Attached files
| file | filename |
|---|---|
| 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 September 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: November 4, 2011, 1,996,355 shares.
1
UONLIVE CORPORATION
Form 10-Q for the period ended September 30, 2011
|
Page
|
|||
|
3
|
|||
|
4
|
|||
|
5
|
|||
|
6
|
|||
|
7 – 13
|
|||
|
14
|
|||
|
16
|
|||
|
17
|
|||
|
17
|
|||
|
18
|
|||
2
CONDENSED CONSOLIDATED BALANCE SHEETS
AS OF SEPTEMBER 30, 2011 AND DECEMBER 31, 2010
(Currency expressed in United States Dollars (“US$”), except for number of shares)
|
September 30, 2011
|
December 31, 2010
|
|||||||
|
(Unaudited)
|
(Audited)
|
|||||||
|
ASSETS
|
||||||||
|
Current assets:
|
||||||||
|
Cash and cash equivalents
|
$ | 14,826 | $ | 16,367 | ||||
|
Accounts receivable, related party
|
- | 3,854 | ||||||
|
Deposits and other receivables
|
- | 3,327 | ||||||
|
Total current assets
|
14,826 | 23,548 | ||||||
|
Non-current assets:
|
||||||||
|
Plant and equipment, net
|
27,926 | 33,192 | ||||||
|
TOTAL ASSETS
|
$ | 42,752 | $ | 56,740 | ||||
|
LIABILITIES AND STOCKHOLDERS’ DEFICIT
|
||||||||
|
Current liabilities:
|
||||||||
|
Accounts payable and accrued liabilities
|
$ | 14,000 | $ | 20,337 | ||||
|
Amount due to a shareholder
|
2,877,087 | 2,483,028 | ||||||
|
Total current liabilities
|
2,891,087 | 2,503,365 | ||||||
|
Long-term liabilities:
|
||||||||
|
Note payable to a shareholder
|
166,780 | 166,998 | ||||||
|
Total liabilities
|
3,057,867 | 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
|
7,666 | 3,922 | ||||||
|
Accumulated deficit
|
(3,222,847 | ) | (2,817,611 | ) | ||||
|
Total stockholders’ deficit
|
(3,015,115 | ) | (2,613,623 | ) | ||||
|
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT
|
$ | 42,752 | $ | 56,740 | ||||
See accompanying notes to the condensed consolidated financial statements.
3
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE LOSS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2011 AND 2010
(Currency expressed in United States Dollars (“US$”), except for number of shares)
(Unaudited)
|
Three months ended September 30,
|
Nine months ended September 30,
|
|||||||||||||||
|
2011
|
2010
|
2011
|
2010
|
|||||||||||||
|
REVENUES, NET
|
||||||||||||||||
|
- Related party
|
$ | 3,849 | $ | 3,861 | $ | 11,559 | $ | 11,581 | ||||||||
|
- Non-related party
|
- | - | - | 2,779 | ||||||||||||
|
Total revenues, net
|
3,849 | 3,861 | 11,559 | 14,360 | ||||||||||||
|
COST OF REVENUE (exclusive of
depreciation)
|
10,397 | 10,437 | 31,304 | 30,348 | ||||||||||||
|
GROSS LOSS
|
(6,548 | ) | (6,576 | ) | (19,745 | ) | (15,988 | ) | ||||||||
|
Operating expenses:
|
||||||||||||||||
|
Sales and marketing
|
1,535 | 1,540 | 4,609 | 5,954 | ||||||||||||
|
General and administrative
|
116,330 | 136,101 | 380,882 | 516,507 | ||||||||||||
|
Total operating expenses
|
117,865 | 137,641 | 385,491 | 522,461 | ||||||||||||
|
LOSS BEFORE INCOME TAXES
|
(124,413 | ) | (144,217 | ) | (405,236 | ) | (538,449 | ) | ||||||||
|
Income tax expense
|
- | - | - | - | ||||||||||||
|
NET LOSS
|
$ | (124,413 | ) | $ | (144,217 | ) | $ | (405,236 | ) | $ | (538,449 | ) | ||||
|
Other comprehensive income:
|
||||||||||||||||
|
- Foreign currency translation (loss) gain
|
3,626 | (7,680 | ) | 3,744 | (261 | ) | ||||||||||
|
COMPREHENSIVE LOSS
|
$ | (120,787 | ) | $ | (151,897 | ) | $ | (401,492 | ) | $ | (538,710 | ) | ||||
|
Net loss per share – basic and diluted
|
$ | (0.06 | ) | $ | (0.07 | ) | $ | (0.20 | ) | $ | (0.27 | ) | ||||
|
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.
