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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-K

 

(Mark One)

 

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

 

For the fiscal year ended December 31, 2015

 

or

 

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

 

For the transition period from ___________ to ___________

 

Commission file number: 333-153261

 

UMATRIN HOLDING LIMITED

(Exact name of registrant as specified in its charter)

 

Delaware

87-0814235

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

 

315 Madison Ave 3rd Floor PMB #3050

New York City, NY

10017

(Address of principal executive offices)

(Zip Code)

 

(866)-874-4888

Registrant's telephone number, including area code

 

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

 

Title of each class:

Name of each exchange on which registered:

None

None

 

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

 

Common Stock, par value $.00001

(Title of class)


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

 

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

 

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x  No o

 

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 o

 

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference Part III of this Form 10-K or any amendment to this Form 10-K. o

 

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

 

Large accelerated filer

o

Accelerated filer

o

Non-accelerated filer

o

Smaller reporting company

x

(Do not check if a smaller reporting company)

 

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

 

State the aggregate market value of the voting and non-voting common equity held by non-affiliates as of June 30, 2015: none.

 

As of April 12, 2016, the number of shares of common stock of the registrant outstanding is 158,319,100, par value $0.00001 per share.

 

 

 

TABLE OF CONTENTS

 

Item Number and Caption

 

Page

 

 

 

 

 

PART I

 

 

 

 

 

 

 

Item 1.

Business

 

 

4

 

 

 

 

 

 

Item 1A.

Risk Factors

 

 

14

 

 

 

 

 

 

Item 1B.

Unresolved Staff Comments

 

 

14

 

 

 

 

 

 

Item 2.

Properties

 

 

14

 

 

 

 

 

 

Item 3.

Legal Proceedings

 

 

14

 

 

 

 

 

 

Item 4.

Mine Safety Disclosures

 

 

14

 

 

 

 

 

 

PART II

 

 

 

 

 

 

 

 

 

Item 5.

Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

 

 

15

 

 

 

 

 

 

Item 6.

Selected Financial Data

 

 

16

 

 

 

 

 

 

Item 7.

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

 

 

16

 

 

 

 

 

 

Item 7A.

Quantitative and Qualitative Disclosures About Market Risk

 

 

19

 

 

 

 

 

 

Item 8.

Financial Statements and Supplementary Data

 

 

20

 

 

 

 

 

 

Item 9.

Changes in and Disagreements With Accountants on Accounting and Financial Disclosure

 

 

20

 

 

 

 

 

 

Item 9A.

Controls and Procedures

 

 

21

 

 

 

 

 

 

Item 9B.

Other Information

 

 

22

 

 

 

 

 

 

PART III

 

 

 

 

 

 

 

 

 

Item 10.

Directors, Executive Officers and Corporate Governance

 

 

23

 

 

 

 

 

 

Item 11.

Executive Compensation

 

 

25

 

 

 

 

 

 

Item 12.

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

 

 

27

 

 

 

 

 

 

Item 13.

Certain Relationships and Related Transactions, and Director Independence

 

 

28

 

 

 

 

 

 

Item 14.

Principal Accountant Fees and Services

 

 

29

 

 

 

 

 

 

PART IV

 

 

 

 

 

 

 

 

 

Item 15.

Exhibits, Financial Statement Schedules

 

 

30

 

 

 

 

 

 

SIGNATURES

 

 

15

 

 

 
2
 

 

CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS

 

This Annual Report on Form 10-K contains "forward-looking statements". Forward-looking statements discuss matters that are not historical facts. Because they discuss future events or conditions, forward-looking statements may include words such as "anticipate," "believe," "estimate," "intend," "could," "should," "would," "may," "seek," "plan," "might," "will," "expect," "anticipate," "predict," "project," "forecast," "potential," "continue" negatives thereof or similar expressions. Forward-looking statements speak only as of the date they are made, are based on various underlying assumptions and current expectations about the future and are not guarantees. Such statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, level of activity, performance or achievement to be materially different from the results of operations or plans expressed or implied by such forward-looking statements.

 

We cannot predict all of the risks and uncertainties. Accordingly, such information should not be regarded as representations that the results or conditions described in such statements or that our objectives and plans will be achieved and we do not assume any responsibility for the accuracy or completeness of any of these forward-looking statements. These forward-looking statements are found at various places throughout this Annual Report on Form 10-K and include information concerning possible or assumed future results of our operations, including statements about potential acquisition or merger targets; business strategies; future cash flows; financing plans; plans and objectives of management; any other statements regarding future acquisitions, future cash needs, future operations, business plans and future financial results, and any other statements that are not historical facts.

 

These forward-looking statements represent our intentions, plans, expectations, assumptions and beliefs about future events and are subject to risks, uncertainties and other factors. Many of those factors are outside of our control and could cause actual results to differ materially from the results expressed or implied by those forward-looking statements. In light of these risks, uncertainties and assumptions, the events described in the forward-looking statements might not occur or might occur to a different extent or at a different time than we have described. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of the Annual Report on Form 10-K. All subsequent written and oral forward-looking statements concerning other matters addressed in this Annual Report on Form 10-K and attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this Annual Report on Form 10-K.

 

Except to the extent required by law, we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, a change in events, conditions, circumstances or assumptions underlying such statements, or otherwise.

 

 
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PART I

 

ITEM 1. BUSINESS.

 

Overview

 

Umatrin Holding Limited (formerly known as Golden Opportunities Corporation) (the "Company) was incorporated in the state of Delaware on February 2, 2005. The Company was originally incorporated in order to locate and negotiate with a targeted business entity for the combination of that target company with the Company.

 

On January 6, 2016, the Company acquired 80% of the equity interests of U Matrin Worldwide SDN BHD ("Umatrin") in exchange for the issuance of a total of 100,000,000 shares of its common stock to the two holders of Umatrin, Dato' Sri and Dato' Liew. Immediately following the Share Exchange, the business of Umatrin became the business of UMHL. The UMHL operation office remained in Malaysia and the business market will remain focus in Asia.

 

Background of Umatrin Holding Limited

 

UMATRIN HOLDING LIMITED, formerly known as Golden Opportunities Corporation, was incorporated in the state of Delaware on February 2, 2005 ("UMHL", or the "Company"). The Company was originally incorporated in order to locate and negotiate with a targeted business entity for the combination of that target company with the Company.

 

On March 27, 2015, a total of 19,555,000 shares were acquired by Umatrin Group Ltd ("UGL", a company incorporated in Seychelles, through its principal and director, Dato' Sri Eu Hin Chai ("Dato' Sri"). At that time, UGL also acquired promissory notes that covert into common shares of the UMHL. In April 2015, the promissory notes were converted into 24,749,100 shares of UMHL common stock. Upon conversion, UGL held 44,304,100 shares of UMHL common stock out of a total issued and outstanding of 58,319,100 shares. As a result of UGL's acquisition, UGL currently hold 75% of the outstanding shares in UMHL and is the majority shareholder of UMHL.

 

On March 31, 2015, symbol of the Company's common stock was changed to "UMHL".

 

On March 31, 2015, Dato' Sri was appointed to the board of directors. In addition, Michael Zahorik was appointed as the Vice President to provide management continuity and to provide his insight and expertise with the Company's development. Dato Sri' was appointed as President and CEO to serve until the next shareholder meeting, and continuing thereafter until removal or resignation.

 

On August 22, 2015, Michael Zahorik, due to his own personal reason, has resigned his position as the Vice President at UMHL, which is therefore currently managed by Dato' Sri, our sole director.

 

Despite Michael's exit, Dato' Sri remains and is dedicated in delivering increased shareholder value. In order to moving forward with this vision, UMHL decided to acquire an operating company in Malaysia to which he is one of the main stockholders, known as U Matrin Worldwide SDN BHD, into UMHL.

 

Background of U Matrin Worldwide SDN BHD

 

U Matrin Worldwide SDN BHD, formerly known as OLC Worldwide SDN BHD, was incorporated in Malaysia on July 22, 1993 ("Umatrin").

 

Since its incorporation until September 2014, Umatrin remained dormant. On April 26, 2013, Umatrin was awarded with a direct selling license (number AJL932015) by the Ministry of Domestic Trade and Consumer Affairs in Malaysia. However, since April 26, 2013 and until September 2014, Umatrin maintained no operation.

 

On July 3, 2014 and August 12, 2014, Umatrin appointed both Dato' Liew Kok Hong ("Dato' Liew") and Dato' Sri as the company's directors. Together, Dato' Liew and Dato' Sri with Dato' Ho Phooi Keow ("Dato' Ho"), the co-founder of Umatrin, decided to start the business and expand it throughout Asia as a leading Online to Offline (O2O) company that provides technology, products and services to enable consumers, merchants, and other participants to conduct E-commerce on its I-Cloud ecosystem.

 

Dato' Liew was awarded by the Royal of Pahang, Malaysia, the "Darjah Kebesaran Mahkota Pahang Yang Amat Mulia Peringkat Kedua Darjah Indera Mahkota Pahang" with the title "Dato". He has more than 20 years' experience in strategic management and business leadership in E-commerce industries. Dato' Liew executes end-to-end strategies to advance Umatrin's position in high-growth markets, expand major market and pursue new customers, capitalize on strategic alliances and strengthen brand recognition. He also leads Umatrin's regional marketing teams, ensuring that Umatrin delivers its full capabilities to its regional and local markets. Dato' Liew is a veteran sales leader with nearly 20 years' experience in regional and global sales industry. He delivers consulting services, system integration and next-generation technology solutions. Dato' Liew has served in various senior executive sales roles and is recognized for his successful transforming and improving of sales performance by establishing disciplined, sustainable sales processes and driving revenue growth.

 

 
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Dato' Ho has more than 20 years' experience in the real estate, property development and E-commerce industries. With his profound knowledge of the real estate and property development market, his sharp observation and quick command of business opportunities, and his ability of planning and negotiation, Dato' Ho is regarded as one of the best real estate and property development experts in Malaysia.

 

In July 2015, due to Dato' Ho's age, he decided to resign as the director of Umatrin and pass the future of Umatrin to both Dato' Sri and Dato' Liew. In any event, he maintains his shares in the company.

 

As a startup, Umatrin focuses on health and beauty care products. Umatrin had cooperated with several corporations and is appointed as their sole distributor for their health and beauty care products in Asia. Umatrin introduces its products via online platform and offline platformwhich is our retail shop. At our retail store, Umatrin also provides training and product introductory speeches to public.

 

At the early stage of our business, both Dato' Sri and Dato' Liew have led our marketing teams to sell our products to the end-user and also introduced an Independent Dealer Program to our customer. To qualified, the customer only needs to host a product demo and then will receive a discount on product purchases and earn additional credit for each product sold during the demo. Consequently, our customer will become our Independent Dealer. As to date, we have about 20,000 dealers selling our products.

 

Main Business Activities

 

Although Umatrin was awarded a Multi-Level Marketing License, Umatrin did not operate by way of multi-level marketing strategy. Instead, Umatrin applies leading O2O (Online to Offline) marketing strategy to both retail and wholesale trade. Umatrin provides technology and services to enable consumers, merchants and other participants to conduct business in our cloud-based trading system.

 

Umatrin uses advanced network technology and rigorous management system to create unlimited business brand space. Without allocating large sums of operating cost, it continuously introduces new products, combined with O2O internet business model and career opportunities.

 

Our Products

 

We have curated non-toxic beauty, personal care to health and wellness products. The principal markets for Umatrin's products are in Malaysia. We market out products through three primary methods: direct contact, online distribution and/or by our dealer program. Our marketing and sales teams work closely together to maintain a high standard of service to our customers. Each and every new products launched will be communicated to our existing customers and to the public. Since September 2014, our best seller products include:

 

(a) Hydrogen Antioxidant Water Purifier

 

Water is a fundamental to human. Each person on Earth requires at least 20 to 50 liters of clean, safe water a day for drinking, cooking and, simply keeping themselves clean. Polluted water isn't just dirty – it's deadly. Every year 1.8 million people die of diarrheal diseases like cholera. In short, the origin of healthy life is sustained by pure and clean water.

 

 
5
 

  

Umatrin introduces the Hydrogen Antioxidant Water Purifier to produce pure and clean water for our customers. The product is manufactured by Hyundai Warcotec Co. Ltd. from Korea. This product removes water impurities using 4 types of filters:

 

(1) Pre-Carbon filter: The carbonfilter applying the suction method of charcoal sucks and eliminates the chlorine elements generated from the treatment process for the city water, organic compounds and odors.

 

(2) Nano Silver Filter: Antibacterial activated silver carbon, which can kill up to 99.99% of bacteria in water, is used to effectively remove various bacteria,. Also provide enhanced taste and removal of odors from the purified water.

 

(3) Alkaline Filter: Emit minerals ions is used to stabilize the water pH and remove heavy metals as well as chemicals. This filter can also breaks the water molecules into small cluster, increases oxygen and energy level and speeds up metabolism.

 

(4) Post-carbon filter: This filter prevents the propagation of germs and eliminating odors melted into water, generating colorless and odorless clean drinking water.

 

(b) Hydrogen Alkaline Water Stick

 

Tap water is supposedly clean, but it contains a host of contaminants. Bottled water is often just tap water by another name, and even water that did come from a natural spring originally may have been sitting around in its plastic bottle, leaching nasty chemicals, for two or three years before being consumed.

 

Alkaline water, high in active hydrogen, can help neutralize stomach acid in acid reflux. This 'micro-clustering' of the water molecules is what makes the water so hydrating.

 

(c) UNIBERSIH

 

Unibersih is a natural and unpolluted herbal essence. This unique essence which consist of a total of eleven kinds of organic natural herbs is an all-rounded detoxification element which can excrete waste and toxins thoroughly. It is applicable to those problems brought to our body in modern living, such as constipation, pigmentation, overweight, bad breath, unsound sleep, lack of physical strength, indigestion, abdominal swelling, dry and pale skin, poor immune system etc. It can also strengthen the function of detoxification.

 

(d) SOYME

 

Soyme is a Malaysian version of Nattō which is made from soybeans, typically nattō soybeans. The benefit of Soyme includes:

 

i. Prevents Heart Disease

 

Soyme has the ability to act as a natural and effective blood thinner in the body, which enables the blood to freely flow throughout the arteries so as to support the vital organs. It can also be very useful in preventing plaque from developing in the complex arteries, which in turn reduces the risk from arterial clotting.

 

 
6
 

  

ii. Anti-Aging Effects

 

Soyme is rich in protein, it will keep the skin healthy so as to look younger for a considerable amount of time. It also contains high amount of vitamin K2, which is a natural and potent anti-aging agent that helps improve the overall health condition of the skin.

   

iii. Improves Blood Circulation

 

Soyme could improve the body's blood circulation, which greatly helps various vital organs to function normally. As Soyme increases blood flow, it helps to prevent the narrowing and hardening of arteries.

 

iv. Lowers Cholesterol

 

As an excellent blood thinner, Soyme becomes a valuable agent in reducing the body's cholesterol levels. With these great benefits, consumers are able to have a lesser risk from suffering heart related conditions and other serious health problems.

 

(e) SOPHIELICIOUS

 

Sophielicous is an anti-aging supplement formulated by using a novel processing technology and the ingredients consists of 3 types of plant stem cells and collagen tri-peptide to enhance the longevity of skin cells. Apple stem cell obtained from the rare and endangered Swiss apple which found rich in epigenetic factors and metabolites to activate sleeping cell, repairs and regenerates new cell; Grape stem cell ensures the vitality and generation capacity of the skin, to protect and prevent the UV damage and pigmentation thus even the skin tone; Argon stem cell derived from very resistant and rare argon tree is for a deep-seated rejuvenation of the skin, restoration of the skin's firmness and wrinkle reduction. It also contains the wonder from deep sea: marine collagen used is in the very short chain of amino acids known tri-peptide. Collagen tri-peptide with the small molecule size can be absorbed fast to the body compare to others collagen, works as cushion and support the epidermis, making it firm and preventing our skin from sagging; lastly the green tea extracts work as powerful antioxidant for the cell protection. Combining all benefits, Sophielicious provides significant anti-aging effect and restores skin.

 

(f) Nano Skin-Care Serum Series + Nano Vibration Serum Pen

 

Nano Anti-Aging Face Serum contains strong antioxidants to delay skin aging. This Anti-Aging Serum is specially formulated to counter-acts aging skin in a unique way. It contains active ingredients that are beneficial to our skin. By applying this product, established wrinkles and fine lines are visibly reduced and skin becomes toned and firmer.

 

Nano Eye Contour Serum improves microcirculation and decongests capillaries around eye area to reduce puffiness and dark circles. With this specially formulated Eye Serum, fine lines and wrinkles are visibly reduced. With daily use of this Eye Serum, there will have improvement in skin luminosity, a decrease in unevenness of the skin, and improvements in appearance of under-eye dark circle & under-eye puffiness.

 

Nano Collagen Face Serum stimulates collagen synthesis and forms a natural barrier to keep skin moisturized. This serum helps to improve skin conditions: skin elasticity, skin firmness and it also helps to prevent skin from premature aging.

 

 
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Nano Whitening Face Serum lightens pigmented skin and skin discoloration using Vitamin E and mushroom extracts. This serum contains active ingredients that will not only lighten your skin tone but also effective against age spot in a unique way. It is a light, non-greasy and readily absorbed to help, protect and nourish the skin.

 

Nano Vibration Serum Pen is for better absorption and increased penetration of Nano Serum active ingredients and vitamins. This product is composed of steel roller balls, which has cooling and refreshing effects. There is a sonic vibration to massage the skin and improve absorption of serum into skin.

  

(g) Dr. Appers Stem Cell

 

This exclusive Stem Cell Essence contained the latest Swiss Apple Stem Cell active ingredients which help to neutralizes and repairs the effects of emotional and environmental stress on the skin. It helps to restore the skin complexion, firm up and reduce fine wrinkle lines, makes the skin look fuller, whiter, younger and more beautiful. As we age, the reduced turnover of our cells means we can lose control over how our skin ages, and Epidermal stem cells needed to create healthy new skin are significantly reduced and function less efficiently. Scientists have found that a novel extract derived from the stem cells of a rare apple tree cultivated for its extraordinary longevity shows tremendous ability to rejuvenate aging skin. By stimulating aging skin stem cells, this plant extract has been shown to lessen the appearance of unsightly wrinkles. Clinical trials show that this unique formulation increases the longevity of skin cells, resulting in skin that has a more youthful and radiant appearance.

