UONLIVE CORP - FORM 10-Q - August 12, 2010

Attached files

file	filename
EX-31.2 - EXHIBIT 31.2 - UONLIVE CORP	ex31-2.htm
EX-32.1 - EXHIBIT 32.1 - UONLIVE CORP	ex32-1.htm
EX-32.2 - EXHIBIT 32.2 - UONLIVE CORP	ex32-2.htm
EX-31.1 - EXHIBIT 31.1 - UONLIVE CORP	ex31-1.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

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

For the quarterly period ended June 30, 2010

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12 b - 2 of the Exchange Act) Yes ¨No x

Commission File Number 0-26119

UONLIVE CORPORATION

(Exact name of Registrant as specified in its charter)

Nevada		87-0629754
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification No.)

5/F, Guangdong Finance Building

88 Connaught Road West, Hong Kong

(Address of principal executive offices)

(011) (852) 2116-3560

(Registrant's telephone number)

Check whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 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 |X| No |_|

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes |_| No |_|

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

Large Accelerated Filer |_| Accelerated Filer |_| Non-accelerated Filer |_| Smaller Reporting Company |X|

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act): Yes |_| No |X|

State the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date: July 19, 2010, 1,996,355 shares.

Table of Contents

UONLIVE CORPORATION

Form 10-Q for the period ended June 30, 2010

TABLE OF CONTENTS

			Page

PART I - FINANCIAL INFORMATION

	ITEM 1 - FINANCIAL STATEMENTS

		Condensed Consolidated Balance Sheets as of June 30, 2010 (Unaudited) and December 31, 2009	F-1

		Condensed Consolidated Statements of Operations and Comprehensive Loss for the Three and Six Months ended June 30, 2010 and 2009 (Unaudited)	F-2

		Condensed Consolidated Statements of Cash Flows for the Six Months ended June 30, 2010 and 2009 (Unaudited)	F-3

		Condensed Consolidated Statements of Stockholders’ Deficit for the Six Months ended June 30, 2010	F-4

		Notes to Condensed Consolidated Financial Statements	F-5 – F13

	ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS		17

	ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK		20

	ITEM 4 - CONTROLS AND PROCEDURES		20

PART II - OTHER INFORMATION

	ITEM 1 - LEGAL PROCEEDINGS		21

	ITEM 2 - UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS		21

	ITEM 3 - DEFAULTS UPON SENIOR SECURITIES		21

	ITEM 4 - REMOVED AND RESERVED		21

	ITEM 5 - OTHER INFORMATION		21

	ITEM 6 - EXHIBITS		21

		SIGNATURES	22

Table of Contents

PART I - FINANCIAL INFORMATION

ITEM 1 - FINANCIAL STATEMENTS

UONLIVE CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

AS OF JUNE 30, 2010 AND DECEMBER 31, 2009

(Currency expressed in United States Dollars (“US$”), except for number of shares)

	June 30, 2010			December 31, 2009
	(Unaudited)			(Audited)
ASSETS
Current assets:
Cash and cash equivalents	$	36,353		$	53,850
Accounts receivable		-			11,605
Accounts receivable, related party		3,854			-
Deposits and other receivables		642			17,208

Total current assets		40,849			82,663

Non-current assets:
Plant and equipment, net		188,081			227,565

TOTAL ASSETS	$	228,930		$	310,228

LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities:
Accounts payable and accrued liabilities	$	12,473		$	25,014
Amount due to a shareholder		2,233,206			1,914,513

Total current liabilities		2,245,679			1,939,527

Non-current liabilities:
Note payable to a shareholder		166,966			167,603

Total liabilities		2,412,645			2,107,130

Stockholders’ deficit:
Series A, Convertible preferred stock, $0.001 par value; 10,000,000 shares authorized, 500,000 shares issued and outstanding as of June 30, 2010 and December 31, 2009		500			500
Common stock, $0.001 par value; 200,000,000 shares authorized; 1,996,355 shares issued and outstanding as of June 30, 2010 and December 31, 2009		1,996			1,996
Additional paid-in capital		197,570			197,570
Accumulated deficit		(2,387,268	)		(1,993,036	)
Accumulated other comprehensive income (loss)		3,487			(3,932	)

Total stockholders’ deficit		(2,183,715	)		(1,796,902	)
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT	$	228,930		$	310,228

See accompanying notes to the condensed consolidated financial statements.

F-1

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UONLIVE CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

AND COMPREHENSIVE LOSS

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2010 AND 2009

(Currency expressed in United States Dollars (“US$”), except for number of shares)

(Unaudited)

	Three months ended June 30,						Six months ended June 30,
	2010			2009			2010			2009

REVENUES, NET
- Related party	$	3,856		$	3,871		$	7,720		$	7,739
- Non-related party		641			7,391			2,779			11,260

Total revenues, net		4,497			11,262			10,499			18,999

COST OF REVENUE (exclusive of depreciation)		(7,058	)		(9,927	)		(19,911	)		(19,850	)

GROSS (LOSS) PROFIT		(2,561	)		1,335			(9,412	)		(851	)

Operating expenses:
Sales and marketing		2,251			-			4,414			1,543
General and administrative		162,413			202,019			380,406			393,455
Total operating expenses		164,664			202,019			384,820			394,998

LOSS BEFORE INCOME TAXES		(167,225	)		(200,684	)		(394,232	)		(395,849	)

Income tax expense		-			-			-			-

NET LOSS	$	(167,225	)	$	(200,684	)	$	(394,232	)	$	(395,849	)

Other comprehensive income (loss):
- Foreign currency translation gain (loss)		5,205			(40	)		7,419			(174	)

COMPREHENSIVE LOSS	$	(162,020	)	$	(200,724	)	$	(386,813	)	$	(396,023	)

Net loss per share – basic and diluted	$	(0.08	)	$	(0.10	)	$	(0.20	)	$	(0.20	)

Weighted average common stock outstanding – basic and diluted		1,996,355			1,996,355			1,996,355			1,996,355

See accompanying notes to the condensed consolidated financial statements.