4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2011 AND 2010
(Currency expressed in United States Dollars (“US$”))
(Unaudited)
|
Nine months ended September 30,
|
||||||||
|
2011
|
2010
|
|||||||
|
Cash flow from operating activities:
|
||||||||
|
Net loss
|
$ | (405,236 | ) | $ | (538,449 | ) | ||
|
Adjustments to reconcile net loss to net cash used in operating activities:
|
||||||||
|
Depreciation
|
10,916 | 58,796 | ||||||
|
Changes in operating assets and liabilities:
|
||||||||
|
Accounts receivable, trade
|
- | 11,601 | ||||||
|
Accounts receivable, related party
|
3,853 | (3,867 | ) | |||||
|
Deposits and other receivables
|
3,325 | 16,812 | ||||||
|
Accounts payable and accrued liabilities
|
(6,337 | ) | (17,990 | ) | ||||
|
Net cash used in operating activities
|
(393,479 | ) | (473,097 | ) | ||||
|
Cash flows from investing activities:
|
||||||||
|
Purchase of plant and equipment
|
(5,689 | ) | (505 | ) | ||||
|
Net cash used in investing activities
|
(5,689 | ) | (505 | ) | ||||
|
Cash flows from financing activities:
|
||||||||
|
Advances from a shareholder
|
397,649 | 426,335 | ||||||
|
Net cash provided by financing activities
|
397,649 | 426,335 | ||||||
|
Effect of exchange rate change on cash and cash equivalents
|
(22 | ) | (900 | ) | ||||
|
NET CHANGE IN CASH AND CASH EQUIVALENTS
|
(1,541 | ) | (48,167 | ) | ||||
|
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
|
16,367 | 53,850 | ||||||
|
CASH AND CASH EQUIVALENTS, END OF PERIOD
|
$ | 14,826 | $ | 5,683 | ||||
|
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
|
||||||||
|
Cash paid for income taxes
|
$ | - | $ | - | ||||
|
Cash paid for interest
|
$ | - | $ | - | ||||
See accompanying notes to the condensed consolidated financial statements
5
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ DEFICIT
FOR THE NINE MONTHS ENDED SEPTEMBER 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
|
- | - | - | - | - | - | (405,236 | ) | (405,236 | ) | ||||||||||||||||||||||
|
Foreign currency translation
adjustment
|
- | - | - | - | - | 3,744 | - | 3,744 | ||||||||||||||||||||||||
|
Balance as of September
30, 2011
|
500,000 | $ | 500 | 1,996,355 | $ | 1,996 | $ | 197,570 | $ | 7,666 | $ | (3,222,847 | ) | $ | (3,015,115 | ) | ||||||||||||||||
See accompanying notes to the condensed consolidated financial statements
6
UONLIVE CORPORATION
FOR THE NINE MONTHS ENDED SEPTEMBER 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 reflect all normal and recurring adjustments considered necessary to state fairly the results for the periods presented. The results for the period ended September 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 nine months ended September 30, 2011, the Company has incurred a net loss of $405,236 and experienced negative operating cash flows of $393,479 with an accumulated deficit of $3,222,847 as of that date. The continuation of the Company is dependent upon the continuing financial support of shareholders and generating significant revenue and achieving profitability. The actions involve certain cost-saving initiatives and growth strategies, including increased promotion and marketing of the radio programs in Hong Kong. However, there is no assurance that the Company will be successful in securing sufficient funds to sustain the operations.
These and other factors raise substantial doubt about the Company’s ability to continue as a going concern. These condensed consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result in the Company not being able to continue as a going concern.