 

(h) AKERO SECRET ANTI-AGING SKIN CARE SERIES

 

Umatrin introduces our own anti-aging skin care series known as "AKERO SECRET". The product was developed with 100% natural botanical active ingredients and adopted a unique nanotechnology for skin hydration and anti-aging. This technology gives user a luminous, firm and flawless skin. It improves skin tone in just 7 days and skin will look more plump in just 14 days. After 28 days, skin will look more translucent. Continuous use will improve skin elasticity, lightens pigmentation, for a brighter looking skin. AKERO SECRET includes moisturizing cleansing foam, facial toner, brightening serum, soothing emulsion, ageless cream and protective sunscreen.

 

Raw Materials and supplies

 

We do not depend on principal suppliers for any of our single product. Most of the raw materials were supplied by various suppliers and some are repackaged in Malaysia. Akero Secret, our anti-aging skin care product, was manufactured in Taiwan.

 

We have an Authorized Exclusive Distributorship with HYUNDAI Healthy Lifestyle Sdn Bhd, in which we should place a minimum order of 250 units of products identified in the agreement and use our best efforts to sale and distribute the products within Malaysia. The duration of the agreement is from May 1, 2015 to April 31, 2016.

 

 
8
 

  

Intellectual Property

 

On February 22, 2015, we filed the application for our trademark "AKERO SECRET" with the Trademark Registry of Malaysia, which is pending for approval. The Registrar of Trademarks will examine the trademark application in approximately six (6) to nine (9) months after the filing date. The Registrar will issue Form on Request for Advertisement of a trademark if there is no objection. The Applicant is required to return the said form within two (2) months from the date received the form with prescription fee. The Registrar will then advertise the application in the government gazette. The Registrar will issue a Certificate of Registration if there is no opposition within two (2) months or any extended time provided by the Registrar from the date of the advertisement in the gazette. In short, a smooth trademark application may take approximately 1.5 – 2 years to be issued with a Certificate of Registration.

 

It is important for Umatrin to register the trademark "AKERO SECRET" because our Company will be introducing different types of quality anti-aging beauty and health products under the brand name AKERO SECRET.

   

Licenses and agreements

 

We possessed 6 licenses for our products from Ministry of Health Malaysia, as listed below:

 

No.

Name of Cosmetic

Validity Period

Notification Number

1.

Moisturising Cleansing Foam

Aug. 17, 2015 – Aug. 17, 2017

NOT150803380K

2.

Facial Toner

Aug. 17, 2015 – Aug. 17, 2017

NOT150803381K

3.

Brightening Serum

Aug. 17, 2015 – Aug. 17, 2017

NOT150803382K

4.

Soothing Emulsion

Aug. 17, 2015 – Aug. 17, 2017

NOT150803383K

5.

Ageless Cream

Aug. 17, 2015 – Aug. 17, 2017

NOT150803384K

6.

Protective Sunscreen

Aug. 17, 2015 – Aug. 17, 2017

NOT150803385K

 

Our manufactures, Nano Patch and Taikuchi Trading, possessed five licenses for our products from Ministry of Health Malaysia, as listed below:

 

No.

Name of Cosmetic

Validity Period

Notification Number

License Holder

1.

NANO WHITENING SERUM

Mar.16, 2015- Mar 16, 2017

NOT150302294K

Nano Patch

2.

NANO EYE CONTOUR SERUM

Mar.16, 2015- Mar 16, 2017

NOT150302293K

Nano Patch

3.

NANO ANTI AGING SERUM

Mar.16, 2015- Mar 16, 2017

NOT150302291K

Nano Patch

4.

NANO COLLAGEN SERUM

Mar.16, 2015- Mar 16, 2017

NOT150302291K

Nano Patch

5.

DR APPERs- Stem Cell Essence

Jun 30, 2014- Jun 30, 2016

NOT140605121K

Taikuchi Trading

 

 
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Customers

 

We do not depend on any major customers. Our customers' basis consists of end-users and dealers.

 

Government Regulation

 

All of our health and beauty products are approved by our Ministry of Health in Malaysia.

 

Our Marketing Strategies

 

Umatrin markets products via online to offline. Umatrin believes that via online channel, we are able to reach our target audiences around the world. Based on Euromonitor International, internet retailing of health and beauty shows fast growth in Asia Pacific Market. As for our offline channel, we have one retail store in Malaysia, whereby anyone can step in and try our products. Following Umatrin's Mission: Improve each standard of living. We provide our customer with quality health and beauty products and also allow them to host event to share our products and at the same time earning additional credit for each sales during the event. Consequently, we will appoint them as our dealers if they wish to start-up their own business. Umatrin will provide market support to the dealers, such as advertisements, products introductory speeches and website to introduce the products to public. This strategy allows Umatrin's products to reach to each and every single person around the Asia Pacific as Umatrin's believe the best advertising will always be by way of word-of-mouth referrals. 

 

As of December 31, 2014, Umatrin's net profit is MYR849,377 (approximately USD$259,563).

 

Most of our customers and dealers are from Asia. We have 20,000 dealers in Asia. From Umatrin's sales, we have seen a market trend that consumers are buying more anti-aging products from us.

   

Industry Trends- Anti-Aging Products Market

 

Based on global research, by 2015, the anti-aging industry will grow by 82% in Asia Pacific and 72% in Japan. The global wellness products industry is a $569 billion industry, and anti-aging is one of the fastest growing categories. The global cosmetics and toiletries industry is a $333 billion industry, and anti-aging is its largest growing segment. In fact, the anti-aging market is predicted to reach a trillion dollars by 2025.

 

Hence, Umatrin is moving towards developing our own brand and anti-aging products. Recently we have developed a 100% natural anti-aging skin care series products under the brand "AKERO SECRET". We have received lots of positive feedbacks on this new skin care series. GCI Magazine had reported that "In anti-aging and beauty trends, the desire for more natural ingredients is one of the fastest growing around the world. According to Kline & Company, the natural personal care market is predicted to reach $6.7 billion in 2015 in the U.S. alone, and according to a recent anti-aging survey by Mintel, 76% of respondents who are concerned with aging report being interested in products with natural/organic ingredients".

 

 
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In view of the above, Umatrin does not stop right here, but aims at developing and manufacturing more anti-aging products to benefit the public enlarged. In order to achieve this, additional capital funds are required for Umatrin to venture into manufacturing industry and expanding further research and development to develop more and more quality products.

 

To save time, Umatrin plans to go public and offers stock in an initial public offering by way of a reverse merger.

 

Competitive Analysis

 

Market Analysis

 

Asia is the Earth's largest and most populous continent. It comprises 30% of Earth's land area, and has historically been home to 60% of the planet's human population (roughly 4.4 billion people reside in Asia). Asian is notable for not only the overall large size, but unusually dense and large settlements as well as vast barely populated regions.

 

Rising individual incomes and changing lifestyles drive the global beauty care products industry. Revenue in the industry is forecast to reach an estimated $265 billion in 2017 with a CAGR of 3.4% over the next five years (2012-2017), highly influenced by the increasing demand in Asia Pacific (APAC) and Europe due to increase in GDP and the improving living standard.

 

Lucintel, a leading global management consulting and market research firm, has analyzed the global beauty care industry and presents its findings in "Global Beauty Care Products Industry 2012-2017: Trend, Profit, and Forecast Analysis." The industry encompasses manufacturers' segment revenue related to beauty care products. As per the study, increased awareness has resulted in higher demand for luxury products, especially cosmetics. Providing quality products at a low cost is a challenge for manufacturers. Skincare, the largest segment, represents the growth in products during the forecast period. Increased demand for multi-feature products such as moisturizing cream with sun protection and anti-aging or anti-wrinkle properties are likely to drive market growth.

 

The cosmetics segment also has growth potential as demand is increasing for premium cosmetics in the expanding middle class in developing countries. Total sales in the beauty and personal care industry were roughly $426 billion in 2011, total global beauty sales for January – March 2012 were up 14% to $2,278,000,000. Total Skincare sales were $844 million, up 19%. The cosmetic industry worldwide seems to be continuously developing, now more than ever with the advent of the Internet companies.

 

Many famous companies sell their cosmetic products online also in countries where they do not have representatives. At present, cosmetics industry is focusing on launching organic cosmetic products because people are now becoming more and more conscious about the chemicals and the harmful effects in the cosmetics. Players are globally exploring the markets to tap the hidden growth potential. Regulatory bodies are also ensuring that consumers have full knowledge about the ingredients of products and hence focusing on labeling.

 

A new global anti-ageing report from Research and Markets, forecasts the global product market will grow at a CAGR of 6.7% over the period 2013-2018, with the rising global ageing population being the main driver. (www.cosmeticsdesign-europe.com)

 

 
11
 

  

Competitors

 

The beauty and health industry is highly competitive and, at times, subject to rapidly changing consumer preferences and industry trends. Competition generally provides incentives to boost brand strength, assortment and continuity of merchandise selection, reliable order fulfillment and on-time delivery, and a higher level of brand support and customer support. We compete with a large number of multi-national manufacturers of beauty and health products, many of which have significantly greater resources than we do. Many of our competitors also have the ability to develop and market products similar to and competitive with our products. Specifically, we compete with the major skin care companies which market many brands including Avon, Chanel, Clarins, Clinique, Estée Lauder, L'Oréal, Lancôme, Neutrogena and Shiseido, major health supplement companies which market many brands including USANA, CVS, Nature Made and Carlson Labs. Most, if not all of these competitors, have launched anti-aging skin care products. We also compete with several smaller prestige boutique and designer anti-aging products brands.

 

We believe that we compete primarily on the basis of product differentiation, sales and marketing strategy and distribution model. We focus on anti-aging industry by introducing quality natural products to be consumed or applied on skins to naturally reach the ultimate results. In addition, we are moving forward to develop our innovative product formulation and differentiated product concepts. We believe that our expertise within the anti-aging industry, brand authenticity and loyal consumer base, and multi-channel marketing and distribution expertise provide us with competitive advantages in the market for prestige anti-aging beauty and health products.

 

Principal Methods of Competition

 

A core element of our success is our distinctive Online to Offline (O2O) marketing strategy and multi-channel distribution model. We focus on educating consumers about the unique benefits of our products, developing intimate relationships with consumers, capitalizing on our multi-channel distribution strategy to effectively reach and engage those consumers and allowing our consumers to enjoy the benefit to be profitable by sharing the same to other consumers. We believe educational media such as products introductory demo and continuous products roadshows are effective at informing consumers about the innovative product formulation, application technique and resulting benefits of our products. We also believe that our company-owned boutiques enhance the authenticity of our brand and provide a personal environment in which we offer our broadest product assortment and provide one-on-one consumer consultations and product demonstrations. At the same time, our physical presence at the event hosted by our dealers have helped to further strengthen our brand image and provide additional points of contact to educate consumers about our products. Moreover, this model allows us to:

 

·

acquire new consumers and maintain premium brand positioning without large expenditures on print-based advertising and marketing common in our industry;

·

provide consumers the ability to select the most convenient channel to purchase our products;

·

develop intimate consumer relationships that foster brand loyalty and encourage repeat purchases;

·

build a base of recurring revenues as a substantial percentage of our consumers participate in our product continuity programs through which products initially purchased are automatically replenished; and

·

drive traffic across our sales channels.

 

 
12
 

  

We believe that our company benefits from strong consumer loyalty as well as the emotional connection formed between our consumers and our brand. In turn, we believe that our consumers are strong advocates for our brand and have displayed a desire and willingness to convert others to our brand. Strong consumer loyalty has resulted in the development of a community of consumers who share a passion for our products and our brand. This community has expressed itself through attendance at events we sponsor, as well as events initiated by individual consumers. In addition, these loyal consumers have established multiple online community independent of the Company's efforts. This loyal community of users provides invaluable feedback that we often incorporate into our product development.

 

As consumers continue to blend their off-line and on-line activities, from "showrooming" and retail apps to sofa shopping and click-and-collect, the lines between internet retailing, e-commerce and physical retailing are increasingly blurred. Big retailers are taking an "omni-channel" approach by merging their offline, on-line and mobile capabilities to create a seamless experience for shoppers. To elaborate, consumer behavior driving internet sales surge. E-commerce and m-commerce have changed the way that consumers', even those who still visit physical stores, approach on shopping. The main drivers of e-commerce include: the search for value and convenience; increased access to, and usage of, the internet; faster download speeds; improved delivery and online payment methods; and the shift towards mobile devices such as smartphones and tablets. Hence, we will be co-operating with our partners to allow our consumer to purchase our products by just a click at their mobile devices apps.

 

We use third-party contract manufacturers and suppliers to obtain substantially all raw materials, components and packaging products and to manufacture finished some of products relating to our Umatrin and AKERO SECRET brands products. We utilize approximately 20 different product and packaging suppliers from which we source and contract manufacture our products. Suppliers purchase all necessary raw materials, including the natural ingredients used to manufacture our products.

  

With respect to our other third-party manufacturers, we make purchases through purchase orders. We believe that we have good relationships with our manufacturers and that there are alternative sources in the event that one or more of these manufacturers is not available. We continually review our manufacturing needs against the capacity of our contract manufacturers to ensure that we are able to meet our production goals, reduce costs, and operate more efficiently.

 

Research and Development

 

We invested approximately $19,500 for a third party manufacturer to develop AKERO SECRET.

 

Employees

 

Umatrin's core team has served with numerous companies like E-commerce, financial sector companies and variety of internet services. The team has over five years' experiences in operating and managing E-commerce sites, brand marketing, product development and financial security. The team also has over ten years' experiences in internet performance and security and was involved in world-class networking enterprises. We currently have 34 full-time employees.

 

 
13
 

 

ITEM 1A. RISK FACTORS

 

Smaller reporting companies are not required to provide the information required by this item.

 

ITEM 1B. UNRESOLVED STAFF COMMENTS

 

Smaller reporting companies are not required to provide the information required by this item.

 

ITEM 2. PROPERTIES.

 

We own the following building:

 

Location

Area

(square meters)

Certificate No.

Encumbrance

No. 32, Jalan Radin Bagus 3, Bandar Baru Seri Petaling, 57000 Kuala Lumpur

178.4

Parcel of land held under PM8479

Leasehold property with its lease term expiring on May 4, 2110.

 

We lease the following building from SKH Media Sdn. Bhd. (the "Lessor"). Set forth in the following table is the information of such lease:

 

Location

Registered Owner of Land

Area

(square meters)

Term and Expiration

Rent

Certificate No.

Encumbrance

No.22-01, Binjai 8, Premium SOHO, No.2, Lorong Binjai 50450 Kuala Lumpur

SKH Media Sdn. Bhd.

131

2 years from October 1, 2014

MYR10,000.00

-

-

  

ITEM 3. LEGAL PROCEEDINGS

 

To the best of our knowledge, there are no material pending legal proceedings to which we are a party or of which any of our property is the subject. From time to time, we may become involved in various lawsuits and legal proceedings, which arise, in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business.

 

ITEM 4. MINE SAFETY DISCLOSURES.

 

Not Applicable.

 

 
14
 

 

PART II

 

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.

 

No Public Market for Common Stock

 

Our common stock was approved to trade on the OTC Bulletin Board system under the symbol "GOOO" on October 28, 2008. Effective April 1, 2015, the Company has received the new symbol of "UMHL". However, to date our Company's Common Stock is not actively traded on a daily basis.

 

The market price of our common stock is subject to significant fluctuations in response to variations in our quarterly operating results, general trends in the market, and other factors, over many of which we have little or no control. In addition, broad market fluctuations, as well as general economic, business and political conditions, may adversely affect the market for our common stock, regardless of our actual or projected performance.

 

Holders

 

As of April 12, 2016, there are approximately 29 shareholders of record of our common stock.

 

Dividends

 

Since inception we have not paid any dividends on our common stock. We currently do not anticipate paying any cash dividends in the foreseeable future on our common stock, when issued pursuant to this offering. Although we intend to retain our earnings, if any, to finance the exploration and growth of our business, our Board of Directors will have the discretion to declare and pay dividends in the future.

 

Payment of dividends in the future will depend upon our earnings, capital requirements, and other factors, which our Board of Directors may deem relevant.

 

Recent Sale of Unregistered Securities

 

On February 16, 2015, Umatrin was authorized to issue additional 4,500,000 shares of common stock at MYR1 per share and additional 1,000,000 shares was issued and paid up for MYR1,000,000 ($305,591).

  

 
15
 

  

Equity Compensation Plan Information

 

The following table sets forth certain information as of December 31, 2015, with respect to compensation plans under which our equity securities are authorized for issuance:

 

(a)

(b)

(c)

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

Weighted-average exercise price of outstanding options, warrants and rights

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

Equity compensation plans approved by security holders

8,000,000

$

0.10

8,000,000

Equity compensation plans not approved by security holders

None

Total

8,000,000

$

0.10

8,000,000

 

ITEM 6. SELECTED FINANCIAL DATA.

 

Smaller reporting companies are not required to provide the information required by this item.

 

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION.

 

You should read the following discussion together with our financial statements and the related notes included elsewhere in this annual report on Form 10-K. This discussion contains forward-looking statements that are based on our current expectations, estimates and projections about our business and operations. Our actual results may differ materially from those currently anticipated and expressed in such forward-looking statements.

 

Overview

 

U Matrin Worldwide SDN BHD, formerly known as OLC Worldwide SDN. BHD. was incorporated in Malaysia on July 22, 1993 ("Umatrin").

 

Since its incorporation until September 2014, Umatrin remained dormant. On April 26, 2013, Umatrin was awarded with a direct selling license number AJL932015 by the Ministry of Domestic Trade and Consumer Affairs Malaysia. However, since April 26, 2013 and until September 2014, Umatrin maintained no operation.

