Attached files
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark
One)
☑
ANNUAL REPORT PURSUANT TO SECTION
13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For the
quarterly period ended March 31, 2017
or
☐
TRANSITION REPORT PURSUANT TO
SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For the
transition period from ____________________to
____________________
333-194748
Commission
file number
HotApp International Inc.
(Exact
name of registrant as specified in its charter)
Delaware
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45-4742558
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(State
or other jurisdiction of incorporation or
organization)
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(I.R.S.
Employer Identification No.)
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4800 Montgomery Lane, Suite 210 Bethesda MD
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20814
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(Address
of principal executive offices)
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(Zip
Code)
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301-971-3940
Registrant’s
telephone number, including area code
Indicate
by check mark whether the registrant (1) has filed all reports
required by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90
day. Yes ☑
No ☐
Indicate
by check mark whether the registrant has submitted electronically
and posted on its corporate Web site, if any, every Interactive
Data File required to be submitted and posted pursuant to Rule 405
of Regulation S-T (§232.405 of this chapter) during the
preceding 12 months (or for such shorter period that the registrant
was required to submit and post such files). Yes ☐ No
☐
Indicate
by check mark whether the registrant is a large accelerated filer,
an accelerated filer, a non-accelerated filer, smaller reporting
company or an emerging growth company. See the definitions of
“large accelerated filer,” “accelerated
filer”, “smaller reporting company” and
“emerging growth company” in Rule 12b-2 if the Exchange
Act.
Large accelerated
filter
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☐
|
Accelerated
filter
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☐
|
Non-accelerated
filter
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☐
|
Smaller reporting
company
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☑
|
(Do not check if a
smaller reporting company)
|
Emerging growth
company
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☑
|
If an
emerging growth company, indicate by check mark if the registrant
has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided
pursuant to Section 13(a) of the Exchange Act.
☐
Indicate
by check mark whether the registrant is a shell company (as defined
in Rule 12b-2 of the Exchange Act). Yes ☐ No
☑
Indicate
the number of shares outstanding of each the registrant’s
classes of common stock, as of the latest practicable date. As of
May 12, 2017, there were
5,909,687 shares outstanding of the registrant’s common stock
$0.001 par value.
Throughout this Report on Form 10-Q, the terms
“Company,” “we,” “us” and
“our” refer to HotApp International Inc., and
“our board of directors” refers to the board of
directors of HotApp International, Inc.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This
report contains forward-looking statements that involve a number of
risks and uncertainties. Although our forward-looking statements
reflect the good faith judgment of our management, these statements
can be based only on facts and factors of which we are currently
aware. Consequently, forward-looking statements are inherently
subject to risks and uncertainties. Actual results and outcomes may
differ materially from results and outcomes discussed in the
forward-looking statements.
Forward-looking
statements can be identified by the use of forward-looking words
such as “may,” “will,”
“should,” “anticipate,”
“believe,” “expect,” “plan,”
“future,” “intend,” “could,”
“estimate,” “predict,” “hope,”
“potential,” “continue,” or the negative of
these terms or other similar expressions. Such forward-looking
statements are based on our management’s current plans and
expectations and are subject to risks, uncertainties and changes in
plans that may cause actual results to differ materially from those
anticipated in the forward-looking statements. You should be aware
that, as a result of any of these factors materializing, the
trading price of our common stock may decline. These factors
include, but are not limited to, the following:
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●
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the
availability and adequacy of capital to support and grow our
business;
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●
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economic,
competitive, business and other conditions in our local and
regional markets;
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●
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actions
taken or not taken by others, including competitors, as well as
legislative, regulatory, judicial and other
governmental authorities;
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●
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competition
in our industry;
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●
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changes
in our business and growth strategy, capital improvements or
development plans;
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●
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the
availability of additional capital to support development;
and
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●
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other
factors discussed elsewhere in this annual report.
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The
cautionary statements made in this quarterly report are intended to
be applicable to all related forward-looking statements wherever
they may appear in this report.
We urge
you not to place undue reliance on these forward-looking
statements, which speak only as of the date of this report. We
undertake no obligation to publicly update any forward
looking-statements, whether as a result of new information, future
events or otherwise.
2
TABLE OF CONTENTS
PART
I
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FINANCIAL
INFORMATION
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ITEM
1.
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INTERIM FINANCIAL
STATEMENTS
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4
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ITEM
2.
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MANAGEMENT’S
DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
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13
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ITEM
3.
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QUANTITATIVE AND
QUALITATIVE DISCLOSURES ABOUT MARKET RISK
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17
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ITEM
4.
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CONTROLS AND
PROCEDURES
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17
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PART
II
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OTHER
INFORMATION
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ITEM
1.
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LEGAL
PROCEEDINGS
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18
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ITEM
1A
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RISK
FACTORS
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18
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ITEM
2.
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UNREGISTERED SALES
OF EQUITY SECURITIES AND USE OF PROCEEDS
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18
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ITEM
3.
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DEFAULTS UPON
SENIOR SECURITIES
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18
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ITEM
4.
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MINE
SAFETY DISCLOSURES
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18
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ITEM
5.
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OTHER
INFORMATION
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18
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ITEM
6.
