UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-K

 

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

 

For the fiscal year ended December 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 ___________________________

 

Commission file number 333-199965

 

HO WAH GENTING GROUP LIMITED

(Exact name of registrant as specified in its charter)

 

Nevada		47-1662242
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

 

Wisma Ho Wah Genting, No. 35, Jalan Maharajalela, 50150 Kuala Lumpur, Malaysia		N/A
(Address of principal executive offices)		(Zip Code)
Registrant’s telephone number, including area code		+ 603 – 2148 -1089

 

(Former name, former address and former fiscal year, if changed since last report)

 

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes  ☐  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  ☐  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.

☒  Yes  ☐  No

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, 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, 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 ☐ (Do not check if a smaller reporting company)	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. ☐

 

As of the last business day of the registrant’s most recently completed second fiscal quarter, the aggregate market value of the registrant’s voting common stock held by non-affiliates of the registrant was approximately $112,693,849 (computed using the closing sales price of $1.02 per share of common stock on such date). For the purposes of this calculation, shares owned by officers, directors and persons known to the registrant to own 10% or more of the outstanding voting power of the registrant have been deemed to be owned by affiliates. This determination of affiliate status is not necessarily a conclusive determination for other purposes.

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).

☐  Yes  ☒  No

 

As of April 13, 2018, the Registrant has 500,027,774 shares of common stock outstanding.

 

 

TABLE OF CONTENTS

 

PART I		2
ITEM 1. – Description of the Business		2
ITEM 1A – Risk Factors		6
ITEM 1B – Unresolved Staff Comments		7
ITEM 2 – Properties		7
ITEM 3 – Legal Proceedings		7
ITEM 4 – Mine Safety Disclosures		7
PART II		7
ITEM 5 – Market for Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities		7
ITEM 6 – Selected Financial Data		8
ITEM 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operations		9
ITEM 7A – Quantitative and Qualitative Disclosures about Market Risk		12
ITEM 8 – Financial Statements and Supplementary Data		F-1
ITEM 9 – Changes in and Disagreements with Accountants on Accounting and Financial Disclosures		13
ITEM 9A – Controls and Procedures		13
PART III		14
ITEM 10 – Directors, Executive Officers and Corporate Governance		14
ITEM 11 – Executive Compensation		16
ITEM 12 – Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters		17
ITEM 13 – Certain Relationships and Related Transactions and Director Independence		17
ITEM 14 – Principal Accountant Fees and Services		19
PART IV		20
Item 15 – Exhibits, Financial Statement Schedules		20
SIGNATURES		21

 

 

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

 

This Annual Report on Form 10-K (this “Report”) contains forward-looking statements, including, without limitation, in the sections captioned “Description of the Business,” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and elsewhere. Any and all statements contained in this Report that are not statements of historical fact may be deemed forward-looking statements. Terms such as “may,” “might,” “would,” “should,” “could,” “project,” “estimate,” “pro-forma,” “predict,” “potential,” “strategy,” “anticipate,” “attempt,” “develop,” “plan,” “help,” “believe,” “continue,” “intend,” “expect,” “future,” and terms of similar import (including the negative of any of the foregoing) may be intended to identify forward-looking statements. However, not all forward-looking statements may contain one or more of these identifying terms. Forward-looking statements in this Report may include, without limitation, statements regarding (i) the plans and objectives of management for future operations, (ii) a projection of income (including income/loss), earnings (including earnings/loss) per share, capital expenditures, dividends, capital structure or other financial items, (iii) our future financial performance, including any such statement contained in a discussion and analysis of financial condition by management or in the results of operations included pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”), and (iv) the assumptions underlying or relating to any statement described in points (i), (ii), or (iii) above.

 

Readers are cautioned not to place undue reliance on forward-looking statements because of the risks and uncertainties related to them and to the risk factors. We disclaim any obligation to update the forward-looking statements contained in this Report to reflect any new information or future events or circumstances or otherwise.

 

Readers should read this Report in conjunction with our financial statements and the related notes thereto in this Report, and other documents which we may file from time to time with the SEC.

