Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

 

FORM 10-Q

 

 

 

☒ QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES ACT OF 1934:

 

For the Quarterly Period ended June 30, 2017

 

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE EXCHANGE ACT

 

For the transition period from __________________ to __________________

 

Commission File Number: 000-50760

 

IGS CAPITAL GROUP LIMITED

(Exact Name of Registrant as Specified in its Charter)

 

 

 

Nevada	58-2670972
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)

 

G5, Tiara Mutiara

(No 139, Jalan Puchong)

58200 Kuala Lumpur, Malaysia

(Address of Principal Executive Offices)

 

+ 603-77726616

(Registrant’s Telephone Number, Including Area Code)

 

SANCON RESOURCES RECOVERY, INC.
(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)

 

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. 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 of the Exchange Act. (Check one)

 

Large accelerated filer ☐	Accelerated filer ☐
Non-accelerated filer ☐	Smaller Reporting Company ☒
Emerging growth company ☐

 

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 ☐

 

Number of shares outstanding of each of the issuer’s classes of common equity, as of August 9, 2017: 3,564,348 shares of Common Stock, par value US $0.001

 

 

Forward Looking Statements

 

CAUTIONARY NOTE ABOUT FORWARD-LOOKING STATEMENTS

 

The information contained in this 10-Q includes some statements that are not purely historical and that are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and as such, may involve risks and uncertainties. These forward-looking statements relate to, among other things, expectations of the business environment in which we operate, perceived opportunities in the market and statements regarding our mission and vision. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. You can generally identify forward-looking statements as statements containing the words “anticipates”, “believes”, “continue”, “could”, “estimates”, “expects”, “intends”, “may”, “might”, “plans”, “possible”, “potential”, “predicts”, “projects”, “seeks”, “should”, “will”, “would” and similar expressions, or the negatives of such terms, but the absence of these words does not mean that a statement is not forward-looking.

 

Forward-looking statements involve risks and uncertainties that could cause actual results or outcomes to differ materially from those expressed in the forward-looking statements. The forward-looking statements contained herein are based on various assumptions, many of which are based, in turn, upon further assumptions. Our expectations, beliefs and forward-looking statements are expressed in good faith on the basis of management’s views and assumptions as of the time the statements are made, but there can be no assurance that management’s expectations, beliefs or projections will result or be achieved or accomplished. We disclaim any obligation to update forward-looking statements to reflect events or circumstances after the date hereof. 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TABLE OF CONTENTS

 

PART I. FINANCIAL INFORMATION

 

ITEM 1.  FINANCIAL STATEMENTS (UNAUDITED)			4
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION			13
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK			16
ITEM 4. CONTROLS AND PROCEDURES			17
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS			18
ITEM 1A. RISK FACTORS			18
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS			18
ITEM 3. DEFAULTS UPON SENIOR SECURITIES			19
ITEM 4. MINE SAFETY DISCLOSURES			19
ITEM 5. OTHER INFORMATION			19
ITEM 6. EXHIBITS			19
SIGNATURES			20
INDEX TO EXHIBITS			21

 

 

 

 

 

 

 

PART I. FINANCIAL INFORMATION

 

ITEM 1.  FINANCIAL STATEMENTS (UNAUDITED) 

IGS CAPITAL GROUP LIMITED

CONDENSED BALANCE SHEETS

 

 

		As at
		June 30, 2017 (Unaudited)				December 31, 2016  (Audited)
Assets
Investments			13				–
Due from related parties			238,768				–
Total current asset and total asset		$	238,781			$	–
Liabilities
Due to related parties			84,779				100,137
Accrued expenses and other payables			37,020				1,973
Total current liabilities and total liabilities			121,799				102,110
Stockholders' equity
Share capital
Authorized: 500,000,000 common shares, par value $0.001 per share
Issued and outstanding: 3,242,815 shares as of June 30, 2017 (December 31, 2016: 105,091,254 shares)			3,243				105,091
Additional paid-in capital			1,305,692				923,070
Share option reserves			89,015				89,015
Accumulated losses			(1,280,968	)			(1,219,286	)
Total stockholders’ earnings/(deficits)			116,982				(102,110	)
Total liabilities & stockholders' equity		$	238,781			$	–

 

The accompanying notes are an integral part of these unaudited condensed financial statements

 

 

 

 

 

 

IGS CAPITAL GROUP LIMITED

CONDENSED STATEMENTS OF OPERATIONS

(UNAUDITED)

 

 

		For the three months periods ended June 30,								For the six months periods ended June 30,
		2017				2016				2017				2016
Net Revenue		$	–			$	–			$	–			$	–
Operating Expenses
General and Administrative expenses			63,143				42,058				71,921				61,045
Total operating expenses			63,143				42,058				71,921				61,045
Operating loss			(63,143	)			(42,058	)			(71,921	)			(61,045	)
Other income			10,239				–				10,239				1,230
Loss before tax			(52,904	)			(42,058	)			(61,682	)			(59,815	)
Income taxes			–				–				–				–
Net loss		$	(52,904	)		$	(42,058	)		$	(61,682	)		$	(59,815	)
Loss per share
Basic loss per share		$	–			$	–			$	–			$	–
Basic weighted average shares outstanding			81,134,124				86,280,798				93,046,509				65,827,320
Diluted loss per share		$	–			$	–			$	–			$	–
Diluted weighted average shares outstanding			84,037,033				86,619,599				95,987,041				65,827,320

 

The accompanying notes are an integral part of these unaudited condensed financial statements

 

 

 

 

IGS CAPITAL GROUP LIMITED

CONDENSED STATEMENTS OF CASH FLOW

(UNAUDITED)

 