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EXHIBITS
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18
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SIGNATURES
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19
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3
Condensed
Consolidated Balance Sheets as of March 31, 2017 (unaudited) and
December 31, 2016
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5
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Condensed
Consolidated Statements of Operations and Comprehensive Loss for
the three months ended March 31, 2017 and 2016
(unaudited)
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6
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Condensed
Consolidated Statements of Cash Flows for the three months ended
March 31, 2017 and 2016 (unaudited)
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7
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Notes
to Condensed Consolidated Financial Statements
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8
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4
HOTAPP INTERNATIONAL INC
CONDENSED CONSOLIDATED BALANCE SHEETS AS OF MARCH 31, 2017
(UNAUDITED) AND DECEMBER 31, 2016
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3/31/17
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12/31/16
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ASSETS
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CURRENT
ASSETS:
|
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Cash and cash
equivalents
|
$98,145
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$102,776
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Account
receivable
|
96,365
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-
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Costs in excess of
billings
|
-
|
30,332
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Prepaid
expenses
|
18,099
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4,650
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Deposit and other
receivable
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23,878
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19,745
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TOTAL CURRENT
ASSETS
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236,487
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157,503
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Fixed assets,
net
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41,358
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46,096
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TOTAL
ASSETS
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$277,845
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$203,599
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LIABILITIES
AND STOCKHOLDERS' EQUITY (DEFICIT)
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CURRENT
LIABILITIES:
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Accounts payable
and accrued expenses
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$220,076
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$238,315
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Accrued taxes and
franchise fees
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7,742
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7,742
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Amount due to
related parties
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766,164
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455,857
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TOTAL CURRENT
LIABILITIES
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993,982
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701,914
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TOTAL
LIABILITIES
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993,982
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701,914
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STOCKHOLDERS'
EQUITY (DEFICIT):
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Preferred stock,
$0.0001 par value, 15,000,000 shares authorized, 13,800,000 issued
and outstanding
|
1,380
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1,380
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Common stock,
$.0001 par value, 500,000,000 shares authorized, 5,909,687 shares
issued and outstanding, as of March 31, 2017 and December 31, 2016,
respectively
|
591
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591
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Accumulated other
comprehensive loss
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(157,334)
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(73,330)
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Additional paid-in
capital
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4,202,020
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4,202,020
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Accumulated
deficit
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(4,762,794)
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(4,628,976)
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TOTAL
STOCKHOLDERS' EQUITY (DEFICIT)
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(716,137)
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(498,315)
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TOTAL
LIABILITIES AND STOCKHOLDERS' EQUITY
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$277,845
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$203,599
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The
accompanying notes to the consolidated financial statements are an
integral part of these statements.
5
HOTAPP INTERNATIONAL INC
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS FOR
THE THREE MONTHS ENDED MARCH 31, 2017 AND 2016
(UNAUDITED)
|
Three Months
Ended
March
31,
2017
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Three Months
Ended
March
31,
2016
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Revenues:
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Project
fee
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$66,178
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$-
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66,178
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-
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Cost
of revenues
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14,105
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-
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Gross
profit
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$52,073
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$-
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|
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Operating
expenses:
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Research and
product development
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$52,662
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$138,447
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Sales and
marketing
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-
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(64,576)
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Deposits written
off
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2,663
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-
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Depreciation
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8,636
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14,209
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General and
administrative
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187,502
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245,705
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Total
operating expenses
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251,463
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333,785
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(Loss)
from operations
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(199,390)
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(333,785)
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Other
income:
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Foreign exchange
gain
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65,572
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754
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Total
other income (expenses)
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65,572
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754
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Loss
before taxes
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(133,818)
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(333,031)
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Income tax
provision
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-
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7,037
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Net
loss applicable to common shareholders
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$(133,818)
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$(340,068)
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Net loss per share
- basic and diluted
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$(0.02)
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$(0.06)
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Weighted number of
shares outstanding -
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Basic and
diluted
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5,909,687
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5,909,687
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Comprehensive
Income Loss:
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Net
loss
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$(133,818)
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$(340,068)
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Foreign currency
translation gain (loss)
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(84,004)
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(3,243)
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Total
comprehensive loss
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$(217,822)
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$(343,311)
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The
accompanying notes to the consolidated financial statements are an
integral part of these statements.
6
HOTAPP INTERNATIONAL INC
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS ENDED
MARCH 31, 2017 AND 2016 (UNAUDITED)
|
Three Months
Ended
March
31,
2017
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Three Months
Ended
March
31,
2016
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CASH
FLOWS FROM OPERATING ACTIVITIES:
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Net
Loss
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$(133,818)
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$(340,068)
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Adjustments
to reconcile net loss to cash used in operating
activities:
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Depreciation
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8,636
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14,209
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Deposit written
off
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2,663
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-
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Foreign exchange
transaction gain
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(65,572)
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(754)
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Change
in operating assets and liabilities:
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Costs in excess of
billings and account receivable
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(66,033)
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-
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Security deposit
and other receivable
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(6,796)
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-
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Prepaid
expenses
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(13,449)
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(6,431)
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Accounts payable
and accrued expenses
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(18,239)
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(77,525)
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Accrued taxes
payable and franchise fees
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-
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7,037
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Net
cash used in operating activities
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$(292,608)
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$(403,532)
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CASH
FLOW FROM INVESTING ACTIVITIES:
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Acquisition of
fixed asset
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(3,898)
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(2,515)
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Net
cash used in investing activities
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$(3,898)
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$(2,515)
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CASH
FLOW FROM FINANCING ACTIVITIES:
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Advance from
affiliate
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310,307
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-
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Net
cash provided by financing activities
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$310,307
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$-
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NET
DECREASE IN CASH
|
13,801
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(406,047)
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Effects of exchange
rates on cash
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(18,432)
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(3,243)
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CASH
AND CASH EQUIVALENTS at beginning of period
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102,776
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495,136
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CASH
AND CASH EQUIVALENTS at end of period
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$98,145
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$85,846
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Supplemental
disclosure of cash flow information
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Cash paid
for:
|
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Interest
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$-
|
$-
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Income
Taxes
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$-
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$-
|
The
accompanying notes to the consolidated financial statements are an
integral part of these statements.
7
HOTAPP INTERNATIONAL INC
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
Note 1. The Company History and Nature of the Business
Hotapp
International Inc., formerly Fragmented Industry Exchange Inc.,
(the “Company” or “Group”) was incorporated
in the State of Delaware on March 7, 2012 and established a fiscal
year end of December 31. The Company’s initial business plan
was to be a financial acquisition intermediary which would serve
buyers and sellers for companies that are in highly fragmented
industries. The Company determined it was in the best interest of
the shareholders to expand its business plan. On October 15, 2014,
through a sale and purchase agreement (the “Purchase
Agreement”) the Company acquired all the issued and
outstanding stock of HotApps International Pte Ltd (the
“HIP”) from Singapore eDevelopment Limited
(“SeD”). HIP owned certain intellectual property
relating to instant messaging for portable devices (the
“HotApp”). HotApp is a cross-platform mobile
application that incorporates instant messaging and ecommerce. It
provides a messaging and calling services for HotApp users (text,
photo, audio). HotApp can be used on any mobile platform (i.e. IOS
Online or Android).
Pursuant
to a Purchase Agreement, the Company issued SeD 1,000,000 shares of
common stock and 13,800,000 shares of newly created convertible
preferred stock. See Note 8 for further description.
