UONLIVE CORP - FORM 10-Q - August 4, 2011

Attached files

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EXCEL - IDEA: XBRL DOCUMENT - UONLIVE CORP	Financial_Report.xls
EX-31.2 - EXHIBIT 31.2 - UONLIVE CORP	ex31-2.htm
EX-31.1 - EXHIBIT 31.1 - UONLIVE CORP	ex31-1.htm
EX-32.2 - EXHIBIT 32.2 - UONLIVE CORP	ex32-2.htm
EX-32.1 - EXHIBIT 32.1 - UONLIVE CORP	ex32-1.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

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

For the quarterly period ended June 30, 2011

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 |X| 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 21, 2011, 1,996,355 shares.

UONLIVE CORPORATION

Form 10-Q for the period ended June 30, 2011

TABLE OF CONTENTS

			Page

PART I - FINANCIAL INFORMATION

	ITEM 1 - FINANCIAL STATEMENTS

		Condensed Consolidated Balance Sheets as of June 30, 2011 (Unaudited) and December 31, 2010	4

		Condensed Consolidated Statements of Operations and Comprehensive Loss for the Three and Six Months ended June 30, 2011 and 2010 (Unaudited)	5

		Condensed Consolidated Statements of Cash Flows for the Six Months ended June 30, 2011 and 2010 (Unaudited)	6

		Condensed Consolidated Statements of Stockholders’ Deficit for the Six Months ended June 30, 2011	7

		Notes to Condensed Consolidated Financial Statements	8 – 15

	ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS		16

	ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK		19

	ITEM 4 - CONTROLS AND PROCEDURE		19

	PART II - OTHER INFORMATION

	ITEM 6 - EXHIBITS		20

		SIGNATURES	21

PART I - FINANCIAL INFORMATION

ITEM 1 - FINANCIAL STATEMENTS

UONLIVE CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

AS OF JUNE 30, 2011 AND DECEMBER 31, 2010

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

	June 30, 2011			December 31, 2010
	(Unaudited)			(Audited)
ASSETS
Current assets:
Cash and cash equivalents	$	9,043		$	16,367
Accounts receivable, related party		3,854			3,854
Deposits and other receivables		-			3,327

Total current assets		12,897			23,548

Non-current assets:
Plant and equipment, net		28,030			33,192

TOTAL ASSETS	$	40,927		$	56,740

LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities:
Accounts payable and accrued liabilities	$	7,000		$	20,337
Amount due to a shareholder		2,761,263			2,483,028

Total current liabilities		2,768,263			2,503,365

Long-term liabilities:
Note payable to a shareholder		166,992			166,998

Total liabilities		2,935,255			2,670,363

Commitments and contingencies

Stockholders’ deficit:
Series A, Convertible preferred stock, $0.001 par value; 10,000,000 shares authorized, 500,000 shares issued and outstanding, respectively		500			500
Common stock, $0.001 par value; 200,000,000 shares authorized; 1,996,355 shares issued and outstanding, respectively		1,996			1,996
Additional paid-in capital		197,570			197,570
Accumulated other comprehensive income		4,040			3,922
Accumulated deficit		(3,098,434	)		(2,817,611	)

Total stockholders’ deficit		(2,894,328	)		(2,613,623	)

TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT	$	40,927		$	56,740

See accompanying notes to the condensed consolidated financial statements.

UONLIVE CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

AND COMPREHENSIVE LOSS

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2011 AND 2010

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

(Unaudited)

	Three months ended June 30,						Six months ended June 30,
	2011			2010			2011			2010

REVENUES, NET
- Related party	$	3,857		$	3,856		$	7,710		$	7,720
- Non-related party		-			641			-			2,779

Total revenues, net		3,857			4,497			7,710			10,499

COST OF REVENUE (exclusive of depreciation)		(10,418	)		(7,058	)		(20,907	)		(19,911	)

GROSS LOSS		(6,561	)		(2,561	)		(13,197	)		(9,412	)

Operating expenses:
Sales and marketing		1,538			2,251			3,074			4,414
General and administrative		125,521			162,413			264,552			380,406

Total operating expenses		127,059			164,664			267,626			384,820

LOSS BEFORE INCOME TAXES		(133,620	)		(167,225	)		(280,823	)		(394,232	)

Income tax expense		-			-			-			-

NET LOSS	$	(133,620	)	$	(167,225	)	$	(280,823	)	$	(394,232	)

Other comprehensive income:
- Foreign currency translation (loss) gain		(1,729	)		5,205			118			7,419

COMPREHENSIVE LOSS	$	(135,349	)	$	(162,020	)	$	(280,705	)	$	(386,813	)

Net loss per share – basic and diluted	$	(0.07	)	$	(0.08	)	$	(0.14	)	$	(0.20	)

Weighted average common shares 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.