F-2

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UONLIVE CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE SIX MONTHS ENDED JUNE 30, 2010 AND 2009

(Currency expressed in United States Dollars (“US$”))

(Unaudited)

	Six months ended June 30,
	2010			2009
Cash flow from operating activities:
Net loss	$	(394,232	)	$	(395,849	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		39,189			29,541
Changes in operating assets and liabilities:
Accounts receivable, trade		11,581			2,837
Accounts receivable, related party		(3,860	)		-
Deposits and other receivables		16,528			45
Accounts payable and accrued liabilities		(12,540	)		(5,710	)
Net cash used in operating activities		(343,334	)		(369,136	)

Cash flows from investing activities:
Purchase of plant and equipment		(505	)		(59,341	)
Net cash used in investing activities		(505	)		(59,341	)

Cash flows from financing activities:
Amount due to a shareholder		326,518			454,108
Net cash provided by financing activities		326,518			454,108

Effect of exchange rate change on cash and cash equivalents		(176	)		9

NET CHANGE IN CASH AND CASH EQUIVALENTS		(17,497	)		25,640

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD		53,850			100

CASH AND CASH EQUIVALENTS, END OF PERIOD	$	36,353		$	25,740

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid for income taxes	$	-		$	-
Cash paid for interest	$	-		$	-

See accompanying notes to the condensed consolidated financial statements

F-3

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UONLIVE CORPORATION

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ DEFICIT

FOR THE SIX MONTHS ENDED JUNE 30, 2010

(Currency expressed in United States Dollars (“US$”), except for number of shares)

(Unaudited)

														Accumulated
	Series A Convertible								Additional					other			Total
	preferred stock				Common stock				paid-in		Accumulated			comprehensive			stockholders’
	No. of shares		Amount		No. of shares		Amount		capital		deficit			income (loss)			deficit

Balance as of January 1, 2010		500,000	$	500		1,996,355	$	1,996	$	197,570	$	(1,993,036	)	$	(3,932	)	$	(1,796,902	)

Net loss for the period		-		-		-		-		-		(394,232	)		-			(394,232	)

Foreign currency translation adjustment		-		-		-		-		-		-			7,419			7,419
Balance as of June 30, 2010		500,000	$	500		1,996,355	$	1,996	$	197,570	$	(2,387,268	)	$	3,487		$	(2,183,715	)

See accompanying notes to the condensed consolidated financial statements

F-4

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UONLIVE CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED JUNE 30, 2010

(Currency expressed in United States Dollars (“US$”))

(Unaudited)

NOTE－1 BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial statements have been prepared by management in accordance with both accounting principles generally accepted in the United States (“GAAP”), and the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Certain information and note disclosures normally included in audited financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to those rules and regulations, although the Company believes that the disclosures made are adequate to make the information not misleading.

In the opinion of management, the consolidated balance sheet as of December 31, 2009 which has been derived from audited financial statements and these unaudited condensed consolidated financial statements reflect all normal and recurring adjustments considered necessary to state fairly the results for the periods presented. The results for the period ended June 30, 2010 are not necessarily indicative of the results to be expected for the entire fiscal year ending December 31, 2010 or for any future periods.

These unaudited condensed consolidated financial statements and notes thereto should be read in conjunction with the Management’s Discussion and the audited financial statements and notes thereto included in the Annual Report on Form 10-K for the year ended December 31, 2009.

NOTE－2 DESCRIPTION OF BUSINESS AND ORGANIZATION

Uonlive Corporation (“UOLI” or the “Company”) was incorporated under the laws of the State of Nevada on January 29, 1998 as Weston International Development Corporation. On July 28, 1998, the name was changed to Txon International Development Corporation. On September 15, 2000, the Company changed its name to China World Trade Corporation. On July 2, 2008, the Company further changed its name to Uonlive Corporation.

UOLI, through its subsidiaries, mainly engages in the provision of online multimedia and advertising services and the operation of online radio stations in Hong Kong and China.

UOLI and its subsidiaries are hereinafter collectively referred to as “the Company”.

NOTE－3 GOING CONCERN UNCERTAINTIES

These condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the discharge of liabilities in the normal course of business for the foreseeable future.

For the six months ended June 30, 2010, the Company has incurred a net loss of $394,232 and experienced negative cash flows from operations of $343,334 with an accumulated deficit of $2,387,268 as of that date. The continuation of the Company is dependent upon the continuing financial support of shareholders and generating significant revenue and achieving profitability. The actions involve certain cost-saving initiatives and growth strategies, including rapid promotion and marketing the radio programs in Hong Kong and China. However, there is no assurance that the Company will be successful in securing sufficient funds to sustain its operations.