As of
March 31, 2017, details of the Company’s subsidiaries are as
follows:
Subsidiaries
|
|
Date of
Incorporation
|
|
Place of
Incorporation
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|
Percentage of
Ownership
|
1st Tier Subsidiary:
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HotApps
International Pte Ltd (“HIP”)
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|
May
23, 2014
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Republic of
Singapore
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100%
by Company
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2nd Tier Subsidiaries:
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|
|
|
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HotApps Call Pte
Ltd
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September 15,
2014
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Republic of
Singapore
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100%
owned by HIP
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HotApps
Information Technology Co Ltd
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|
November 10,
2014
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People’s
Republic of China
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|
100%
owned by HIP
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HotApp
International Limited*
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July
8, 2014
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Hong
Kong (Special Administrative Region)
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|
100%
owned by HIP
|
* On
March 25, 2015, HotApps International Pte Ltd acquired 100% of
issued share capital in HotApp International Limited.
The
financial statements have been prepared using accounting principles
generally accepted in the United States of America applicable for a
going concern, which assumes that the Company will realize its
assets and discharge its liabilities in the ordinary course of
business. Since inception, the Company has incurred net losses of
$4,762,794 and has net working capital deficit of $757,495 at March
31, 2017. Management has concluded that due to the conditions
described above, there is substantial doubt about the entities
ability to continue as a going concern through May 12, 2018. We
have evaluated the significance of the conditions in relation to
our ability to meet our obligations and believe that our current
cash balance along with our current operations will not provide
sufficient capital to continue operation through 2017. Our ability
to continue as a going concern is dependent upon achieving sales
growth, management of operating expenses and ability of the Company
to obtain the necessary financing to meet its obligations and pay
its liabilities arising from normal business operations when they
come due, and upon profitable operations.
Our
majority shareholder has advised us not to depend solely on it, for
financing. We have increased our efforts to raise additional
capital through equity or debt financings from other
sources. However, we cannot be certain that such
capital (from our shareholders or third parties) will be available
to us or whether such capital will be available on terms that are
acceptable to us. Any such financing likely would
be dilutive to existing stockholders and could result in
significant financial operating covenants that would negatively
impact our business. If we are unable to raise
sufficient additional capital on acceptable terms, we will have
insufficient funds to operate our business or pursue our planned
growth.
These
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.
Note 2. Summary of Significant Accounting Policies
Basis of presentation
The
condensed consolidated balance sheet at December 31, 2016 was
derived from audited financial statement but does not include all
disclosures required by accounting principles generally accepted in
the United States of America. The other information in these
condensed financial statements is unaudited but, in the opinion of
management, reflects all adjustments necessary for a fair
presentation of the results for the periods covered. All such
adjustments are of a normal recurring nature unless disclosed
otherwise. These condensed financial statements, including notes,
have been prepared in accordance with the applicable rules of the
Securities and
Exchange
Commission and do not include all of the information and
disclosures required by accounting principles generally accepted in
the United States of America for complete financial statements.
These condensed financial statements should be read in conjunction
with the financial statements and additional information as
contained in our Annual Report on Form 10-K for the year ended
December 31, 2016.
8
Basis of consolidation
The
consolidated financial statements of the Group include the
financial statements of Hotapp International Inc and its
subsidiaries. All inter-company transactions and
balances have been eliminated upon consolidation.
Use of estimates
The
preparation of financial statements in conformity with U.S. GAAP
requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities and revenues, cost
and expenses in the financial statements and accompanying notes.
Significant accounting estimates reflected in the Group’s
consolidated financial statements include revenue recognition, the
useful lives and impairment of property and equipment, valuation
allowance for deferred tax assets and share-based
compensation.
Cash and cash equivalents
Cash
and cash equivalents consist of cash on hand and highly liquid
investments, which are unrestricted from withdrawal or use, or
which have original maturities of three months or less when
purchased.
Foreign currency risk
Because
of its foreign operations, the Company holds cash in non-US
dollars. As of March 31, 2017, cash and cash
equivalents of the Group includes, on an as converted basis to US
dollars $25,365, $52,037 and $18,951 in Hong Kong Dollars
(“HK$”), Reminbi (“RMB”) and Singapore
Dollars (“S$”), respectively.
The
Renminbi (“RMB”) is not a freely convertible
currency. The State Administration for Foreign
Exchange, under the authority of the People’s Bank of China,
controls the conversion of RMB into foreign currencies. The value
of the RMB is subject to changes in central government policies and
to international economic and political developments affecting
supply and demand in the China Foreign Exchange Trading System
market.
Concentration of credit risk
Financial
instruments that potentially expose the Group to concentration of
credit risk consist primarily of cash and cash
equivalents. The Group places their cash with financial
institutions with high-credit ratings and quality.
Fixed assets, net
Property
and equipment are stated at cost less accumulated depreciation.
Depreciation is calculated on a straight-line basis over the
following estimated useful lives:
Office
equipment
|
3
years
|
Computer
equipment
|
3
years
|
Furniture
and fixtures
|
3
years
|
Motor
vehicles
|
10
years
|
Fair value
Fair
value is the price that would be received from selling an asset or
paid to transfer a liability in an orderly transaction between
market participants at the measurement date. When determining the
fair value measurements for assets and liabilities required or
permitted to be recorded at fair value, the Group considers the
principal or most advantageous market in which it would transact
and it considers assumptions that market participants would use
when pricing the asset or liability.
Revenue recognition
The
Group recognizes revenue when persuasive evidence of an arrangement
exists, delivery has occurred, the sales price is fixed or
determinable, and collectability is reasonably assured. The Group
currently has $66,178 revenue from its services rendered on
projects, and plans to derive its revenue from membership
subscription services, offering the platform for Enterprise
Collaboration with integration. Revenue is currently recognized
under contract accounting due to the significant software
production required, and the percentage-of-completion method is
used in accordance with ASC 605-35. The Company is recognizing the
percentage-of-completion based on input measures that measured
directly from expenses incurred, and management reviews the
progress to completion.
9
Research and development expenses
Research
and development expenses primarily consist of (i) salaries and
benefits for research and development personnel, and
(ii) office rental, general expenses and depreciation expenses
associated with the research and development
activities. The Company’s research and development
activities primarily consist of the research and development of new
features for its mobile platform and its self-developed mobile
games. Expenditures incurred during the research phase are expensed
as incurred.