7
UONLIVE CORPORATION
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2011
(Currency expressed in United States Dollars (“US$”))
(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.
|
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 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.
|
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:
|
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 September 30, 2011 and 2010 was $3,732 and $19,607, respectively.
Depreciation expense for the nine months ended September 30, 2011 and 2010 was $10,916 and $58,796, respectively.
|
l
|
Impairment of long-lived assets
|
Long-lived assets primarily include plant and equipment. In accordance with Accounting Standards Codification (“ASC”) ASC Topic 360-10-5, “Impairment or Disposal of Long-Lived Assets,” the Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable or that the useful lives are no longer appropriate. If the total of the expected undiscounted future net cash flows is less than the carrying amount of the asset, a loss is recognized for the difference between the fair value and carrying amount of the asset. There has been no impairment charge for the periods presented.
|
l
|
Revenue recognition
|
The Company derives revenues from the sale of advertising airtime to customers. Revenue is recognized when the following four revenue criteria are met: persuasive evidence of an arrangement exists, delivery has occurred, the selling price is fixed or determinable, and collectibility is reasonably assured, as defined by ASC Topic 605, “Revenue Recognition.”
8
UONLIVE CORPORATION
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2011
(Currency expressed in United States Dollars (“US$”))
(Unaudited)
|
l
|
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 nine months ended September 30, 2011 and 2010, the Company did not have any interest and penalties associated with tax positions. As of September 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.
|
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 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.
|
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 maintains its books and record in its local currency, Hong Kong Dollars ("HK$"), which functional currency is the primary currency of the economic environment in which their operations are conducted.
In general, for consolidation purposes, assets and liabilities of its subsidiaries whose functional currency is not US$ are translated into US$, in accordance with ASC Topic 830-30, “Translation of Financial Statement,” using the exchange rate on the balance sheet date. Revenues and expenses are translated at average rates prevailing during the period. The gains and losses resulting from translation of financial statements of foreign subsidiaries are recorded as a separate component of accumulated other comprehensive income within the statement of stockholders’ deficit.
9
UONLIVE CORPORATION
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2011
(Currency expressed in United States Dollars (“US$”))
(Unaudited)
Translation of amounts from HK$ into US$1 has been made at the following exchange rates for the respective period:
|
September 30, 2011
|
September 30, 2010
|
|||||||
|
Period-end HK$:US$1 exchange rate
|
7.7934 | 7.7582 | ||||||
|
Period average HK$:US$1 exchange rate
|
7.7867 | 7.7717 | ||||||
|
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. The Company operates in one reportable segment in Hong Kong.
|
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 of financial instruments
|
The carrying value of the Company’s financial instruments: cash, accounts receivable, deposits and other receivables, amount due to a shareholder, accounts payable and accrued liabilities 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.
|
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.
NOTE－5 AMOUNT DUE TO AND NOTE PAYBLE TO A SHAREHOLDER
(a) Amount due to a shareholder
As of September 30, 2011, the balance represented temporary advances made by a major shareholder, Mr. Samuel Tsun to the Company for its working capital purposes, which was unsecured, interest-free with no fixed terms of repayment.
10
UONLIVE CORPORATION
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2011
(Currency expressed in United States Dollars (“US$”))
(Unaudited)
(b) Note payable to a shareholder
As of September 30, 2011, 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 nine months ended September 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.
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 nine months ended September 30, 2011 and 2010, respectively. For the nine months ended September 30, 2011, the Company incurred an operating loss of $312,497 for income tax purposes, with approximately $2,297,159 of cumulative 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 September 30, 2011 and December 31, 2010:
|
September 30, 2011
|
December 31, 2010
|
|||||||
|
Deferred tax assets:
|
||||||||
|
Net operating loss carryforwards
|
$ | 378,707 | $ | 327,985 | ||||
|
Less: valuation allowance
|
(378,707 | ) | (327,985 | ) | ||||
|
Net deferred tax assets
|
$ | - | $ | - | ||||
As of September 30, 2011, the Company has provided for a full valuation allowance against the deferred tax assets of $378,707 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 nine months ended September 30, 2011, the valuation allowance is increased by $50,722, 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 nine months ended September 30, 2011 and 2010, the Company earned sales revenue of $11,559 and $11,581 from Dbtronix (Far East) Ltd., which is controlled by a director of the Company, Mr. Samuel Tsun, at the current market value in the normal course of business.