UONLIVE CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE SIX MONTHS ENDED JUNE 30, 2011 AND 2010

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

(Unaudited)

	Six months ended June 30,
	2011			2010
Cash flow from operating activities:
Net loss	$	(280,823	)	$	(394,232	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		7,184			39,189
Changes in operating assets and liabilities:
Accounts receivable, trade		-			11,581
Accounts receivable, related party		-			(3,860	)
Deposits and other receivables		3,327			16,528
Accounts payable and accrued liabilities		(13,337	)		(12,540	)

Net cash used in operating activities		(283,649	)		(343,334	)

Cash flows from investing activities:
Purchase of plant and equipment		(2,022	)		(505	)

Net cash used in investing activities		(2,022	)		(505	)

Cash flows from financing activities:
Advances from a shareholder		278,350			326,518

Net cash provided by financing activities		278,350			326,518

Effect of exchange rate change on cash and cash equivalents		(3	)		(176	)

NET CHANGE IN CASH AND CASH EQUIVALENTS		(7,324	)		(17,497	)

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD		16,367			53,850

CASH AND CASH EQUIVALENTS, END OF PERIOD	$	9,043		$	36,353

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

See accompanying notes to the condensed consolidated financial statements

UONLIVE CORPORATION

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ DEFICIT

FOR THE SIX MONTHS ENDED JUNE 30, 2011

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

(Unaudited)

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

Balance as of January 1, 2011		500,000	$	500		1,996,355	$	1,996	$	197,570	$	3,922	$	(2,817,611	)	$	(2,613,623	)

Net loss for the period		-		-		-		-		-				(280,823	)		(280,823	)

Foreign currency translation adjustment		-		-		-		-		-		118		-			118
Balance as of June 30, 2011		500,000	$	500		1,996,355	$	1,996	$	197,570	$	4,040	$	(3,098,434	)	$	(2,894,328	)

See accompanying notes to the condensed consolidated financial statements

UONLIVE CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED JUNE 30, 2011

(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, 2010, which has been derived from audited financial statements and these unaudited condensed consolidated financial statements, reflects all normal and recurring adjustments considered necessary to state fairly the results for the periods presented. The results for the period ended June 30, 2011 are not necessarily indicative of the results to be expected for the entire fiscal year ending December 31, 2011 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, 2010.

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 to its company name to China World Trade Corporation. On July 2, 2008, the Company further changed its company name to Uonlive Corporation.

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

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, 2011, the Company has incurred a net loss of $280,823 and experienced negative cash flows from operations of $283,649 with an accumulated deficit of $3,098,434 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 growing strategies, including increased promotion and marketing the radio program in Hong Kong. However, there is no assurance that the Company will be successful in securing sufficient funds to sustain the 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.

UONLIVE CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED JUNE 30, 2011

(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.

●	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.

●

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.

●	Cash and cash equivalents

Cash and cash equivalents are carried at cost and represent cash on hand, demand deposits placed with banks or other financial institutions and all highly liquid investments with an original maturity of three months or less as of the purchase date of such investments.

●	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. The Company did not provide an allowance for doubtful accounts, nor have there been any write-offs during the periods presented.

●

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:

	Expected useful 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, 2011 and 2010 was $3,622 and $19,583 respectively.

Depreciation expense for the six months ended June 30, 2011 and 2010 was $7,184 and $39,189, respectively.

●

Impairment of long-lived assets

Long-lived assets primarily include plant and equipment. In accordance with Accounting Standards Codification (“ASC”) 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 or that the useful lives are no longer appropriate. 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 charge for the periods presented.