		For the six months periods ended June 30,
		2017				2016
Cash Flows from Operating Activities
Net loss		$	(61,682	)		$	(59,815	)
Change in current assets and liabilities
Increase / (Decrease) in accrued expenses and other payables			35,047				(55,952	)
Net cash flows used in operating activities			(26,635	)			(115,767	)
Cash Flows from Investing Activities
Purchase of investment			(13	)			–
Net cash flows used in investing activities			(13	)			–
Cash Flows from Financing Activities
Issuance of shares			280,774				203,221
Loans from related parties			2,043				–
Loans to related parties			(256,169	)			–
Settlement of loans from related parties			–				(87,454	)
Net cash flows provided by financing activities			26,648				115,767
Effect of exchange rate changes on cash			–				–
Net Increase in Cash & Cash Equivalent			–				–
Cash & Cash Equivalent at start of period		$	–			$	–
Cash & Cash Equivalent at end of period		$	–			$	–

 

The accompanying notes are an integral part of these unaudited condensed financial statements

 

 

 

 

 

IGS CAPITAL GROUP LIMITED

NOTES TO THE FINANCIAL STATEMENTS

For the six months periods ended June 30, 2017

(Unaudited)

 

Note 1.  Nature of Operations

 

IGS Capital Group Limited ("IGS", or "the Company", or "we", or "us"), formerly known as Sancon Resources Recovery, Inc., is registered in the State of Nevada. The Company was dormant during the period.

 

On April 26, 2017, the Company filed a certificate of amendment to its articles of incorporation with the Secretary of State of the State of Nevada (the “Amendment”) changing the Company’s name from “Sancon Resources Recovery, Inc.” to “IGS Capital Group Limited”. The name change became effective with FINRA on June 8, 2017.

 

Note 2.  Basis of Presentation

 

Unaudited Interim Condensed Financial Statements

 

The accompanying unaudited condensed financial statements have been prepared in conformity with generally accepted accounting principles in the United States of America. However, certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been omitted or condensed, pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC"). In the opinion of IGS’s management, all adjustments of a normal recurring nature necessary for a fair presentation have been included. The results for periods are not necessarily indicative of results for the entire year. These financial statements and accompanying notes should be read in conjunction with our annual financial statements and the notes thereto for the year ended December 31, 2016, included in our Annual Report on Form 10K, filed with the Securities and Exchange Commission.

 

Note 3.  Summary of Significant Accounting Policies

 

Use of Estimates

 

These financial statements are prepared in accordance with accounting principles accepted generally in the USA. These principles require management to use its best judgment in determining estimates and assumptions that: affect the reported amounts of assets and liabilities; disclosure of contingent assets and liabilities at the date of the financial statements; and the reported amounts of revenues and expenses during the reporting period. Management makes its best estimate of the ultimate outcome for such items based on historical trends and other information available when the financial statements are prepared. Changes in estimates are recognized in accordance with the relevant accounting rules, typically in the period when new information becomes available to management. Actual results in the future could differ from the estimates made in the prior and current periods.

 

Earnings Per Share

 

Basic earnings per share ("EPS") is calculated using net earnings (the numerator) divided by the weighted-average number of shares outstanding (the denominator) during the reporting period.  Diluted EPS includes the effect from potentially dilutive securities.

 

Income Taxes

 

The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statement or tax returns. Under this method, deferred tax assets and liabilities are determined based on the difference between financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse.

 

The Company operates in several countries. As a result, we are subject to numerous domestic and foreign tax jurisdictions and tax agreements and treaties among the various taxing authorities. Our operations in these jurisdictions are taxed on various bases: income before taxes, deemed profits and withholding taxes based on revenue. The calculation of our tax liabilities involves consideration of uncertainties in the application and interpretation of complex tax regulations in a multitude of jurisdictions across our global operations.

 

 

 

We regularly assess our position with regard to individual tax exposures and record liabilities for our uncertain tax positions and related interest and penalties. These accruals reflect management's view of the likely outcomes of current and future audits. The future resolution of these uncertain tax positions may be different from the amounts currently accrued and therefore could impact future tax period expense.

 

Changes in tax laws, regulations, agreements and treaties, foreign currency exchange restrictions or our level of operations or profitability in each taxing jurisdiction could have an impact upon the amount of income taxes that we provide during any given year.

 

Recent pronouncements

 

The Company has considered all new accounting pronouncements and has concluded that there are no new pronouncements that may have a material impact on results of operations, financial condition, or cash flows, based on current information.

 

Note 4.  Going Concern

 

The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplate continuation of the Company as a going concern. However, after the disposal of its operating subsidiaries in the 4^th quarter of 2011 and became dormant afterwards, the Company has the stockholders’ earnings of $116,982 as of June 30, 2017 and the stockholders’ deficits of $102,110 as of December 31, 2016 respectively. These factors raise substantial doubt about the ability of the Company to continue as a going concern. In this regard, management is proposing to raise any necessary additional funds not provided by operations through loans, additional sales of its common stock or through a possible business combination. There is no assurance that the Company will be successful in raising this additional capital or in achieving profitable operations. The financial statements do not include any adjustments that might result from the outcome of these uncertainties.

 

Note 5. Related Party Transactions

 

As of June 30, 2017, the Company owed $84,779 to a related company, $237,990 and $778 from a director and a related company respectively.

 

As of December 31, 2016, the Company owed $17,400 and $82,737 to a director and a shareholder respectively.

 

On May 4, 2016, (i) 42,582,858 shares of our common stock, valued at $138,000 were issued in lieu of cash compensation for director and secretarial services from March 13, 2014 through June 30, 2016; and (ii) 9,288,400 shares of our common stock, valued at $23,221 were issued in lieu of cash compensation for accounting services from December 22, 2013 through June 30, 2016.