Income taxes
Current
income taxes are provided for in accordance with the laws of the
relevant tax authorities. Deferred income taxes are
recognized when temporary differences exist between the tax bases
of assets and liabilities and their reported amounts in the
consolidated financial statements. Net operating loss carry
forwards and credits are applied using enacted statutory tax rates
applicable to future years. Deferred tax assets are reduced by a
valuation allowance when, in the opinion of management, it is
more-likely-than-not that a portion of or all of the deferred tax
assets will not be realized. The components of the deferred tax
assets and liabilities are individually classified as current and
non-current based on their characteristics.
The
impact of an uncertain income tax position on the income tax return
is recognized at the largest amount that is more-likely-than-not to
be sustained upon audit by the relevant tax authority. An uncertain
income tax position will not be recognized if it has less than a
50% likelihood of being sustained. Interest and
penalties on income taxes will be classified as a component of the
provisions for income taxes. The Group did not recognize any income
tax due to uncertain tax position or incur any interest and
penalties related to potential underpaid income tax expenses for
the years ended December 31, 2016 or 2015,
respectively.
Uncertainties
exist with respect to the application of the New EIT Law to our
operations, specifically with respect to our tax
residency. The New EIT Law specifies that legal entities
organized outside of the PRC will be considered residents for PRC
income tax purposes if their “de facto management
bodies” as “establishments that carry on substantial
and overall management and control over the operations, personnel,
accounting, properties, etc. of the
Company.” Because of the uncertainties that have
resulted from limited PRC guidance on the issue, it is uncertain
whether our legal entities outside the PRC constitute residents
under the New EIT Law. If one or more of our legal
entities organized outside the PRC were characterized as PRC
residents, the impact would adversely affect our results of
operations.
Foreign currency translation
The
functional and reporting currency of the Company is the United
States dollar (“U.S. dollar”). The financial records of
the Company’s subsidiaries located in Singapore, Hong Kong
and the PRC are maintained in their local currencies, the Singapore
Dollar (S$), Hong Kong Dollar (HK$) and Renminbi ("RMB"),
which are also the functional currencies of these
entities.
Monetary
assets and liabilities denominated in currencies other than the
functional currency are translated into the functional currency at
the rates of exchange ruling at the balance sheet date.
Transactions in currencies other than the functional currency
during the year are converted into functional currency at the
applicable rates of exchange prevailing when the transactions
occurred. Transaction gains and losses are
recognized in the statement of operations.
The
Company’s entities with functional currency of Renminbi, Hong
Kong Dollar and Singapore Dollar, translate their operating results
and financial positions into the U.S. dollar, the Company’s
reporting currency. Assets and liabilities are translated using the
exchange rates in effect on the balance sheet date. Revenues,
expenses, gains and losses are translated using the average rate
for the year. Translation adjustments are reported as cumulative
translation adjustments and are shown as a separate component of
comprehensive income (loss).
For the
three months ended March 31, 2017, the Company recorded other
comprehensive loss from translation loss of $84,004 in the
consolidated financial statements.
Operating leases
Leases
where the rewards and risks of ownership of assets primarily remain
with the lessor are accounted for as operating leases. Payments
made under operating leases are charged to the consolidated
statements of operations on a straight-line basis over the lease
periods.
Comprehensive income (loss)
Comprehensive
income (loss) includes gains (losses) from foreign currency
translation adjustments. Comprehensive income (loss) is reported in
the consolidated statements of operations and comprehensive
loss.
10
Loss per share
Basic
loss per share is computed by dividing net loss attributable to
shareholders by the weighted average number of shares outstanding
during the period.
The
Company's convertible preferred shares are not participating
securities and have no voting rights until converted to common
stock. As of March 31, 2017, no shares of
preferred stock are eligible for conversion into voting common
stock.
Recent accounting pronouncements not yet adopted
In May
2014, the Financial Accounting Standards Board (FASB) issued
Accounting Standards Update No. 2014-09, Revenue from Contracts
with Customers (Topic 606) (ASU 2014-09), which amends the existing
accounting standards for revenue recognition. In August 2015, the
FASB issued ASU No. 2015-14, Revenue from Contracts with Customers
(Topic 606): Deferral of the Effective Date, which delays the
effective date of ASU 2014-09 by one year. The FASB also agreed to
allow entities to choose to adopt the standard as of the original
effective date. We do not expect the adoption of this guidance to
have a significant effect on our consolidated financial
statements.
In
November 2015, the FASB issued Accounting Standards Update No.
2015-17, Income Taxes (Topic 740): Balance Sheet Classification of
Deferred Taxes (ASU 2015-17), which simplifies the presentation of
deferred income taxes by requiring deferred tax assets and
liabilities be classified as noncurrent on the balance sheet. The
updated standard is effective for us beginning on January 1, 2017.
We do not expect the adoption of this guidance to have a
significant effect on our consolidated financial
statements.
On Feb.
25, 2016, the Financial Accounting Standards Board (FASB) released
Accounting Standards Update No. 2016-02, Leases (Topic
842) (the Update). The new leasing standard presents dramatic
changes to the balance sheets of lessees. Lessor
accounting is updated to align with certain changes in the
lessee model and the new revenue recognition standard. The Company
does not expect the adoption of ASU No. 2016-02 to have a material
impact on its financial statements.
Note 3. FIXED ASSETS, NET
Fixed
assets, net consisted of the following:
|
March
31,
|
December
31,
|
|
2017
|
2016
|
Computer
equipment
|
$73,159
|
$69,442
|
Office
equipment
|
19,821
|
19,671
|
Furniture and
fixtures
|
7,187
|
7,156
|
|
$100,167
|
$96,269
|
Less: accumulated
depreciation
|
(58,809)
|
(50,173)
|
Fixed assets,
net
|
$41,358
|
$46,096
|
Depreciation
expenses charged to the consolidated statements of operations for
the three months ended March 31, 2017 and 2016 were $8,636 and
$14,209, respectively.
Note 4. ACCOUNTS PAYABLE AND ACCRUED
EXPENSES
Accrued
expenses and other current liabilities consisted of the
following:
|
March
31,
|
December
31,
|
|
2017
|
2016
|
Accrued
payroll
|
$175,059
|
$180,464
|
Accrued
professional fees
|
34,722
|
45,612
|
Other
|
10,295
|
12,239
|
Total
|
$220,076
|
$238,315
|
11
Note 5. SHARE CAPITALIZATION
The
Company is authorized to issue 500 million shares of common stock
and 15 million shares of preferred stock. Both share
types have a $0.0001 par value. As of March 31, 2017 and
2016, the Company had issued and outstanding, 5,909,687 of common
stock, respectively and 13,800,000 shares of preferred stock,
respectively.