 

The forward-looking statements are not meant to predict or guarantee actual results, performance, events or circumstances and may not be realized because they are based upon our current projections, plans, objectives, beliefs, expectations, estimates and assumptions and are subject to a number of risks and uncertainties and other influences, many of which we have no control over. Actual results and the timing of certain events and circumstances may differ materially from those described by the forward-looking statements as a result of these risks and uncertainties. Factors that may influence or contribute to the inaccuracy of the forward-looking statements or cause actual results to differ materially from expected or desired results may include, without limitation, our inability to obtain adequate financing, the significant length of time and resources associated with the development of our products and services and related insufficient cash flows and resulting illiquidity, our inability to expand our business, significant government regulation of our industry, existing or increased competition, results of arbitration and litigation, stock volatility and illiquidity, and our failure to implement our business plans or strategies. When considering such forward-looking statements, you should keep in mind the factors described in Item 1A. “Risk Factors” and other cautionary statements contained in this Report. A description of some of the risks and uncertainties that could cause our actual results to differ materially from those described by the forward-looking statements in this Report includes the following:

 

●

our relationship with, and our ability to acquire members, and to influence the actions of, our members of our Exclusive Travel Membership (defined below);

 

●

improper action by our employees or members of our Exclusive Travel Membership in violation of applicable law;

 

●

adverse publicity associated with our products or services, including our ability to comfort the marketplace and regulators regarding our compliance with applicable laws;

 

●

changing consumer preferences and demands;

 

●

our reliance upon, or the loss or departure of any member of, our senior management team which could negatively impact our member relations and operating results;

 

●

the competitive nature of our businesses;

 

●

regulatory matters governing our products and services, including potential governmental or regulatory actions concerning our products and services, risks associated with operating internationally and the effect of economic factors, including foreign exchange, inflation, disruptions or conflicts with our partners, pricing and currency devaluation risks;

 

●

uncertainties relating to the application of transfer pricing, duties, value added taxes, and other tax regulations, and changes thereto;

 

●

adverse changes in the Malaysian economy;

 

●

our dependence on increased penetration of existing markets;

 

●

our reliance on our information technology infrastructure and outside service providers and strategic partners;

 

  

●

the sufficiency of trademarks and other intellectual property rights;

  

●

changes in tax laws, treaties or regulations, or their interpretation; and

  

●

share price volatility related to, among other things, speculative trading and certain traders shorting our common shares.

  

PART I.

 

ITEM 1. Description of the Business

 

Corporate History

 

We were incorporated in Nevada as Computron, Inc. on August 22, 2014. Our original business was to engage in computer support services.

 

On October 28, 2016, (i) we changed our name to Ho Wah Genting Group Limited and (ii) we increased our authorized capital stock from 75,000,000 shares of common stock, par value $0.0001, to 1,500,000,000 shares of common stock, par value $0.0001 (the “Common Stock”) by filing an Amended and Restated Articles of Incorporation (the “Restated Articles”) with the Nevada Secretary of State. The Company’s name change to “Ho Wah Genting Group Limited” became effective on FINRA’s Over-the-Counter Bulletin Board on November 8, 2016 under the new stock ticker symbol “HWGG”.

 

We consummated a transaction evidenced by a Share Exchange Agreement dated November 4, 2016, by and among us, Ho Wah Genting Group Sdn. Bhd, a Malaysian private company limited by shares formed in September 2, 1985 (“HWGG”), and the shareholders of HWGG (“HWGG Shareholders”) pursuant to which we acquired from the HWGG Shareholders all of the issued and outstanding equity interests of HWGG in exchange for 560,000 shares of our Common Stock (“Share Exchange”). As a result of the Share Exchange, the HWGG shareholders, as the former shareholders of HWGG, became our controlling shareholders and HWGG became a wholly owned subsidiary of ours. The Share Exchange was accounted for as a reverse takeover/recapitalization effected by a share exchange, wherein HWGG was considered the acquirer for accounting and financial reporting purposes.  In accordance with “reverse acquisition” accounting treatment, our historical financial statements as of period ends, and for periods ended, prior to the acquisition, were replaced with the historical financial statements of HWGG prior to the Share Exchange.

 

As a result of the Share Exchange, and pursuant to our Split-Off Agreement dated November 4, 2016 with our former controlling shareholder prior to the Share Exchange, we discontinued our pre-exchange business, acquired the business of HWGG and continued the existing business operations of HWGG as a publicly traded company.