As of September 30, 2011, there was no accounts receivable due from a related party.
11
UONLIVE CORPORATION
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2011
(Currency expressed in United States Dollars (“US$”))
(Unaudited)
(b) IT service cost paid to a related company
For the nine months ended September 30, 2011 and 2010, the Company paid IT service cost of $25,428 and $25,477, respectively to the related company, which is controlled by a director of the Company, Mr. Samuel Tsun, at the current market value in the normal course of business.
(c) Rent charge paid to a related company
For the nine months ended September 30, 2011 and 2010, the Company paid rent charge of $69,349 and $69,483, respectively to the related company, which is controlled by a director of the Company, Mr. Samuel Tsun, at the current market value in the 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 nine months ended September 30, 2011, there was one single customer who accounted for 100% of the Company’s revenues with no outstanding accounts receivable at period-end date.
For the three months ended September 30, 2010, there was one single customer who accounted for 100% of the Company’s revenues with the accounts receivable of $3,867 at period-end date.
For the nine months ended September 30, 2010, there was one single customer who accounted for 81% of the Company’s revenues with the accounts receivable of $3,867 of at period-end date.
(b) Major vendors
For the three and nine months ended September 30, 2011 and 2010, there was no single vendor who accounted for 10% or more of the Company’s purchases.
(c) Credit risk
Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash and trade accounts receivable. The Company performs ongoing credit evaluations of its customers’ financial condition, but does not require collateral to support such receivables.
(d) Exchange rate risk
The Company cannot guarantee that the current exchange rate will remain steady; therefore there is a possibility that the Company could post the same amount of profit for two comparable periods and because of the fluctuating exchange rate actually post higher or lower profit depending on exchange rate of HK$ 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
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 $69,349 and $69,483 for the nine months ended September 30, 2011 and 2010.
As of September 30, 2011, the Company has future minimum rent payments due under a non-cancelable operating lease in next two years, as follows:
12
UONLIVE CORPORATION
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2011
(Currency expressed in United States Dollars (“US$”))
(Unaudited)
|
Year ending September 30:
|
||||
|
2012
|
$ | 92,386 | ||
|
2013
|
46,193 | |||
|
Total:
|
$ | 138,579 | ||
NOTE－10 SUBSEQUENT EVENT
The Company evaluated subsequent events through the date the financial statements were issued and filed with this Form 10-Q. There were no subsequent events that required recognition or disclosure.
13
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.
14
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 nine-month period ended September 30, 2011 and 2010 and related notes thereto.
THREE-MONTH PERIOD ENDED SEPTEMBER 30, 2011 COMPARED TO THREE-MONTH PERIOD ENDED SEPTEMBER 30, 2010
Operating Revenue
We recorded a total of $3,849 consolidated revenue for the three-month period ended September 30, 2011 compared to $3,861 for the same corresponding period in 2010 without a significant change comparatively. The consolidated gross loss for the three-month period ended September 30, 2011 was recorded at $6,548. 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 $530 and rental of approximately $1,400.
Operating Expenses
Operating expenses for the three-month period ended September 30, 2011 decreased to $117,865 from $137,641 in the corresponding period of 2010, reflecting the cost savings from closure of our office in China, which was an insignificant part of our overall operations. Operating expenses consisted of $1,535 for sales and marketing expenses and $116,330 for general and administrative expenses. The general and administrative expense included approximately $22,000 of salaries expense and labor charges, approximately $21,700 of rental expense, approximately $35,600 of consulting and professional fees, approximately $3,700 depreciation expenses and approximately $32,100 of computer system maintenance expense.
Depreciation
During the three-month period ended September 30, 2011, we incurred $3,732 of depreciation expenses, compared to $19,607 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 $124,413 for the three-month period ended September 30, 2011, compared to $144,217 for the corresponding period in the year 2010.
15
We accounted for a comprehensive loss of $120,787 for the three-month period ended September 30, 2011 after an adjustment on the foreign currency translation, compared to $151,897 for the same corresponding period in 2010.