These and other factors raise substantial doubt about the Company’s ability to continue as a going concern. These condensed consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result in the Company not being able to continue as a going concern.

F-5

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UONLIVE CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED JUNE 30, 2010

(Currency expressed in United States Dollars (“US$”))

(Unaudited)

NOTE－4 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The accompanying condensed consolidated financial statements reflect the application of certain significant accounting policies as described in this note and elsewhere in the accompanying condensed consolidated financial statements and notes.

l	Use of estimates

In preparing these condensed consolidated financial statements, management makes estimates and assumptions that affect the reported amounts of assets and liabilities in the balance sheets and revenues and expenses during the periods reported. Actual results may differ from these estimates.

l	Basis of consolidation

The condensed consolidated financial statements include the financial statements of UOLI and its subsidiaries. All significant inter-company balances and transactions within the Company have been eliminated upon consolidation.

l	Cash and cash equivalents

Cash and cash equivalents are carried at cost and maintained in bank deposit accounts with an original maturity of six months or less to be cash equivalents.

l	Accounts receivable

Accounts receivable consist primarily of trade receivables. Accounts receivable are recognized and carried at original invoiced amount less an allowance for any uncollectible accounts. Management reviews and adjusts this allowance periodically based on historical experience, current economic climate as well as its evaluation of the collectibility of outstanding accounts. The Company evaluates the credit risks of its customers utilizing historical data and estimates of future performance. For the six months ended June 30, 2010 and 2009, the Company did not provide an allowance for doubtful accounts, nor have there been any write-offs.

l	Plant and equipment

Plant and equipment are stated at cost less accumulated depreciation and accumulated impairment losses, if any. Depreciation is calculated on the straight-line basis over the following expected useful lives from the date on which they become fully operational:

	Depreciable life
Furniture, fittings and office equipment	5 years
Computer and broadcasting equipment	5 years

Expenditure for maintenance and repairs is expensed as incurred. The gain or loss on the disposal of plant and equipment is the difference between the net sales proceeds and the carrying amount of the relevant assets and is recognized in the statement of operations.

Depreciation expense for the three months ended June 30, 2010 and 2009 was $19,583 and $11,026, respectively.

Depreciation expense for the six months ended June 30, 2010 and 2009 was $39,189 and $29,541, respectively.

F-6

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UONLIVE CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED JUNE 30, 2010

(Currency expressed in United States Dollars (“US$”))

(Unaudited)

l	Intangible asset

Intangible asset represents the acquisition cost of online radio broadcasting technology and its domain name paid to Mr. Samuel Tsun, a shareholder and director of the Company at the fair value of $167,698. Purchased technical know-how includes webpage development cost, acquisition cost of domain name of www.uonlive.com, online radio technology, broadcasting technical and procedural manuals, with an indefinite useful life.

In accordance with the provisions of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification ("ASC") ASC Topic 350-50, “General Intangibles Other Than Goodwill” (“ASC 350”), if an intangible asset is determined to have an indefinite useful life, it should not be amortized until its useful life is determined to be no longer indefinite. The asset’s remaining useful life should be reviewed each reporting period. If such an asset is later determined to have a finite useful life, the asset should be tested for impairment. That asset should then be amortized prospectively over its estimated remaining useful life and accounted for in the same way as intangible assets subject to amortization. An intangible asset that is not subject to amortization should be tested for impairment at least annually.

The Company evaluates the recoverability of identifiable intangible assets whenever events or changes in circumstances indicate that an intangible asset’s carrying amount may not be recoverable. Such circumstances could include, but are not limited to: (1) a significant decrease in the market value of an asset, (2) a significant adverse change in the extent or manner in which an asset is used, or (3) an accumulation of costs significantly in excess of the amount originally expected for the acquisition of an asset. The Company measures the carrying amount of the asset against the estimated undiscounted future cash flows associated with it. Should the sum of the expected future net cash flows be less than the carrying value of the asset being evaluated, an impairment loss would be recognized. The impairment loss would be calculated as the amount by which the carrying value of the asset exceeds its fair value. The evaluation of asset impairment requires the Company to make assumptions about future cash flows over the life of the asset being evaluated. These assumptions require significant judgment and actual results may differ from assumed and estimated amounts.

Based on the results of the Company's discounted cash flows calculation, the Company evaluated that the carrying value of the intangible asset exceeded its fair value and recognized a full impairment loss in the 2008 fiscal year.

l	Impairment of long-lived assets

Long-lived assets primarily include plant and equipment. In accordance with ASC Topic 360-10-5, “Impairment or Disposal of Long-Lived Assets”, the Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable. If the total of the expected undiscounted future net cash flows is less than the carrying amount of the asset, a loss is recognized for the difference between the fair value and carrying amount of the asset. There has been no impairment as of June 30, 2010.

l	Revenue recognition

The Company derives revenues from the sale of advertising airtime to customers. Revenue is recognized when the following four revenue criteria are met: persuasive evidence of an arrangement exists, delivery has occurred, the selling price is fixed or determinable, and collectibility is reasonably assured, as defined by ASC Topic 605, “Revenue Recognition”.

l	Income taxes

The provision for income taxes is determined in accordance with the provisions of ASC Topic 740, “Income Taxes” (“ASC 740”). Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted income tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Any effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

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UONLIVE CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED JUNE 30, 2010

(Currency expressed in United States Dollars (“US$”))

(Unaudited)

ASC 740 prescribes a comprehensive model for how companies should recognize, measure, present, and disclose in their financial statements uncertain tax positions taken or expected to be taken on a tax return. Under ASC 740, tax positions must initially be recognized in the financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities. Such tax positions must initially and subsequently be measured as the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the tax authority assuming full knowledge of the position and relevant facts.