 

On July 3, 2014 and August 12, 2014, Umatrin appointed both Dato' Liew Kok Hong ("Dato' Liew") and Dato' Sri as its directors. Together, Dato' Liew and Dato' Sri with Dato' Ho Phooi Keow ("Dato' Ho"), the co-founder of Umatrin, decided to start the business and expand it throughout the Asia as a leading Online to Offline (O2O) company that provides technology, products and services to enable consumers, merchants, and other participants to conduct E-commerce on its I-Cloud ecosystem.

 

 
16
 

  

Dato' Liew was awarded by the Royal of Pahang, Malaysia, as the "Darjah Kebesaran Mahkota Pahang Yang Amat Mulia Peringkat Kedua Darjah Indera Mahkota Pahang" with the title "Dato". He has more than 20 years' experience in strategic management and business leadership in E-commerce industries. Dato' Liew executes end-to-end strategies to advance Umatrin's position in high-growth markets, pursue new customers, capitalize on strategic alliances and strengthen brand recognition. He also leads and ensures that Umatrin delivers its full capabilities to its regional and local markets. Dato' Liew is a veteran sales leader with nearly 20 years' experience in regional and global sales industry. He delivers consulting services, system integration and next-generation technology solutions. Dato' Liew had served in various senior executive sales roles and is recognized for his successfully transforming and improving sales of performance, by establishing disciplined, sustainable sales processes which drives revenue growth.

 

Dato' Ho has more than 20 years' experience in real estate and property development and E-commerce industries. With his profound knowledge of the real estate and property development market, his sharp observation and quick command of business opportunities, and his ability of planning and negotiation, Dato' Ho is regarded as one of the best real estate and property development experts in Malaysia.

 

On March 23, 2015, due to Dato' Ho's age, he decided to resign as the director of Umatrin and pass the future of Umatrin to both Dato' Sri and Dato' Liew. In any event, he maintains his shares in the company.

 

On February 24, 2016, the Board of Directors of Umatrin Holding Limited (the "Company") approved and ratified to change the Company's fiscal year end from January 31 to December 31, effective immediately as of the date of the board approval.

 

Umatrin's Results of Operations for the Year Ended December 31, 2015 Compared to the Year Ended December 31, 2014

 

 

 

For the Years Ended

 

 

 

December 31,

 

 

December 31,

 

 

 

2015

 

 

2014

 

Sales

 

$3,158,296

 

 

$2,888,483

 

Cost of sales

 

 

(544,169)

 

 

(707,091)

Gross profit

 

 

2,614,127

 

 

 

2,181,392

 

Selling, general & administrative expenses

 

 

(2,577,904)

 

 

(1,771,394)

Other income

 

 

-

 

 

 

5

 

Provision of income taxes

 

 

(27,701)

 

 

(150,440)

Net income (loss)

 

$8,522

 

 

$259,563

 

 

Sales

 

For the year ended December 31, 2015, the Company was able to generate $3,158,296, which sees an improved 9% in sales in selling beauty and health products through the improving market condition in the local market in Malaysia as these products were being highly sought after.

   

Gross profit and gross margin

 

The Company was able to generate a gross profit margin of 82% as these luxury products do tend to have higher margin at a range of 65% to 86%.

 

 
17
 

  

Selling, general and administrative costs

 

Major operating costs include salaries and wages, sales commission and advertising and promotional costs for the year ended December 31, 2015 and 2014.

 

Net income

 

At the end of the financial period December 31, 2015, the Company was able to generate $8,522 net income. This surplus of fund will be used for the coming expansion of the Company.

 

Liquidity and Capital Resources

 

The Company had cash and cash equivalent of $174,113 and $2,140,653 as of December 31, 2015 and December 31, 2014, respectively.

 

Our company's operations have been funded through an equity financing and a series of debt transactions, primarily with shareholders, directors, and officers of our company and affiliated entities. These related party debt transactions such as sales purchases of inventory and advances have operated as informal lines of credit since the inception of our company, and related parties have extended credit as needed which our company has repaid at its convenience. We anticipate that we will incur operating losses in the foreseeable future and we believe we will need additional cash to support our daily operations while we are attempting to execute our business plan and produce revenues. If our related parties are unable or unwilling to provide additional capital, we would likely require financing from third parties. There can be no assurance that any additional financing will be available to us, on terms we believe to be favorable or at all. The inability to obtain additional capital would have a material adverse effect on our operations and financial condition and could force us to curtail or discontinue operations entirely and/or file for protection under bankruptcy laws.

 

On February 16, 2015, the Company increased its authorized common stock from 500,000 to 5,000,000 shares at MYR1 (approximately $0.3056) par value while allotting additional 1,000,000 shares at MYR1 (approximately $0.3056) par value to use for the funding for its business expansion plan.

 

Operating Activities

 

For the year ended December 31, 2015 and 2014, we received $375,676 and used $2,457,934 in operating activities, respectively. The movement in net cash received and used in operating activities resulted from movement in other receivables and prepayments, related parties balances, other payables and accrued expenses.

 

Investing Activities

 

During the year ended December 31, 2015 and 2014, we used $1,385,944 and $333,888 in investing activity. The net cash used in investing activity resulted from fixed assets purchased as the Company expanded its operation.

 

 
18
 

    

Financing Activities

 

During the year ended December 31, 2015, we received proceeds from capital contribution of $305,591, drawdown of a term loan of $586,946 and repayment to related parties of $1,219,660, and as a result, we had net cash used in financing activities of $327,123.

 

During the year ended December 31, 2014, we received advances from related parties of $163,551, and as a result, we had net cash provided by financing activity of $163,551.

 

Loan Commitment

 

On December 23, 2014, MYR2,300,000 (approximately $657,507) term loan was granted to Umatrin for the purchase of four Story Shop Offices located at No.32, 32-1, 32-2, 32-3, Jalan Radin Bagus 3, Bandar Baru Seri Petaling, 57000, Kuala Lumpur with a repayment period of 240 months. This term loan was secured by (i) title deed for the said property, and (ii) way of guarantee by directors of the Company. This term loan is subject to an interest charges at 2.10% per annum below the Bank's Base Lending Rate ("BLR") with daily rests. The BLR is currently at 6.85% for both December 31, 2015 and December 31, 2014.

 

On July 27, 2015, the drawdown of MYR2,300,000 (approximately $609,554) was made and repayment effectively starts on December 1, 2015 with a fixed instalment of MYR14,863.14 (approximately $4,249) for 240 instalments.

 

Other than the above funding, the Company do not have any other external source of funding.

 

We have no known demands or commitments and we are not aware of any events or uncertainties as of December 31, 2015 that will result in or that are reasonably likely to materially increase or decrease our current liquidity.

 

We had no material commitments for capital expenditure for the year ended December 31, 2015 and 2014 except mentioned above.

 

The Company's Results of Operations for the Eleven Months Ended December 31, 2015 Compared to the Year Ended January 31, 2015

 

 

 

Eleven Month Year

 

 

 

December 31,

 

 

January 31,

 

 

 

2015

 

 

2015

 

Sales

 

$-

 

 

$-

 

Operating expenses

 

 

(360,991)

 

 

(79,256)

Other expenses

 

 

(3,085)

 

 

(5,537)

Net loss

 

$(364,076)

 

$(84,793)

 

The Company did not generate any operating revenue for the eleven months ended December 31, 2015 and for the year ended January 31, 2015. The major operating costs include stock compensation cost, legal and audit fees, and general filling fees for the eleven months ended December 31, 2015 and for the year ended January 31, 2015. The significant increase in operating cost was due to share option cost amounting $283,126 for the eleven months ended December 31, 2015 compared to $62,942 for the year ended January 31, 2015.

 

Liquidity and Capital Resources

 

The Company had cash and cash equivalents of $Nil and $16 as of December 31, 2015 and January 31, 2015, respectively.

 

We have no internal sources of liquidity. Our only external source of liquidity are our officers/directors who personally fund our operating expenses through related party loans. There is no assurances of their ability to continue personally funding our operating expenses. There is no assurance we would be able to secure additional sources of funding. The Company continues to rely upon the issuance of common stock and capital contributions from shareholders to fund administrative expenses.

 

We have no known demands or commitments and are not aware of any events or uncertainties as of December 31, 2015 that will result in or that are reasonably likely to materially increase or decrease our current liquidity.

 

We have no material commitments for capital expenditures for the year ended December 31, 2015 and January 31, 2015.

 

Critical Accounting Policies

 

We prepare our financial statements in conformity with the generally accepted accounting principles in the United States (GAAP), which requires management to make certain estimates and apply judgments. We base our estimates and judgments on historical experiences, current trends and other factors that management believes to be important at the time the condensed financial statements are prepared. Due to the need to make estimates about effect of matters that are inherently uncertain, materially different amounts could be reported under different conditions or using different assumptions. On a regular basis, we review our critical accounting policies and how they are applied in the preparation of our financial statements.

 

While we believe that the historical experiences, current trends and other factors considered support the preparation of our condensed financial statements in conformity with GAAP, the actual results could differ from our estimates and such difference could be material.

 

Off Balance Sheet Arrangements

 

As of December 31, 2015, we do not have any off-balance sheet arrangements.

 

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

 

Smaller reporting companies are not required to provide the information required by this item.

 

 
19
 

 

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

 

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

 

(1)

Previous Independent Registered Public Accounting Firm

(i)

On March 7, 2016, Jimmy P. Lee, CPA, P.C. ("Lee") resigned as the independent registered public accounting firm of Umatrin Holding Limited. (the "Company").

(ii)

The audit report of Lee on the financial statements of the Company as of and for the fiscal years ended December 31, 2014 and December 31, 2013 did not contain an adverse opinion or disclaimer of opinion and were not qualified or modified as to uncertainty, audit scope or accounting principles.

(iii)

The decision to change the independent registered public accounting firm was recommended and approved by the Board of Directors of the Company.

(iv)

During the Company's two most recent fiscal years ended December 31, 2014 and December 31, 2013 and any subsequent interim periods through September 30, 2015, (a) there were no disagreements with Lee on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of Lee, would have caused it to make reference thereto in its reports on the financial statements for such years and (b) there were no "reportable events" as described in Item 304(a)(1)(v) of Regulation S-K.

(v)

On March 10, 2016, the Company provided Lee with a copy of this Current Report and has requested that it furnish the Company with a letter addressed to the U.S. Securities and Exchange Commission stating whether it agrees with the above statements. A copy of such letter is attached as Exhibit 16.1 to the Current Report on Form 8-K filed with the SEC on March 11, 2016.

(2)

New Independent Registered Public Accounting Firm

On March 10, 2016, the Board of Directors of the Company appointed Yichien Yeh, CPA ("Yeh") as its new independent registered public accounting firm to audit and review the Company's financial statements. During the two most recent fiscal years ended December 31, 2014 and December 31, 2013 and any subsequent interim periods through the date hereof prior to the engagement of Yeh, neither the Company, nor someone on its behalf, has consulted Yeh regarding:

(i)

either: the application of accounting principles to a specified transaction, either completed or proposed; or the type of audit opinion that might be rendered on the Company's consolidated financial statements, and either a written report was provided to the Company or oral advice was provided that the new independent registered public accounting firm concluded was an important factor considered by the Company in reaching a decision as to the accounting, auditing or financial reporting issue; or

(ii)

any matter that was either the subject of a disagreement as defined in paragraph 304(a)(1)(iv) of Regulation S-K or a reportable event as described in paragraph 304(a)(1)(v) of Regulation S-K.

 

 
20
 

 

ITEM 9A. CONTROLS AND PROCEDURES.

 

Evaluation of Disclosure Controls and Procedures

 

We carried out an evaluation, under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, of the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)). Based upon that evaluation, our principal executive officer and principal financial officer concluded that, as of the end of the period covered in this report, our disclosure controls and procedures were not effective to ensure that information required to be disclosed in reports filed under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the required time periods and is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

 

Limitations on Systems of Controls

 

Our management, including our principal executive officer and principal financial officer, does not expect that our disclosure controls and procedures or our internal controls will prevent all error or fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs. Due to the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. To address the material weaknesses identified in our evaluation, we performed additional analysis and other post-closing procedures in an effort to ensure our financial statements included in this annual report have been prepared in accordance with generally accepted accounting principles. Accordingly, management believes that the financial statements included in this report fairly present in all material respects our financial condition, results of operations and cash flows for the periods presented.

 

Management's Report on Internal Control Over Financial Reporting

 

Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Securities Exchange Act of 1934 as a process designed by, or under the supervision of, the company's principal executive and principal financial officers and effected by the company's board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America and includes those policies and procedures that:

 

·

Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the company;

·

Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and,

·

Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company's assets that could have a material effect on the financial statements.

 

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Because of the inherent limitations of internal control, there is a risk that material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting. However, these inherent limitations are known features of the financial reporting process. Therefore, it is possible to design into the process safeguards to reduce, but not eliminate, this risk.

 

 
21
 

 

As of December 31, 2015, management assessed the effectiveness of our internal control over financial reporting based on the criteria for effective internal control over financial reporting established in Internal Control--Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO") and SEC guidance on conducting such assessments. Based on that evaluation, they concluded that, during the period covered by this report, such internal controls and procedures were not effective to detect the inappropriate application of US GAAP rules as more fully described below. This was due to deficiencies that existed in the design or operation of our internal controls over financial reporting that adversely affected our internal controls and that may be considered to be material weaknesses.

 

The matters involving internal controls and procedures that our management considered to be material weaknesses under the standards of the Public Company Accounting Oversight Board were lack of a functioning audit committee due to a lack of a majority of independent members; lack of a majority of outside directors on board of directors, resulting in ineffective oversight in the establishment and monitoring of required internal controls and procedures; inadequate segregation of duties consistent with control objectives and affecting the functions of authorization, recordkeeping, custody of assets, and reconciliation; and, management dominated by a single individual/small group without adequate compensating controls.

 

Management believes that the material weaknesses did not have an effect on our financial results. However, management believes that the lack of a functioning audit committee and the lack of a majority of outside directors on our board of directors results in ineffective oversight in the establishment and monitoring of required internal controls and procedures, which could result in a material misstatement in our financial statements in future periods.

 

Management's Remediation Initiatives

 

In an effort to remediate the identified material weaknesses and other deficiencies and enhance our internal controls, we have initiated, or plan to initiate, the following series of measures:

 

We will create a position to segregate duties consistent with control objectives and will increase our personnel resources and technical accounting expertise within the accounting function when funds are available to us. And, we plan to appoint one or more outside directors to our board of directors who shall be appointed to an audit committee resulting in a fully functioning audit committee who will undertake the oversight in the establishment and monitoring of required internal controls and procedures such as reviewing and approving estimates and assumptions made by management when funds are available to us.

 

Management believes that the appointment of one or more outside directors, who shall be appointed to a fully functioning audit committee, will remedy the lack of a functioning audit committee and a lack of a majority of outside directors on our Board.

 

We will work as quickly as possible to implement these initiatives; however, the lack of adequate working capital and positive cash flow from operations will likely slow this implementation.

 

Changes in internal controls over financial reporting

 

There was no change in our internal controls over financial reporting that occurred during the period covered by this report, which has materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.

 

ITEM 9B. OTHER INFORMATION

 

None.

 

 
22
 

  

PART III

 

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.

 

Directors and Executive Officers

 

The following sets forth information about our directors and executive officers as of the date of this report:

 

Name

Age

Title

Dato' Liew Kok Hong

41

President, CEO, CFO, Director

Dato' Sri Warren Eu Hin Chai

37

Vice President, Director

Dato' Osmanthus Ang Kui Hwa

58

Director

Teoh Bi Shan

30

Director

Teng Ling Ching

36

Director

 

All of our directors hold offices until the next annual meeting of the shareholders of the Company, and until their successors have been qualified after being elected or appointed. Officers serve at the discretion of the board of directors.

 

The following sets forth biographical information regarding the above Officers and Directors.

 

Dato' Liew Kok Hong, Chairman of the Board, Chief Executive Officer, Chief Financial Officer, President and Director

 

Dato' Liew was awarded by the Royal of Pahang, Malaysia, as the "Darjah Kebesaran Mahkota Pahang Yang Amat Mulia Peringkat Kedua Darjah Indera Mahkota Pahang" with the title "Dato". He has more than 20 years' experience in strategic management and business leadership in E-commerce industries. Dato' Liew executes end-to-end strategies to advance Umatrin's position in high-growth markets, expand major market and pursue new customers, capitalize on strategic alliances and strengthen brand recognition. He also leads Umatrin's regional marketing teams, ensuring that Umatrin delivers its full capabilities to its regional and local markets. Dato' Liew is a veteran sales leader in JS Health and Beauty with nearly 20 years' experience in regional and global sales industry. He delivers consulting services, system integration and next-generation technology solutions. Dato' Liew has served in various senior executive sales roles and is recognized for his successful transforming and improving of sales performance by establishing disciplined, sustainable sales processes and driving revenue growth.

 

Dato' Sri Warren Eu Hin Chai, Vice President and Director

 

On March 31, 2015, Dato' Sri Warren Eu Hin Chai was appointed President and Chief Executive Officer of UHML. Dato' Sri's reputation as a business leader in Malaysia and in other regions of Asia is well known. He is the founder of numerous successful companies offering goods and services in Malaysia and surrounding countries and one of them is SKH Media. He was awarded Sri Sultan Ahmad Shah Pahang (S.S.A.P.) from the Sultan of Pahang that carries the title "Dato' Sri" in year 2014. Prior to that, he was awarded Darjah Indera Mahkota Pahang (D.I.M.P.) from the Sultan of Pahang in year 2013 that carries the title Dato'. Dato' Sri holds a Doctorate of Philosophy (Ph.D.) in Finance from the Golden State University in the United States of America (USA), and is a successful business tutor and entrepreneur.