Common Shares:
On July
13, 2015, SED acquired 777,687 shares of the Company common stock
by converting outstanding loans made to the Company into common
stock of the Company at a rate of $5.00 per share (rounded to the
nearest full share). After such transactions SED owned 98.17% of
the Company.
Preferred Shares:
Pursuant
to the Purchase Agreement, dated October 15, 2014, the Company
issued 1,000,000 shares of common stock to
SED. Such amount represented 19% ownership in the
Company. Pursuant to the Purchase Agreement, dated October
15, 2014, the Company issued 13,800,000 shares of a class of
preferred stock called Perpetual Preferred Stock (“Preferred
Stock”) to SED. The Preferred Stock has no dividend or voting
rights. The Preferred Stock is convertible to common stock of the
Company dependent upon the number of commercial users of the
Software. For each 1,000,000 commercial users of the Software
(without duplication), SED shall have the right to convert
1,464,000 shares of Perpetual Preferred Stock into 7,320,000 shares
of Common Stock, so that there must be a minimum of 9,426,230
commercial users in order for all of the shares of the Perpetual
Preferred Stock to be converted into common stock of the Company
(13,800,000 shares of Preferred Stock convertible into 69,000,000
shares of common stock).
Other
than the conversion rights described above, the Preferred Stock has
no voting, dividend, redemption or other rights.
Note 6. COMMITMENTS AND CONTINGENCIES
On May
9, 2016, the Company entered into a lease agreement for 1,231
square feet of office space in Guangzhou, China. The lease
commenced on May 9, 2016 and runs through May 8, 2018 with monthly
payments of $2,241. The Company was required to put up a security
deposit of $4,482. For the three months ended March 31, 2017, the
Company recorded rent expense of $6,734 for the Guangzhou
office.
On
April 10, 2015, the Company entered into a lease agreement for 347
square feet of office space in Kowloon, Hong Kong. This lease
commenced on April 20, 2015 and runs through April 19, 2017 with
monthly payments of $2,574. The Company was required to put up a
security deposit of $5,147. On March 16, 2017, the Company entered
into a lease agreement for 1,504 square feet of office space in
Kowloon, Hong Kong. This lease commenced on March 16, 2017 and runs
through March 31, 2019 with monthly payments of $3,281. The Company
was required to put up a security deposit of $6,563. For the three
months ended March 31, 2017, the Company recorded rent expense of
$8,088 for these offices.
The
following is a schedule by years of future minimum lease
payments:
2017
|
$42,366
|
2018
|
9,844
|
Total
|
$52,212
|
Note 7. RELATED PARTY BALANCES AND
TRANSACTIONS
During
the period covered by this report, Mr. Chan Heng Fai was the
Company’s Chief Executive Officer (CEO) and a member of the
Board. Mr. Chan is also the Chief Executive Officer of Singapore
eDevelopment Limited (“SeD”), a Singapore
company. SeD is the majority shareholder of the
Company. The Company’s other two directors
included Lum Kan Fai, who served as the Company’s Chief
Technology Officer during the period covered by this report and who
has entered into an employment arrangement with the Company’s
wholly owned subsidiary, HotApp International
Limited. As of the date of this report, the
Company has not entered into any employment arrangement with any
director or officer.
Note 8. SUBSEQUENT EVENT
On
March 27, 2017, the Company entered into a Loan Conversion
Agreement with SeD, pursuant to which SeD agreed to convert
$450,890 of debt owed by Company to SeD into 500,988,889 common
shares at a conversion price of $0.0009.
The
Company’s board of directors and majority stockholder have
approved an increase in the number of the Company’s
authorized shares of common stock from 500,000,000 to 1,000,000,000
by means of an amendment to the Company’s Articles of
Incorporation. This amendment was filed with the State of Delaware
on May 5, 2017. This increase in authorized shares will permit the
Company to issue the 500,988,889 shares of common stock described
above.
On
March 27, 2017, SeD and the Company also entered into a Preferred
Stock Cancellation Agreement, by which SeD agreed to cancel its
13,800,000 shares Perpetual Preferred Stock issued by the
Company.
The
terms of the additional shares of common stock will be identical to
those of the currently outstanding shares of Common Stock. However,
because the holders of common stock do not have preemptive rights
to purchase or subscribe for any new issuances of common stock, the
authorization and subsequent issuance of additional shares of
common stock will reduce the current stockholders’ percentage
ownership interest in the total outstanding shares of common stock.
This amendment and the creation of additional shares of authorized
common stock will not alter current stockholders’ relative
rights and limitations.
12
ITEM
2. MANAGEMENT’S DISCUSSION AND ANALYSIS OR
PLAN OF OPERATION.
FORWARD-LOOKING STATEMENTS
Certain matters discussed herein are forward-looking statements.
Such forward-looking statements contained in this Form 10-Q
involve risks and uncertainties, including statements as
to:
1.
|
|
our
future operating results;
|
2.
|
|
our
business prospects;
|
3.
|
|
any
contractual arrangements and relationships with third
parties;
|
4.
|
|
the
dependence of our future success on the general
economy;
|
5.
|
|
any
possible financings; and
|
6.
|
|
the
adequacy of our cash resources and working
capital.
|
These forward-looking statements can generally be identified as
such because the context of the statement will include words such
as we “believe,” “anticipate,”
“expect,” “estimate” or words of similar
meaning. Similarly, statements that describe our future
plans, objectives or goals are also forward-looking statements.
Such forward-looking statements are subject to certain
risks and uncertainties which are described in close proximity to
such statements and which could cause actual results to differ
materially from those anticipated as of the date of filing of this
Form 10-Q. Shareholders, potential investors and other
readers are urged to consider these factors in evaluating the
forward-looking statements and are cautioned not to place undue
reliance on such forward-looking statements. The
forward-looking statements included herein are only made as of the
date of filing of this Form 10-Q, and we undertake no obligation to
publicly update such forward-looking statements to reflect
subsequent events or circumstances.
This discussion contains forward-looking statements that reflect
our plans, estimates and beliefs. Our actual results may differ
materially from those anticipated in these forward-looking
statements.