For the six months ended June 30, 2010 and 2009, the Company did not have any interest and penalties associated with tax positions. As of June 30, 2010, the Company did not have any significant unrecognized uncertain tax positions.

The Company conducts major businesses in Hong Kong and is subject to tax in this jurisdiction. As a result of its business activities, the Company files tax returns that are subject to examination by the foreign tax authority.

l	Net loss per share

The Company calculates net loss per share in accordance with ASC Topic 260, “Earnings per Share.” Basic loss per share is computed by dividing the net loss by the weighted-average number of common stock outstanding during the period. Diluted loss per share is computed similar to basic loss per share except that the denominator is increased to include the number of additional common stock that would have been outstanding if the potential common stock equivalents had been issued and if the additional common shares were dilutive.

l	Comprehensive income or loss

ASC Topic 220, “Comprehensive Income” establishes standards for reporting and display of comprehensive income or loss, its components and accumulated balances. Comprehensive income or loss as defined includes all changes in equity during a period from non-owner sources. Accumulated comprehensive income or loss consists of changes in unrealized gains and losses on foreign currency translation. This comprehensive income or loss is not included in the computation of income tax expense or benefit.

l	Foreign currencies translation

Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transaction. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency using the applicable exchange rates at the balance sheet dates. The resulting exchange differences are recorded in the condensed consolidated statement of operations.

The reporting currency of the Company is the United States Dollars ("US$") and the accompanying condensed consolidated financial statements have been expressed in US$. In addition, the Company’s subsidiary in Hong Kong maintain its books and record in its local currency, Hong Kong Dollars ("HK$"), which is its functional currency and the primary currency of the economic environment in which its operations are conducted.

In general, for consolidation purposes, assets and liabilities of its subsidiaries whose functional currency is not US$ are translated into US$, in accordance with ASC Topic 830-30, “Translation of Financial Statement”, using the exchange rate on the balance sheet date. Revenues and expenses are translated at average rates prevailing during the period. The gains and losses resulting from translation of financial statements of foreign subsidiaries are recorded as a separate component of accumulated other comprehensive income within the statement of stockholders’ deficit.

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UONLIVE CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED JUNE 30, 2010

(Currency expressed in United States Dollars (“US$”))

(Unaudited)

Translation of amounts from HK$ into US$1 has been made at the following exchange rates for the respective period:

	June 30, 2010		June 30, 2009
Period-end HK$:US$1 exchange rate		7.7847		7.7504
Period average HK$:US$1 exchange rate		7.7717		7.7530

l	Segment reporting

ASC Topic 280, “Segment Reporting” establishes standards for reporting information about operating segments on a basis consistent with the Company’s internal organization structure as well as information about geographical areas, business segments and major customers in financial statements. For the six months ended June 30, 2010, the Company operates in one reportable segment in Hong Kong and China.

l	Related parties

For the purposes of these financial statements, parties are considered to be related if one party has the ability, directly or indirectly, to control the party or exercise significant influence over the party in making financial and operating decisions, or vice versa, or where the Company and the party are subject to common control or common significant influence. Related parties may be individuals or other entities.

l	Fair value measurement

ASC Topic 820, “Fair Value Measurements and Disclosures” ("ASC 820") establishes a new framework for measuring fair value and expands related disclosures. Broadly, ASC 820 framework requires fair value to be determined based on the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants. ASC 820 establishes a three-level valuation hierarchy based upon observable and non-observable inputs. These tiers include: Level 1, defined as observable inputs such as quoted prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions.

For financial assets and liabilities, fair value is the price the Company would receive to sell an asset or pay to transfer a liability in an orderly transaction with a market participant at the measurement date. In the absence of active markets for the identical assets or liabilities, such measurements involve developing assumptions based on market observable data and, in the absence of such data, internal information that is consistent with what market participants would use in a hypothetical transaction that occurs at the measurement date.

l	Fair value of financial instruments

The carrying value of the Company’s financial instruments include cash and cash equivalents, accounts receivable, deposits and other receivables, accounts payable and accrued liabilities, amount due to and note payable to a shareholder. Fair values were assumed to approximate carrying values for these financial instruments because they are short term in nature and their carrying amounts approximate at fair values.

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UONLIVE CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED JUNE 30, 2010

(Currency expressed in United States Dollars (“US$”))

(Unaudited)

l	Recent accounting pronouncements

The Company has reviewed all recently issued, but not yet effective, accounting pronouncements and does not believe the future adoption of any such pronouncements may be expected to cause a material impact on its financial condition or the results of its operations, as follows:

In April 2010, the Financial Accounting Standard Board (“FASB”) issued Accounting Standards Update (“ASU”) 2010-13, Compensation – Stock Compensation (Topic 718): Effect of Denominating the Exercise Price of a Share-Based Payment Award in the Currency of the Market in Which the Underlying Equity Security Trades. ASU 2010-13 provides guidance on the classification of a share-based payment award as either equity or a liability. A share-based payment that contains a condition that is not a market, performance, or service condition is required to be classified as a liability. ASU 2010-13 is effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2010 and is not expected to have a significant impact on the Company’s financial statements.