 

On July 12, 2017, our Board of Directors authorized and approved an amendment to our Amended and Restated Articles of Incorporation, which authorized a two-to-one reverse stock split of our outstanding common stock, par value $0.0001 per share, with a record date of July 14, 2017. In connection with the reverse stock split, the Board of Directors also authorized and approved a related increase in the par value of the HWGG common stock from $0.0001 per share to $0.0002 per share. On August 9, 2017 we received approval from the Financial Industry Regulatory Authority to effectuate the Reverse Split at the open of business on August 11, 2017. At such time, our trading symbol will temporarily change to “HWGGD.” The added “D” will remain for 20 business days after which our trading symbol will revert to “HWGG.” When the reverse stock split became effective, every two shares of our pre-split issued and outstanding common stock, par value 0.0001 per share, automatically converted into one post-split share of our common stock, par value 0.0002 per share, and with a corresponding reduction of the number of shares of common stock we are authorized to issue, and a related increase in par value. All fractional shares which would otherwise result from the reverse stock split was rounded up.

  

As used in this Report, references to the “Company,” the “Registrant,” “we,” “our” or “us” refer to Ho Wah Genting Group Limited and its wholly owned subsidiary, HWGG, unless the context otherwise indicates.

 

Our Current Business

 

We are currently engaged in promoting entertainment membership, junket operating and marketing of real estate property through our wholly owned subsidiary HWGG.

 

One of the main products we offer is an exclusive travel membership that focuses on travel and entertainment around the world (“Exclusive Travel Membership”). We strive to serve our member’s every travel need by offering our members discounted vacation packages, hotel and room accommodations, flight arrangements and various on ground transportation means. We are developing our website and mobile application so members can purchase our membership packages online via their computer and mobile device. Currently, a person can purchase a member package at our sales office in Kuala Lumpur, Malaysia. Member packages include products and points that carry a value that approximates the package price. Each member package is available in English and Chinese and typically includes booklets describing us, our compensation plan and rules of member conduct, various training and promotional materials, member applications and a product and services catalog. The price of a member package varies by package type and provides a low cost entry for incoming members. On June 19, 2015, we began offering the following four member packages:

 

●

Holiday Card Member

  

●

Classic Card Member

  

●

Gold Card Member

  

●

Black Card Member

 

The Holiday Card Member package was our entry based package, designed for members that wished to try or test our products and services for no annual fee. Holiday Card members had access to our Local and International Membership Subscription, value travel packages and accommodation booking services. This package was terminated in 2017.

 

 

The Classic Card Member package is our mid-level entry package and is designed for members that wish to earn extra benefits in addition to those available under our former Holiday Card Member package. It requires a yearly subscription payment of US$8,000 for our International Membership Subscription, or RM 20,000 for our Local Membership Subscription. It provides members up to 12% discount rewards per annum and access to our entertainment services, air ticket purchase services, value travel packages and accommodation booking services.

 

The Gold Card Member package is our advanced entry-level package. This package provides members up to 13.2% discount rewards per annum and access to our travel arrangement services, entertainment services, air ticket purchase services, value travel packages and accommodation booking services. It requires a yearly subscription payment of US$16,000 for our International Subscription or RM 50,000 for our Local Membership Subscription.

 

The Black Card Member package is our professional entry-level package. It requires a yearly subscription payment of US$32,000 for our International Membership Subscription or RM 100,000 for our Local Membership Subscription. It provides members up to 14.4% discount rewards per annum and access to our travel arrangement services, entertainment services, air ticket purchase services, value travel packages and accommodation booking services.

 

Members’ subscription amount will be converted into member redemption points (“MRP”) on an equivalent basis. MRPs can be utilized to purchase products and services offered by us and our partnering company Ho Wah Genting Holiday SDH BHD, a Malaysian corporation (“HWGH”), which pursuant to our Travel and Junket Service Contract dated April 1, 2016, provides travel agency services and prepares tour packages, hotel bookings, and transportation arrangements to offer HWGG’s members and customers. We will recognize revenue from our Exclusive Travel Membership once our members utilize their MRPs on such services and facilities. Discount rewards will be calculated based on month end point balance and rewarded based on month end MRP balance. Discount rewards can be exchanged for entertainment vouchers at selected destinations. All of our membership options terminate after twelve (12) months.

