instruments, including prepaid expenses and other current assets and accrued liabilities, the carrying amounts approximate fair values due to their short maturities.


Transactions involving related parties cannot be presumed to be carried out on an arm's-length basis, as the requisite conditions of competitive, free-market dealings may not exist. Representations about transactions with related parties, if made, shall not imply that the related party transactions were consummated on terms equivalent to those that prevail in arm's-length transactions unless such representations can be substantiated.


It is not, however, practical to determine the fair value of amounts due to  related parties and lease and management arrangement with related parties, if any, due to their related party nature.

INCOME TAXES

INCOME TAXES


The Company uses the liability method of accounting for income taxes. Under this method, deferred income taxes are recorded to reflect the tax consequences on future years of temporary differences between the tax basis of assets and liabilities and their financial amounts at year-end. The Company provides a valuation allowance to reduce deferred tax assets to their net realizable value.


The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such positions are then measured based on the largest benefit that has a greater than 50% likelihood of being realized upon settlement.

STOCK-BASED COMPENSATION

STOCK-BASED COMPENSATION


Accounting Standard 718, “Accounting for Stock-Based Compensation” (“ASC 718”) established financial accounting and reporting standards for stock-based employee compensation plans. It defines a fair value based method of accounting for an employee stock option or similar equity instrument. ASC 718 requires companies to recognize in the statement of operations the grant-date fair value of stock options and other equity based compensation. The Company accounts for compensation cost for stock option plans in accordance with ASC 718.


The Company accounts for share based compensation to non-employees in accordance with Accounting Standard 505-50 “Accounting for Equity Instruments Issued to Non-Employees for Acquiring, or in Conjunction with Selling, Goods or Services”. The final measurement date for the fair value of equity instruments with performance criteria is the date that each performance commitment for such equity instrument is satisfied or there is a significant disincentive for non-performance.

LOSS PER SHARE

LOSS PER SHARE


Basic and diluted net loss per share is computed on the basis of the weighted average number of shares of common stock outstanding during each period. Potentially dilutive options that were outstanding during 2016 and 2015 were not considered in the calculation of diluted earnings per share because the Company's net loss rendered their impact anti-dilutive. Accordingly, basic and diluted losses per share were identical for the years ended December 31, 2016 and 2015.

RECLASSIFICATIONS

RECLASSIFICATIONS


Certain prior year amounts have been reclassified to conform to the current period presentation. These reclassifications had no impact on net earnings and financial position.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS


The Company does not expect any recent accounting pronouncements to have a material impact to its financial position or result of operations.

XML 28 R17.htm IDEA: XBRL DOCUMENT v3.7.0.1
GOING CONCERN CONSIDERATIONS (Tables)
12 Months Ended
Dec. 31, 2016
Going Concern Considerations  
Schedule of Financial Results

We experienced negative financial results as follows:


 

 

2016

 

 

2015

 

Net loss

 

$

(497,268

)

 

$

(486,427

)

Negative working capital

 

 

(4,228,513

)

 

 

(3,710,662

)

Stockholders’ deficit

 

 

(4,207,930

)

 

 

(3,710,662

)

XML 29 R18.htm IDEA: XBRL DOCUMENT v3.7.0.1
ACCRUED LIABILITIES (Tables)
12 Months Ended
Dec. 31, 2016
Payables and Accruals [Abstract]  
Schedule of Accrued Liabilities

The accrued liabilities are summarized below:


 

 

12/31/2016

 

 

12/31/2015

 

Accrued interest on note payable

 

$

1,667,083

 

 

$

1,345,893

 

Accrued general and administrative expenses

 

 

123,528

 

 

 

124,114

 

Other payable

 

 

727,500

 

 

 

727,500

 

 

 

$

2,518,111

 

 

$

2,197,507

 

 

XML 30 R19.htm IDEA: XBRL DOCUMENT v3.7.0.1
RELATED PARTY TRANSACTIONS (Tables)
12 Months Ended
Dec. 31, 2016
Related Party Transactions [Abstract]  
Schedule of Related Party Transactions

The due to related party is summarized below:


 

 

12/31/2016

 

 

12/31/2015

 

 

 

 

 

 

 

 

 Fees paid by Logicquest Technology Limited, a company controlled by the Company’s Chief Financial Officer, Cheng Yew Siong, on behalf of the Company

 

$

380,196

 

 

$

204,587

 

XML 31 R20.htm IDEA: XBRL DOCUMENT v3.7.0.1
INTANGIBLE ASSETS (Tables)
12 Months Ended
Dec. 31, 2016
Goodwill and Intangible Assets Disclosure [Abstract]  
Schedule of Intangible Assets

The following table presents the detail of intangible assets:


   

  

12/31/2016

  

  

12/31/2015

  

Trademarks

  

 

 

  

  

 

 

  

Gross Carrying Value

  

$

22,473

 

  

$

-

 

Less: Accumulated Amortization Total

  

 

(1,890

)

  

 

-

 

 

 

 

 

 

 

 

 

 

Trademarks, net

 

$

20,583

 

 