In May 2010, the FASB issued ASU 2010-19, Foreign Currency (Topic 830): Foreign Currency Issues: Multiple Foreign Currency Exchange Rates. The amendments in ASU 2010-19 are effective as of the announcement date of March 18, 2010. The Company does not expect the provisions of ASU 2010-19 to have a material effect on the financial position, results of operations or cash flows of the Company.

NOTE－5 AMOUNT DUE TO AND NOTE PAYBLE TO A SHAREHOLDER

(a) Amount due to a shareholder

As of June 30, 2010, the amount of $2,233,206 represented temporary advances for working capital purposes from a major shareholder, Mr. Samuel Tsun, which were unsecured, interest free and has no fixed terms of repayment.

(b) Note payable to a shareholder

As of June 30, 2010, the note payable due to a major shareholder, Mr. Samuel Tsun, was unsecured, interest free and had no fixed repayment term.

NOTE－6 INCOME TAXES

The Company has operations in various countries and is subject to tax in the jurisdictions in which it operates, as follows:

United States of America

UOLI is registered in the State of Nevada and is subject to United States of America tax law. No provision for income taxes have been made as UOLI has generated no taxable income for the six months ended June 30, 2010.

British Virgin Island

Under the current BVI law, the Company is not subject to tax on income.

Hong Kong

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UONLIVE CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED JUNE 30, 2010

(Currency expressed in United States Dollars (“US$”))

(Unaudited)

The Company’s subsidiary operating in Hong Kong is subject to Hong Kong Profits Tax at the statutory rate of 16.5% on its assessable income. For the six months ended June 30, 2010, the Company incurred an operating loss of $278,981, with approximately $1,809,031 of cumulative operating loss carryforwards available for Hong Kong income tax purpose at no expiration.

The following table sets forth the significant components of the aggregate net deferred tax assets of the Company as of June 30, 2010 and December 31, 2009:

	June 30, 2010			December 31, 2009
				(Audited)
Deferred tax assets:
Net operating loss carryforwards	$	298,490		$	216,178
Less: valuation allowance		(298,490	)		(216,178	)
Net deferred tax assets	$	-		$	-

As of June 30, 2010, the Company has provided for a full valuation allowance against the deferred tax assets of $298,490 on the expected future tax benefits from the net operating loss carryforwards as the management believes it is more likely than not that these assets will not be realized in the future. For the six months ended June 30, 2010, the valuation allowance is increased by $82,312, primarily relating to net operating loss carryforwards from the foreign tax regime.

NOTE－7 RELATED PARTY TRANSACTIONS

(a) Accounts receivable and sales – related company

For the six months ended June 30, 2010 and 2009, the Company earned sales revenue of $7,720 and $7,739 from Dbtronix (Far East) Ltd., which is controlled by a director of the Company, Mr. Samuel Tsun, at the current market value in a normal course of business.

As of June 30, 2010, accounts receivable from a related party amounted to $3,854.

(b) IT service cost paid to a related company

For the six months ended June 30, 2010 and 2009, the Company paid IT service costs of $16,985 and $17,026, respectively, to the related company, which is controlled by a director of the Company, Mr. Samuel Tsun, at the current market value in a normal course of business.

For the six months ended June 30, 2010 and 2009, the Company paid rent charge of $46,322 and $42,564 respectively to the related company, which is controlled by a director of the Company, Mr. Samuel Tsun, at the current market value in a normal course of business.

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UONLIVE CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED JUNE 30, 2010

(Currency expressed in United States Dollars (“US$”))

(Unaudited)

NOTE－8 CONCENTRATIONS OF RISK

The Company is exposed to the following concentrations of risk:

(a) Major customers

For the three and six months ended June 30, 2010 and 2009, customers who account for 10% or more of revenues and their outstanding balances as at period-end dates, are presented as follows:

	Three months ended June 30, 2010					June 30, 2010
	Revenue		Percentage of revenue			Accounts receivable

Customer A (related party)	$	3,856		86	%	$	3,854
Customer E		641		14	%		-
Total:	$	4,497		100	%	$	3,854

	Six months ended June 30, 2010					June 30, 2010
	Revenue		Percentage of revenue			Accounts receivable

Customer A (related party)	$	7,720		74	%	$	3,854
Customer D		1,351		13	%		-
Total:	$	9,071		87	%	$	3,854

	Three months ended June 30, 2009					June 30, 2009
	Revenue		Percentage of revenue			Accounts receivable

Customer A (related party)	$	3,870		34	%	$	-
Customer B		2,489		22	%		-
Customer C		3,870		34	%		7,742
Total:	$	10,229		90	%	$	7,742

	Six months ended June 30, 2009					June 30, 2009
	Revenue		Percentage of revenue			Accounts receivable

Customer A (related party)	$	7,739		41	%	$	-
Customer B		2,489		13	%		-
Customer C		7,739		41	%		7,742
Total:	$	17,967		95	%	$	7,742

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UONLIVE CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED JUNE 30, 2010

(Currency expressed in United States Dollars (“US$”))

(Unaudited)

(b) Major vendors

For the three and six months ended June 30, 2010 and 2009, there is no vendor who accounts for 10% or more of the Company’s purchases.

Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash and trade accounts receivable. The Company performs ongoing credit evaluations of its customers’ financial condition, but does not require collateral to support such receivables.

(d) Exchange rate risk

The Company cannot guarantee that the current exchange rate will remain steady; therefore there is a possibility that the Company could post the same amount of profit for two comparable periods and because of the fluctuating exchange rate actually post higher or lower profit depending on exchange rate of HK$ converted to US$ on that date. The exchange rate could fluctuate depending on changes in political and economic environments without notice.

NOTE－9 COMMITMENTS AND CONTINGENCIES

(a) Operating lease commitments

The Company rented office spaces from a related party under a non-cancelable operating lease agreement in Hong Kong for a term of 3 years, with fixed monthly rentals, expiring in March 2011. Costs incurred under the operating lease, which are considered to be equivalent to the market rate, are recorded as rental expense and totaled approximately $46,322 and $42,564 for the six months ended June 30, 2010 and 2009.

As of June 30, 2010, the future minimum rental payments due under this non-cancelable operating lease in the next 12 months is $69,367.

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ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

PRELIMINARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

THIS REPORT CONTAINS CERTAIN FORWARD-LOOKING STATEMENTS ABOUT OUR OPERATIONS. THE READER SHOULD UNDERSTAND THAT SEVERAL FACTORS GOVERN WHETHER ANY FORWARD LOOKING STATEMENT CONTAINED HEREIN WILL BE OR CAN BE ACHIEVED. ANY ONE OF THOSE FACTORS COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE PROJECTED HEREIN. THESE FORWARD LOOKING STATEMENTS INCLUDE PLANS AND OBJECTIVES OF MANAGEMENT FOR FUTURE OPERATIONS, INCLUDING PLANS AND OBJECTIVES RELATING TO THE PRODUCTS AND THE FUTURE ECONOMIC PERFORMANCE OF THE COMPANY. ASSUMPTIONS RELATING TO THE FOREGOING INVOLVE JUDGMENTS WITH RESPECT TO, AMONG OTHER THINGS, FUTURE ECONOMIC, COMPETITIVE AND MARKET CONDITIONS, FUTURE BUSINESS DECISIONS, AND THE TIME AND MONEY REQUIRED TO SUCCESSFULLY COMPLETE DEVELOPMENT PROJECTS, ALL OF WHICH ARE DIFFICULT OR IMPOSSIBLE TO PREDICT ACCURATELY AND MANY OF WHICH ARE BEYOND THE CONTROL OF THE COMPANY. ALTHOUGH THE COMPANY BELIEVES THAT THE ASSUMPTIONS UNDERLYING THE FORWARD LOOKING STATEMENTS CONTAINED HEREIN ARE REASONABLE, ANY OF THOSE ASSUMPTIONS COULD PROVE INACCURATE AND, THEREFORE, THERE CAN BE NO ASSURANCE THAT THE RESULTS CONTEMPLATED IN ANY OF THE FORWARD LOOKING STATEMENTS CONTAINED HEREIN WILL BE REALIZED. BASED ON ACTUAL EXPERIENCE AND BUSINESS DEVELOPMENT, THE COMPANY MAY ALTER ITS MARKETING, CAPITAL EXPENDITURE PLANS OR OTHER BUDGETS, WHICH MAY IN TURN AFFECT THE COMPANY'S RESULTS OF OPERATIONS. IN LIGHT OF THE SIGNIFICANT UNCERTAINTIES INHERENT IN THE FORWARD - LOOKING STATEMENTS INCLUDED THEREIN, THE INCLUSION OF ANY SUCH STATEMENT SHOULD NOT BE REGARDED AS A REPRESENTATION BY THE COMPANY OR ANY OTHER PERSON THAT THE OBJECTIVES OR PLANS OF THE COMPANY WILL BE ACHIEVED.

OVERVIEW

The predecessor of Uonlive Corporation was incorporated in the State of Nevada on January 29, 1998 under the name Txon International Development Corporation to conduct any lawful business, to exercise any lawful purpose and power, and to engage in any lawful act or activity for which corporations may be organized under the General Corporation Laws of Nevada. On August 1, 2008, the Company changed its name to Uonlive Corporation.

On March 28, 2008, the Company entered into the Exchange Agreement with Tsang William, Uonlive Limited, Tsun Samuel, Hui Chi Kit and Parure Capital Limited. Upon closing of the Share Exchange on March 31, 2008, Tsun and Hui delivered all of their share capital in Parure Capital to the Company in exchange for 150,000,000 shares of common stock of the Company and 500,000 shares of Series A Convertible Preferred Stock, resulting in Parure Capital becoming a wholly owned subsidiary of the Company and Uonlive becoming an indirect wholly owned subsidiary of the Company.