 

We have launched limited time offer (ended on December 31, 2017) of Resort Club Membership (“RCM”) exclusively designed to meet the demands of those seeking for a membership with great value, wealth generation and a wide selection retreats. RCM is a premier exclusive club offering an elegant and welcoming ambience for all who seek for the perfect resort club membership. RCM is committed to the highest levels of comfort and cuisine, exceptional venues and an unmatched level of personal service. The RCM consist of three membership packages: (i) Platinum; (ii) World; & (iii) Prestige.

 

The Platinum Card Member package starting from subscription payment of US$1,500. It provides members up to 6 nights free stay with the Hotel Suite. Members can enjoy up to 10% discount on hotel booking at Ho Wah Genting Resort which located on the west coast of the Peninsula Malaysia. Members also can earn a yearly discount rewards of 6% per annum.

 

The World Card Member package starting from subscription payment of US$7,500. It provides members up to 12 nights free stay with the Hotel Suite or Cruise Hotel. Members can enjoy up to 20% discount on hotel booking at Ho Wah Genting Resort which located on the west coast of the Peninsula Malaysia. Members also can earn a yearly discount rewards of 9% per annum.

 

The Prestige Card Member package starting from subscription payment of US$15,000. It provides members up to 18 nights free stay with the Hotel Suite or Cruise Hotel or Water Chalets. Members can enjoy up to 30% discount on hotel booking at Ho Wah Genting Resort which located on the west coast of the Peninsula Malaysia. Members also can earn a yearly discount rewards of 12% per annum.

 

We have generated 223 active members as of December 31, 2017 with the following breakdown:

 

	●	Classic Card Members	:	77
	●	Gold Card Members	:	44
	●	Black Card Members	:	79
	●	Platinum Card Members	:	15
	●	World Card Members	:	3
	●	Prestige Card Members	:	5

 

With our group’s foresight of the rising competition in the leisure and gaming industry, our main priority is to develop and acquire a unique premium market database via online subscription to our membership program. With the Asian market in sight, we believe a huge database of users will result in better negotiation leverage to secure the best deals for our members, thereby fortifying our unique selling propositions.

 

In connection to our Exclusive Travel Membership, we also provide junket operating services by promoting premium market players to our partner’s resorts and cruise lines. We currently have an agreement to operate as a licensed junket operator for Genting Malaysia Berhad, a Malaysian public company involved in the leisure and hospitality business covering theme parks, gaming, hotels, seaside resorts and entertainment for over fifty years throughout Asia, and Genting Hong Kong Limited, a Hong-Kong based investment holding company principally engaged in cruise businesses. To date, HWGG is an approved junket operator and local group casino rebate programme for Genting Malaysia Berhad’s casino in Peninsular Malaysia and Genting Hong Kong Limited’s entire Star Cruises Fleet and Resorts World Manila. Pursuant to the Travel and Junket Service Contract, we shared 50% of the commission earned through certain junket operations with HWGH. Starting 2017, HWGG takes 100% of the junket commission from its operations with HWGH. Our Exclusive Travel Membership members may exchange their MRPs for junket services at various leisure entities such as resorts and cruises offered by our strategic partners. HWGG earns an average of 1.0% - 1.5% for the rolling activities of our players.

 

 

With such an attractive line-up of privileges and benefits exclusively available to our members, we believe our membership program will stand out as a popular product in Asia’s premium entertainment market. Our Exclusive Travel Membership will further add value to the company as we progress into a future that is increasingly dominated by big data technologies.

 

Marketing Plan, Overview and Business Strategy

 

According to the World Travel and Tourism Council, travel and tourism total contribution which include direct, indirect and induced generated $8.3 trillion (USD) and 313 million jobs for the global economy in 2017. In 2018, the World Travel and Tourism Council is expected to attract 1.4 billion international tourist arrivals. By 2028, international tourist arrivals are forecast to total 2.1 billion, generating expenditure of $2,311.4 (USD) billion, an increase of 4.1% per annum.