UONLIVE CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED JUNE 30, 2011

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

(Unaudited)

●	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.”

●	Income taxes

Income taxes are 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.

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, 2011 and 2010, the Company did not have any interest and penalties associated with tax positions. As of June 30, 2011, 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.

●

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 shares 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 shares that would have been outstanding if the potential common stock equivalents had been issued and if the additional common shares were dilutive.

●	Comprehensive 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 consists of changes in unrealized gains and losses on foreign currency translation. This comprehensive income is not included in the computation of income tax expense or benefit.

●

Foreign currency 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.

UONLIVE CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED JUNE 30, 2011

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

(Unaudited)

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 maintains its books and records in its local currency, Hong Kong Dollars ("HK$"), which is the functional currency as it is the primary currency of the economic environment in which their 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.

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

	June 30, 2011		June 30, 2010
Period-end HK$:US$1 exchange rate		7.7835		7.7847
Period average HK$:US$1 exchange rate		7.7830		7.7717

●	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. The Company operates in one reportable segment in Hong Kong.

●	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.

●	Fair value of financial instruments

The carrying value of the Company’s financial instruments: cash, accounts receivable, deposits and other receivables, accounts payable and accrued liabilities and amount due to a shareholder approximate at their fair values because of the short-term nature of these financial instruments.

The Company also follows the guidance of ASC Topic 820-10, “Fair Value Measurements and Disclosures” ("ASC 820-10"), with respect to financial assets and liabilities that are measured at fair value. ASC 820-10 establishes a three-tier fair value hierarchy that prioritizes the inputs used in measuring fair value as follows:

●	Level 1 : Inputs are based upon unadjusted quoted prices for identical instruments traded in active markets;

●	Level 2 : Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and

●

Level 3 : Inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques, including option pricing models and discounted cash flow models.

Fair value estimates are made at a specific point in time based on relevant market information about the financial instrument. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and, therefore, cannot be determined with precision. Changes in assumptions could significantly affect the estimates.

UONLIVE CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED JUNE 30, 2011

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

(Unaudited)

●	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 May 2011, the Financial Accounting Standard Board (“FASB”) issued ASU 2011-04, which is an update to Topic 820, “Fair Value Measurement.” This update establishes common requirements for measuring fair value and related disclosures in accordance with accounting principles generally accepted in the United Sates and international financial reporting standards. This amendment did not require additional fair value measurements. ASU 2011-04 is effective for all interim and annual reporting periods beginning after December 15, 2011. The Company does not expect the adoption of this guidance to have a material impact on its financial position or results of operations.

In June 2011, the FASB issued ASU 2011-05, which is an update to Topic 220, “Comprehensive Income.” This update eliminates the option of presenting the components of other comprehensive income as part of the statement of changes in stockholders’ equity, requires consecutive presentation of the statement of net income and other comprehensive income and requires reclassification adjustments from other comprehensive income to net income to be shown on the financial statements. ASU 2011-05 is effective for all interim and annual reporting periods beginning after December 15, 2011. The Company does not expect the adoption of this guidance to have a material impact on its financial position or results of operations.

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

(a)	Amount due to a shareholder

As of June 30, 2011 and December 31, 2010, the balance represented temporary advances made by a major shareholder, Mr. Samuel Tsun for working capital purposes, which was unsecured, interest-free with no fixed terms of repayment.

(b)	Note payable to a shareholder

As of June 30, 2011 and December 31, 2010, the note payable due to a major shareholder, Mr. Samuel Tsun, was unsecured, interest free and not repayable within the next twelve months.

NOTE－6 INCOME TAXES

The Company generated an operating loss for the six months ended June 30, 2011 and 2010 and did not record income tax expense. The Company has operations in various countries and is subject to tax in the jurisdictions in which they operate, 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 periods presented.