 

 
23
 

  

Dato' Osmanthus Ang Kui Hwa, Director

 

Dato' Osmanthus Ang, a graduate who holds a Doctorate of Philosophy in Business from University of Wisconsin, United States of America. She has started her own business since 1985 offering beauty and design services. She was the Founder and Chairman of Jashen Interior Design and had led the business to growth steadily and successfully. Dato' Osmanthus Ang is not only a successful entrepreneur, she has been actively involved in social causes. She is the Founder and President of United Commerce of Women, a non-governmental organization established to provide support to women especially single mother, to enhance their self-image, build their self-confidence and networks, to assist them to set up their own businesses or to form business partnerships. Her success in business and her contribution to society has been recognized and she was awarded with numerous awards, and one of them is "Darjah Kebesaran Mahkota Pahang Yang Amat Mulia Peringkat Kedua Darjah Indera Mahkota Pahang" with the title "Dato".

 

Teoh Bi Shan, Director

 

Ms. Teoh joined Umatrin since April 2015 and has served as our legal advisor. She had successfully resolved the company legal dispute and had reorganized the management of the company towards ISO standards. She is a law graduate from University of Northumbria, United Kingdom. After she obtained her Certificate in Legal Practice (CLP), she joined Jeff Leong Poon & Wong and has advised public listed companies in fund raising and other corporate exercises on Bursa Malaysia including initial public offerings, trust deed, warrant, rights issues, bond issues, share split and restructuring. Thereafter, she shifted from a corporate lawyer to a litigator and joined Vin & Isaac Lee. She has several years of complex litigation experience in directorship dispute, partnership dissolution, business contract dispute and intellectual property dispute.

 

Teng Ling Ching, Director

 

Mr. Teng was an accomplished systems administrator with more than 14 years of experience managing server infrastructures and data-center operations across multiple platforms such as Unix, Linux, Windows. He had effectively plan, install, configure and optimize the IT infrastructure to consistently achieve high ability and performance. He had proven his ability to create and deliver solutions for fast business growth, organizational development and systems/network optimization. Throughout his history of employment with MVM Home Entertainment and MNC Group Indonesia, he is well known as skilled troubleshooter and a great team leader in a range of IT environments.

 

Term of Office

 

Our directors hold office until the next annual general meeting of our stockholders and until their successors have been duly elected and qualified or until removed from office in accordance with our bylaws. Our officers are elected by and serve at the discretion of the board of directors.

 

Family Relationships

 

There are no family relationships between any of our directors or executive officers.

 

Certain Legal Proceedings

 

To our knowledge, no director, nominee for director, or executive officer of the Company has been a party in any legal proceeding material to an evaluation of his ability or integrity during the past ten years.

 

Potential Conflicts of Interest

 

We are not aware of any current or potential conflicts of interest with our director or executive officer.

 

 
24
 

  

Board Committees

 

We have not formed an Audit Committee, Compensation Committee or Nominating and Corporate Governance Committee as of the filing of this Annual Report. Our Board of Directors performs the principal functions of an Audit Committee. We currently do not have an audit committee financial expert on our Board of Directors.

 

Compliance with Section 16(A) Of The Exchange Act.

 

Section 16(a) of the Exchange Act requires the Company's officers and directors, and persons who beneficially own more than 10% of a registered class of the Company's equity securities, to file reports of ownership and changes in ownership with the Securities and Exchange Commission and are required to furnish copies to the Company. Based solely on our review of the reports filed with the SEC, no person failed to timely file reports required by Section 16(a) in the past two fiscal years.

 

Code of Ethics

 

We have not adopted a Code of Ethics applicable to our Principal Executive Officer and Principal Financial Officer.

 

ITEM 11. EXECUTIVE COMPENSATION

 

The following is a summary of the compensation we paid to our former executive officers, for the years ended December 31, 2015 and 2014. Our former executive officers did not receive any compensation (other than Company stock) for services rendered to us, have not received such compensation in the past, and are not accruing any compensation pursuant to any agreement with us.

 

No former executive officer received compensation in excess of $100,000 for any of those two years.

 

(a)

(b)

(c)

(d)

(e)

(f)

(g)

(h)

(i)

(j)

Name and Principal Position

Year

Salary
($)

Bonus
($)

Stock Awards
($)

Option Awards
($)

Non-equity Incentive

Plan Compen-

sation
($)

Non-qualified Deferred Compen-

sation

Earnings
($)

All Other Compen-

sation
($)

Total Compen-

sation
($)

Michael A. Zahorik

2015

$

-

-

-

-

-

-

-

-

2014

$

-

-

-

-

-

-

-

-

 

The following is a summary of the compensation we paid to our current executive officer, for the years ended December 31, 2015 and 2014. No current executive officer received compensation in excess of $100,000 for any of those two years.

 

(a)

(b)

(c)

(d)

(e)

(f)

(g)

(h)

(i)

(j)

Name and Principal Position

Year

Salary
($)

Bonus
($)

Stock Awards
($)

Option Awards
($)

Non-equity Incentive

Plan Compen-

sation
($)

Non-qualified Deferred
Compen-

sation

Earnings
($)

All Other Compen-

sation
($)

Total
Compen-

sation
($)

Dato' Sri Warren Eu Hin Chai

2015

$

-

-

-

-

-

-

-

-

2014

$

-

-

-

-

-

-

-

-

 

 
25
 

 

Compensation Discussion and Analysis

 

We strive to provide our named executive officers (as defined in Item 402 of Regulation S-K) with a competitive base salary that is in line with their roles and responsibilities when compared to peer companies of comparable size in similar locations.

 

We plan to implement a more comprehensive compensation program, which takes into account other elements of compensation, including, without limitation, short and long term compensation, cash and non-cash, and other equity-based compensation such as stock options. We expect that this compensation program will be comparable to the programs of our peer companies and aimed to retain and attract talented individuals.

 

Compensation of Directors

 

Our former director, Michael A. Zahorik, did not receive any compensation (other than Company stock) for services rendered to us, have not received such compensation in the past, and are not accruing any compensation pursuant to any agreement with us.

 

The following is a summary of the compensation we paid to our former Director, Michael A. Zahorik, for the years ended December 31, 2015 and 2014.

 

Name and Principal Position

 

Fiscal

Year

 

Salary
($)

 

 

Bonus
($)

 

 

Stock

Awards
($)

 

 

Option

Awards
($)

 

 

Non-equity Incentive Plan Compensation
($)

 

 

Change in Pension Value and Nonqualified Deferred Compensation Earnings
($)

 

 

All Other Compensation
($)

 

 

Total
($)

 

Michael A. Zahorik (1)

 

2015

 

 

-

 

 

 

 -

 

 

 

 -

 

 

 

 -

 

 

 

 -

 

 

 

 -

 

 

 

 -

 

 

 

 -

 

 

 

2014

 

 

-

 

 

 

 -

 

 

 

 -

 

 

 

-

 

 

 

-

 

 

 

 -

 

 

 

 -

 

 

 

 -

 

___________ 

(1)

Michael A. Zahorik was appointed Director of the Company on March 31, 2015. He resigned effectively August 22, 2015.

 

 
26
 

 

The following is a summary of the compensation we paid to the Directors of Umatrin, for the years ended December 31, 2015 and 2014.

 

Name and Principal Position

Fiscal

Year

Salary

($)

Bonus

($)

Stock

Awards

($)

Option

Awards

($)

Non-equity Incentive Plan Compensation

($)

Change in Pension Value and Nonqualified Deferred Compensation Earnings

($)

All Other Compensation

($)

Total

($)

Dato' Liew Kok Hong (1)

2015

171,520

-

-

-

-

-

-

171,520

2014

45,000

-

-

-

-

-

-

45,000

Dato' Sri Warren Eu Hin Chai (2)

2015

171,520

-

-

-

-

-

-

171,520

2014

45,000

-

-

-

-

-

-

45,000

Dato' Ho Phooi Keow (3)

2015

-

-

-

-

-

-

-

-

2014

-

-

-

-

-

-

-

-

_________ 

(1)

Dato' Liew Kok Hong was appointed Director of the Company on July 3, 2014.

(2)

Dato' Sri Warren Eu Hin Chai was appointed Director of the Company on August 12, 2014.

(3)

Dato' Ho Phooi Keow was appointed Director of the Company on August 12, 2014. He resigned effectively on March 23, 2015. 

 

As of the date of this report, we have no formal or informal arrangements or agreements to compensate our directors for services they provide as directors.

 

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

 

The following table sets forth certain information as of the date hereof with respect to the beneficial ownership of our ordinary shares, the sole outstanding class of our voting securities, by (i) each stockholder known to be the beneficial owner of 5% or more of the outstanding ordinary shares of the Company, (ii) each executive officer and director, and (iii) all executive officers and directors as a group. Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission and generally includes voting or investment power with respect to securities. ordinary shares subject to options, warrants or convertible securities exercisable or convertible within 60 days as of the date hereof are deemed outstanding for computing the percentage of the person or entity holding such options, warrants or convertible securities but are not deemed outstanding for computing the percentage of any other person.

 

 
27
 

  

Name of Beneficial Owner

 

Amount

and Nature

of

Beneficial

Ownership

 

 

Percentage

of Class(1)

 

 

 

 

 

 

 

 

Umatrin Group Ltd.(4)

 

 

44,304,100(2)

 

28.0%

Dato' Liew Kok Hong

 

 

50,000,000

 

 

 

31.6%

Dato' Sri Warren Eu Hin Chai

 

 

74,184,100(3)

 

46.9%

Dato'Osmantus Ang Kui Hwa

 

 

6,200,000

 

 

 

3.9%

Teoh Bi Shan

 

 

6,200,000

 

 

 

3.9%

Teng Ling Ching

 

 

6,200,000

 

 

 

3.9%

All officers and directors

 

 

142,784,100

 

 

 

90.2%

_________________ 

(1)

Based on 158,319,100 shares of common stock outstanding as of April 12, 2016.

(2)

Dato' Sri Warren Eu Hin Chai, our Vice President and director is the sole stockholder of Umatrin Group Ltd. Through his position as the sole stockholder in Umatrin Group Ltd, Dato' Sri has the power to dispose of or direct the disposition of the shares of common stock in Umatrin Group Ltd. As a result, Dato' Sri may, under the rules of the Securities and Exchange Commission, be deemed to be the beneficial owner of the shares of common stock.

(3)

Includes (i) 29,880,000 shares owned directly by Dato' Sri, and (ii) 44,304,100 shares owned by Umatrin Group Ltd. As reflected in footnote 2, Dato' Sri may be deemed to be the beneficial owner of these shares.

(4)

Principal offices located at 24 Lesperance Complex Providence Industrial Estate, Maha T2 0000.

 

ITEM 13. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.

 

Due from related parties in the books of Umatrin consists of the following:

 

 

 

December 31,

 

 

December 31,

 

 

 

 

 

 

2015

 

 

2014

 

 

Purpose

 

Dato Ho Phooi Keow

 

$-

 

 

$99,115

 

 

Advance

 

Global Bizrewards Sdn. Bhd.

 

 

34,465

 

 

 

28,587

 

 

Advance

 

Fine Portal Sdn Bhd

 

 

-

 

 

 

85,762

 

 

Advance

 

Multimedia Biz Solution Sdn. Bhd.

 

 

46,574

 

 

 

85,762

 

 

Advance

 

SKH Media Sdn. Bhd.

 

 

-

 

 

 

54,316

 

 

Advance

 

Umatrin Holding Ltd

 

 

7,875

 

 

 

-

 

 

Advance

 

Total Due from

 

 

88,914

 

 

 

353,542

 

 

 

 

 

 
28
 

 

Due to related parties in the books of Umatrin consists of the following:

 

 

 

December 31,

 

 

December 31,

 

 

 

 

 

 

2015

 

 

2014

 

 

 

 

Dato Sri Warren Eu Hin Chai

 

$407,146

 

 

$1,014,493

 

 

Advance

 

SKH Media Sdn. Bhd.

 

 

15,939

 

 

 

554,253

 

 

Advance

 

JS Health & Beauty Sdn. Bhd.

 

 

-

 

 

 

180,567

 

 

Inventory Purchase

 

Creative Iconic Sdn. Bhd.

 

 

167,159

 

 

 

-

 

 

Inventory Purchase

 

Total Due to

 

 

590,244

 

 

 

1,749,313

 

 

 

 

 

The related parties' relationship to Umatrin as follows:

 

Name

Relationship

Dato Ho Phooi Keow

Director, Majority Shareholder and Officer of the Company

Global Bizrewards Sdn. Bhd.

Related by common director, Dato' Sri Eu Hin Chai

Fine Portal Sdn. Bhd.

Related by common director, Dato' Sri Eu Hin Chai

Multimedia Biz Solution Sdn. Bhd.

Related by common director, Dato' Liew Kok Hong

SKH Media Sdn. Bhd.

Related by common director, Dato' Sri Eu Hin Chai

Dato Sri Warren Eu Hin Chai

Director & Shareholder of the Company

JS Health & Beauty Sdn. Bhd.

A Company owned by a director of the Company

Creative Iconic Sdn. Bhd.

Related by key employee; Patricia Low

 

The amounts due from or due to related parties' were unsecured, non-interest bearing, and due on demand.

 

Umatrin purchased its inventory from its supplier JS Health & Beauty Sdn. Bhd. and Creative Iconic Sdn. Bhd. The amounts of inventory purchased were $642,179 and $707,091 for the year ended December 31, 2015 and 2014, respectively.

 

Umatrin leased an office space from SKH Media Sdn. Bhd.. The rent expenses were $30,788 and $9,168 for the years ended December 31, 2015 and 2014, respectively.

 

Due to related party consists of the following:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31,

 

 

January 31,

 

 

 

 

 

 

2015

 

 

2015

 

 

Purpose

 

 

 

 

 

 

 

 

 

 

 

Dato Sri' Eu Hin Chai

 

 

65,591

 

 

 

-

 

 

Advance

 

Michael A. Zahorik

 

 

30,707

 

 

 

21,967

 

 

Advance

 

 

The related parties' relationship to the Company as follows:

 

Name

 

Relationship

Dato Sri' Eu Hin Chai

 

Vice President and Director

Michael A. Zahorik

 

Former Director

 

The amount due to related party was unsecured, noninterest bearing, and due on demand.

 

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

 

The following table sets forth the fees billed by our principal independent accountant for each of our last two fiscal years for the categories of services indicated.

 

 

 

Years Ended December 31,

 

Category

 

2015

 

 

2014

 

Audit Fees

 

$89,250

 

 

$4,500

 

Audit Related Fees

 

 

0

 

 

 

0

 

Tax Fees

 

 

0

 

 

 

0

 

All Other Fees

 

 

0

 

 

 

0

 

 

Audit fees. Consists of fees billed for the audit of our annual financial statements, review of our Form 10-K, review of our quarterly financial statements, review of our Forms 10-Q and services that are normally provided by the accountant in connection with year-end and interim statutory and regulatory filings or engagements.

 

Audit-related fees. Consists of fees billed for the review of registration statements, audit related consulting and services that are normally provided by the accountant in connection with non-year end statutory and regulatory filings or engagements.

 

Tax fees. Consists of professional services rendered by our principal accountant for tax compliance, tax advice, and tax planning.

 

 
29
 

 

PART IV

 

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES.

 

a) Documents filed as part of this Annual Report

 

1. Consolidated Financial Statements

 

2. Financial Statement Schedules

 

3. Exhibits

 

Exhibits #

Title

3.1

Certificate of Incorporation of the Company (1)

3.2

Certificate of Amendment to the Articles of Incorporation of the Company, dated June 3, 2008 (2)

3.3

Certificate of Amendment to the Articles of Incorporation of the Company, dated March 16, 2015 (3)

3.4

Certificate of Amendment to the Articles of Incorporation of the Company, dated March 28, 2015 (3)

3.5

Bylaws (2)

10.1

Share Exchange Agreement, dated January 6, 2016, by and among Dato' Sri Warren Eu Hin Chai, Dato' Liew Kok Hong, the Company, and U MATRIN WORLDWIDE SDN BHD. (3)

10.2

Term Loan Agreement, dated December 23, 2014, by and between RHB Bank Berhad and U MATRIN WORLDWIDE SDN BHD. (3)

10.3

Sale and Purchase Agreement, dated November 12, 2014, by and between Mega Panorama Sdn Bhd. and U MATRIN WORLDWIDE SDN BHD. (3)

21.1

List of Subsidiaries (3)

31.1

Certification of Principal Executive Officer and Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1+

Certification of Principal Executive Officer and Principal Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.INS

 XBRL Instance Document

101.SCH

 XBRL Taxonomy Extension Schema Document

101.CAL

 XBRL Taxonomy Extension Calculation Linkbase Document

101.LAB

 XBRL Taxonomy Extension Label Linkbase Document

101.PRE

 XBRL Taxonomy Extension Presentation Linkbase Document

101.DEF

 XBRL Taxonomy Extension Definition Linkbase Document

______________  

+

In accordance with the SEC Release 33-8238, deemed being furnished and not filed.

(1)

Incorporated by reference to the Company's Registration Statement on Form 10-SB, as filed with the Securities and Exchange Commission on March 8, 2005.

(2)

Incorporated by reference to the Company's Registration Statement on Form S-1, as filed with the Securities and Exchange Commission on August 29, 2008.

(3)

Incorporated by reference to the Company's Current Report on Form 8-K, as filed with the Securities and Exchange Commission on January 6, 2016.

 

 
30
 

 

SIGNATURES

 

Pursuant to the requirement of Section 13 or 15(d) of the Securities Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

 

UMATRIN HOLDING LIMITED

Date: April 14, 2016

By:

/s/ Dato' Liew Kok Hong

Dato' Liew Kok Hong

President, Chief Executive Officer, and

Chief Financial Officer

(Duly Authorized Officer,

Principal Executive Officer and

Principal Financial Officer)

 

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

 

Name

Title

Date

/s/ Dato' Liew Kok Hong

President, Chief Executive Officer, Chief

April 14, 2016

Dato' Liew Kok Hong

Financial Officer, and Chairman of the

Board of Directors (Principal Executive Officer and Principal Financial Officer)

/s/ Dato' Sri Warren Eu Hin Chai

Vice President and Director

April 14, 2016

Dato' Sri Warren Eu Hin Chai

 

/s/ Dato' Osmanthus Ang Kui Hwa

Director

April 14, 2016

Dato' Osmanthus Ang Kui Hwa

/s/ Teoh Bi Shan

Director

April 14, 2016

Teoh Bi Shan

/s/ Teng Ling Ching

Director

April 14, 2016

Teng Ling Ching

 

 
31
 

 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

To the Board of Directors and Stockholders of

Umatrin Holding Limited

 

We have audited the accompanying balance sheets of Umatrin Holding Limited as of December 31, 2015 and January 31, 2015, and the related statement of operations, stockholders' deficit, and cash flows for the eleven months ended December 31, 2015 and for the year ended January 31, 2015. Umatrin Holding Limited's management is responsible for these financial statements. Our responsibility is to express an opinion on these financial statements based on our audit.