 

During the period, the Company advanced $255,390 to Kok Seng Yeap, Eddy.

 

Note 6.  Stockholders’ equity

 

Common stock

 

On May 8, 2017, 1,923,200 new shares issued. The total number of shares issued and outstanding increased from 105,091,254 to 107,014,454.

 

On May 22, 2017, 2,332,541 new shares issued. The total number of shares issued and outstanding increased from 107,014,454 to 109,346,995.

 

On April 26, 2017, the Company filed a certificate of change with the Secretary of State of Nevada to effectuate a reverse stock split (the “Stock Split”) of its issued and outstanding shares of common stock on a 1-for-100 basis. The number of its authorized shares of common stock will remain at 500,000 000 shares, par value $0.001. The Stock Split became effective with FINRA on June 8, 2017 (the “Effective Date”). As of that date, every 100 shares of issued and outstanding common stock were converted into one share of common stock.  No fractional shares will be issued in connection with the Stock Split. Instead, any fractional shares will be rounded up to the next whole share and a holder of record of old common stock on the Effective Date who would otherwise be entitled to a fraction of a share will, in lieu thereof, be issued one whole share.

 

 

 

 

Pre-Reverse Stock Split	Common
Authorized Common Shares	Issued Shares	Authorized but Unissued
500,000,000	109,346,995	390,653,005
Authorized Common	Post-Reverse Common Stock
Shares	Split Issued Shares	Authorized but Unissued
500,000,000	1,094,500	498,905,500

 

The reverse split will not change the proportionate equity interests of our stockholders, nor will the respective voting rights and other rights of stockholders be altered, except for possible immaterial changes, due to rounding-up any fractional shares. The Common Stock issued pursuant to the reverse split will remain fully paid and non-assessable. The reverse split is not intended as, and will not have the effect of, a "going private transaction" covered by Rule 13e-3 under the Securities Exchange Act of 1934. We will continue to be subject to the periodic reporting requirements of the Securities Exchange Act of 1934.

 

Beginning on June 9, 2017, the Company’s shares of common stock began trading on the OTCQB Marketplace under the symbol “SRRY” with a “D” added for 20 trading days to signify that the Stock Split has occurred. After the 20 trading days, the “D” will be deleted and the symbol will change to “IGSC” to reflect the Company’s new name.

 

On June 27, 2017, 2,500 fractional shares issued. On June 29, 2017, 2,145,815 new shares issued. The total number of shares issued and outstanding increase from 1,094,500 to 3,242,815.

 

For the new issuance of shares, please refer to Item 2. UNREGISTERED SALES OF EQUITY AND USE OF PROCEEDS of PART II. OTHER INFORMATION.

 

Stock options

 

On December 5, 2012, the Company entered into a settlement agreement with Dragon Wings for the settlement of the claim by Dragon Wings. In consideration of IGS's agreement to make the payments in the form of common shares and share options listed in the settlement agreement. The Company would give the option to Dragon Wings to purchase 6,000,000 common shares; the option may be exercised by Dragon Wings in whole or in part, at any time within 5 years from the date of this settlement agreement with the exercise price at US$0.01 per share, with dilution protection and subject to share split adjustment.

 

		As at
		June 30, 2017				December 31, 2016
Loan settled by share option		$	149,015			$	149,015
Par value of the common shares			60,000				60,000
Fair value of share option		$	89,015			$	89,015

  

Note 7. Income Taxes

 

The Company has U.S. federal net operating loss carry forwards that if unused could expire in varying amounts in the years through 2020 to 2026. However, as a result of the acquisition, the amount of net operating loss carry forward available to be utilized in reduction of future taxable income was reduced pursuant to the change in control provisions of Section 382 of the Internal Revenue Code.

 

A 100% valuation allowance has been established as a reserve against the deferred tax assets arising from the net operating losses and other net temporary differences since it cannot, at this time, be considered more likely than not that their benefit will be realized in the future.

 

 

 

Note 8. Subsequent events

 

On July 10, 2017, the Board of Directors of the Company approved the subscription of the company’s shares with details as follows were tabled.

 

No.	Name of Applicant	Number of shares	Price (USD)	Date of Application
1	PAVITHIRAN DEVADASAN	3,000.00	300.00	June 19, 2017
2	RUSTINA SING	8,000.00	800.00	June 19, 2017
3	ZAINUDDIN BIN YAACOB	6,000.00	600.00	June 19, 2017
4	ANBAZAGAN SAMUEL	15,000.00	1,500.00	June 19, 2017
5	OTHMAN BIN AHMAN	3,000.00	300.00	June 19, 2017
6	ROSLINA BINTI AMALUDDIN	3,000.00	300.00	June 19, 2017
7	SITI SAUDAH BINTI SYED MUDAN	6,000.00	600.00	June 19, 2017
8	FAZIAH BINTI SELAMAT	3,000.00	300.00	June 19, 2017
9	ROHAYAH BINTI MOHD	6,000.00	600.00	June 19, 2017
10	FAZUAH BINTI HAJI ABD RAHIM	6,000.00	600.00	June 19, 2017
11	MOHD FIRDAUS BIN MANSOR	3,000.00	300.00	June 19, 2017
12	AMIR BIN SHAIDIN	3,000.00	300.00	June 19, 2017
13	SHANDON BIN ABD WAHAB	3,000.00	300.00	June 19, 2017
14	HASIAH BINTI ABD RAHIM	3,000.00	300.00	June 19, 2017
15	PAIZAH BINTI BOKHARI	3,000.00	300.00	June 19, 2017
16	HERMES GEORGE	13,000.00	1,300.00	June 19, 2017
17	CHE SALIM BIN SAID	9,000.00	900.00	June 19, 2017
18	YA ACUB BIN DOLLAH	3,000.00	300.00	June 19, 2017
19	SHIM SHOO FAH	15,000.00	1,500.00	June 19, 2017
20	SHIM SHOO FAH	10,000.00	1,000.00	June 19, 2017
21	AMINUDDIN BIN HAJI MUHAMMAD SAID	30,000.00	3,000.00	June 19, 2017
22	NG KOK CHONG	10,000.00	1,000.00	June 19, 2017
23	LIM WEI CHING	50,000.00	5,000.00	June 19, 2017
24	ONG LEE CHIA	20,000.00	2,000.00	June 19, 2017