Background
Hotapp
International Inc, formerly Fragmented Industry Exchange Inc., (the
“Company” or “Group”) was incorporated in
the State of Delaware on March 7, 2012 and established a fiscal
year end of December 31. The Company’s initial business plan
was to be a financial acquisition intermediary which would serve
buyers and sellers for companies that are in highly fragmented
industries. The Company determined it was in the best interest of
the shareholders to expand its business plan. On October 15, 2014,
through a sale and purchase agreement (the “Purchase
Agreement”) the Company acquired all the issued and
outstanding stock of HotApps International Pte Ltd (the
“HIP”) from Singapore eDevelopment Limited
(“SeD”). HIP owned certain intellectual property
relating to instant messaging for portable devices (the
“HotApp”). HotApp is a cross-platform mobile
application that incorporates instant messaging and ecommerce. It
provides a messaging and calling services for HotApp users (text,
photo, audio). HotApp can be used on any mobile platform (i.e. IOS
Online or Android).
As of
March 31, 2017, details of the Company’s subsidiaries are as
follows:
Subsidiaries
|
|
Date of
Incorporation
|
|
Place of
Incorporation
|
|
Percentage of
Ownership
|
1st Tier Subsidiary:
|
|
|
|
|
|
|
HotApps
International Pte Ltd (“HIP”)
|
|
May
23, 2014
|
|
Republic of
Singapore
|
|
100%
by Company
|
2nd Tier Subsidiaries:
|
|
|
|
|
|
|
HotApps Call Pte
Ltd
|
|
September 15,
2014
|
|
Republic of
Singapore
|
|
100%
owned by HIP
|
HotApps
Information Technology Co Ltd
|
|
November 10,
2014
|
|
People’s
Republic of China
|
|
100%
owned by HIP
|
HotApp
International Limited*
|
|
July
8, 2014
|
|
Hong
Kong (Special Administrative Region)
|
|
100%
owned by HIP
|
* On
March 25, 2015, HotApps International Pte Ltd acquired 100% of
issued share capital in HotApp International Limited.
The
Group has relied significantly on SeD as its principal sources of
funding during the year. The Board has, in the meantime, reviewed
and approved the restructuring of HotApp, by which has since
reduced by half its personnel resources as compared to 2015. HotApp
has revamped its business model and technology platform to focus on
business-to-business (“B2B”) services, built around
enterprise communications and workflow. Its product line will
target these industries: (i) network and direct marketing; (ii)
enterprise Voice-over-IP; (iii) enterprise messaging; (iv) real
estate; (v) social media; (vi) e-commerce; (vii) investor
relations; (viii) healthcare and wellness; and (ix) hospitality,
combining HotApp applications with hotel-room management. This
strategic shift is intended to create commercial value with a
sharper focus.
13
Our Business
HotApp,
our software application, is a community communications ecosystem
(the “Platform”), connecting users who wish to seek out
both local and global communities (“Users” or
“Communities”) and equipping them with necessary tools
to communicate effectively across borders. HotApp will monetize the
relationship between brands, Online-2-Offline (“O2O”)
operators and service providers (collectively,
“Enterprises”) and the HotApp Communities, and in the
process mediate something of value to both parties.
With
our Platform, users can discover and build their own communities
and create valuable content. Our Platform tools empower these
communities to share their thoughts and words across multiple
channels. As these communities grow, they provide the critical mass
that attracts enterprises. Enterprises in turn enhance user
experience with premium contents, all of which are facilitated by
the transactions of every stakeholder via e-commerce.
Trends in the Market and Our Opportunity
According
to eMarketer Research in Nov 2016, by 2019, more than one-quarter
of the world’s population will be using mobile messaging
apps.
Mobile
phone messaging apps will be used by more than 1.4 billion people
in 2016, an increase of almost 16% from 2015.
The
Asia-Pacific region is home to more than 50% of all chat app users
worldwide, with more than 805 million consumers in
2016.
In
addition to the substantial opportunities in consumer messaging
market, Enterprise Messaging and Collaboration Services and Apps
are widely deployed in Small Medium Enterprises (SMEs) and Large
Enterprise as an alternative to Email and Intranet. This emerging
need in Enterprise Messaging and Collaboration offers a huge
opportunity for IT service providers in offering development,
integration and white label services for SMEs and Corporations.
According to Statista, global messaging platform service providers
are expected to bring in US$1.8 billion revenue riding on the
growth in growing demand of Enterprise Messaging.
Based
upon the above trends, we believe significant opportunities
exist for:
●
Enterprise
deploying messaging platform to effective engage different
stakeholders.
●
Continuing growth
in demand for OTT Services encapsulated within a single mobile app
with a clear intent and objectives fulfilling the communication
need for specific communities and industries.
●
Enterprises to
increase usage of OTT Services, such as adoption of Enterprise
messaging Apps alongside with using of email, video and audio
conferencing, collaboration through cloud services, as a new medium
for different stakeholder engagement including customers, to
promote and market their products and services (Collaboration
Framework). HotApp’s approach in white labelling for the
enterprises will augment and fill this demand in the market. White
label refers to packaging HotApp solution under brand name of
clients with some content being customized only for
clients.
●
Industries such as
Network Marketing and Hospitality and Franchising businesses are
utilizing OTT Services to reach out effectively to their marketing
network on a global basis.
Our Plan of Operations and Growth Strategy
We
believe that we have significant opportunities to further enhance
the value we deliver to our Users. We intend
to pursue the following growth strategy:
●
Position HotApp as
an open platform to be ready for integration with third party
technology partnerships such as Payment Services, Loyalty Programs,
and e-commerce.
●
Engage
Mobile App Integration Opportunities for Enterprises globally
through “Powered by HotApp” initiatives, enabling
Offline businesses to go On Line (O2O) with HotApp technology
support. Powered by HotApp, is a business initiative from HotApp
International, that offers modules in HotApp technology for service
and customization, targeting vertical industry such as Hospitality
and Real Estate Agencies.
●
Identify Strategic
Partnership Opportunities globally through “Powered by HotApp ” initiatives,
enabling Offline businesses to go On Line (O2O) with HotApp
technology support
●
Establish
community and business partnerships (collectively, “HotApp
Partnerships”) to expand our user base and
engagement.