 

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

 

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Umatrin Holding Limited as of December 31, 2015 and January 31, 2015, and the results of operations and cash flows for the eleven months ended December 31, 2015 and for the year ended January 31, 2015 in conformity with accounting principles generally accepted in the United States of America.

 

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3 to the financial statements, the Company has incurred accumulated deficit of $2,384,996 as of December 31, 2015 that include loss of $364,077 for the eleven months ended December 31, 2015. These factors raise substantial doubt about its ability to continue as a going concern. Management's plans concerning this matter are also described in Note 3. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

Yichien Yeh, CPA

Oakland Gardens, New York

April 7, 2016

 

 
 
 

 

UMATRIN HOLDING LIMITED

F/K/A

GOLDEN OPPORTUNITIES CORPORATION

BALANCE SHEETS

 

 

 

December 31,

 

 

January 31,

 

 

January 31,

 

 

 

2015

 

 

2015

 

 

2014

 

 

 

 

 

 

 

 

 

 

 

ASSETS

Current Assets

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$-

 

 

$16

 

 

$91

 

Total Current Assets

 

 

-

 

 

 

16

 

 

 

91

 

TOTAL ASSETS

 

$-

 

 

$16

 

 

$91

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS DEFICIT

 

 

 

 

 

 

 

 

 

 

 

 

Current Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

Accounts payable and accrued expenses

 

$6,831

 

 

$3,312

 

 

$1,540

 

Shareholder advance

 

 

96,298

 

 

 

21,967

 

 

 

7,500

 

Total Current Liabilities

 

 

103,129

 

 

 

25,279

 

 

 

9,040

 

Convertible notes payable, related party, net of debt discounts

 

 

-

 

 

 

6,530

 

 

 

1,583

 

TOTAL LIABILITIES

 

 

103,129

 

 

 

31,809

 

 

 

10,623

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders' Deficit

 

 

 

 

 

 

 

 

 

 

 

 

Preferred stock: 10,000,000 authorized; $0.00001 par value 0 and 0 shares issued and outstanding  

 

-

 

 

 

-

 

 

 

 

 

Common stock: 500,000,000 authorized; $0.00001 par value 33,570,000 and 58,319,000 shares issued and outstanding  

 

583

 

 

 

336

 

 

 

336

 

Additional paid in capital

 

 

2,281,284

 

 

 

1,988,790

 

 

 

1,925,258

 

Accumulated deficit

 

 

(2,384,996)

 

 

(2,020,919)

 

 

(1,936,126)

Total Stockholders' Deficit

 

 

(103,129)

 

 

(31,793)

 

 

(10,532)

 

 

 

 

 

 

 

 

 

 

 

 

 

TOTAL LIABILITIES AND STOCKHOLDERS DEFICIT

 

$-

 

 

$16

 

 

$91

 

 
See auditor's report and notes to the audited financial statements
 

 
F-1
 

 

UMATRIN HOLDING LIMITED

F/K/A

GOLDEN OPPORTUNITIES CORPORATION

STATEMENTS OF OPERATIONS

 

 

 

For the Eleven Months Ended

 

 

For the Year Ended

 

 

 

December 31,

 

 

January 31,

 

 

 

2015

 

 

2014

 

 

2015

 

 

 

 

 

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

REVENUE

 

$-

 

 

$-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING EXPENSES

 

 

 

 

 

 

 

 

 

 

 

Professional fees

 

 

69,840

 

 

 

7,037

 

 

 

10,349

 

Stock Compensation-Stock Options

 

 

283,126

 

 

 

57,654

 

 

 

62,942

 

General and Administrative

 

 

8,026

 

 

 

62

 

 

 

5,965

 

TOTAL OPERATING EXPENSES

 

 

360,991

 

 

 

64,753

 

 

 

79,256

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LOSS FROM OPERATIONS

 

 

(360,991)

 

 

(64,753)

 

 

(79,256)

 

 

 

 

 

 

 

 

 

 

 

 

 

OTHER INCOME (EXPENSES)

 

 

 

 

 

 

 

 

 

 

 

 

Imputed Interest expense

 

 

(2,168)

 

 

(574)

 

 

(590)

Interest Expense-Beneficial Conversion

 

 

(917

)

 

 

(4,479)

 

 

(4,947)

TOTAL OTHER INCOME (EXPENSES), NET

 

 

(3,085)

 

 

(5,053)

 

 

(5,537)

 

 

 

 

 

 

 

 

 

 

 

 

 

LOSS BEFORE INCOME TAXES

 

 

(364,077)

 

 

(69,806)

 

 

(84,793)

 

 

 

 

 

 

 

 

 

 

 

 

 

INCOME TAXES

 

 

-

 

 

 

-

 

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET LOSS

 

$(364,077)

 

$(69,806)

 

$(84,793)

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Loss Per Common Share - basic & diluted

 

$(0.01)

 

$(0.00)

 

$(0.00)

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted Average Common Shares Outstanding

 

 

54,095,451

 

 

 

33,570,000

 

 

 

33,570,000

 

 
See auditor's report and notes to the audited financial statements 

 

 
F-2
 

 

UMATRIN HOLDING LIMITED

F/K/A

GOLDEN OPPORTUNITIES CORPORATION

STATEMENT OF STOCKHOLDERS' DEFICIT

 

 

 

 

 

 

 

Additional

 

 

 

 

 

 

 

Common Stock

 

 

Paid in

 

 

Accumulated

 

 

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Deficit

 

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, January 31, 2014

 

 

33,570,000

 

 

 

336

 

 

 

1,925,258

 

 

 

(1,936,126)

 

 

(10,532)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest as in-kind contribution

 

 

 

 

 

 

 

 

 

 

590

 

 

 

 

 

 

 

590

 

Stock options expense

 

 

 

 

 

 

 

 

 

 

62,942

 

 

 

 

 

 

 

62,942

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(84,793)

 

 

(84,793)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, January 31, 2015

 

 

33,570,000

 

 

$336

 

 

$1,988,790

 

 

$(2,020,919)

 

$(31,793)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of stock for promissory notes

 

 

24,749,100

 

 

 

247

 

 

 

7,200

 

 

 

 

 

 

 

7,447

 

Interest as in-kind contribution

 

 

 

 

 

 

 

 

 

 

2,168

 

 

 

 

 

 

 

2,168

 

Stock options expense

 

 

 

 

 

 

 

 

 

 

283,126

 

 

 

 

 

 

 

283,126

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(364,077)

 

 

(364,077)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, December 31, 2015

 

 

58,319,100

 

 

$583

 

 

$2,281,284

 

 

$(2,384,996)

 

$(103,129)

 
See auditor's report and notes to the audited financial statements

 

 
F-3
 

 

UMATRIN HOLDING LIMITED

F/K/A

GOLDEN OPPORTUNITIES CORPORATION

STATEMENTS OF CASH FLOW

  

 

 

For the Eleven Months Ended

 

 

For the Year Ended

 

 

 

December 31,

 

 

January 31,

 

 

 

2015

 

 

2014

 

 

2015

 

 

 

 

 

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

 

 

 

 

 

Net loss

 

$(364,077)

 

$(69,806)

 

 

(84,793)

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:  

 

 

 

 

 

 

 

 

 

 

 

Interest contribution

 

 

2,168

 

 

 

5,053

 

 

 

590

 

Amortization of debt discounts

 

 

917

 

 

 

-

 

 

 

4,947

 

Stock options issued for compensation

 

 

283,126

 

 

 

57,654

 

 

 

62,942

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Accounts payable and accrued expenses

 

 

3,519

 

 

 

(1,540)

 

 

1,772

 

Shareholder advance

 

 

74,331

 

 

 

8,558

 

 

 

14,467

 

Net Cash Provided By (Used in) Operating Activities

 

 

(16)

 

 

(81)

 

 

(75)

 

 

 

 

 

 

 

 

 

 

 

 

 

Net increase (decrease) in cash and cash equivalents

 

 

(16)

 

 

(81)

 

 

(75)

Cash and cash equivalents, beginning of period

 

 

16

 

 

 

91

 

 

 

91

 

Cash and cash equivalents, end of period

 

$-

 

 

$10

 

 

$16

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Supplemental cash flow information

 

 

 

 

 

 

 

 

 

 

 

 

Cash paid for interest

 

$-

 

 

$-

 

 

$-

 

Cash paid for taxes

 

$-

 

 

$-

 

 

$-

 

 

See auditor's report and notes to the audited financial statements

 

 

F-4
 

 

UMATRIN HOLDING LTD.

 

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED DECEMBER 31, 2015 AND 2014 


 

1. ORGANIZATION

 

Umatrin Holding Limited (formerly known as Golden Opportunities Corporation) (the "Company") ("Umatrin") was incorporated in the state of Delaware on February 2, 2005. The Company was originally incorporated in order to locate and negotiate with a targeted business entity for the combination of that target company with the Company.

 

2. SIGNIFICANT ACCOUNTING POLICIES

 

Basis of presentation

 

The accompanying financial statements have been prepared in accordance with generally accepted accounting principles in the United States ("US GAAP").

 

The Company's financial statements are expressed in U.S. dollars.

 

Change in fiscal year

 

On February 24, 2016, the Board of Directors of the "Company" approved and ratified to change the Company's fiscal year end from January 31 to December 31, effective immediately as of the date of the board approval.The required transition period of February 1, 2015 to December 31, 2015 is included in these financial statements

 

Use of estimates

 

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates.

 

Fair value of financial instruments

 

The Company's balance sheet includes financial instruments, including cash, accounts payable, accrued expenses, amounts due to related party and convertible notes payable to a related party. The carrying amounts of current assets and current liabilities approximate their fair value because of the relatively short period of time between the origination of these instruments and their expected realization. 
  

 
F-5
 

 

UMATRIN HOLDING LTD.

 

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED DECEMBER 31, 2015 AND 2014 


 

Accounting Standards Codification ("ASC") 820, Fair Value Measurements and Disclosures, defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity's own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below:

 

Level 1

Quoted market prices available in active markets for identical assets or liabilities as of the reporting date.

 
Level 2

Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date.

 
Level 3

Pricing inputs that are generally observable inputs and not corroborated by market data.

 

Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of December 31, 2015. The respective carrying value of certain amounts on the balance sheet financial instruments approximated their fair values due to the short-term nature of these instruments.

 

Related parties

 

The Company adopted ASC 850, Related Party Disclosures, for the identification of related parties and disclosure of related party transactions.

 

Risks and Uncertainties

 

The Company's operations are subject to significant risks and uncertainties including financial, operational and regulatory risks, including the potential risk of business failure.

 

Commitments and contingencies

 

The Company adopted ASC 450-20, Loss Contingencies, to report accounting for contingencies. Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated.

 

There were no commitments or contingencies at December 31, 2015 and January 31, 2015. 
  

 
F-6
 

 

UMATRIN HOLDING LTD.

 

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED DECEMBER 31, 2015 AND 2014 


 

Impairment of assets

 

The carrying amounts of assets on the balance sheet are reviewed for impairment when there is an indication that the assets might be impaired. Impairment is measured by comparing the carrying values of the assets with their recoverable amounts.

 

An impairment loss is charged to the statement of operation immediately unless the asset is carried at its revalued amount. Any impairment loss of a revalued asset is treated as a revaluation decrease to the extent of a previously recognized revaluation surplus for the same asset.

 

In respect of assets other than goodwill, and when there is a change in the estimates used to determine the recoverable amount, a subsequent increase in the recoverable amount of an asset is treated as a reversal of the previous impairment loss and is recognized to the extent of the carrying amount of the asset that would have been determined (net of amortization and depreciation) had no impairment loss been recognized. The reversal is recognized in the statement of operation immediately, unless the asset is carried at its revalued amount. A reversal of an impairment loss on a revalued asset is credited directly to the revaluation surplus. However, to the extent that an impairment loss on the same revalued asset was previously recognized as an expense in the statement of operation, a reversal of that impairment loss is recognized as income in the statement of operation.

  

Cash and cash equivalents

 

The Company considers all highly liquid investments with maturities of three months or less at the time of purchase to be cash equivalents.

 

The cash and cash equivalents on December 31, 2015 and January 31, 2015 were $nil and $16, respectively.

 

Income taxes and valuation allowance

 

The Company follows ASC 740, Income Taxes. The Company records deferred tax assets and liabilities for future income tax consequences that are attributable to differences between financial statement carrying amounts of assets and liabilities and their income tax bases. The measurement of deferred tax assets and liabilities is based on enacted tax rates that are expected to apply to taxable income in the year when settlement or recovery of those temporary differences is expected to occur. The Company recognizes the effect on deferred tax assets and liabilities of any change in income tax rates in the period that includes the enactment date. The Company record a valuation allowance to reduce deferred tax assets if it is more likely than not that some portion or all of the deferred tax assets will not be realized.

 

A tax benefit from an uncertain tax position may be recognized only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities. The determination is based on the technical merits of the position and presumes that the relevant taxing authority that has full knowledge of all relevant information will examine each uncertain tax position. Although the Company believes the estimates are reasonable, no assurance can be given that the final outcome of these matters will not be different than what is reflected in the historical income tax provisions and accruals. 
  

 
F-7
 

 

UMATRIN HOLDING LTD.

 

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED DECEMBER 31, 2015 AND 2014 


 

Cash flows reporting

 

The Company follows ASC 230, Statement of Cash Flows, for cash flows reporting, classifies cash receipts and payments according to whether they stem from operating, investing, or financing activities and provides definitions of each category, and uses the indirect or reconciliation method ("Indirect method") as defined by ASC 230 to report net cash flow from operating activities by adjusting net income to reconcile it to net cash flow from operating activities by removing the effects of (a) all deferrals of past operating cash receipts and payments and all accruals of expected future operating cash receipts and payments and (b) all items that are included in net income that do not affect operating cash receipts and payments. The Company reports the reporting currency equivalent of foreign currency cash flows, using the current exchange rate at the time of the cash flows and the effect of exchange rate changes on cash held in foreign currencies is reported as a separate item in the reconciliation of beginning and ending balances of cash and cash equivalents and separately provides information about investing and financing activities not resulting in cash receipts or payments in the period.

 

Recent Accounting Pronouncements

 

In July 2015, the FASB issued ASU No. 2015-11, Simplifying the Measurement of Inventory, which modifies existing requirements regarding measuring inventory at the lower of cost or market. Under existing standards, the market amount requires consideration of replacement cost, net realizable value (NRV), and NRV less an approximately normal profit margin. The new ASU replaces market with NRV, defined as estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. This eliminates the need to determine and consider replacement cost or NRV less an approximately normal profit margin when measuring inventory. The amendments are effective for the annual period ending after December 15, 2016, and for annual and interim periods thereafter. Early application is permitted. The Company is currently assessing this ASU's impacts on the Company's results of operations and financial condition.

 

In February 2015, FASB issued ASU No. 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis. The new consolidation standard changes the way reporting enterprises evaluate whether (a) they should consolidate limited partnerships and similar entities, (b) fees paid to a decision maker or service provider are variable interests in a VIE, and (c) variable interests in a VIE held by related parties of the reporting enterprise require the reporting enterprise to consolidate the VIE. The guidance is effective for public business entities for annual and interim periods in fiscal years beginning after December 15, 2015. Early adoption is allowed, including early adoption in an interim period. A reporting entity may apply a modified retrospective approach by recording a cumulative-effect adjustment to equity as of the beginning of the fiscal year of adoption or may apply the amendments retrospectively. The Company is currently assessing the impact of the adoption of this guidance on the financial statements.

 

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers, which provides a single comprehensive model to be used in the accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. The standard's stated core principle is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve this core principle the ASU includes provisions within a five step model that includes identifying the contract with a customer, identifying the performance obligations in the contract, determining the transaction price, allocating the transaction price to the performance obligations, and recognizing revenue when (or as) an entity satisfies a performance obligation. The standard also specifies the accounting for some costs to obtain or fulfill a contract with a customer and requires expanded disclosures about revenue recognition. The standard provides for either full retrospective adoption or a modified retrospective adoption by which it is applied only to the most current period presented. This ASU is effective January 1, 2017. The Company is currently assessing this ASU's impact on the Company's results of operations and financial condition.

 

The Company believes that there were no other accounting standards recently issued that had or are expected to have a material impact on our financial position or results of operations. 
  

 
F-8
 

 

UMATRIN HOLDING LTD.

 

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED DECEMBER 31, 2015 AND 2014 


 

3. GOING CONCERN

 

As reflected in the accompanying financial statements, the Company had earned no revenues and at December 31, 2015 had accumulated a deficit of $2,384,996 that included loss of $364,077 for the eleven months ended December 31, 2015.

 

While the Company is attempting to commence operations and produce revenues, the Company's cash position may not be significant enough to support the Company's daily operations. Management intends to raise additional funds by way of a public or private offering. Management believes that the actions presently being taken to further implement its business plan and generate revenues provide the opportunity for the Company to continue as a going concern. While the Company believes in the viability of its strategy to increase revenues and in its ability to raise additional funds, there can be no assurances to that effect. The ability of the Company to continue as a going concern is dependent upon the Company's ability to further implement its business plan and generate revenues.