$

-

 

XML 32 R21.htm IDEA: XBRL DOCUMENT v3.7.0.1
INCOME TAXES (Tables)
12 Months Ended
Dec. 31, 2016
Income Tax Disclosure [Abstract]  
Schedule of Deferred Tax Assets

The composition of deferred tax assets at December 31, 2016 and 2015 were as follows:


 

 

2016

 

 

2015

 

Deferred tax assets

 

 

 

 

 

 

Benefit from carryforward of net operating loss

 

$

2,917,000

 

 

$

2,748,000,

 

Less valuation allowance

 

 

(2,917,000

)

 

 

(2,748,000

)

Net deferred tax asset

 

$

-

 

 

$

-

 

XML 33 R22.htm IDEA: XBRL DOCUMENT v3.7.0.1
GOING CONCERN CONSIDERATIONS (Details) - USD ($)
12 Months Ended
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Going Concern Considerations      
Net loss $ (497,268) $ (486,427)  
Negative working capital (4,228,513) (3,710,662)  
Total stockholders' deficit $ (4,207,930) $ (3,710,662) $ (3,224,235)
XML 34 R23.htm IDEA: XBRL DOCUMENT v3.7.0.1
ACCRUED LIABILITIES (Details) - USD ($)
Dec. 31, 2016
Dec. 31, 2015
Payables and Accruals [Abstract]    
Accrued interest on note payable $ 1,667,083 $ 1,345,893
Accrued general and administrative expenses 123,528 124,114
Other payable 727,500 727,500
Accrued liabilities $ 2,518,111 $ 2,197,507
XML 35 R24.htm IDEA: XBRL DOCUMENT v3.7.0.1
NOTE PAYABLE (Details) - USD ($)
12 Months Ended
Dec. 31, 2016
Dec. 31, 2015
Debt Disclosure [Abstract]    
Note payable $ 1,337,600 $ 1,337,600
Debt instrument, interest rate 15.00% 15.00%
Late charge owed on any late interest payments $ 10,000 $ 10,000
Interest expense 321,190 320,640
Accrued interest $ 1,667,083 $ 1,345,893
XML 36 R25.htm IDEA: XBRL DOCUMENT v3.7.0.1
RELATED PARTY TRANSACTIONS (Details) - USD ($)
12 Months Ended
Dec. 31, 2016
Dec. 31, 2015
Related Party Transactions [Abstract]    
Fees paid by Logicquest Technology Limited, a company controlled by the Company's Chief Financial Officer, Cheng Yew Siong, on behalf of the Company $ 380,196 $ 204,587
Salary paid to chief executive officer $ 65,000 $ 45,000
XML 37 R26.htm IDEA: XBRL DOCUMENT v3.7.0.1
INTANGIBLE ASSETS (Details) - USD ($)
Dec. 31, 2016
Dec. 31, 2015
Finite-Lived Intangible Assets [Line Items]    
Trademarks, net $ 20,583
Trademarks [Member]    
Finite-Lived Intangible Assets [Line Items]    
Gross Carrying Value 22,473
Less: Accumulated Amortization Total (1,890)
Trademarks, net $ 20,583
XML 38 R27.htm IDEA: XBRL DOCUMENT v3.7.0.1
INCOME TAXES (Narrative) (Details) - USD ($)
12 Months Ended
Dec. 31, 2016
Dec. 31, 2015
Operating Loss Carryforwards [Line Items]    
U.S. Federal statutory rate 34.00% 34.00%
Operating loss carryforward amount $ 8,581,000  
Maximum [Member]    
Operating Loss Carryforwards [Line Items]    
Operating loss carryforward expiration date Dec. 31, 2036  
XML 39 R28.htm IDEA: XBRL DOCUMENT v3.7.0.1
INCOME TAXES (Schedule of Deferred Tax Assets) (Details) - USD ($)
Dec. 31, 2016
Dec. 31, 2015
Income Tax Disclosure [Abstract]    
Benefit from carryforward of net operating loss $ 2,917,000 $ 2,748,000
Less valuation allowance (2,917,000) (2,748,000)
Net deferred tax asset
XML 40 R29.htm IDEA: XBRL DOCUMENT v3.7.0.1
STOCKHOLDERS' DEFICIT (Details) - shares
12 Months Ended
Dec. 31, 2016
Dec. 31, 2015
Class of Stock [Line Items]    
Common stock, shares outstanding 2,301,968 2,301,968
Preferred stock convertible to common stock outstanding 72,500  
Common stock outstanding, fully diluted, upon conversion of preferred stock 2,374,468  
Number of shares authorized by Articles of Incorporation 200,000,000  
Common stock, shares authorized 200,000,000 200,000,000
Common Stock [Member]    
Class of Stock [Line Items]    
Share adjustment, shares   119
XML 41 R30.htm IDEA: XBRL DOCUMENT v3.7.0.1
COMMITMENTS AND CONTINGENCIES (Details)
Dec. 31, 2016
USD ($)
Commitments and Contingencies Disclosure [Abstract]  
Monthly rent owed on property $ 155
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