Attached files
| file | filename |
|---|---|
| EX-32.2 - EXHIBIT 32.2 - LOGIQ, INC. | ex32_2apg.htm |
| EX-32.1 - EXHIBIT 32.1 - LOGIQ, INC. | ex32_1apg.htm |
| EX-31.2 - EXHIBIT 31.2 - LOGIQ, INC. | ex31_2apg.htm |
| EX-31.1 - EXHIBIT 31.1 - LOGIQ, INC. | ex31_1apg.htm |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended 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__to __ |
Commission File Number: 000-51815
WEYLAND TECH INC.
(Exact name of registrant as specified in its charter)
Delaware | 20-1945139 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
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| 198 Wellington Street, 8/F The Wellington, Central, Hong Kong SAR. Hong Kong HKSAR | |
| (Address of principal executive offices, including Zip Code)
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| +852 9316 6780 (Registrant’s telephone number, including area code) | |
Securities registered under Section 12 (b) of the Exchange Act: None
Securities registered under Section 12 (g) of the Exchange Act: Common stock, $0.0001 par value (the “Common Stock”).
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. [ ]Yes [X]No
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 [X]No
Indicate by check mark whether the registrant (1) has filed all reports required to be filed 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 days. [X]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 (§ 229.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). [X]Yes [ ]No
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 in Part III of this Form 10-K or any amendment to this Form 10-K. [ ]
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non- accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer [ ] Accelerated filer [ ] Non-accelerated filer [ ] 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 [X]No
As of June 30, 2016 (the last business day of the registrant’s most recently completed second fiscal quarter), the aggregate market value of the shares of the registrant’s common stock held by non- affiliates (based upon the closing sale price of such shares as reported on the OTCOB Market) was approximately $42 million. Shares of the registrant’s common stock held by each executive officer and director and each person who owns 10% or more of the outstanding common stock have been excluded from the calculation in that such persons may be deemed to be affiliates of the registrant. This determination of affiliate status is not necessarily a conclusive determination for other purposes.
There were a total of 21,555,128 shares of the registrant’s common stock outstanding as of May 4, 2017.
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TABLE OF CONTENTS
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| PART I – FINANCIAL INFORMATION |
| 1 | |
Item 1. | Financial Statements |
| 1 |
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
| 4 |
Item 3. | Quantitative and Qualitative Disclosures About Market Risk |
| 8 |
Item 4. | Controls and Procedures |
| 8 |
| PART II – OTHER INFORMATION |
| 9 | |
Item 1. | Legal Proceedings |
| 9 |
Item 1A. | Risk Factors |
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Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds |
| 9 |
Item 3. | Exhibits |
| 10 |
SIGNATURES |
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| 11 |
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PART I – FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
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| WEYLAND TECH INC. | ||||||||
| Condensed Statements of Cash Flows | ||||||||
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| Three Months Ended March 31, | |||
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| 2017 |
| 2016 | |
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| (Unaudited) |
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| Cash flows from operations: |
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| Profit from continuing operations |
| $ | 1,458,082 | $ | 1,369,982 | ||
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| Adjustment to reconcile net loss to net cash used in operating activities: |
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| Depreciation expense/amortization development costs |
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| 87,983 |
| 83,333 | |
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| Changes in operating assets and liabilities: |
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| Accounts receivables |
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| - |
| (9,000) | |
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| Deposit and other receivables |
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| - |
| - | |
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| Prepayment |
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| (1,842,089) |
| - | |
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| Account payable |
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| 48,675 |
| (36,440) | |
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| Accruals and other payables |
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| 229,649 |
| (32,961) | |
| Net cash (used) provided in operations |
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| (17,700) |
| 1,392,914 | |||
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| Investment activities: |
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| Investment in Joint Venture |
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| - |
| (100,000) | |||
| Net cash provided by / (used in) investment activities |
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| - |
| (100,000) | |||
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| Financing activities: |
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| Proceeds from stock issuance |
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| 363,755 |
| 254,430 | ||
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| Net cash provided by financing activities |
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| 363,755 |
| 254,430 | |||
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| Net increase in cash |
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| 346,055 |
| 1,547,344 | |||