 

The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

 

4. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

 

In July 2015, the FASB issued ASU No. 2015-11, Simplifying the Measurement of Inventory, which modifies existing requirements regarding measuring inventory at the lower of cost or market. Under existing standards, the market amount requires consideration of replacement cost, net realizable value (NRV), and NRV less an approximately normal profit margin. The new ASU replaces market with NRV, defined as estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. This eliminates the need to determine and consider replacement cost or NRV less an approximately normal profit margin when measuring inventory. The amendments are effective for the annual period ending after December 15, 2016, and for annual and interim periods thereafter. Early application is permitted. The Company is currently assessing this ASU's impacts on the Company's consolidated results of operations and financial condition.

 

In April 2015, FASB issued Accounting Standards Update (ASU) No. 2015-03, Consolidation (Topic 810). The amendments in this update are effective for fiscal years and interim periods within those fiscal years, beginning after December 15, 2015. The amendments in this update simplify the codification by requiring that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct reduction form the carrying amount of the related debt liability. This treatment is consistent with the treatment of debt discounts. Recognition and measurement guidance for debt issuance costs remain unchanged by this update. Early adoption is permitted, but not required; for financial statements that have not been previously issued. At this time we are not early adopting. As the objective of this standard is to reduce cost and complexity and alleviate uncertainty while maintaining or improving the usefulness of information provided to the users of financials statements, the adoption of this standard is not expected to impact our financial position or results of operations.

 

In February 2015, FASB issued Accounting Standards Update (ASU) No. 2015-03, Interest-Imputation of Interest (Subtopic 835-30). The amendments in this update are effective for fiscal years and interim periods within those fiscal years, beginning after December 15, 2015. The amendments in this update simplify the codification and reduce the number of consolidation models by eliminating the indefinite deferral of Statement 167 and placing more emphasis on the risk of loss when determining controlling financial interests. Early adoption is permitted, but not required; at this time we are not early adopting. As the objective of this standard is to reduce cost and complexity and alleviate uncertainty while maintaining or improving the usefulness of information provided to the users of financials statements, the adoption of this standard is not expected to impact our financial position or results of operations. 
  

 
F-9
 

 

UMATRIN HOLDING LTD.

 

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED DECEMBER 31, 2015 AND 2014 


 

In February 2015, FASB issued Accounting Standards Update (ASU) No. 2015-02, Consolidation (Topic 810). The amendments in this update are effective for fiscal years and interim periods within those fiscal years, beginning after December 15, 2015. The amendments in this update simplify the codification and reduce the number of consolidation models by eliminating the indefinite deferral of Statement 167 and placing more emphasis on the risk of loss when determining controlling financial interests. Early adoption is permitted, but not required. As the objective of this standard is to reduce cost and complexity and alleviate uncertainty while maintaining or improving the usefulness of information provided to the users of financials statements, the adoption of this standard is not expected to impact our financial position or results of operations.

 

In January 2015, FASB issued Accounting Standards Update (ASU) No. 2015-01, Income Statement-Extraordinary and Unusual Items (Subtopic 225-20). This update eliminates from GAAP the concept of extraordinary items. The amendments in this update are effective for fiscal years and interim periods within those fiscal years, beginning after December 15, 2015. The amendment may be applied both prospectively and retrospectively. Early adoption is permitted, but not required; as long as the standard is applied from the beginning of the fiscal year of adoption. As the objective of this standard is to reduce cost and complexity and alleviate uncertainty while maintaining or improving the usefulness of information provided to the users of financials statements, the adoption of this standard is not expected to impact our financial position or results of operations.

 

The Company believes that there were no other accounting standards recently issued that had or are expected to have a material impact on our financial position or results of operations.

 

5. RELATED PARTY TRANSACTIONS

 

Shareholder Advances

 

In support of the Company's efforts and cash requirements, the Company has relied on advances from the majority shareholder and sole officer until such time that the Company can support its operations or attain adequate financing through sales of its equity or traditional debt financing. There is no formal written commitment for continued support by this shareholder. Shareholder advances were used to fund current operating expenses through advances or amounts paid on behalf of the Company in satisfaction of liabilities.

 

During the eleven months ended December 31, 2015 and the year ended January 31, 2014, the Company's officers advanced a total of $74,331 and $14,467, respectively. Shareholder advances outstanding was $96,298 at December 31, 2015, and $21,967 at January 31, 2015, respectively.

 

Shareholder advances are non-interest bearing. The Company had recognized imputed interest expense on advances, in the amounts of $2,168 and $590 for the eleven months ended December 31, 2015 and for the year ended December 31, 2014, respectively. These amounts were recognized as interest expense and a corresponding contribution to capital.

 

Convertible Notes Payable

 

On September 15, 2013, $164,994 of shareholder advances payable to the Company's former sole officer and majority owner were re-structured into two notes in equal amounts of $82,497, each convertible into the Company's common stock at rates of $0.005 and $0.01 per share respectively. The notes are convertible on demand of the holder, bear no interest, and have a maturity date of September 15, 2023. The two notes in equal amounts of $82,497 were converted by the new controlling shareholder on March 29, 2015 into 16,499,400 shares of common stock at $0.005 per share and 8,249,700 shares of common stock at $0.01 per share. (For more information, please refer to Note 6.) 
  

Equity

 

In 2011, the Company issued an option to purchase 8,000,000 common shares at $0.10 per share, to an officer of the Company for compensation. (For more information, please refer to Note 7.)

 

 
F-10
 

 

UMATRIN HOLDING LTD.

 

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED DECEMBER 31, 2015 AND 2014 


 

6. CONVERTIBLE NOTE PAYABLE

 

On September 15, 2013, $164,994 of shareholder advances payable to the Company's sole officer and majority owner were re-structured into two notes in equal amounts of $82,497, each convertible into the Company's common stock at rates of $0.005 and $0.01 per share respectively. They are convertible on demand of the holder, bear no interest, have a maturity date of September 15, 2023.

 

The Company discounted the non-interest bearing note at 3.24% interest rate, in accordance with the Applicable Federal Rate. Based on the intrinsic value of the conversion feature, the Company determined that there was a beneficial conversion feature associated with two notes payable. As a result of the beneficial conversion feature exceeding the proceeds received from the promissory notes, management discounted the notes 100% as a debt discount and will amortize this discount over the 10-year lives of the notes on the interest rate method.

 

The two notes in equal amounts of $82,497 were converted by the new controlling shareholder on March 29, 2015 into 16,499,400 shares of common stock at $0.005 per share and 8,249,700 shares of common stock at $0.01 per share. Total debt discount of $7,447 was amortized from issuance of convertible note to the day the notes was converted.

 

The interest expense amortized for the eleven months ended December 31, 2015 and for the year ended January 31, 2015 were $917 and $4,947, respectively.

 

7. STOCKHOLDERS' EQUITY

 

On February 20, 2015, the majority shareholders voted on and approved an increase of the number of authorized common shares from 100,000,000 to 500,000,000 and a decrease in par value from $0.001 to $0.00001. The majority shareholders also voted on and approved a designation of 10,000,000 preferred shares with no series and a par value of $0.00001. The financial statements presented have been retroactively restated to present the change in authorized and par value.

 

Equity – Common Stock

 

On March 29, 2015, the Company issued 16,499,400 shares at $0.005 a share and totaling $82,497 and 8,249,700 shares at $0.01 a share and totaling $82,497 as conversions of two promissory notes payable for past advances and loans. See Note 5.

 

Equity – Additional Paid-In Capital

 

The Company had recognized imputed interest expense on advances, in the amounts of $2,168 and $590 for the eleven months ended December 31, 2015 and for the year ended December 31, 2014, respectively. These amounts were recognized as interest expense and a corresponding contribution to capital. 
  

 
F-11
 

 

UMATRIN HOLDING LTD.

 

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED DECEMBER 31, 2015 AND 2014 


 

Stock options

 

On July 30, 2011, the Company issued an option to purchase 8,000,000 common shares to an officer of the Company in consideration for services at $0.10 per share valued at nil on the date of grant as compensation.

 

The fair value of the option grant estimated on the date of grant uses the Black-Scholes option-pricing model with the following weighted-average assumptions:

 

 

 

July 31,

2011

 

Expected option life (year)

 

 

8

 

Expected volatility

 

 

58.62%*

Expected dividends

 

 

0.00%

Risk-free rate(s)

 

 

2.32%

__________________

As a thinly traded public entity, it is not practicable for the Company to estimate the expected volatility of its share price. The Company selected two (2) comparable companies to calculate the expected volatility. The Company calculated two (2) comparable companies' historical volatility over the expect life of the share options of eight (8) years and averaged the two (2) comparable companies' historical volatility as its expected volatility.

 

The fair value of the stock options issued on July 31, 2011 using the Black-Scholes Option Pricing Model was $504,024 at the date of grant. On August 22, 2015, all the remaining unvested stock options became vested. For the periods ended December 31 and December 31, 2014, $283,126 and $57,654 respectively, was recognized as compensation expense for stock options issued.

 

Summary of Compensation Expense-Options

 

Date

 

Value on

Date of
Grant

 

 

Expenses

Reported

 

 

Expense
Projected

 

True-up
Amount

 

 

Cumulative
Reported
Expense

 

 

Unrecognized Compensation

 

 

Weighted

Average
Period

to Recognize

 

7/30/2011

 

 

504,024

 

 

 

 

 

 

 

 

 

 

 

 

 

 

504,024

 

 

 

7.0

 

1/31/2012

 

 

 

 

 

 

16,053

 

 

 

 

 

 

 

 

31,933

 

 

 

472,091

 

 

 

6.5

 

1/31/2013

 

 

 

 

 

 

61,132

 

 

 

 

 

(43)

 

 

95,065

 

 

 

408,959

 

 

 

5.5

 

1/31/2014

 

 

 

 

 

 

62,891

 

 

 

 

 

43

 

 

 

157,957

 

 

 

346,067

 

 

 

4.5

 

1/31/2015

 

 

 

 

 

 

62,941

 

 

 

 

 

 

 

 

 

220,898

 

 

 

283,126

 

 

 

3.5

 

12/31/2015

 

 

 

 

 

 

283,126

 

 

 

 

 

 

 

 

 

504,024

 

 

 

-

 

 

 

-

 

 

 
F-12
 

 

UMATRIN HOLDING LTD.

 

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED DECEMBER 31, 2015 AND 2014 



8. INCOME TAXES

 

The Company has not recognized an income tax benefit for its domestic operating losses based on uncertainties concerning its ability to generate taxable income in future periods. The tax benefit for the periods presented is offset by a valuation allowance established against deferred tax assets arising from the net operating losses and other temporary differences, the realization of which could not be considered more likely than not. In future periods, tax benefits and related deferred tax assets will be recognized when management considers realization of such amounts to be more likely than not.

 

As of December 31 and January 31, 2015, the Company had incurred domestic net losses of $2,384,996 and $2,020,919, which constitute net operating losses for income tax purposes and results in a deferred tax asset. NOLs begin expiring in 2025. The losses result in a deferred tax asset and an equal valuation allowance of:

 

 

 

December 31,

 

 

January 31,

 

 

 

2015

 

 

2015

 

Deferred tax asset, generated from net operating loss at statutory rates

 

$357,700

 

 

$303,100

 

Valuation allowance

 

 

(357,700)

 

 

(303,100)

 

 

 

-

 

 

 

 

 

 

 

$-

 

 

$-

 

 

The reconciliation of the effective income tax rate to the federal statutory rate is as follows:

 

 

 

Federal income tax rate

 

 

15.0%

Increase in valuation allowance

 

 

(15.0)%

Effective income tax rate

 

 

0.0%

 

 
F-13
 

 

UMATRIN HOLDING LTD.

 

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED DECEMBER 31, 2015 AND 2014 


 

9. BUSINESS COMBINATION

 

On January 6, 2016, the Company acquired 80% of the equity interests of U Matrin Worldwide SDN BHD ("Umatrin") in exchange for the issuance of a total of 100,000,000 shares of its common stock to the two holders of Umatrin, Dato' Sri and Dato' Liew. Immediately following the Share Exchange, the business of Umatrin became the business of the Company.

 

U Matrin Worldwide SDN BHD, formerly known as OLC Worldwide SDN BHD, was incorporated in Malaysia on July 22, 1993. The principal activities of Umatrin is direct selling and trading on beauty and personal care products, and investment holding.

 

The Company entered into a share exchange agreement with Umatrin whereas the acquisition was accounted under US GAAP as a business combination under common control with the Company being the acquirer as both entities were owned by the same controlling shareholders. Accordingly, historical cost will be the basis for transfer of assets and liabilities in the business combination in accordance with ASC 805-50-30-5.

 

A. Audited Financial Statements

 

Audited Financial Statements of Umatrin Worldwide Sdn. Bhd. ("Umatrin") as of and for the years ended December 31, 2015 and 2014 are presented as follows in accordance with Rule 3-05 of the SEC's Regulation S-X.

 

 
F-14
 

 

UMATRIN HOLDING LTD.

 

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED DECEMBER 31, 2015 AND 2014


 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

To the Board of Directors and Stockholders of

U Matrin Worldwide Sdn. Bhd.

 

We have audited the accompanying balance sheet of U Matrin Worldwide Sdn. Bhd. as of December 31, 2015, and the related statement of operations and comprehensive income, owners' equity, and cash flows for the year ended December 31, 2015. U Matrin Worldwide Sdn. Bhd.'s management is responsible for these financial statements. Our responsibility is to express an opinion on these financial statements based on our audit.

 

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

 

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of U Matrin Worldwide Sdn. Bhd. as of December 31, 2015, and the results of operations and cash flows for the year ended December 31, 2015 in conformity with accounting principles generally accepted in the United States of America.

 

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3 to the financial statements, the Company has incurred accumulated deficit of $166,830 as of December 31, 2015. There is no assurance the Company will obtain revenue or financing to cover any operating losses it may incur. These factors raise substantial doubt about its ability to continue as a going concern. Management's plans concerning this matter are also described in Note 3. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

 

Yichien Yeh, CPA

Oakland Gardens, New York

April 7, 2016

 

 
F-15
 

 

UMATRIN HOLDING LTD.

 

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED DECEMBER 31, 2015 AND 2014


 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

To the Board of Directors and Stockholders of

U Matrin Worldwide Sdn. Bhd.

 

We have audited the accompanying balance sheets of U Matrin Worldwide Sdn. Bhd. as of December 31, 2014, and the related statements of income, comprehensive income, stockholders' equity, and cash flows for each of the years in the year ended December 31, 2014. U Matrin Worldwide Sdn. Bhd.'s management is responsible for these financial statements. Our responsibility is to express an opinion on these financial statements based on our audits.

 

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

 

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of U Matrin Worldwide Sdn. Bhd. as of December 31, 2014, and the results of its operations and its cash flows for each of the years in the year ended December 31, 2014, in conformity with accounting principles generally accepted in the United States of America.

 

/s/ Jimmy P. Lee, CPA PC                               

Astoria, NY

January 6, 2016

 

 
F-16
 

 

UMATRIN HOLDING LTD.

 

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED DECEMBER 31, 2015 AND 2014


 

U MATRIN WORLDWIDE SDN. BHD.

BALANCE SHEETS

 

 

 

December 31,

 

 

December 31,

 

 

 

2015

 

 

2014

 

Assets

 

 

 

 

 

 

Current Assets

 

 

 

 

 

 

Cash and cash equivalents

 

$174,113

 

 

$2,140,653

 

Trade receivables, net

 

 

-

 

 

 

87,357

 

Inventory

 

 

88,957

 

 

 

-

 

Deferred tax assets

 

 

9,991

 

 

 

12,265

 

Due from related parties

 

 

88,914

 

 

 

353,542

 

Other receivables, deposits and prepayments

 

 

45,373

 

 

 

192,735

 

Total Current Assets

 

 

407,348

 

 

 

2,786,552

 

Property and equipment, net

 

 

1,423,002

 

 

 

308,766

 

Total Assets

 

 

1,830,350

 

 

 

3,095,318

 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

Current Liabilities

 

 

 

 

 

 

 

 

Due to related parties

 

 

590,244

 

 

 

1,749,313

 

Taxes payable

 

 

1,441

 

 

 

152,998

 

Other payables and accruals

 

 

183,719

 

 

 

847,309

 

Term loan payable-current portion

 

 

41,535

 

 

 

-

 

Total Current Liabilities

 

 

816,939

 

 

 

2,749,620

 

Term loan payable-long term

 

 

491,197

 

 

 

-

 

Total Liabilities

 

 

1,308,136

 

 

 

2,749,620

 

 

 

 

 

 

 

 

 

 

Commitments & Contingencies

 

 

-

 

 

 

-

 

 

 

 

 

 

 

 

 

 

Stockholders' Equity

 

 

 

 

 

 

 

 

Shares capital; 1,500,000 and 500,000 shares issued and outstanding

 

 

467,518

 

 

 

161,927

 

Retained earnings

 

 

221,526

 

 

 

213,004

 

Accumulated other comprehensive loss

 

 

(166,830)

 

 

(29,233)

Total Stockholders Equity

 

 

522,214

 

 

 

345,698

 

Total Liabilities and Stockholders Equity

 

$1,830,350

 

 

$3,095,318

 

 

 
F-17
 

 

 

UMATRIN HOLDING LTD.

 

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED DECEMBER 31, 2015 AND 2014


 

U MATRIN WORLDWIDE SDN. BHD.

STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

 

 

 

For the Twelve Months Ended

 

 

 

December 31,

 

 

December 31,

 

 

 

2015

 

 

2014

 

Sales

 

$3,158,296

 

 

$2,888,483

 

Cost of sales

 

 

544,169

 

 

 

707,091

 

Gross margin

 

 

2,614,127

 

 

 

2,181,392

 

 

 

 

 

 

 

 

 

 

Operating expenses

 

 

 

 

 

 

 

 

Selling, general & administrative expenses

 

2,577,904

 

 

 

1,771,394

 

Total operating expenses

 

 

2,577,904

 

 

 

1,771,394

 

 

 

 

 

 

 

 

 

 

Income (Loss) from operations

 

 

36,223

 

 

 

409,998

 

 

 

 

 

 

 

 

 

 

Other income (expenses)

 

 

 

 

 

 

 

 

Other income

 

 

-

 

 

 

5

 

Total other income (expenses)

 

 

-

 

 

 

5

 

 

 

 

 

 

 

 

 

 

Net income (loss) before income taxes

 

 

36,223

 

 

 

410,003

 

 

 

 

 

 

 

 

 

 

Provision of income taxes

 

 

(27,701)

 

 

(150,440)

 

 

 

 

 

 

 

 

 

Net income (loss)

 

$8,522

 

 

$259,563

 

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustment

 

 

(137,597)

 

 

(23,210)

 

 

 

 

 

 

 

 

 

Comprehensive income (loss)

 

$(129,075)

 

$236,353

 

 

 

 

 

 

 

 

 

 

Net loss per Common Share - Basic and Diluted

 

$0.01

 

 

$0.52

 

 

 

 

 

 

 

 

 

 

Weighted Average Number of Shares Outstanding - Basic and Diluted

 

 

1,371,233

 

 

 

500,000

 

 

 
F-18
 

 

UMATRIN HOLDING LTD.

 

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED DECEMBER 31, 2015 AND 2014


 

U MATRIN WORLDWIDE SDN. BHD.

STATEMENTS OF OWNERS' EQUITY

For the Years Ended December 31, 2015 and 2014

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other

 

 

Total

 

 

 

Shares Capital

 

 

Retained

 

 

Comprehensive

 

 

Owners'

 

 

 

Shares

 

 

Amount

 

 

Earnings (Deficit)

 

 

Loss

 

 

Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, December 31, 2013

 

 

500,000

 

 

$161,927

 

 

$(46,559)

 

$(6,023)

 

$109,345

 

Net income

 

 

-

 

 

 

-

 

 

 

259,563

 

 

 

-

 

 

 

259,563

 

Cumulative translation adjustment

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(23,210)

 

 

(23,210)

Balance, December 31, 2014

 

 

500,000

 

 

 

161,927

 

 

 

213,004

 

 

 

(29,233)

 

 

345,698

 

Issuance of common stock

 

 

1,000,000

 

 

 

305,591

 

 

 

 

 

 

 

-

 

 

 

305,591

 

Net income

 

 

-

 

 

 

-

 

 

 

8,522

 

 

 

-

 

 

 

8,522

 

Cumulative translation adjustment

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(137,597)

 

 

(137,597)

Balance, September 30, 2015

 

 

1,500,000

 

 

 

467,518

 

 

 

221,526

 

 

 

(166,830)

 

 

522,214

 

 

 
F-19
 

 

UMATRIN HOLDING LTD.

 

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED DECEMBER 31, 2015 AND 2014


 

U MATRIN WORLDWIDE SDN. BHD.

STATEMENTS OF CASH FLOWS

 

 

 

For the Twelve Months Ended

 

 

 

December 31,

 

 

December 31,

 

 

 

2015

 

 

2014

 

Cash flows from operating activities

 

 

 

 

 

 

Net loss

 

$8,522

 

 

$259,563

 

Adjustment to reconcile net loss from operations:

 

 

 

 

 

 

 

 

Depreciation expense

 

 

47,623

 

 

 

3,825

 

Changes in Operating Assets and Liabilities

 

 

 

 

 

 

 

 

Trade receivables

 

 

93,382

 

 

 

(93,382)

Inventory

 

 

(98,010)

 

 

-

 

Deferred tax asset

 

 

2,103

 

 

 

(13,111)

Due from related parties

 

 

279,965

 

 

 

(267,852)

Other receivables and prepayments

 

 

156,039

 

 

 

(206,029)

Taxes payable

 

 

(161,964)

 

 

1,869,971

 

Other payables

 

 

(703,336)

 

 

904,949

 

Net cash used in operating activities

 

 

(375,676)

 

 

2,457,934

 

 

 

 

 

 

 

 

 

 

Cash flows from investing activity

 

 

 

 

 

 

 

 

Purchase of property and equipment

 

 

(1,385,944)

 

 

(333,888)

Net cash provided by investing activity

 

 

(1,385,944)

 

 

(333,888)

 

 

 

 

 

 

 

 

 

Cash flows from financing activities

 

 

 

 

 

 

 

 

Proceedsfrom issuance of common stock

 

 

305,591

 

 

 

-

 

Proceeds/(Repayment) to related party, net

 

 

(1,219,660)

 

 

163,551

 

Proceeds/(Repayments) from term loan, net

 

 

586,946

 

 

 

-

 

Net cash provided by financing activities

 

 

(327,123)

 

 

163,551

 

 

 

 

 

 

 

 

 

 

Effect of exchange rate changes

 

 

122,203

 

 

 

(151,718)

 

 

 

 

 

 

 

 

 

Net increase (decrease) in cash and cash equivalents

 

 

(1,966,540)

 

 

2,135,879

 

Cash and cash equivalents at beginning of period

 

 

2,140,653

 

 

 

4,774

 

Cash and cash equivalents at end of period

 

$174,113

 

 

$2,140,653

 

 

 

 

 

 

 

 

 

 

Supplemental disclosures of cash flow information

 

 

 

 

 

 

 

 

Interest paid

 

$-

 

 

$-

 

Income taxes paid

 

$-

 

 

$-

 

 

 
F-20
 

 

U MATRIN WORLDWIDE SDN. BHD.

 

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2015 AND 2014


  

1. ORGANIZATION

 

U Matrin Worldwide Sdn. Bhd. (the "U Matrin") is a limited liability company incorporated and domiciled in Malaysia on July 22, 1993 and remained dormant until September 2014.

 

The principal activities of the Company is direct selling and trading on beauty and personal care products, and investment holding.

 

2. SIGNIFICANT ACCOUNTING POLICIES

 

Basis of presentation

 

The accompanying unaudited financial statements and related notes have been prepared in accordance with generally accepted accounting principles in the United States ("US GAAP").

 

The Company's financial statements are expressed in U.S. dollars.

 

Fiscal year end

 

The Company upon its formation elected December 31 as its fiscal year.

 

Use of estimates

 

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates.

 

 
F-21
 

 

U MATRIN WORLDWIDE SDN. BHD.

 

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2015 AND 2014


 

Fair value of financial instruments

 

The Company's balance sheet includes financial instruments, including cash, accounts payable, accrued expenses, amounts due to related party and convertible notes payable to a related party. The carrying amounts of current assets and current liabilities approximate their fair value because of the relatively short period of time between the origination of these instruments and their expected realization.

 

Accounting Standards Codification ("ASC") 820, Fair Value Measurements and Disclosures, defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity's own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below:

 

Level 1 - Quoted market prices available in active markets for identical assets or liabilities as of the reporting date.

 

Level 2 - Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date.

 

Level 3 - Pricing inputs that are generally observable inputs and not corroborated by market data.

 

Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of December 31, 2015. The respective carrying value of certain amounts on the balance sheet financial instruments approximated their fair values due to the short-term nature of these instruments.

 

Comprehensive Income (Loss)

 

The Company follows the provisions of the Financial Accounting Standards Board (the "FASB") ASC 220 Reporting Comprehensive Income, and establishes standards for the reporting and display of comprehensive income, its components and accumulated balances in a full set of general purpose financial statements. The Company's comprehensive income (loss) consists of net income (loss) and foreign currency translation adjustments.

 

 
F-22
 

 

U MATRIN WORLDWIDE SDN. BHD.

 

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2015 AND 2014


 

Related parties

 

The Company adopted ASC 850, Related Party Disclosures, for the identification of related parties and disclosure of related party transactions.

 

Risks and Uncertainties

 

The Company's operations are subject to significant risks and uncertainties including financial, operational and regulatory risks, including the potential risk of business failure.

   

Commitments and contingencies

 

The Company adopted ASC 450-20, Loss Contingencies, to report accounting for contingencies. Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated.

 

Property and Equipment

 

Property and equipment are stated at cost less accumulated depreciation and impairment losses, if any.

 

Depreciation is calculated under the straight-line method to write off the cost of the assets over their estimated useful lives.

 

Computer and software

5 years

Furniture and fittings

10 years

Office equipment

10 years

Renovation and improvements

10 years

Building

95 years

 

 
F-23
 

 

U MATRIN WORLDWIDE SDN. BHD.

 

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2015 AND 2014


 

An item of equipment is derecognized upon disposal or when no future economic benefits are expected from its use. Any gain or loss arising from de-recognition of asset is recognized in profit or loss.

 

Expenditures for repairs and maintenance, which do not improve or extend the expected useful lives of the assets, are expensed as incurred while major replacements and improvements are capitalized.

 

Impairment of assets

 

The carrying amounts of assets on the balance sheet are reviewed for impairment when there is an indication that the assets might be impaired. Impairment is measured by comparing the carrying values of the assets with their recoverable amounts.

 

An impairment loss is charged to the statement of operation immediately unless the asset is carried at its revalued amount. Any impairment loss of a revalued asset is treated as a revaluation decrease to the extent of a previously recognized revaluation surplus for the same asset.

   

In respect of assets other than goodwill, and when there is a change in the estimates used to determine the recoverable amount, a subsequent increase in the recoverable amount of an asset is treated as a reversal of the previous impairment loss and is recognized to the extent of the carrying amount of the asset that would have been determined (net of amortization and depreciation) had no impairment loss been recognized. The reversal is recognized in the statement of operation immediately, unless the asset is carried at its revalued amount. A reversal of an impairment loss on a revalued asset is credited directly to the revaluation surplus. However, to the extent that an impairment loss on the same revalued asset was previously recognized as an expense in the statement of operation, a reversal of that impairment loss is recognized as income in the statement of operation.

 

 
F-24
 

  

U MATRIN WORLDWIDE SDN. BHD.

 

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2015 AND 2014


 

Functional and presentation currency

 

The functional currency of the Company is the currency of the primary economic environment in which the Company operates which is Malaysia Ringgit ("MYR").

 

Transactions in currencies other than the entity's functional currency are recorded at the rates of exchange prevailing on the date of the transaction. At the end of each reporting period, monetary items denominated in foreign currencies are translated at the rates prevailing at the end of the reporting periods. Exchange differences arising on the settlement of monetary items and on translation of monetary items at period-end are included in income statement of the period.

 

For the purpose of presenting these financial statements, the Company's assets and liabilities are expressed in US$ at the exchange rate on the balance sheet date, stockholder's equity accounts are translated at historical rates, and income and expense items are translated at the weighted average exchange rate during the period. The resulting translation adjustments are reported under accumulated other comprehensive income in the stockholder's equity section of the balance sheets.

 

Exchange rate used for the translation as follows:

 

 

 

Period End

 

 

Average

 

US$ to MYR

 

Rate

 

 

Rate

 

 

 

 

 

 

 

 

December 31, 2015

 

 

4.29419

 

 

 

3.89755

 

December 31, 2014

 

 

3.49806

 

 

 

3.27235

 

 

Cash and cash equivalents

 

The Company considers all highly liquid investments with maturities of three months or less at the time of purchase to be cash equivalents.

 

The cash and cash equivalents for the year ended December 31, 2015 and 2014 were $174,113 and $2,140,653 respectively.

 

 
F-25
 

  

U MATRIN WORLDWIDE SDN. BHD.

 

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2015 AND 2014


 

Trade Receivables

 

Trade receivables are carried at anticipated realizable value. Bad debts are written off in the period in which they are identified. An estimate is made for doubtful debts based on a review of all outstanding amounts at the balance sheet date.

 

Bad debt expense were $nil and $nil for the year ended December 31, 2015 and 2014, respectively.

 

Inventories

 

Inventories, which are primarily comprised of finished goods for sale, are stated at the lower of cost or net realizable value, using the first-in first-out (FIFO) method. The Company evaluates the need for reserves associated with obsolete, slow-moving and non-salable inventory by reviewing net realizable values on a periodic basis.

 

Revenue Recognition

 

The Company generally recognizes product sales revenue when the significant risks and rewards of ownership have been transferred pursuant to Malaysia law, including such factors as when persuasive evidence of an arrangement exists, delivery has occurred, the sales price is fixed or determinable, sales and value-added tax laws have been complied with, and collectability is reasonably assured.

 

Commission

 

The Company expenses commission costs as incurred and includes it in selling expenses.

 

Advertising

 

The Company expenses advertising costs as incurred and includes it in selling expenses.

 

Income taxes and valuation allowance

 

The Company follows ASC 740, Income Taxes. The Company records deferred tax assets and liabilities for future income tax consequences that are attributable to differences between financial statement carrying amounts of assets and liabilities and their income tax bases. The measurement of deferred tax assets and liabilities is based on enacted tax rates that are expected to apply to taxable income in the year when settlement or recovery of those temporary differences is expected to occur. The Company recognizes the effect on deferred tax assets and liabilities of any change in income tax rates in the period that includes the enactment date. The Company record a valuation allowance to reduce deferred tax assets if it is more likely than not that some portion or all of the deferred tax assets will not be realized.

  

A tax benefit from an uncertain tax position may be recognized only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities. The determination is based on the technical merits of the position and presumes that the relevant taxing authority that has full knowledge of all relevant information will examine each uncertain tax position. Although the Company believes the estimates are reasonable, no assurance can be given that the final outcome of these matters will not be different than what is reflected in the historical income tax provisions and accruals.

 

 
F-26
 

 

U MATRIN WORLDWIDE SDN. BHD.

 

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2015 AND 2014


 

Segment Information

 

The Company adopted ASC-280, Disclosures about Segments of an Enterprise and Related Information, which requires certain financial and supplementary information to be disclosed on an annual and interim basis for each reportable segment of an enterprise. The Company believes that it operates in one business segment (marketing and sales) and in one geographical segment Malaysia, as all of the Company's current operations are carried in Malaysia.

 

Recent Accounting Pronouncements

 

In July 2015, the FASB issued ASU No. 2015-11, Simplifying the Measurement of Inventory, which modifies existing requirements regarding measuring inventory at the lower of cost or market. Under existing standards, the market amount requires consideration of replacement cost, net realizable value (NRV), and NRV less an approximately normal profit margin. The new ASU replaces market with NRV, defined as estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. This eliminates the need to determine and consider replacement cost or NRV less an approximately normal profit margin when measuring inventory. The amendments are effective for the annual period ending after December 15, 2016, and for annual and interim periods thereafter. Early application is permitted. The Company is currently assessing this ASU's impacts on the Company's consolidated results of operations and financial condition.

 

In February 2015, FASB issued ASU No. 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis. The new consolidation standard changes the way reporting enterprises evaluate whether (a) they should consolidate limited partnerships and similar entities, (b) fees paid to a decision maker or service provider are variable interests in a VIE, and (c) variable interests in a VIE held by related parties of the reporting enterprise require the reporting enterprise to consolidate the VIE. The guidance is effective for public business entities for annual and interim periods in fiscal years beginning after December 15, 2015. Early adoption is allowed, including early adoption in an interim period. A reporting entity may apply a modified retrospective approach by recording a cumulative-effect adjustment to equity as of the beginning of the fiscal year of adoption or may apply the amendments retrospectively. The Company is currently assessing the impact of the adoption of this guidance on the consolidated financial statements.

 

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers, which provides a single comprehensive model to be used in the accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. The standard's stated core principle is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve this core principle the ASU includes provisions within a five step model that includes identifying the contract with a customer, identifying the performance obligations in the contract, determining the transaction price, allocating the transaction price to the performance obligations, and recognizing revenue when (or as) an entity satisfies a performance obligation. The standard also specifies the accounting for some costs to obtain or fulfill a contract with a customer and requires expanded disclosures about revenue recognition. The standard provides for either full retrospective adoption or a modified retrospective adoption by which it is applied only to the most current period presented. This ASU is effective January 1, 2017. The Company is currently assessing this ASU's impact on the Company's consolidated results of operations and financial condition.

 

The Company believes that there were no other accounting standards recently issued that had or are expected to have a material impact on our financial position or results of operations.

 

 
F-27
 

  

U MATRIN WORLDWIDE SDN. BHD.

 

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2015 AND 2014


 

3. GOING CONCERN

 

As reflected in the accompanying financial statements, the Company had accumulated a deficit of $166,830 and $29,233 as of December 31, 2015 and 2014, respectively.

 

Uncertainty arise as the market being in operation faces economic slowdown which might cast a slight doubt on the Company ability to generate profit in the next 12 months. Management's plans include the raising of capital through the equity markets to fund future operations, seeking additional acquisitions, and generating of revenue through the business. However, there can be no assurances the Company will be successful in its efforts to secure additional equity financing and obtaining sufficient revenue. These factors raise substantial doubt about the Company's ability to continue as a going concern. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or amounts and classification of liabilities that might result from this uncertainty.

 

4. OTHER RECEIVABLES, DEPOSITS AND PREPAYMENTS

 

 

 

December 31,

 

 

December 31,

 

 

 

2015

 

 

2014

 

Other receivables

 

$9,431

 

 

$1,143

 

Deposits

 

 

35,942

 

 

 

184,731

 

Prepayments

 

 

-

 

 

 

6,861

 

Total

 

$45,373

 

 

$192,735

 

 

5. PROPERTY & EQUIPMENT

 

Property & equipment consist of the following:

 

 

 

December 31,

 

 

December 31,

 

 

 

2015

 

 

2014

 

Computer and software

 

$20,571

 

 

$15,421

 

Furniture and fittings

 

 

28,408

 

 

 

12,751

 

Office equipment

 

 

41,014

 

 

 

45,718

 

Renovations and improvements

 

 

298,093

 

 

 

238,454

 

Building

 

 

1,081,054

 

 

 

 

 

Total

 

 

1,469,140

 

 

 

312,344

 

Less: accumulated depreciation

 

 

(46,138)

 

 

(3,578)

Net

 

$1,423,002

 

 

$308,766

 

 

The depreciation expense charged to general and administrative expenses were $47,623 and $3,825 for the years ended December 31, 2015 and 2014, respectively.

 

 
F-28
 

 

U MATRIN WORLDWIDE SDN. BHD.