14
Results of Operations
Summary of Key Results
For the unaudited three months period ending March 31, 2017 and
2016
Revenue
Revenue
consist primarily of the service rendered on projects which require
significant software production. Total revenue for the three months
ended March 31, 2017 and 2016 were $66,178 and $0
respectively.
Cost of revenue
Cost of
revenue consist primarily of salary and outside consulting expenses
incurred directly to the projects. Total cost of revenue for the
three months ended March 31, 2017 and 2016 were $14,105 and $0,
respectively.
Research and Development Expense
Research
and development expenses consists primarily of salary and
benefits. Expenditures incurred during the
research phase are expensed as incurred. We expect
our research and development expenses to maintain with moderate
changes in line with business activities. Total research
and development for the quarters ended March 31, 2017 and 2016
were $52,662 and $138,447, respectively. The
decrease was due to the reduction of development staff which is in
line with the streamlining and restructuring of
Company.
Sales and Marketing Expense
Sales
and marketing expenses consist primarily of third party
professional service providers. We expect our sales and marketing
expenses to maintain with moderate changes in line with business
activities. Total sales and marketing expenses for the quarters
ended March 31, 2017 and 2016 were $0 and ($64,576), respectively.
The negative ($64,576) was due to a reversal of $65,252 provision
for HotApp Credit Points because the program was
eliminated.
General and Administrative
General
and administrative expenses consist primarily of salary and
benefits, professional fees and rental expense. We
expect our general and administrative expenses to maintain with
moderate changes in line with business activities. Total
general and administrative expenses for the quarters ended March
31, 2017 and 2016 were $196,138 and $259,914,
respectively.
Other Expense (Income)
In the
quarters ended March 31, 2017 and 2016, we have incurred $65,572
and $754 in foreign exchange gain and $2,663 and $0 for the
deposits written off.
Liquidity and Capital Resources
At
March 31, 2017, we had cash of $98,145 and working capital deficit
of $757,495. Cash had decreased during the three months ended
March 31, 2017 primarily due to operating losses incurred during
the quarter.
We had
a total stockholders’ deficit of $716,137 and an accumulated
deficit of $4,762,794 as of March 31, 2017 compared with a total
stockholders’ deficit of $498,315 and an accumulated deficit
of $4,628,976 as of December 31, 2016. This
difference is primarily due to the net loss incurred during the
quarter.
For the
three months ended March 31, 2017, we recorded a net loss of
$133,818. We made a positive adjustment of $8,636 due to
depreciation, a positive adjustment of $2,663 due to deposits
written off and a negative adjustment of $65,572 due to foreign
currency transaction gain. We had a negative change of $66,033 due
to costs in excess of billings and account receivable, a negative
change of $6,796 due to security deposit and other receivables, and
a negative change of $13,449 due to prepaid expenses. We had a
negative change of $18,239 due to accounts payable and accrued
expenses. As a result, we had net cash used in operating activities
of $292,608 for the three months ended March 31, 2017.
For the
three months ended March 31, 2016, we recorded a net loss of
$340,068. We made a positive adjustment of $14,209 due to
depreciation and a negative adjustment of $754 due to foreign
currency transaction gain. We had a negative change of $77,525 due
to accounts payable and accrued expenses. We had a negative change
of $6,431 due to prepaid expenses and a positive change of $7,037
due to accrued taxes payable and franchise fees. As a result, we
had net cash used in operating activities of $403,532 for the three
months ended March 31, 2016.
15
For the
three months ended March 31, 2017, we spent $3,898 on the
acquisition of fixed assets, resulting in net cash used in
investing activities of $3,898 for the period.
For the
three months ended March 31, 2016, we spent $2,515 on the
acquisition of fixed assets, resulting in net cash used in
investing activities of $2,515 for the period.
For the
three months ended March 31, 2017, we had net cash provided by
financial activities of $310,307 due to advances from
affiliate.
For the
three months ended March 31, 2016, we did not pursue any financing
activities.
As of
March 31, 2017, we have fixed operating office lease agreements for
Guangzhou’s office amounting to $11,205 from 2017 to 2018,
Hong Kong’s offices minimum lease commitments of $41,007 from
2017 to 2018.
We will
need to raise additional capital through equity or debt financings.
However, we cannot be certain that such capital (from SED or third
party) will be available to us or whether such capital will be
available on a term that is acceptable to us. Any such financing
likely would be dilutive to existing shareholders and could result
in significant financial and operating covenants that would
negatively impact our business. If we are unable to raise
sufficient additional capital on acceptable terms, we will have
insufficient funds to operate our business and pursue our business
plan.
Consistent
with Section 144 of Delaware General Corporation Law, it is our
current policy that all transactions between us and our officers,
directors and their affiliates will be entered into only if such
transactions are approved by a majority of the disinterested
directors, are approved by vote of the stockholders, or are fair to
us as corporation as of the time it is authorized, approved or
ratified by the board. We will conduct an appropriate review of all
related party transactions on an ongoing basis.
Critical Accounting Policies
Our
discussion and analysis of the financial condition and results of
operations are based upon the Company’s financial statements,
which have been prepared in accordance with generally accepted
accounting principles in the United States (“GAAP”).
The preparation of these financial statements requires us to make
estimates and judgments that affect the reported amounts of assets,
liabilities, revenues and expenses, and related disclosure of
contingent assets and liabilities. We believe that the estimates,
assumptions and judgments involved in the accounting policies
described below have the greatest potential impact on our financial
statements, so we consider these to be our critical accounting
policies. Because of the uncertainty inherent in these matters,
actual results could differ from the estimates we use in applying
the critical accounting policies. Certain of these critical
accounting policies affect working capital account balances,
including the policies for revenue recognition, allowance for
doubtful accounts, inventory reserves and income taxes. These
policies require that we make estimates in the preparation of our
financial statements as of a given date.
Within
the context of these critical accounting policies, we are not
currently aware of any reasonably likely events or circumstances
that would result in materially different amounts being
reported.
Revenue recognition
The
Group recognizes revenue when persuasive evidence of an arrangement
exists, delivery has occurred, the sales price is fixed or
determinable, and collectability is reasonably assured. The Group
currently has $66,178 revenue from its services rendered on
projects, and plans to derive its revenue from membership
subscription services, offering the platform for Enterprise
Collaboration with integration. Revenue is currently recognized
under contract accounting due to the significant software
production required, and the percentage-of-completion method is
used in accordance with ASC 605-35. The Company is recognizing the
percentage-of-completion based on input measures that measured
directly from expenses incurred, and management reviews the
progress to completion.