NINE-MONTH PERIOD ENDED SEPTEMBER 30, 2011 COMPARED TO NINE-MONTH PERIOD ENDED SEPTEMBER 30, 2010
Operating Revenue
We recorded a total of $11,559 consolidated revenue for the nine-month period ended September 30, 2011 compared to $14,360 for the same corresponding period in 2010, a decrease of 19.5%. The decrease was primarily the result of the poor performance of our sales team. The consolidated gross loss for the nine-month ended September 30, 2011 and 2010 was recorded at $19,745 and $15,988, respectively. The gross loss was mainly due to the decrease in sales to customers.
Operating Expenses
Operating expenses for the nine-month period ended September 30, 2011 decreased by $136,970 to $385,491, which included approximately $4,600 for sales and marketing expenses. The decrease was largely attributable to lower general and administrative expenses after the closing of our office in China, an insignificant part of our overall operations. General and administrative expenses were $380,882, a decrease of $135,625 compared to $516,507 in the same corresponding period in 2010. The decrease was mainly due to the reduction of salaries and labor charge amounting to approximately $41,000, lower consultant and professional expense of $21,000, the reduction on computer maintenance of approximately $24,000 and lower depreciation expense of about $48,000. The general and administrative expense included approximately $78,000 of salaries and labor charge expense, $65,000 of rental expense, $76,800 of consultancy fees, $36,000 of professional fees, and $108,700 of computer system maintenance expense.
Depreciation
During the nine-month period ended September 30, 2011 and 2010, we incurred $10,916 and $58,796 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 $405,236 for the nine-month period ended September 30, 2011, a decrease of $133,213 from the corresponding period in the year 2010 due to the decrease in operating expenses. We accounted for a comprehensive loss of $401,492 for the nine-month period ended September 30, 2011 compared to a comprehensive loss of $538,710 for the same period in 2010.
LIQUIDITY AND CAPITAL RESOURCES
During the quarter ended September 30, 2011, net cash used in operating activities was $393,479, which included a net loss of $405,236 compared to $473,097 and $538,449 for the same period in 2010. The operating activities also included the use in depreciation of $10,916, a decrease in changes to deposits and other receivables of approximately $3,300, which was offset by the decrease in changes to accounts payable and accrued liabilities of approximately $6,300. We accounted for net cash used in investing activities of approximately $5,700, which was used to purchase plant and equipment, compared to a minimal amount of approximately $500 for the corresponding period in 2010. Net cash provided by financing activities accounted for $397,649 and $426,335 for the nine-month periods ended September 30, 2011 and 2010, respectively, which represented further advances from a shareholder.
ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Credit Risk
Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash and trade accounts receivable. The Company performs ongoing credit evaluations of its customers’ financial condition, but does not require collateral to support such receivables.
16
Exchange Rate Risk
The Company cannot guarantee that the current exchange rate will remain steady; therefore there is a possibility that the Company could post the same amount of profit for two comparable periods and because of the fluctuating exchange rate actually post higher or lower profit depending on exchange rate of HK$ 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.
|
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
|
|
101.INS**
|
XBRL Instance
|
|
101.SCH**
|
XBRL Taxonomy Extension Schema
|
|
101.CAL**
|
XBRL Taxonomy Extension Calculation
|
|
101.DEF**
|
XBRL Taxonomy Extension Definition
|
|
101.LAB**
|
XBRL Taxonomy Extension Labels
|
|
101.PRE**
|
XBRL Taxonomy Extension Presentation
|
|
** XBRL
|
Information is furnished and not filed or a part of a registration statement or prospectus for purposes of sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.
|
17
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)
|
November 10, 2011
|
/s/ Tsun Sin Man Samuel
|
|
|
Tsun Sin Man Samuel
|
||
|
Chief Executive Officer and Director
|
||
|
(Principal Executive Officer)
|
||
|
November 10, 2011
|
/s/ Hui Chi Kit
|
|
|
Hui Chi Kit
|
||
|
Chief Financial Officer
|
||
|
(Principal Financial and Accounting Officer)
|
||