 

 

 

 

On July 20, 2017, the Board of Directors of the Company approved the subscription of the company’s shares with details as follows were tabled.

 

No.	Name of Applicant	Number of shares	Price (USD)	Date of Application
1	YOO HAK JONG	3,585	8,570.00	July 11, 2017
2	PARK JONGSUL	1,744	4,170.00	July 11, 2017
3	PARK SOONSEK	3,544	8,470.00	July 11, 2017
4	LEE SOON KYO	489	1,170.00	July 11, 2017
5	KIM OKJU	782	1,870.00	July 11, 2017
6	CHOI YOUNGCHAE	1,093	2,613.00	July 11, 2017
7	CHOI HYE KYUNG	7,280	17,400.00	July 11, 2017
8	HA KEUM JA	1,255	3,000.00	July 11, 2017
9	DOO HO	1,243	2,970.00	July 11, 2017
10	PARK YOUNG MAN	418	1,000.00	July 11, 2017
11	LEE SEUNGBOK	2,038	4,870.00	July 11, 2017
12	LEE YUBEEN	1,255	3,000.00	July 11, 2017
13	KIM YOUNG SUNG	837	2,000.00	July 11, 2017
14	KIM KYUNG WON	1,255	3,000.00	July 11, 2017
15	LIM MUN SEOP	418	1,000.00	July 11, 2017
16	LEE HOON	418	1,000.00	July 11, 2017
17	KIM DAE IL	837	2,000.00	July 11, 2017
18	AHN JONG CHUL	837	2,000.00	July 11, 2017
19	KANG KYUNG HEE	418	1,000.00	July 11, 2017
20	KIM YEON POONG	8,954	21,400.00	July 11, 2017
21	KIM HWOIIL	2,092	5,000.00	July 11, 2017
22	PARK JIHYEON	4,602	11,000.00	July 11, 2017
23	LEE GEUM SOON	364	870.00	July 11, 2017
24	KIM YOON	837	2,000.00	July 11, 2017
25	NAM HYERAN	2,196	2,624.00	July 11, 2017
26	LEE NAMYONG	1,506	1,800.00	July 11, 2017
27	KWON BOKCHOOL	3,766	4,500.00	July 11, 2017
28	BAEK HEEJA	1,506	1,800.00	July 11, 2017
29	SONG MYUNGBOON	2,510	3,000.00	July 11, 2017
30	KO CHANG BUM	837	1,000.00	July 11, 2017
31	PAK EUNSUN	1,506	1,800.00	July 11, 2017
32	CHOI JEOMNIM	837	1,000.00	July 11, 2017
33	KANG SEONGHUI	2,259	2,700.00	July 11, 2017
34	KIM HONG WOO	628	750.00	July 11, 2017
35	KIM KEUMHO	837	1,000.00	July 11, 2017
36	WOO DONGHWAN	4,978	5,949.00	July 11, 2017
37	WOO YOUNG HWAN	1,257	2,000.00	July 11, 2017
38	SEO YONGMOON	3,485	7,318.00	July 11, 2017

 

 

 

On August 1, 2017, the Board of Directors of the Company approved the subscription of the company’s shares with details as follows were tabled.

 

No.	Name of Applicant	Number of shares	Price (USD)	Date of Application
1	KIM JAE YEON	4,866	12,165.56	August 1, 2017
2	OH JOUNGSOUK	400	1,000.00	August 1, 2017
3	PARK JONGSUL	1,668	4,170.00	August 1, 2017
4	SEO HYOSEUNG	1,200	3,000.00	August 1, 2017
5	KIM KWANGSUK	1,440	1,800.00	August 1, 2017
6	RUSNANI BINTI AHMAD	120	300.00	August 1, 2017
7	RITA SARID	240	600.00	August 1, 2017
8	WONG OI LAN	800	2,000.00	August 1, 2017
9	KANG DONGKUK	1,696	4,238.89	August 1, 2017
10	YANG JEONG SOON	400	1,000.00	August 1, 2017

 

According to the issuance of total 321,533 shares of common stock, the total number of share outstanding increased from 3,242,815 shares to 3,564,348 shares.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

 

Item 2(a). Discussion for the Interim Operations and Financial Condition

 

Introduction

 

Management's discussion and analysis of results of operations and financial condition ("MD&A") is provided as a supplement to the accompanying financial statements and footnotes to help provide an understanding of our financial condition, changes in financial condition and results of operations. The MD&A is organized as follows:

 

•

Caution concerning forward-looking statements and risk factors. This section discusses how certain forward-looking statements made by us throughout the MD&A and in the financial statements are based on our present expectations about future events and are inherently susceptible to uncertainty and changes in circumstances.

 

•

Overview. This section provides a general description of our business, as well as recent developments that we believe are important in understanding the results of operations and to anticipate future trends in those operations.

 

•

Results of operations. This section provides an analysis of our results of operations for the three month and six month periods ended June 30, 2017 compared to the same period in 2016. A brief description is provided of transactions and events, including any related party transactions that affect the comparability of the results being analyzed.