British Virgin Island

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

UONLIVE CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED JUNE 30, 2011

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

(Unaudited)

Hong Kong

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, 2011 and 2010, respectively. For the six months ended June 30, 2011, the Company incurred an operating loss of $217,458 for income tax purposes, with approximately $2,203,079 of net operating loss carryforwards for Hong Kong 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, 2011 and December 31, 2010:

	June 30, 2011			December 31, 2010
Deferred tax assets:
Net operating loss carryforwards	$	363,483		$	327,985
Less: valuation allowance		(363,483	)		(327,985	)
Net deferred tax assets	$	-		$	-

As of June 30, 2011, the Company has provided for a full valuation allowance against the deferred tax assets of $363,483 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, 2011, the valuation allowance is increased by $35,498, 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, 2011 and 2010, the Company earned sales revenue of $7,710 and $7,720 from Dbtronix (Far East) Ltd., which was 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, 2011, 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, 2011 and 2010, the Company paid IT service costs of $16,960 and $16,985, respectively to the related company, which was controlled by a director of the Company, Mr. Samuel Tsun, at the current market value in a normal course of business.

(c)	Rent charge paid to a related company

For the six months ended June 30, 2011 and 2010, the Company paid rent charges of $46,255 and $46,322 respectively to the related company, which was controlled by a director of the Company, Mr. Samuel Tsun, at the current market value in a normal course of business.

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, 2011, there was one single customer (Customer A) who accounted for 100% of the Company’s revenues with the outstanding balance of $3,854 at period-end date.

UONLIVE CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED JUNE 30, 2011

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

(Unaudited)

For the three and six months ended June 30, 2010, two customers who accounted for 10% or more of the Company’s revenues and their outstanding balances as at period-end date, 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 B		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 C		1,351		13	%		-
Total:	$	9,071		87	%	$	3,854

(b)	Major vendors

For the three and six months ended June 30, 2011 and 2010, there was no single vendor who accounted for 10% or more of the Company’s purchases.

(c)	Credit risk

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 two years, with fixed monthly rentals, expiring in March 2013. Costs incurred under the operating lease, which are considered to equivalent to the market rate, are recorded as rental expense and totaled approximately $46,255 and $46,322 for the six months ended June 30, 2011 and 2010.

UONLIVE CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED JUNE 30, 2011

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

(Unaudited)

As of June 30, 2011, the Company has future minimum rent payments due under a non-cancelable operating lease in next two years, as follows:

Year ending June 30:
2012	$	92,503
2013		69,378
Total:	$	161,881

NOTE－10 SUBSEQUENT EVENT

In accordance with ASC Topic 855, “Subsequent Events,” which establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued, the Company has evaluated all events or transactions that occurred after June 30, 2011 through the date the condensed financial statements were issued and filed with this Form 10-Q. There were no subsequent events that required recognition or disclosure.

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 Weston International Development Corporation to conduct any lawful business for which a Nevada corporation may be organized. On March 28, 2008, the Company entered into an Exchange Agreement with Uonlive Limited, among others, pursuant to which Uonlive became an indirect wholly owned subsidiary of 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. On August 1, 2008, the Company changed its name to Uonlive Corporation. In addition, 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.

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, blogs, download service, an online player and more in order to reach increased 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 16 diversified channels, 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 developed rapidly. Many large competitors were 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 have caused 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, developing a “U outlet,” and later 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. Lastly, Uonlive will endeavor another model allowing users to call in and record a message leaving it on the website so that other people can 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 package tailored for each customer, which 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 2011 for customers to place their advertisements.

Management believes that Uonlive has a niche market in the online radio industry in Hong Kong. However, management will continue to focus on the Hong Kong market in consideration of the limited resources of the Company. 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.

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, 2011 and 2010 and related notes thereto.

THREE-MONTH PERIOD ENDED JUNE 30, 2011 COMPARED TO THREE-MONTH PERIOD ENDED JUNE 30, 2010

Operating Revenue

We recorded a total of $3,857 consolidated revenue for the three-month period ended June 30, 2011 compared to $4,497 for the same corresponding period in 2010. The decrease was mainly due to the loss of customers and difficult business environment. The consolidated gross loss for the three-month period ended June 30, 2011 was recorded at $6,561. The gross loss was mainly due to higher cost of revenue incurred which included IT consultancy expense of approximately $8,400, server and communication expenses of approximately $500 and rent of approximately $1,400.