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| Balances per prior period balance sheet |
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| 1,003,924 |
| 832,218 | |||
| Ending balances |
| $ | 1,349,979 |
| 2,379,562 | |||
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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
Forward Looking Statements
This quarterly report on Form 10-Q and other reports that we file with the SEC contain statements that are considered forward-looking statements. Forward-looking statements give the Company’s current expectations, plans, objectives, assumptions or forecasts of future events. All statements other than statements of current or historical fact contained in this quarterly report, including statements regarding the Company’s future financial position, business strategy, budgets, projected costs and plans and objectives of management for future operations, are forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “anticipate,” “estimate,” “plans,” “potential,” “projects,” “ongoing,” “expects,” “management believes,” “we believe,” “we intend,” and similar expressions. These statements are based on the Company’s current plans and are subject to risks and uncertainties, and as such the Company’s actual future activities and results of operations may be materially different from those set forth in the forward-looking statements. Any or all of the forward-looking statements in this periodic report may turn out to be inaccurate and as such, you should not place undue reliance on these forward-looking statements. The Company has based these forward-looking statements largely on its current expectations and projections about future events and financial trends that it believes may affect its financial condition, results of operations, business strategy and financial needs. The forward-looking statements can be affected by inaccurate assumptions or by known or unknown risks, uncertainties and assumptions due to a number of factors, including:
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dependence on key personnel;
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Competitive factors;
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degree of success of research and development programs;
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the operation of our business; and
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general economic conditions in the ASEAN, Asia-Pacific Region and in the Unit States.
These forward-looking statements speak only as of the date on which they are made, and except to the extent required by federal securities laws, we undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events. In addition, we cannot assess the impact of each factor on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. All subsequent written and oral forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by the cautionary statements contained in this annual report.
Use of Terms
Except as otherwise indicated by the context and for the purposes of this report only, references in this report to:
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“Weyland” the “Company,” “we,” “us,” or “our,” are to the business of Weyland Tech Inc., a Delaware corporation;
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“SEC” are to the Securities and Exchange Commission;
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“Securities Act” are to the Securities Act of 1933, as amended;
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“Exchange Act” are to the Securities Exchange Act of 1934, as amended;
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“U.S. dollars,” “dollars” and “$” are to the legal currency of the United States.
You should read the following plan of operation together with our financial statements and related notes appearing elsewhere in this quarterly report and the most recent Form 10-K and Form 10-Q. This plan of operation contains forward-looking statements that involve risks, uncertainties, and assumptions. The actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors.
Overview
Weyland Tech’s CreateApp platform enables small-medium-sized businesses ("SMBs") to create a mobile application ("app") without the need of technical knowledge, high investment or background in IT.
We believe that SMBs can increase sales, reach more customers and promote their products and services via a simple easy to build mobile app at an affordable price and in a cost-effective manner.
The Company is currently in ‘application’ stage with the NASDAQ Market for approval to have its shares traded on the NASDAQ Capital Market. It is anticipated, though not certain, that this process should be completed within the calendar year 2017.
Our corporate headquarters are located at 198 Wellington Street, 8/F The Wellington, Central, Hong Kong HKSAR. Although we maintain a website at www.weyland-tech.com, we do not intend that information available on our website be incorporated into this filing.
Our Growth Strategy
Although Weyland Tech's CreateApp platform originally focused on the Pan-Asia markets—the platform is provided in twelve, predominantly Asian, languages—we have partners that work with us to develop the EU and North American markets.
The CreateApp platform enables SMBs to create a mobile application ("app") without the need of technical knowledge, high investment or background in IT.
We believe that through our app, SMBs can increase sales, reach more customers and promote their products and services via a simple easy to build mobile app at an affordable and cost-effective manner.
Weyland Tech currently offers the CreateApp platform directly, in the following key
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markets:
Singapore: www.createappsingapore.com
India (Jaipur): www.aapkiapp.in
US/Canada: www.createappamericas.com
Weyland Tech currently offers a DIY App builder through a 'white label' platform, in the following markets, primarily via strategic Cooperation agreements that were structured in late 2015 and early 2016:
EU, via a Strategic Cooperation with Augicom S.A. (www.augicom.ch)
• Malaysia, via a Strategic Cooperation agreement with Silver Ridge Tangerine Sdn Bhd (www.silverridge.com.my)
• Hong Kong and South China via a Strategic Cooperation agreement with Info Zone Ltd.