 

•

Liquidity and capital resources. This section provides an analysis of our financial condition and cash flows for the three month and six month periods ended June 30, 2017 and 2016.

 

•

Critical accounting policies. This section provides an analysis of the significant estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities.

 

Forward-looking Statements

 

We have sought to identify what we believe to be the most significant risks to our business, but we cannot predict whether, or to what extent, any of such risks may be realized nor can we guarantee that we have identified all possible risks that might arise. Investors should carefully consider all of such risk factors before making an investment decision with respect to our Common Stock.

 

The following discussion should be read in conjunction with our financial statements and the notes thereto, and the other financial information appearing elsewhere in this document. In addition to historical information, the following discussion and other parts of this document contain certain forward-looking information. When used in this discussion, the words "believes", "anticipates", "expects", and similar expressions are intended to identify forward-looking statements. Such statements are subject to certain risks and uncertainties, which could cause actual results to differ materially from projected results, due to a number of factors beyond our control. We do not undertake to publicly update or revise any of our forward-looking statements, even if experience or future changes show that the indicated results or events will not be realized. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. Readers are also urged to carefully review and consider our discussions regarding the various factors, which affect our business, included in this section and elsewhere in this report.

 

Factors that might cause actual results, performance or achievements to differ materially from those projected or implied in such forward-looking statements include, among other things: (i) the impact of competitive products; (ii) changes in law and regulations; (iii) limitations on future financing; (iv) increases in the cost of borrowings and unavailability of debt or equity capital; (v) our inability to gain and/or hold market share; (vi) managing and maintaining growth; (vii) customer demands; (viii) market and industry conditions, (ix) the success of product development and new product introductions into the marketplace; (x) the departure of key members of management; as well as other risks and uncertainties that are described from time to time in our filings with the Securities and Exchange Commission.

 

 

 

Limited Market Due To Penny Stock

 

The Company's stock differs from many stocks, in that it is a "penny stock". The Securities and Exchange Commission has adopted a number of rules to regulate "penny stock". These rules include, but are not limited to, Rules 3a5l-l, 15g-1, 15g-2, 15g-3, 15g-4, 15g-5, 15g-6 and 15g-7 under the Securities and Exchange Act of 1934, as amended. Because our securities probably constitute "penny stock" within the meaning of the rules, the rules would apply to us and our securities. The rules may further affect the ability of owners of our stock to sell their securities in any market that may develop for them. There may be a limited market for penny stocks, due to the regulatory burdens on broker-dealers. The market among dealers may not be active. Investors in penny stock often are unable to sell stock back to the dealer that sold them the stock. The mark-ups or commissions charged by the broker-dealers may be greater than any profit a seller may make. Because of large dealer spreads, investors may be unable to sell the stock immediately back to the dealer at the same price the dealer sold the stock to the investor. In some cases, the stock may fall quickly in value. Investors may be unable to reap any profit from any sale of the stock, if they can sell it at all. Stockholders should be aware that, according to the Securities and Exchange Commission Release No. 34- 29093, the market for penny stocks has suffered in recent years from patterns of fraud and abuse. These patterns include: - Control of the market for the security by one or a few broker-dealers that are often related to the promoter or issuer; - Manipulation of prices through prearranged matching of purchases and sales and false and misleading press releases; - "Boiler room" practices involving high pressure sales tactics and unrealistic price projections by inexperienced sales persons; - Excessive and undisclosed bid-ask differentials and markups by selling broker-dealers; and - The wholesale dumping of the same securities by promoters and broker- dealers after prices have been manipulated to a desired level, along with the inevitable collapse of those prices with consequent investor losses. Furthermore, the "penny stock" designation may adversely affect the development of any public market for the Company's shares of common stock or, if such a market develops, its continuation. Broker-dealers are required to personally determine whether an investment in "penny stock" is suitable for customers. Penny stocks are securities (i) with a price of less than five dollars per share; (ii) that are not traded on a "recognized" national exchange; (iii) whose prices are not quoted on the NASDAQ automated quotation system (NASDAQ-listed stocks must still meet requirement (i) above); or (iv) of an issuer with net tangible assets less than $2,000,000 (if the issuer has been in continuous operation for at least three years) or $5,000,000 (if in continuous operation for less than three years), or with average annual revenues of less than $6,000,000 for the last three years. Section 15(g) of the Exchange Act and Rule 15g-2 of the Commission require broker-dealers dealing in penny stocks to provide potential investors with a document disclosing the risks of penny stocks and to obtain a manually signed and dated written receipt of the document before effecting any transaction in a penny stock for the investor‘s account. Potential investors in the Company‘s common stock are urged to obtain and read such disclosure carefully before purchasing any shares that are deemed to be "penny stock". Rule 15g-9 of the Commission requires broker-dealers in penny stocks to approve the account of any investor for transactions in such stocks before selling any penny stock to that investor. This procedure requires the broker-dealer to (i) obtain from the investor information concerning his or her financial situation, investment experience and investment objectives; (ii) reasonably determine, based on that information, that transactions in penny stocks are suitable for the investor and that the investor has sufficient knowledge and experience as to be reasonably capable of evaluating the risks of penny stock transactions; (iii) provide the investor with a written statement setting forth the basis on which the broker-dealer made the determination in (ii) above; and (iv) receive a signed and dated copy of such statement from the investor, confirming that it accurately reflects the investor's financial situation, investment experience and investment objectives. Compliance with these requirements may make it more difficult for the Company's stockholders to resell their shares to third parties or to otherwise dispose of them.

  

Overview of the Company and its Operations

 

The Company sold all its business in the 4^th quarter of 2011. It has no business operation as of the date of this report.