 

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2015 AND 2014


  

6. RELATED PARTIES TRANSACTIONS

 

Due from related parties consists of the following:

 

 

 

December 31,

 

 

December 31,

 

 

 

 

 

 

2015

 

 

2014

 

 

Purpose

 

Dato Ho Phooi Keow

 

$-

 

 

$99,115

 

 

Advance

 

Global Bizrewards Sdn. Bhd.

 

 

34,465

 

 

 

28,587

 

 

Advance

 

Fine Portal Sdn Bhd

 

 

-

 

 

 

85,762

 

 

Advance

 

Multimedia Biz Solution Sdn. Bhd.

 

 

46,574

 

 

 

85,762

 

 

Advance

 

SKH Media Sdn. Bhd.

 

 

-

 

 

 

54,316

 

 

Advance

 

Umatrin Holding Ltd

 

 

7,875

 

 

 

-

 

 

Advance

 

Total Due from

 

 

88,914

 

 

 

353,542

 

 

 

 

 

Due to related parties consists of the following:

 

 

 

December 31,

 

 

December 31,

 

 

 

 

 

 

2015

 

 

2014

 

 

 

 

Dato Sri Warren Eu Hin Chai

 

$407,146

 

 

$1,014,493

 

 

Advance

 

SKH Media Sdn. Bhd.

 

 

15,939

 

 

 

554,253

 

 

Advance

 

JS Health & Beauty Sdn. Bhd.

 

 

-

 

 

 

180,567

 

 

Inventory Purchase

 

Creative Iconic Sdn. Bhd.

 

 

167,159

 

 

 

-

 

 

Inventory Purchase

 

Total Due to

 

 

590,244

 

 

 

1,749,313

 

 

 

 

 

 
F-29
 

 

U MATRIN WORLDWIDE SDN. BHD.

 

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2015 AND 2014


   

The related parties' relationship to the Company as follows:

 

Name

Relationship

Dato Ho Phooi Keow

Director, Majority Shareholder and Officer of the Company

Global Bizrewards Sdn. Bhd.

Related by common director, Dato' Sri Eu Hin Chai

Fine Portal Sdn. Bhd.

Related by common director, Dato' Sri Eu Hin Chai

Multimedia Biz Solution Sdn. Bhd.

Related by common director, Dato' Liew Kok Hong

SKH Media Sdn. Bhd.

Related by common director, Dato' Sri Eu Hin Chai

Dato Sri Warren Eu Hin Chai

Director & Shareholder of the Company

JS Health & Beauty Sdn. Bhd.

A Company owned by a director of the Company

Creative Iconic Sdn. Bhd.

Related by key employee; Patricia Low

 

The amounts due from or due to related parties' were unsecured, non-interest bearing, and due on demand.

 

The Company purchased its inventory from its supplier JS Health & Beauty Sdn. Bhd. and Creative Iconic Sdn. Bhd. The amounts of inventory purchased were $642,179 and $707,091 for the year ended December 31, 2015 and 2014, respectively.

 

The Company leased an office space from SKH Media Sdn. Bhd.. The rent expenses were $30,788 and $9,168 for the years ended December 31, 2015 and 2014, respectively.

 

7. OTHER PAYABLES AND ACCRUALS

 

 

 

December 31,

 

 

December 31,

 

 

 

2015

 

 

2014

 

Other payables

 

$52,862

 

 

$746,700

 

Accruals

 

 

130,857

 

 

 

100,609

 

 

 

 

-

 

 

 

 

 

Total

 

$183,719

 

 

$847,309

 

 

 
F-30
 

 

U MATRIN WORLDWIDE SDN. BHD.

 

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2015 AND 2014


  

8. STOCKHOLDERS' EQUITY

 

The Company is authorized to issue 500,000 shares of common stock at MYR1 per share with 500,000 shares issued and paid up for MYR500,000 ($161,927).

 

On February 16, 2015, the Company was authorized to issue additional 4,500,000 shares of common stock at MYR1 per share and additional 1,000,000 shares was issued and paid up for MYR1,000,000 ($305,591).

 

9. PROVISION FOR INCOME TAXES

 

A reconciliation of income taxes applicable to the profit before income taxes at the statutory tax rate and income tax expense at the effective tax rate of the Company is as follows:

 

 

 

For the year ended

 

 

 

December 31,

 

 

December 31,

 

 

 

2015

 

 

2014

 

Net profit before income taxes

 

 

36,223

 

 

 

410,003

 

 

 

 

 

 

 

 

 

 

Tax at the statutory tax rate

 

 

7,245

 

 

 

62,500

 

 

 

 

 

 

 

 

 

 

Tax effects of:

 

 

-

 

 

 

-

 

Non-deductible expenses

 

 

-

 

 

 

47,940

 

Under accrual in prior year

 

 

2,044

 

 

 

-

 

Allowance Valuation

 

 

18,412

 

 

 

40,000

 

Income tax expense

 

 

27,701

 

 

 

150,440

 

 

 
F-31
 

 

U MATRIN WORLDWIDE SDN. BHD.

 

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2015 AND 2014


  

Deferred tax assets consisted of the following:

 

 

 

December 31,

 

 

December 31,

 

Deferred tax assets:

 

2015

 

 

2014

 

Net operating losses

 

 

-

 

 

 

-

 

Timing differences in expenses deductions

 

 

9,991

 

 

 

12,265

 

Allowance Valuation

 

 

-

 

 

 

-

 

Total

 

 

9,991

 

 

 

12,265

 

 

10. COMMITMENTS, CONTINGENCIES, RISKS AND UNCERTAINTIES

 

Operating Lease Commitments

 

The Company entered into a property lease agreement for office space which started on December 1, 2014 and expired on October 31, 2015 for monthly payment of MYR10,000 (approximately $2,858). The lease was not renewed and the Company continues to rent the property on a month to month basis.

 

The Company entered into a property lease agreement for office space which started on September 5, 2014 and expired on September 4, 2015 for monthly payment of MYR4,500 (approximately $1,286). The lease was not renewed and the Company continues to rent the property on a month to month basis.

 

The rent expenses were $67,895 and $16,502 for the year ended December 31, 2015 and 2014, respectively.

 

Concentration and Credit risk

 

Cash deposits with banks are held in financial institutions in Malaysia, which are federally insured with deposit protection up to MYR250,000 (approximately $58,218). Accordingly, the Company has a concentration of credit risk related to the uninsured part of bank deposits. The Company has not experienced any losses in such accounts and believes it is not exposed to significant credit risk.

 

The Company depends on few supplier for its products. Accordingly, the Company has a concentration risk related to these suppliers. Failure to maintain existing relationships with the suppliers or to establish new relationships in the future could negatively affect the Company's ability to obtain products sold to customers in a timely manner. If the Company is unable to obtain ample supply of products from existing suppliers or alternative sources of supply, the Company may be unable to satisfy the orders from its customers, which could materially and adversely affect revenues.

 

 
F-32
 

 

U MATRIN WORLDWIDE SDN. BHD.

 

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2015 AND 2014


  

11. TERM LOAN

 

On December 23, 2014, MYR2,300,000 (approximately $657,507) term loan was granted to the Company for the purchase of a four-story office with a repayment period of 240 months.

 

The term loan was secured by the title deed for the said property and guaranteed by directors of the Company. The term loan is subject to an interest charges at 2.10% per annum below the Bank's Base Lending Rate ("BLR") with daily rests. The BLR is currently at 6.85% for September 30, 2015.

 

On July 27, 2015, the Company made a drawdown of MYR2,300,000 (approx. $609,554) on the term loan. The repayment started effectively on September 1, 2015 with a fixed installment of MYR14,863.14 (approx. $4,249) for 240 installments. The current and non-current portion of the loan on December 31, 2015 is $41,535 and $491,197, respectively.

 

Interest expenses were $12,085 and $Nil for the year ended December 31, 2015 and 2014, respectively.

 

12. SUBSEQUENT EVENTS

 

Management has evaluated subsequent events through the date the financial statements were issued. Based on our evaluation, no events have occurred which require adjustment or disclosure.

 

 
F-33
 

 

U MATRIN WORLDWIDE SDN. BHD.

 

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2015 AND 2014


  

B. Unaudited Pro Forma Combined Financial Information

 

The accompanying unaudited pro forma combined financial information have been prepared to present the balance sheet and statements of operations of Umatrin Holding Ltd. (the "Company" or "UMHL"), to indicate how the consolidated financial statements of the Company might have looked like if the acquisition of Umatrin Worldwide Sdn. Bhd. ("Umatrin") and transactions related to the acquisition had occurred as of the beginning of the period presented.

 

The unaudited pro forma condensed combined balance sheet as of December 31, 2015 is presented as if the acquisition of Umatrin had occurred on the first day of the eleven months ended December 31, 2015.

 

The unaudited pro forma condensed combined statements of operations for the nine months ended October 31, 2015, and for the fiscal year ended January 31, 2015, are presented as if the acquisition of Umatrin had occurred on the first day of the fiscal year ended January 31, 2015 and were carried forward through each of the aforementioned periods presented.

 

These pro forma condensed financial statements are presented for illustrative purposes only and are not intended to be indicative of actual consolidated financial position and consolidated results of operations had the purchase been in effect during the periods presented, or of consolidated financial condition or consolidated results of operations that may be reported in the future.

 

The pro forma adjustments contained in the pro forma combined financial statements relate to the assumptions of all prior and existing liabilities of the Company upon consummation of the acquisition. 

 

 
F-34
 

  

Pro forma Balance Sheet

 

 

 

Historical

 

 

Pro forma

 

 

 

December 31,

 

 

December 31,

 

 

 

 

 

 

 

 

 

 

 

2015

 

 

2015

 

 

 

 

 

 

 

 

 

 

 

UMHL

 

 

Umatrin

 

 

Adjustment

 

 

Notes

 

Combined

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$-

 

 

$174,113

 

 

 

-

 

 

 

 

$174,113

 

Trade receivables, net

 

 

-

 

 

 

-

 

 

 

-

 

 

 

 

 

-

 

Inventory

 

 

-

 

 

 

88,957

 

 

 

-

 

 

 

 

 

88,957

 

Deferred tax assets

 

 

-

 

 

 

9,991

 

 

 

-

 

 

 

 

 

9,991

 

Due from related parties

 

 

-

 

 

 

88,914

 

 

 

-

 

 

 

 

 

88,914

 

Other receivables, deposits and prepayments

 

 

-

 

 

 

45,373

 

 

 

-

 

 

 

 

 

45,373

 

Total Current Assets

 

 

-

 

 

 

407,348

 

 

 

-

 

 

 

 

 

407,348

 

Property and equipment, net

 

 

-

 

 

 

1,423,002

 

 

 

-

 

 

 

 

 

1,423,002

 

Total Assets

 

 

-

 

 

 

1,830,350

 

 

 

-

 

 

 

 

 

1,830,350

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accounts payables and accrued expenses

 

 

6,831

 

 

 

-

 

 

 

-

 

 

 

 

 

6,831

 

Trade payables

 

 

-

 

 

 

-

 

 

 

-

 

 

 

 

 

-

 

Due to related parties

 

 

96,298

 

 

 

590,244

 

 

 

-

 

 

 

 

 

686,542

 

Taxes payable

 

 

-

 

 

 

1,441

 

 

 

-

 

 

 

 

 

1,441

 

Other payables and accruals

 

 

-

 

 

 

183,719

 

 

 

-

 

 

 

 

 

183,719

 

Term loan payable-current portion

 

 

-

 

 

 

41,535

 

 

 

-

 

 

 

 

 

41,535

 

Advance from customers

 

 

-

 

 

 

-

 

 

 

-

 

 

 

 

 

-

 

Total Current Liabilities

 

 

103,129

 

 

 

816,939

 

 

 

-

 

 

 

 

 

920,068

 

Term loan payable-long term

 

 

-

 

 

 

491,197

 

 

 

-

 

 

 

 

 

491,197

 

Total Liabilities

 

 

103,129

 

 

 

1,308,136

 

 

 

-

 

 

 

 

 

1,411,265

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commitments & Contingencies

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders' Equity (Deficit)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Umatrin Holding Ltd. Stockholders' Equity (Deficit)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Preferred stock, $0.00001 par value

 

 

-

 

 

 

-

 

 

 

-

 

 

 

 

 

-

 

Common stock, $0.00001 par value

 

 

583

 

 

 

-

 

 

 

1,000

 

 

(A)

 

 

1,583

 

Shares capital

 

 

-

 

 

 

467,518

 

 

 

(467,518)

 

(B)

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

(1,000)

 

(A)

 

 

 

 

Additional paid-in capital

 

 

2,281,284

 

 

 

-

 

 

 

374,014

 

 

(B)

 

 

2,654,298

 

Accumulated earnings (deficits)

 

 

(2,384,996)

 

 

221,526

 

 

 

(44,305)

 

(C)

 

 

(2,207,775)

Accumulated other comprehensive income

 

 

-

 

 

 

(166,830)

 

 

33,366

 

 

(C)

 

 

(133,464)

Total Umatrin Holding Ltd. Stockholders' Equity (Deficit)

 

 

(103,129)

 

 

522,214

 

 

 

-

 

 

 

 

 

314,642

 

 

 

 

 

 

 

 

 

 

 

 

93,504

 

 

(B) (C)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

44,305

 

 

(C)

 

 

 

 

Noncontrolling interest

 

 

-

 

 

 

-

 

 

 

(33,366)

 

(C)

 

 

104,443

 

Total Stockholders Equity (Deficit)

 

 

(103,129)

 

 

522,214

 

 

 

-

 

 

 

 

 

419,085

 

Total Liabilities and Stockholders Equity (Deficit)

 

$-

 

 

$1,830,350

 

 

 

-

 

 

 

 

$1,830,350

 

 

 
F-35
 

 

Pro forma Statements of Operations and Comprehensive Income (Loss)

 

 

 

Historical

 

 

Pro forma

 

 

 

For the years ended

 

 

 

 

 

 

 

 

 

 

 

December 31,

 

 

December 31,

 

 

 

 

 

 

 

 

 

 

 

2015

 

 

2015

 

 

 

 

 

 

 

 

 

 

 

UMHL

 

 

Umatrin

 

 

Adjustment

 

 

Notes

 

Combined

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales

 

$-

 

 

$3,158,296

 

 

 

-

 

 

 

 

$3,158,296

 

Cost of sales

 

 

-

 

 

 

544,169

 

 

 

 

 

 

 

 

 

544,169

 

Gross margin

 

 

-

 

 

 

2,614,127

 

 

 

 

 

 

 

 

 

2,614,127

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general & administrative expenses

 

 

375,495

 

 

 

2,577,904

 

 

 

 

 

 

 

 

 

2,953,399

 

Total operating expenses

 

 

375,495

 

 

 

2,577,904

 

 

 

 

 

 

 

 

 

2,953,399

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (Loss) from operations

 

 

(375,495)

 

 

36,223

 

 

 

 

 

 

 

 

 

(339,272)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income (expenses)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

(3,569)

 

 

-

 

 

 

 

 

 

 

 

 

(3,569)

Other income

 

 

-

 

 

 

-

 

 

 

 

 

 

 

 

 

-

 

Total other income (expenses)

 

 

(3,569)

 

 

-

 

 

 

 

 

 

 

 

 

(3,569)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) before income taxes

 

 

(379,064)

 

 

36,223

 

 

 

 

 

 

 

 

 

(342,841)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Provision of income taxes

 

 

-

 

 

 

(27,701)

 

 

 

 

 

 

 

 

(27,701)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) including noncontrolling interest

 

 

(379,064)

 

 

8,522

 

 

 

 

 

 

 

 

 

(370,542)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Less: Net loss attributable to noncontrolling interest

 

 

-

 

 

 

-

 

 

 

1,704

 

 

(C)

 

 

1,704

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) attributable to Umatrin Holding Ltd.

 

$(379,064)

 

$8,522

 

 

 

 

 

 

 

 

$(372,246)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) including noncontrolling interest

 

$(379,064)

 

$8,522

 

 

 

 

 

 

 

 

$(370,542)

Foreign currency translation adjustment

 

 

-

 

 

 

(137,597)

 

 

 

 

 

 

 

 

(137,597)

Comprehensive income (loss) including noncontrolling interest

 

$(379,064)

 

$(129,075)

 

 

 

 

 

 

 

$(508,139)

Comprehensive income (loss) attributable to noncontrolling interest

 

 

-

 

 

 

-

 

 

 

27,519

 

 

(C)

 

 

27,519

 

Comprehensive income (loss) attributable to Umatrin Holding Ltd.

 

$(379,064)

 

$(129,075)

 

 

 

 

 

 

 

$(480,620)
 

 
F-36
 

 

UMATRIN HOLDING LTD.

 

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED DECEMBER 31, 2015 AND 2014 


 

Notes to Unaudited Pro Forma Combined Financial Information

 

Note 1 – Basis of Presentation

 

The unaudited pro forma combined balance sheet as of December 31, 2015, and the unaudited pro forma combined statements of operations for the year ended December 31, 2015, are based on the historical financial statements of the Company and Umatrin after giving effect of the share exchange agreements entered between the Company and Umatrin on January 6, 2016, and the assumptions, reclassifications and adjustments described in the accompanying notes to the unaudited pro forma condensed combined financial information.

 

The Company entered into a share exchange agreement with Umatrin whereas the acquisition was accounted under US GAAP as a business combination under common control with the Company being the acquirer as both entities were owned by the same controlling shareholders. The pro forma combined financial information have been presented at historical costs and on a retroactive basis of the entities. No purchase price or reverse merger accounting methods were used.

 

Note 2 – Adjustments

 

(A)

The Company issued 100,000,000 shares of its commons stock to two shareholders of Umatrin in exchange for 1,200,000 shares (80% ownership) of Umatrin. Pursuant to the share exchange agreement effective January 6, 2016, the Company issued to Dato' Sri Eu Hin Chai and Dato' Liew Kok Hong 50,000,000 and 50,000,000 shares, respectively.

 
(B)

To eliminate Umatrin's historical shares capital, assuming the Umatrin's original stockholders will exchange their shares in Umatrin for the Company's shares.

 
(C)

To adjust the 20% noncontrolling interest after the share exchange.

   

 

F-37