• Indonesia, via a Strategic Cooperation agreement with Worldfriend's Network (www.worldfriends.com) and Orient Asia Pacific Limited. Indonesian SMBs are also targeted via a Strategic Cooperation agreement with DPEX Worldwide
• North America, via a Strategic Cooperation agreement with Aurum Digital Inc. (www.createappamericas.com)
• Korea via IAM, Inc. (http://www.iamyourapp.co.kr/)
• Thailand via a Strategic Cooperation agreement with BGT Corporation Public Company Limited
The Philippines and Vietnam via a Strategic Cooperation agreement with MocaApp
SMBs
The Company believes that these agreements will create a large enough addressable market opportunity to generate sales and profits in a scalable manner, grow the Company's business and enhance shareholder value.
Given the nature of DIY mobile apps ("apps"), and the primary target market of SMBs, a typical go- to-market strategy would have direct sales force or resellers approach SMBs directly to drive license sales.
Over the past year, the Company has evolved this model with two distinct market paths to drive recurring revenue sales:
A) Strategic Cooperation agreements in countries/regions where our partners are responsible for targeting SMBs either through an installed base of customers or groups of Direct Sellers with a sales force encompassing SMBs as end customers.
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B) Enterprise Solutions where large retailers (hypermarket chains, mall owners, brand owners with company-owned and franchise stores) adopt a 'Master App' on a white-label basis, hosted at a 3rd party regional Hosting or Data Center facility.
With the above strategy, we believe that the Company has been able to maintain a lower capital expenditure base due to the 'level-two' customer support vs. 'level-one' customer support, smaller sales and marketing teams, and the need to provide hosting services.
In addition to the previously announced cooperation agreements this year, the Company is currently in late stage discussions and negotiations with a number of strategic business partners and enterprise- sized customers, including major regional and country telecommunications providers, Fortune 500 retailers and 'affiliate' groups.
Specific terms of the relationships and agreements will remain confidential for competitive reasons. However, agreements are expected to continue to support a transition from a licensing model to a multi-year model with subscriptions, m-commerce revenue sharing and advertising revenues.
Subsequent Events
On April 27, 2017 the Company announced initial subscriptions and revenues from its South East Asian partner, MOCAAPP. Marketing and development of additional applications -- powered by CreateApp -- continues in the Philippines through the Company's white label channel partner.
Concurrently, MOCAAPP indicated initial marketing and trade show efforts have begun in Vietnam.
Weyland believes the expansion of m-commerce in South East Asia is in the early stages and is working with their channel partners to become the mobile on-ramp for e-commerce in the region.
On May 1, 2017, Weyland Tech, Inc. (the "Company"), a provider of mobile business applications announces that it has signed a definitive acquisition agreement with Escape Pixel, a provider of Web Development, Mobile Development, & Digital Customized Solutions, based in Singapore and Yangon Myanmar. The terms of the acquisition are confidential. Following the closing of the transaction, Escape Pixel will become a wholly-owned subsidiary of the Company.
On May 1, 2017, the Company signed a software development agreement with Faith United Technology LTD, a Hong Kong based software developer. Weyland Tech and Faith United are collaborating on Online-to-Offline (“O2O”) applications initially targeting the food service industry. Weyland Tech believes O2O solutions allow merchants to reach online buyers that are not directly served by Third Party Logistics providers (“3PL”) but can reach more centralized physical locations for pick-up.
Results of Operation
Service Revenue
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Service Revenue was $2,837,246 and $2,261,455 for the three months ended March 31, 2017 and 2016, respectively. The increase is due to the service income from our customers.
Cost of Service
Cost of Service was $1,040,048 and $634,331 for the three months ended March 31, 2017 and 2016, respectively. Included are development costs of $ 181,770 (March 31, 2016: Nil). The increase is in line with our normal gross margins associated with a corresponding increase in our service income.
Operating Expenses
General and administrative: General and administrative expenses were $251,133 and $173,809 and for the three months ended March 31, 2017 and 2016, respectively. The increase was due to increased staff costs, travel and professional costs from the increased level of business.