 

IGS's Visions and Goals

 

After the disposal of all its business in 2011, the directors are now looking for viable business that it can acquire in Asia.

 

Employees

 

As of June 30, 2017, the Company had no employees.

 

Factors That May Affect Future Results

 

The Company's ability to execute its business strategy and to sustain its operations depends upon its ability to maintain or procure capital. There can be no absolute assurance the necessary amount of capital will continue to be available to the Company on favorable terms, or at all. The Company's inability to obtain sufficient capital would limit the Company's ability to: (i) acquire new business and (ii) fund its working capital needs. The Company's access to capital may have a material adverse effect on the Company's business, financial condition and/or results of operations.

 

 

 

 

There can be no absolute assurance the Company will be able to effectively manage its existing or the possible future expansion of its operations, or the Company's systems, procedures or controls will be adequate to support the Company's operations. Consequently, the Company's business, financial condition and/or results of operations could be possibly and adversely affected.

 

As a public company, IGS is subject to certain regulatory requirements including, but not limited to, compliance with Section 404 of the Sarbanes-Oxley Act of 2002 ("SOX404"). Such compliance results in significant additional costs to the Company by increased audit and consulting fees, and the time required by management to address the regulations.

 

Results of Operations - Comparison between the three month and six month periods ended June 30, 2017 and the same period in 2016.

 

Revenue

 

The Company had no revenues for the three month and six month periods ended June 30, 2017 and the same period in 2016.

 

General and administrative expenses

 

General and administrative expenses increased to $63,143 and $71,921 for the three month and six month periods ended June 30, 2017 respectively, from $42,058 and $61,045 for the three month and six month periods ended June 30, 2016 respectively, an increase of $21,085 and $10,876 respectively. Of these amounts, $30,000 and $30,000 related to the value of cash compensation to our directors and secretary for the three and six months, respectively, ended June 30, 2017 and $15,000 and $30,000 related to the value of cash compensation to our directors and secretary for the three and six months, respectively, ended June 30, 2016. In addition, a substantial portion of our expenses for the three and six months, respectively, ended June 30, 2017 and June 30, 2016 related to accounting service fees, audit fees, legal service fees, professional service fees and transfer agent fees.

 

Other Income

 

The other income for the three month and six month periods ended June 30, 2017 was $10,239 and $10,239 respectively, compared to the other income of $nil and $1,230 for the three month and six month periods ended June 30, 2016, an increase of $10,239 and $9,009 respectively.

 

Income Tax

 

There were no income taxes for the three month and six month periods ended June 30, 2017 and the same period in 2016.

 

Net loss

 

The net loss for the three month and six month periods ended June 30, 2017 was $52,904 and $61,682 respectively, compared to the net loss of $42,058 and $59,815 for the three month and six month periods ended June 30, 2016 respectively, an increase of $10,846 and $1,867 respectively.

 

Liquidity and Capital Resources

 

Working Capital

		As of				As of
		June 30,				December 31,
		2017				2016
Current Assets		$	238,781			$	–
Current Liabilities		$	121,799			$	102,110
Working Capital		$	116,982			$	(102,110	)

 

As shown in the accompanying financial statements, the Company has accumulated loss of $1,280,968 as of June 30, 2017 compared to $1,219,286 as of December 31, 2016. There was a working capital earning of $116,982 on June 30, 2017 and it was a working capital deficit of $102,110 as of December 31, 2016. It has increased by $219,092. This is due to the settlement of liability due to related parties by issuance of common shares.

 

 

 

 

Operating Activities

 

The net cash flows used in operating activities for the six months period ended June 30, 2017 was $26,635 compared to $115,767 for the six months period ended June 30, 2016. The decrease is attributed to increase in accrued expenses and other payables.

 

Investing Activities

 

The net cash flows used in investing activities for the six months period ended June 30, 2017 was $13 compared to $nil for the six months period ended June 30, 2016. The increase is attributed to purchase of investment.

 

Financing Activities

 

The net cash flows provided by financing activities for the six months period ended June 30, 2017 was $26,648 compared to $115,767 for the six months period ended June 30, 2016. The Company financed its growth by utilizing cash reserves, loans from related parties and issuance of common shares. Loans from related parties were unsecured, and deferred payment term and without interest bearing. The Company’s primary use of funds was for operation expense and working capital.

 

Critical Accounting Policies and Estimates

 

The preparation of our financial statements in conformity with accounting principles generally accepted in the United States requires us to make estimates and judgments that affect our reported assets, liabilities, revenues, and expenses, and the disclosure of contingent assets and liabilities. We base our estimates and judgments on historical experience and on various other assumptions we believe to be reasonable under the circumstances. Future events, however, may differ markedly from our current expectations and assumptions. While there are a number of significant accounting policies affecting our financial statements; we believe the following critical accounting policies involve the most complex, difficult and subjective estimates and judgments: allowance for doubtful accounts; income taxes; stock-based compensation; asset impairment.

  

Stock-Based Compensation

Effective January 1, 2006, the beginning of IGS's first fiscal quarter of 2006, the Company adopted the fair value recognition provisions of SFAS 123R (ASC 718), using the modified-prospective transition method. Under this transition method, stock-based compensation expense was recognized in the consolidated financial statements for granted stock options, since the related purchase discounts exceeded the amount allowed under SFAS 123R(ASC 718) for non-compensatory treatment. Compensation expense recognized included: the estimated expense for stock options granted on and subsequent to January 1, 2006, based on the grant date fair value estimated in accordance with the provisions of SFAS 123R(ASC 718); and the estimated expense for the portion vesting in the period for options granted prior to, but not vested as of January 1, 2006, based on the grant date fair value estimated in accordance with the original provisions of SFAS 123(ASC 718). Results for prior periods have not been restated, as provided for under the modified-prospective method.