Research and development expenses
Research
and development expenses primarily consist of (i) salaries and
benefits for research and development personnel, and
(ii) office rental, general expenses and depreciation expenses
associated with the research and development
activities. The Company’s research and development
activities primarily consist of the research and development of new
features for its mobile platform and its self-developed mobile
games. Expenditures incurred during the research phase are expensed
as incurred.
Income taxes
Current
income taxes are provided for in accordance with the laws of the
relevant tax authorities. Deferred income taxes are
recognized when temporary differences exist between the tax bases
of assets and liabilities and their reported amounts in the
consolidated financial statements. Net operating loss carry
forwards and credits are applied using enacted statutory tax rates
applicable to future years. Deferred tax assets are reduced by a
valuation allowance when, in the opinion of management, it is
more-likely-than-not that a portion of or all of the deferred tax
assets will not be realized. The components of the deferred tax
assets and liabilities are individually classified as current and
non-current based on their characteristics.
16
Uncertainties
exist with respect to the application of the New EIT Law to our
operations, specifically with respect to our tax
residency. The New EIT Law specifies that legal entities
organized outside of the PRC will be considered residents for PRC
income tax purposes if their “de facto management
bodies” as “establishments that carry on substantial
and overall management and control over the operations, personnel,
accounting, properties, etc. of the
Company.” Because of the uncertainties resulted
from limited PRC guidance on the issue, it is uncertain whether our
legal entities outside the PRC constitute residents under the New
EIT Law. If one or more of our legal entities organized
outside the PRC were characterized as PRC residents, the impact
would adversely affect our results of operations.
Not applicable to a “smaller reporting company” as
defined in Item 10(f)(1) of SEC Regulation S-K
Our Chief Executive Officer and Chief Financial Officer are
responsible for establishing and maintaining disclosure controls
and procedures for the Company.
(a) Evaluation of
Disclosure Controls and Procedures
Based on the evaluation as of the end of the period covered by this
Quarterly Report on Form 10-Q, our Chief Executive Officer and
Chief Financial Officer concluded that our disclosure controls and
procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the
Securities Exchange Act of 1934, as amended (the “Exchange
Act”) are effective to ensure that information required to be
disclosed by us in reports that we file or submit under the
Exchange Act is recorded, processed, summarized and reported within
the time periods specified in the Securities and Exchange
Commission’s (“SECs”) rules and forms and to
ensure that information required to be disclosed by us in the
reports that we file or submit under the Exchange Act is
accumulated and communicated to our management, including our Chief
Executive Officer and Chief Financial Officer, as appropriate to
allow timely decisions regarding required disclosure.
(b) Changes in the
Company’s Internal Controls over Financial
Reporting
There have been no changes in the Company’s internal control
over financial reporting during the most recently completed fiscal
quarter that have materially affected or are reasonably likely to
materially affect, the Company’s internal control over
financial reporting.
17
PART
II OTHER INFORMATION
We are not a party to any legal proceedings. Management is not
aware of any legal proceedings proposed to be initiated against us.
However, from time to time, we may become subject to claims and
litigation generally associated with any business venture operating
in the ordinary course.
Not applicable to a “smaller reporting company” as
defined in Item 10(f)(1) of SEC Regulation S-K
On
March 27, 2017, the Company sold 500,988,889 shares of common stock
to SeD in exchange for the conversion of $450,890.00 of debt owed
by the Company to SeD at a conversion price of $0.0009 per share.
The sale of these shares was made in accordance with the exemption
provided by Section 4(a)(2) of the Securities Act of 1933, as
amended.
None.
Not Applicable.
None.
The
following exhibits filed with this Form 10-Q Quarterly
Report:
Exhibit Number
|
|
Description
|
|
|
|
10.7
|
|
Agreement for Services dated January 25, 2017, by and between the
Company and IGalen International Inc. (incorporated herein by
reference to Exhibit 10.1 to the Company’s Current Report on
Form 8-K filed on February 21, 2017).
|
|
|
|
10.8
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|
Loan Conversion Agreement, by and among HotApp International Inc.
and Singapore eDevelopment Limited, dated as of March 27, 2017
(incorporated herein by reference to Exhibit 10.1 to the
Company’s Current Report on Form 8-K filed on March 31,
2017).
|
|
|
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10.9
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|
Preferred Stock Cancellation Agreement, by and among HotApp
International Inc. and Singapore eDevelopment Limited, dated as of
March 27, 2017 (incorporated herein by reference to Exhibit 10.2 to
the Company’s Current Report on Form 8-K filed on March 31,
2017).
|
|
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31.1*
|
|
Certification of Chief Executive Officer pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002.
|
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31.2*
|
|
Certification of Chief Financial Officer pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002.
|
|
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32.1*
|
|
Section 1350 Certification of Chief Executive Officer and Chief
Financial Officer
|
|
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101.INS*
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|
XBRL Instance Document
|
|
|
|
101.SCH**
|
|
XBXRL Taxonomy Extension Schema.
|
|
|
|
101.CAL**
|
|
XBRL Taxonomy Extension Calculation Linkbase.
|
|
|
|
101.DEF**
|
|
XBRL Taxonomy Extenstion Definition Linkbase.
|
|
|
|
101.LAB**
|
|
XBRL Taxonomy Extension Label Linkbase
|
*Filed
herewith.
**XBRL
(Extensible Business Reporting Language) information is furnished
and not filed or a part of a registration statement or prospectus
for purposes of Sections 11 or 12 of the Securities Act of 1933, as
amended, is deemed not filed for puposes of Section 18 of the
Securities Exchange Act of 1934, as amended, and otherwise is not
subject to liability under these sections.
18
SIGNATURES
Pursuant
to the requirements of the Securities Act of 1934, the registrant
has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
|
HOTAPP INTERNATIONAL INC
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|
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Date:
May 12, 2017
|
By:
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/s/
Chan Heng Fai
|
|
|
|
Chan
Heng Fai
|
|
|
|
Chief
Executive Officer and Director
|
|
|
|
|
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Date:
May 12, 2017
|
By:
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/s/ Lui
Wai Leung, Alan
|
|
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Lui Wai
Leung, Alan
|
|
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Chief
Financial Officer
|
|
|
|
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19