 

Through our Exclusive Travel Membership, we intend to tap the travel and tourism industry, particularly through Asia’s emerging markets. We currently provide service arrangements to our partners’ exclusive entertainment lounges located in Malaysia, Singapore, Philippines, and China. Through the growth of our membership, we believe we will gain better negotiation power for the best travel deals for our members, enhancing our unique selling points, products and services that we offer our customers.

 

As China reigns supreme as Asia’s biggest superpower, it is the biggest market when it comes to membership acquisition due to its large population and huge spending power. We believe China will be one of the biggest contributors to our Company’s revenue due to our strategic partner’s fleet of cruises launched in the China region.

 

We also believe our junket operation business will be a huge contributor to our future revenue. According to the Research And Markets, the Casino games market was US 129 billion in 2016 and is estimated to reach USD 191 billion by 2022 at a compound annual growth rate of 6.8% during the period.. Based on Business Wire News, Asia comprises sixty percent of the world population and is home to many of the world’s top ten biggest casinos by gambling revenue, which are located in Macau and Singapore.

 

We believe in our strategic partner’s vision of not only promoting the gaming industry but also marketing family focused entertainment, such as entertainment parks, shopping malls and concerts. This diverse marketing approach of our partners will help attract not only the premium market but also satisfy the mass market as well. Since the Company promotes our strategic partners’ resorts and cruises, any promotion of these entertainment and travel destinations will indirectly benefit the Company. This is a distinct advantage for the Company as it builds our market exposure for our products.

 

To ensure that our Exclusive Travel Membership and junket operation services become known throughout Asia, we plan to release and promote information through word of mouth, promotion and organizing events to further increase our brand recognition.

 

Competition and Competitive Strengths

 

Our competition, which is strong and increasing, includes online and offline travel companies that target leisure and corporate travelers, including travel agencies, tour operators, travel supplier direct websites and their call centers, consolidators and wholesalers of travel products and services, large online portals and search websites, certain travel metasearch websites, mobile travel applications and social media websites, as well as traditional consumer eCommerce and group buying websites. We face these competitors in local, regional, national and/or international markets. Many of our competitors are well established, substantially larger and have substantially greater market recognition, greater resources and broader capabilities than we have. There can be no assurance that we will be able to compete successfully against current and future competitors. The competitive pressures that we face may have a material adverse effect on our business, prospects, financial condition and results of operations.

 

We believe that while we currently may have disadvantages in the travel and entertainment market, the growth of this market will allow us to earn additional market share if we can expand our membership database and maintain reliable, responsive, and quality service to our Exclusive Travel Membership members and partners.

 

We intend to use our expertise in the Asian markets and a user-friendly website to compete with the major competitors in this field. We plan to compete on the basis of ease of use, pricing and customer preference.

 

Junket operation is a niche market, competition is not high, however, it requires a substantial network of high-roller tourists in order to attract VIP players. By providing discount rewards, high quality services and with the continuously growing network that our senior management has, we believe that we are able to pull the necessary VIP players to be successful.

 

Real Estate Investment Business

 

Prior to entering the entertainment and travel industry, HWGG was primary engaged in residential and commercial property investment and development in Kuala Lumpur, Malaysia. Throughout the years, we have been approached by property developers and investors requesting that we study property projects in Malaysia. Our portfolio currently consists of a condominium in Kuala Lumpur, Malaysia which generates rental income for us. We may sell or purchase further properties, if opportunities arise that we believe will maximize our overall asset values.

 

According to Knight Frank Malaysia, a unit of London-based Knight Frank LLP, Malaysia’s property market is expected to remain sluggish in the first six months of 2018. The market continued to be weak in the second half of 2017 with oversupplied position in the main sub-sectors such as high-end residential, office and retail. During the second half of 2017, the developers continued shifting their focus to the middle-income and affordable housing segments to cater to a wider target catchment amid challenges in the high-end market. Despite the current challenges in the retail industry, Knight Frank Malaysia foreseen the mid to longer term prospect remains positive as more retailers embrace the concept of “clicks and mortar” amid the e-commerce boom.