 

On December 5, 2012, the Company entered into a settlement agreement with Dragon Wings for the settlement of the claim by Dragon Wings. In consideration of IGS's agreement to make the payments in the form of common shares and share options listed in the settlement agreement. The Company would give the option to Dragon Wings to purchase 6,000,000 common shares; the option may be exercised by Dragon Wings in whole or in part, at any time within 5 years from the date of this settlement agreement with the exercise price at US$0.01 per share, with dilution protection and subject to share split adjustment.

 

For other items paid for by common stock, the value of the transaction is determined by the value of the goods or services received, measured at the time of the transaction. The corresponding stock value, used to determine the number of share to be issued, is the value of the average price for the 20 to 30 days prior to the transaction date.

 

Item 2(b). Off-Balance Sheet Arrangements

 

There are no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on the Company's financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources, that are material to investors.

 

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

The information is not required of smaller reporting companies.

 

 

 

 

ITEM 4. CONTROLS AND PROCEDURES

 

Under the supervision and with the participation of our management, including our principal executive officer and the principal financial officer, we conducted an evaluation of the effectiveness of the design and operation of its disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as of the end of the period covered by this report (the "Evaluation Date"). Based on this evaluation, our principal executive officer and principal financial officer concluded as of the Evaluation Date, that our disclosure controls and procedures were not effective.

 

During the six months ended June 30, 2017, there were no changes in our internal accounting controls or in other factors that materially affected our internal controls over financial reporting.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PART II. OTHER INFORMATION

 

ITEM 1. LEGAL PROCEEDINGS

 

None.

 

Item 1A. RISK FACTORS

 

The information is not required for smaller reporting companies.

 

Item 2. UNREGISTERED SALES OF EQUITY AND USE OF PROCEEDS

 

We have sold the following equity securities within the period covered by this report in transactions which were not registered under the Securities Act of 1933, as amended: Except where otherwise noted, all shares were issued in offshore transactions in reliance upon the exemption from the registration requirements of the Securities Act in accordance with Regulation S promulgated thereunder.

 

No.	Name of shareholder	Number of shares	Price(US$)	Date of issuance
1	MARCUS BIN APAU	20,000	400.00	May 8, 2017
2	MICHAEL DHAS ANBALAGAN	45,000	900.00	May 8, 2017
3	NORAINI BINTI ABU KASSIM	30,000	600.00	May 8, 2017
4	ANDREW BIN SANDAH	20,000	400.00	May 8, 2017
5	SALIM BIN AHMAD	15,000	300.00	May 8, 2017
6	LIPAH BIN UMPOK	20,000	400.00	May 8, 2017
7	HAI ZATON BINTI AHMAD	45,000	900.00	May 8, 2017
8	HASLIZA BINTI AHMAD	15,000	300.00	May 8, 2017
9	NOOR SHAM BINTI ABU KASSIM	15,000	300.00	May 8, 2017
10	NORAINI BINTI MAJID	20,000	400.00	May 8, 2017
11	NAJMUIN BIN MOHAMAD	135,000	2,700.00	May 8, 2017
12	NORAZIZAM BIN DAHLAN	30,000	600.00	May 8, 2017
13	MOHD MAIZATUL KEFTIAH BIN AHMAD	15,000	300.00	May 8, 2017
14	RUSTINA SING	40,000	800.00	May 8, 2017
15	TAN TOH NGUANG	135,000	2,700.00	May 8, 2017
16	MOHD SABRI BIN ANANG	30,000	600.00	May 8, 2017
17	SITI MUHIDAH BINTI KAMARUDDIN	60,000	1,200.00	May 8, 2017
18	MOHAMAD ABDUL WAHAB BIN ABDUL HALIM	15,000	300.00	May 8, 2017
19	JOLAILI BIN MATMIN	30,000	900.00	May 8, 2017
20	RAMLEE BIN RASMAT	10,000	300.00	May 8, 2017
21	MOHAMAD NAZRI BIN HASHIM	125,000	2,500.00	May 8, 2017
22	FARIZ IZADI BIN MAHIZAN	10,000	300.00	May 8, 2017
23	ROZALINDA BINTI MUSTAFFA	20,000	400.00	May 8, 2017
24	MOHAMED YUSOFF BIN ABDUL GHANI	50,000	1,500.00	May 8, 2017
25	MOHD FAZLY BIN MOHD NOOR SHAM	70,000	1,400.00	May 8, 2017
26	ANISAH BINTI AMBILAH	65,000	1,300.00	May 8, 2017
27	NAREIN BALAGEE	30,000	600.00	May 8, 2017
28	ADTAR KHAFIZ BIN RAMLAN	15,000	300.00	May 8, 2017
29	AZMAN BIN SAHAROM	628,200	12,564.00	May 8, 2017
30	SUHANA BINTI ASMAT	15,000	300.00	May 8, 2017
31	MIOR ZAMRI BIN MIOR AHMAD	150,000	3,000.00	May 8, 2017
32	LOH SIU CHAN	340,000	6,800.00	May 22, 2017
33	PONTOON BOAT INC.	1,992,541	19,925.41	May 22, 2017
34	PONTOON BOAT INC	1,290,145	129,014.50	June 29, 2017
35	KHALID BIN HASHIM	15,000	1,500.00	June 29, 2017
36	JULIA BINTI MOSIOL	3,000	300.00	June 29, 2017
37	ROHAYA BINTI BAKAR	3,200	320.00	June 29, 2017
38	ASMAH BINTI ATOU	3,000	300.00	June 29, 2017
39	RITA SARID	6,000	600.00	June 29, 2017
40	SULAIMAN MADAHIN	6,000	600.00	June 29, 2017
41	KAMARUZAMAN BIN ISMAIL	4,000	400.00	June 29, 2017
42	ANBAZAGAN SAMUEL	15,000	1,500.00	June 29, 2017
43	PAMELA BINTI BENJAMIN	9,000	900.00	June 29, 2017
44	MD JALAL BIN JAAFAR	15,000	1,500.00	June 29, 2017
45	JAMAKIYAH BINTI MAJID	4,000	400.00	June 29, 2017