As a result, post reverse split, 49,565,923 shares of the Company’s common stock were outstanding immediately prior to the closing of the Share Exchange, and 199,565,923 shares of the Company’s common stock were outstanding immediately after the closing of the Share Exchange. In addition, 500,000 shares of Series A Convertible Preferred Stock were outstanding immediately after the closing of the Share Exchange. Of these shares, approximately 26,355,874 shares represented the Company’s “public float” prior to and after the Share Exchange. The 150,000,000 shares of common stock and 500,000 shares of Series A Convertible Preferred Stock issued in the Share Exchange were issued in reliance upon an exemption from registration pursuant to Regulation S under the Securities Act of 1933, as amended (the “Securities Act”). The shares in the public float will continue to represent the shares of the Company’s common stock held for resale without further registration by the holders thereof. After the Share Exchange, Uonlive becomes our operating subsidiary.

On May 19, 2009, we approved a 1:100 reverse stock split (the “Reverse Split”) of our common stock and an amendment to our Articles of Incorporation to effectuate the Reverse Split.

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Uonlive is a leading private online multimedia company incorporated in April 2007 with its headquarters in Hong Kong, China. It is one of the members of Jingu Group. The main business of Uonlive is operating an online radio station, a kind of virtual community able to provide the public with free online radio services, and mainly targets the younger listening audience.

Uonlive is the abbreviation for “You Are on Live”, which means no matter where you live around the world, Uonlive’s information can be transmitted to you. With online radio, there are no geographic boundaries.

Uonlive provides multi-division entertainment programs through live-audio-radio and audio-on-demand. Audio-on-demand allows the listener to choose his or her own programming. Uonlive also utilizes the most advanced technologies for DJs and audiences to control their broadcasting techniques. Uonlive is also endeavoring to develop new radio receiving techniques. For example, in the near future, Uonlive hopes to distribute online radio programs for communication products including mobile, family electronics etc., anytime and anywhere.

Different than traditional radio stations, Uonlive is continuously adding more interactive features, including online live voting, chat rooms, and download service, etc. in order to reach more audiences.

In addition, Uonlive provides professional training courses to DJs. It is committed to developing new radio personalities by providing professional and systematic training programs. After completion of the courses, the participants are qualified to take part in large-scale activities and ceremonies. Such opportunities work for the mutual benefit of the online station and the participant. Currently, Uonlive has over 50 DJs hosting online radio programs and has over 40 diversified programs, which operate 24-hours a day. No matter when and where, listeners can hear Uonlive voices anytime.

Our objective is to develop and provide diversified programming that has an upbeat message for anyone who listens. We will use advanced technologies to provide a variety of interactive channels through a Multimedia Communication Platform to give the audience impressive and fun radio shows.

Development of Our Business

The commercial market for the online radio business is developing rapidly. Many large competitors have been formed or are in the process of being formed to take advantage of an expanding market. The commercialization of the Internet has effectively promoted the development of online radio communication technologies. The significant business opportunities inherent in online radio will cause the utilization of the various kinds of equipment necessary for an online radio station.

Our development strategies include opening up new channels, attracting more members, strengthening and diversifying online programs, selling or renting our channels, attempting to develop a “U outlet”, and later attempting co-operation with Karaoke, and developing a voice-ecard for our stations. Uonlive will also sell its commercial products to users through its multimedia communication platform. It hopes to set up a team to source products in Guangdong Province, China and market the product on the website. Lastly, Uonlive will try another model allowing users to call up and record a message and leave it on the website so that other people listen to them (thereby setting up a sound recording library).

Our revenue model is to (1) sell air time or spot time to customers in different time sections with a tailor made package to be designed for each customer, which package may contain a number of air or spot times with a time frame of, say, 30 seconds, (2) to sell title sponsorships to customers for each program, and (3) to sell banner advertisements on our website. We plan to have eight banners for the year 2010 for customers to place their advertisements.

Management believes that Uonlive has a niche market in the online radio industry in Hong Kong and Mainland China. The prospect for this industry is enormous with high margin potential. Uonlive is the pioneer in this market and hopes to be the leader, taking the largest market share in the coming years.

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RESULTS OF OPERATIONS

The following discussion should be read in conjunction with the unaudited condensed consolidated Financial Statements of the Company for the six-month period ended June 30, 2010 and 2009 and related notes thereto.

THREE-MONTH PERIOD ENDED JUNE 30, 2010 COMPARED TO THREE-MONTH PERIOD ENDED JUNE 30, 2009

Operating Revenue

We recorded a total of $4,497 consolidated revenue for the three-month period ended June 30, 2010 compared to $11,262 for the same corresponding period in 2009. The decrease was mainly due to a tough business environment and the slow recovery in the economy. The consolidated gross loss for the three-month period ended June 30, 2010 recorded at $2,561, which accounted for (57.0)% of total revenue. The gross loss was mainly due to the decrease in sales to the customers.

Operating Expenses

Operating expenses for the three-month period ended June 30, 2010 decreased to $164,664 from $202,019 in the corresponding period of 2009, which consisted of $2,251 for sales and marketing expenses and $162,413, for general and administrative expenses. The general and administrative expense included approximately $39,100 of salaries expense and labor charges, approximately $21,800 of rental expense, approximately $30,800 of consulting and professional fees; approximately $19,600 depreciation expenses and approximately $25,700 of computer system maintenance expense.

Impairment and Depreciation

During the three-month period ended June 30, 2010, we incurred $19,600 of depreciation expenses, compared to $11,000 for the same period in 2009.

Net Loss/ Comprehensive Loss

We incurred a net loss of $167,225 for the three-month period ended June 30, 2010, compared to $200,684 for the corresponding period in the year 2009.