 

 

Notwithstanding these measures, we expect the housing market to remain resilient and sustainable in the near future. According to an article published by Asean Today, properties in Malaysia will hit a peak by year 2020. Surveys conducted by local reputable firms specializing in analyzing Malaysian investment behavior, noted that Malaysians prefer to invest in property due to higher yields on rental, good appreciation, retirement plan, for better environment and for affordable pricing. Our management believes that foreign investors actually favor Malaysian property due to Malaysia’s modern and sophisticated infrastructure that is being further enhanced by government initiatives to facilitate foreign investment in Malaysia, including tax incentives and easing of laws governing foreign ownership of property. We believe that the property cycle has or will be reaching its bottom line soon and the cycle will turn within these few years. Even with a slowdown in property transaction, our management believes the price of the properties does not drop much (most of the properties either go up in price or remain unchanged) and that real estate investment remains attractive to foreign buyers due to Malaysian’s weaker ringgit (which mean the properties in Malaysia are relatively cheap to foreign investors). All this information provides assurance to us that the property sector in Malaysia remains solid and that now is the best time to invest in this industry. We also believe that by remaining in the property investment industry, we will capture this market by building our brand name.

 

We may not be able to compete with the big companies at our current stage. Our competitors may have larger financial capacities, greater resource availability, and more diversification in terms of their property portfolios and experience.  Our competitive strategies will focus on the following key areas: lease and sales strategy, target local market (mostly mid income earner), target foreign market (partly mid income earner and partly high income earner) and strategize location with a reasonable pricing.

 

We have engaged project managers to look into enhancing this sector of our business and are in the early state of exploring and planning our next property investment project. On November 23, 2016, we acquired rights to purchase 202 units in a condominium development scheduled to be completed no later than December 31, 2017 in Negeri Johor, Malaysia, at 40% below market price. Pursuant to such agreement, we are able to resale the units to customers at market price. We expected to earn approximately 40% of the gross revenue for each unit that we are able to sell by December 31, 2017 and would not have any further obligations to purchase any units that we are unable to find customers for. However, this expired on December 31, 2017, and we did not acquire the property.

 

Information Technology Business

 

On June 25, 2015, HWGG acquired 65% of the equity interests of Beedo SDN BHD, a Malaysian corporation that specializes in information technology services (“Beedo”). On July 7, 2015, Beedo increased its issued and paid-up shares from 2,500 to 1,000,000. HWGG acquired an additional 508,375 shares on that date, making its balance of shares 510,000 and effectively diluting its ownership in Beedo from 65% to 51%. On August 12, 2016, HWGG completed the disposal of its subsidiary, Beedo, by wholly transferring the shares it owns to a related party, Dato’ Lim Hui Boon, for the consideration of $118,881 (RM 510,000). Since selling its interest of Beedo, we no longer participate in the information technology services industry.

 

Long Term Plans

 

Our long term plan is to expand our travel and entertainment and junket operation business throughout Asia and to the United States, particularly in Las Vegas, Nevada. To achieve this, we will continue to make improvements on our Exclusive Travel Membership and network of VIP players and receive feedback from our members and strategic partners. We will also need to conduct further research and studies to better understand the travel and tourism business and junket operator requirements in those markets.

 

Additionally, we plan to create an online gaming platform to enhance our membership services. The global online gambling market is expected to grow at a rate of up to 11% from 2016 to 2020, according to Technavio’s report as released in late 2015. The American Gaming Association says the online gambling market is currently valued at approximately US $37 billion annually, and 85 countries have chosen to legalize Internet gambling. With regard to the United States, only a few states have permitted online casino gambling to date, including Nevada, New Jersey and Delaware. A significant share of global online gambling revenue comes from Europe. According to the European Commission, the online gambling market is about $15 billion per year, and it is growing at a rate of approximately 15% on an annual basis. We believe that the online gambling sector is an industry that can contribute significantly to our revenue and further enhance our shareholder value.

 

Another long term plan is to set up an investment fund. Our management team is currently working with a few investment firms to form connections in order to further contribute to our revenue.