Operating Expenses

Operating expenses for the three-month period ended June 30, 2011 decreased to $127,059 from $164,664 in the corresponding period of 2010, reflecting the savings from closing our office in China, which was an insignificant part of our overall opeations. Operating expenses consisted of $1,538 for sales and marketing expenses and $125,521, for general and administrative expenses. The general and administrative expense included approximately $25,000 of salaries expense and labor charges, approximately $21,700 of rental expense, approximately $37,900 of consulting and professional fees, approximately $3,600 depreciation expenses and approximately $33,400 of computer system maintenance expense.

Impairment and Depreciation

During the three-month period ended June 30, 2011, we incurred $3,600 of depreciation expenses, compared to $19,600 for the same period in 2010 resulting from the plant and equipment written off and impairment loss incurred for the year end December 31, 2010.

Net Loss/ Comprehensive Loss

We incurred a net loss of $133,620 for the three-month period ended June 30, 2011, compared to $167,225 for the corresponding period in the year 2010.

We accounted for a comprehensive loss of $135,349 for the three-month period ended June 30, 2011 after an adjustment on the foreign currency translation, compared to $162,020 for the same corresponding period in 2010.

SIX-MONTH PERIOD ENDED JUNE 30, 2011 COMPARED TO SIX-MONTH PERIOD ENDED JUNE 30, 2010

Operating Revenue

We recorded a total of $7,710 consolidated revenue for the six-month period ended June 30, 2011 compared to $10,499 for the same corresponding period in 2010, a decrease of 26.5%. The decrease was mainly due to a difficult business environment and the loss of customers. The consolidated gross loss for the six-month ended June 30, 2011 and 2010 was recorded at $13,197 and $9,412, respectively. The gross loss was mainly due to the decrease in sales to customers.

Operating Expenses

Operating expenses for the six-month period ended June 30, 2011 decreased by $117,194 to $267,262, which consisted of approximately $3,000 for sales and marketing expenses. Again, the decrease was mainly due to the closing of our office in China, an insignificant part of our overall operations. Approximately $264,500 accounted for general and administrative expenses, a decrease of approximately $115,800 compared to $380,406 in the same corresponding period in 2010. The decrease was mainly due to the reduction of salaries amounting to approximately $27,000, the reduction on computer maintenance of approximately $31,000 and the reduction on depreciation expense of approximately $32,000. The general and administrative expense included approximately $50,900 of salaries expense, approximately $43,400 of rental expense, approximately $51,800 of consultancy fees, approximately $38,500 of professional fees and approximately $76,600 of computer system maintenance expense.

Impairment and Depreciation

During the six-month period ended June 30, 2011 and 2010, we incurred approximately $7,200 and $39,200 for depreciation expenses. The decrease was due to the write off of plant and equipment by the end of year 2010.

Net Loss/Comprehensive Loss

We incurred a net loss of approximately $280,800 for the six-month period ended June 30, 2011, a decrease of approximately $114,000 from the corresponding period in the year 2010 due to the decrease in operating expenses. We accounted for a comprehensive loss of approximately $280,700 for the six-month period ended June 30, 2011 compared to a comprehensive loss of approximately $386,800 for the same period in 2010.

LIQUIDITY AND CAPITAL RESOURCES

During the quarter ended June 30, 2011, net cash used in operating activities was $283,649, which included a net loss of $280,823 compared to $343,334 and $394,232 for the same period in 2010. The operating activities also included the use in depreciation of approximately $7,200, a decrease in changes to deposits and other receivables of approximately $3,300, which was offset by the decrease in changes to accounts payables and accrued liabilities of approximately $13,300. We accounted for net cash used in investing activities of approximately $2,000, which was used to purchase plant and equipment, comparing to a minimal of approximately $500 for the corresponding period in 2010. Net cash provided by financing activities accounted for approximately $278,300 and $326,500 for the six-month periods ended June 30, 2011 and 2010, 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.

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 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

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 4, 2011	/s/ Tsun Sin Man Samuel
	Tsun Sin Man Samuel
	Chief Executive Officer and Director
	(Principal Executive Officer)


August 4, 2011	/s/ Hui Chi Kit
	Hui Chi Kit
	Chief Financial Officer
	(Principal Financial and Accounting Officer)

Attached files

UONLIVE CORP Reports

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