We accounted for a comprehensive loss of $162,020 for the three-month period ended June 30, 2010 after an adjustment on the foreign currency translation compared to $200,724 for the same corresponding period in 2009.

SIX-MONTH PERIOD ENDED JUNE 30, 2010 COMPARED TO SIX-MONTH PERIOD ENDED JUNE 30, 2009

Operating Revenue

We recorded a total of $10,499 consolidated revenue for the six-month period ended June 30, 2010 compared to $18,999 for the same corresponding period in 2009, a decrease of 44.7%. The decrease was mainly due to a tough business environment and the slow recovery in the economy. The consolidated gross loss for the six-month ended June 30, 2010 recorded at $9,412, which accounted for (90)% of total revenue. The gross loss was mainly due to the decrease in sales to the customers.

Operating Expenses

Operating expenses for the six-month period ended June 30, 2010 decreased by $10,178 to $384,820, which consisted of approximately $4,400 for sales and marketing expenses or 42% of total revenue. Approximately $380,400 accounted for general and administrative expenses, a decrease of approximately $13,000 compared to the same corresponding period in 2009. The general and administrative expense included approximately $84,800 of salaries expense, approximately $43,400 of rental expense, approximately $63,300 of consultancy fees, approximately $48,600 of professional fees and approximately $107,400 of computer system maintenance expense.

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Impairment and Depreciation

During the six-month period ended June 30, 2010 and 2009, we incurred approximately $39,100 and $29,600 for depreciation expenses.

Net Loss/ Comprehensive Income (loss)

We incurred a net loss of approximately $394,200 for the six-month period ended June 30, 2010, a decrease of approximately $1,600 from the corresponding period in the year 2009. We accounted for a comprehensive loss of approximately $386,800 for the six-month period ended June 30, 2010 compared to a comprehensive loss of approximately $396,000 for the same corresponding period in 2009.

LIQUIDITY AND CAPITAL RESOURCES

During the quarter ended June 30, 2010, net cash used in operating activities was $343,334, which included a net loss of $394,232 compared to $369,136 and $395,849 for the same period in 2009. The operating activities also included the use in depreciation of approximately $39,100; an increase in changes to accounts receivable of approximately $11,500 and deposits and other receivables of approximately $16,500, which was offset by the decrease in changes to accounts receivable by related party of approximately $3,800 and accounts payables and accrued liabilities of approximately $12,500. We accounted for net cash used in investing activities of a minimal $500, which was used to purchase plant and equipment, and approximately $59,000 for the corresponding period in 2009. Net cash provided by financing activities accounted for approximately $326,500 and $454,000 for the six-month period ended June 30, 2010 and 2009, respectively, which represented further advances from a shareholder.

ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Credit Risk

Exchange Rate Risk

The Company cannot guarantee that the current exchange rate will remain steady; therefore there is a possibility that the Company could post the same amount of profit for two comparable periods and because of the fluctuating exchange rate actually post higher or lower profit depending on exchange rate of HK$ converted to US$ on that date. The exchange rate could fluctuate without notice, depending on changes in political and economic environments.

ITEM 4 - CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

The Company maintains disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended ("Exchange Act")) designed to ensure that information required to be disclosed in reports filed under the Exchange Act is recorded, processed, summarized and reported within the specified time periods. The Company’s Chief Executive Officer and its Chief Financial Officer (collectively, the “Certifying Officers”) are responsible for maintaining disclosure controls and procedures for the Company. The controls and procedures established by the Company are designed to provide reasonable assurance that information required to be disclosed by the issuer in the reports that it files or submits under the Exchange Act are recorded, processed, summarized and reported within the time periods specified in the Commission’s rules and forms.

As of the end of the period covered by this report, the Certifying Officers evaluated the effectiveness of the Company’s disclosure controls and procedures. Based on the evaluation, the Certifying Officers concluded that the Company’s disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the applicable rules and forms, and that it is accumulated and communicated to our management, including the Certifying Officers, as appropriate to allow timely decisions regarding required disclosure.

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Changes in Internal Control over Financial Reporting

There were no changes in the Company's internal controls over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act), known to the chief executive officer or the chief financial officer that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting.

PART II - OTHER INFORMATION

ITEM 1 - LEGAL PROCEEDINGS

None.

ITEM 2 - UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 3 - DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4 - REMOVED AND RESERVED

ITEM 5 - OTHER INFORMATION

None.

ITEM 6 - EXHIBITS

31.1	Certification of the Chief Executive Officer Pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934

31.2	Certification of the Chief Financial Officer Pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934

32.1	Certification of the Company's Chief Executive Officer Pursuant to 18 U.S.C. SS. 1350 Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2	Certification of the Chief Financial Officer Pursuant to 18 U.S.C. SS. 1350 Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

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SIGNATURES

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

UONLIVE CORPORATION

(Registrant)

August 12, 2010	/s/ Tsun Sin Man Samuel
	Tsun Sin Man Samuel
	Chief Executive Officer and Director
	(Principal Executive Officer)


August 12, 2010	/s/ Hui Chi Kit
	Hui Chi Kit
	Chief Financial Officer
	(Principal Financial and Accounting Officer)

UONLIVE CORP - FORM 10-Q - August 12, 2010

Attached files

UONLIVE CORP Reports