 

 

46	RUSTINA SING	5,000	500.00	June 29, 2017
47	TAN TOH NGUANG	210,000	21,000.00	June 29, 2017
48	JOHN OMPUK	4,000	400.00	June 29, 2017
49	MOGAN ARWANANTHAN	65,140	6,514.00	June 29, 2017
50	AZMI BIN HASSIM	12,000	1,200.00	June 29, 2017
51	AZMAN BIN AMBIR	15,000	1,500.00	June 29, 2017
52	HASRINAH BINTI MOHD GULLAM	8,000	800.00	June 29, 2017
53	IBRISHAM BIN ZAKARIA	30,000	3,000.00	June 29, 2017
54	MOHD LASA BIN ABDUL	3,000	300.00	June 29, 2017
55	MUHAMMAD AZIM BIN BANI AMIN	3,000	300.00	June 29, 2017
56	MOHD RUSHDI BIN YUSOF	3,000	300.00	June 29, 2017
57	SHIM SHOO FAH	10,000	1,000.00	June 29, 2017
58	AMINUDDIN BIN HAJI MUHAMMAD SAID	10,000	1,000.00	June 29, 2017
59	SHIM SHOO FAH	30,000	3,000.00	June 29, 2017
60	AMINUDDIN BIN HAJI MUHAMMAD SAID	20,000	2,000.00	June 29, 2017
61	KIANCHONG BIN JAILANI	6,000	600.00	June 29, 2017
62	SEO MANWON	43,600	4,360.00	June 29, 2017
63	SIN HYUNMUN	10,000	1,000.00	June 29, 2017
64	PARK SUNG KYU	10,000	1,000.00	June 29, 2017
65	SHIN SOOKJA	10,000	1,000.00	June 29, 2017
66	BACK YOUNG HEE	10,000	1,000.00	June 29, 2017
67	JEONG SONGGEUN	30,700	3,070.00	June 29, 2017
68	KIM YOUNGSE	10,000	1,000.00	June 29, 2017
69	SHIN YUNG SEUNG	3,830	383.00	June 29, 2017
70	LIM MUNSOON	16,000	1,600.00	June 29, 2017
71	KIM HWA SOOK	10,000	1,000.00	June 29, 2017
72	KIM HWA AE	10,000	1,000.00	June 29, 2017
73	FATIMAH BINTI MUHAMAD	15,000	1,500.00	June 29, 2017
74	MAT HARUN BIN AB MANAF	15,000	1,500.00	June 29, 2017
75	TAY BOON HUA	20,000	2,000.00	June 29, 2017
76	KEE POH SOON	20,000	2,000.00	June 29, 2017
77	JEONG JEONGAE	35,000	3,500.00	June 29, 2017
78	WOO DONGHWAN	37,500	3,750.00	June 29, 2017
79	KIM JUNG HWAN	11,700	1,170.00	June 29, 2017
80	SONG SANOCK	20,000	2,000.00	June 29, 2017

 

For the shares issued before June 7, 2017, a reverse stock split will be effectuated on a 1-for-100 basis.

 

Item 3. DEFAULTS UPON SENIOR SECURITIES

 

None.

 

Item 4. MINE SAFETY DISCLOSURES

 

None.

 

Item 5. OTHER INFORMATION

 

On April 26, 2017, the Company filed a certificate of amendment to its articles of incorporation with the Secretary of State of the State of Nevada changing the Company’s name to IGS Capital Group Limited and a reverse split of the Company’s Common Stock on a 1-for-100 basis. For details, please refer to Note 8 stated in Item 1 of Part I.

 

On July 10, 2017, July 20, 2017 and August 1, 2017, the Board of Directors of the Company approved the subscription of the company’s shares. Total 321,533 shares of common stock issued. The total number of share outstanding increased to 3,564,348 shares. For details, please refer to Note 8 stated in Item 1 of Part I.

 

Item 6. EXHIBITS

 

(1)	Exhibits: Exhibits required to be attached by Item 601 of Regulation S-K are listed in the Index to Exhibits following the signature page of this Form 10-Q, which is incorporated herein by reference.

 

 

SIGNATURES

 

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

	IGS CAPITAL GROUP LIMITED
Dated: August 11, 2017	By:	/s/ Kok Seng Yeap
		Kok Seng Yeap
		Director
		(Chief Executive Officer, Chief Financial Officer and Secretary)
Dated: August 11, 2017	By:	/s/ He Qianying
		He Qianying
		Director

 

 

 

 

 

 

INDEX TO EXHIBITS

 

Exhibit No.		Description
31.1		Certification of Director and Chief Executive Officer
31.2		Certification of Director
32.1		Statement required by 18 U.S.C. Section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002
32.2		Statement required by 18 U.S.C. Section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002
101		The following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2017, formatted in XBRL (eXtensible Business Reporting Language); (i) Balance Sheets at June 30, 2017 and December 31, 2016, (ii) Statement of Operations for the six months period ended June 30, 2017 and 2016, (iii) Statement of Cash Flows for the six months period ended June 30, 2017 and 2016, and (iv) Notes to Financial Statements.