Net Profit (Loss)
The Company had a net profit of $1,458,082 and $1,369,982 for the three months ended March 31, 2017 and 2016, respectively. The net profit for the period was due to the increased level of business and contribution from our Createapp business.
Included in Net profit was amortization of $87,983 for the three months ended Mar 31, 2017. (2016: $83,333).
Off-Balance Sheet Arrangements
The Company has no off-balance sheet arrangements.
Liquidity and Capital Resources
On March 31, 2017, we had negative working capital of $17,700. The decrease in working capital is due to prepayment of service costs of US$1,842,089 in the period.
Revenue Recognition
The Company's CreateApp platform generates sales to SMBs on a monthly licensing basis (direct sales model) as well as through 'resellers of the platform (reseller model) and country/market specific cooperation agreements whereby our cooperation partner rebrands the CreateApp platform under their own branding (white label sales model).
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
As a smaller reporting company” (as defined by §229.10(f)(1)), the Company is not required to provide the information required by this Item.
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ITEM 4. CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
Our management is responsible for establishing and maintaining a system of disclosure controls and procedures (as defined in Rule 13a-415(e)) under the Exchange Act) that is designed to ensure that information required to be disclosed by the Company in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time specified in the Commission's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer's management, including its principal executive officer or officers and principal financial officer or officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
Changes in Internal Controls Over Financial Reporting
During the period, we have by board resolution formulated the directors forming our audit committee. Our audit committee comprises Mr. Matt Burlage as acting chairman with Messrs. Brett Lay and Ross O’Brien as members.
Other than the above, there has been no changes in our internal controls over financial reporting that occurred during our fiscal quarter of the period covered by this quarterly report on Form 10-Q that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.
PART II – OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Company is currently undergoing civil litigation in Singapore where a dispute has arisen between a shareholder and the Company in relation to the ownership of approximately 3,500,000 shares of the Company’s common stock. Currently, the Company is pursuing alternative means of dispute resolution which if successful is expected to be able to resolve the aforementioned litigation proceedings by the third quarter of 2017. Given that the matter is still in its preliminary stages, no assurances can be given about the outcome of these proceedings. In the meanwhile, the Company believes that there are unlikely to be any negative repercussions to the other shareholders.
Additionally, the Company has also filed a suit against another shareholder in Singapore. This shareholder had sold 800,000 shares of the Company’s stock, while they were subject to a restrictive legend, to a third party for $800,000 in cash. That third party is currently attempting to register and sell the shares. While the Company is contesting such transfer as improper and potentially in violation of US securities laws, it has also named this third party as an additional defendant in the suit for amongst other things, the return of those 800,000 shares. In addition, the Company may file a related lawsuit naming its Transfer Agent in order to facilitate the requested prohibition on sale of such securities. The Company can give no assurances regarding the outcome of any such litigation, and should this third party be able to clear and sell the 800,000 shares, the market price of the Company’s shares may be
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adversely affected, regardless of whether the Company may at a later date have a right to recover damages from the aforesaid third party.
Other than the above, we are currently not aware of any other legal proceedings or claims that we believe will have a material adverse effect on our business, financial condition or operating results.
ITEM 1A. RISK FACTORS
The Company, as a “smaller reporting company” (as defined by §229.10(f)(1)), is not required to provide the information required by this Item.
ITEM 2. RECENT UNREGISTERED SALES OF EQUITY SECURITIES
During the three months ended March 31, 2017, the Company received proceeds of $363,755 for the private placement of the company's common shares to professional investors at prices ranging from $2.50-$4.00 These shares were issued pursuant to Regulation D under the Securities Act of 1933, as amended, are exempt from registration by reason of Section 4(2) of the Securities Act of 1933, as amended (the "Act"), and bear an appropriate restrictive legend.
ITEM 3. EXHIBITS
| Exhibit No. |
| Description |
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31.1 |
| Certifications of Principal Executive Officer filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
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| Certifications of Principal Financial Officer filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
32.1 |
| Certifications of Principal Executive Officer furnished pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
32.2 |
| Certifications of Principal Financial Officer furnished pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
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| Weyland Tech Inc. |
| May 15, 2017 | /s/ Brent Y Suen President, Chief Executive Officer (Principal Executive Officer) |
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