 

Our management has experience in the Hong Kong, Malaysia and US markets. Our management has helped raise funds for various companies to be used as working capital and other corporate exercise matters, including mergers and acquisitions. Our management has also conducted due diligence for more than 10 different types of industries (mining, construction, properties, manufacturing, food and beverage, trading, beauty products, furniture products and others) for potential investment purposes. With the experience of our management team, we believe that opening an investment fund will be a viable and profitable option to enhance the value of our Company overtime. We intend to work with reputable partners to invest in securities and other permitted assets to generate an additional revenue stream and increase profit for our shareholders.

 

 

Patents and Trademarks

 

At the present we do not have any patents or trademarks.

 

Need for any Government Approval of Services

 

We do not require any government approval for our services.

 

In the event any of our operations or services requires government approval, we will comply with any and all local, state and federal requirements.

 

Government and Industry Regulation

 

We are committed to complying with all federal, state and international laws governing our business operations.

 

We believe that we comply with the requirements in Malaysia for any licenses or approvals to pursue our proposed business plan. In locations where we operate, the applicable laws and regulations are subject to amendment or interpretation by regulatory authorities. Generally, such authorities are vested with relatively broad discretion to grant, renew and revoke licensee and approvals, and to implement regulations. Possible sanctions which may be imposed include the suspension of individual employees, limitations on engaging in a particular business for specific periods of time, revocation of licenses, censures, redress to customers and fines. We may be prevented from operating if our activities are not in compliance with domestic Malaysian regulations.

 

In addition, we may be subject to various laws and regulations globally, particularly with respect to our travel and entertainment segment of our business. Many countries have either implemented new laws or made revisions to existing laws on travel and entertainment, particularly in the gaming industry, in the last decade. We may be prevented from operating if our activities are not in compliance with certain foreign regulations and must take action to comply with such relevant laws and regulations.

 

As a junket operator, we may deal with significant amounts of cash in our operations and may be subject to various reporting and anti-money laundering regulations. Such laws and regulations could change or could be interpreted differently in the future, or new laws and regulations could be enacted which could adversely affect our operating results.

 

Furthermore, our real estate investments are subject to extensive local, city, county and state rules and regulations regarding permitting, zoning, subdivision, utilities and water quality as well as federal rules and regulations regarding air and water quality and protection of endangered species and their habitats. Such regulation may delay future plans of development of our current and future properties and result in higher than anticipated developmental and administrative costs.

 

Research and Development Activities

 

Other than time spent researching our business and proposed markets and segmentation, the Company has not spent any funds on research and development activities to date. In the event opportunities arise from our operations, the Company may elect to initiate research and development activities, but the Company has no plans for any activities to date.

 

Environmental Laws

 

Our operations are not subject to any Environmental Laws.

 

Employees

 

We currently have 11 full time employees, all of which are located in Malaysia. None of our employees are members of any labor union, and we have never experienced any business interruption as a result of any labor disputes.

 

Internet Access to Other Information

 

Information included on our website does not constitute part of this Report.

 

ITEM 1A. Risk Factors

 

Not applicable for smaller reporting companies.

 

 

ITEM 1B. Unresolved Staff Comments

 

None.

 

ITEM 2. Properties

 

Our principal executive office is currently located at Wisma Ho Wah Genting, No. 35, Jalan Maharajalela, 50150 Kuala Lumpur, Malaysia, where the Company leases approximately 800 square feet free of charge from Ho Wah Genting Berhad, a public Malaysian corporation (“HWGB”). Two sons of Dato Lim Hui Boon, our president, are directors of HWGB. In addition, Dato Lim Hui Boon is the Group President and shareholder of HWGB. We do not have a separate contract with HWGB for our office space. We believe our facilities are adequate for our current needs.

 

We own the Endah Puri Condominium located at A-19-02, Jalan 3/149E, Bandar Baru Sri Petaling, 57000 Kuala Lumpur, Malaysia. The property is currently rented out with a monthly rental of RM 2,000 (approximately US$ 480.00).

 

ITEM 3. Legal Proceedings

 

We are not currently involved in any pending or threatened material litigation or other material legal proceedings, nor have we been made aware of any pending or threatened regulatory audits.

 

ITEM 4. Mine Safety Disclosures

 

Not Applicable.

 

PART II

 

ITEM 5. Market for Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

 

Market Information

 

Our common stock is currently eligible for quotation and trades on the OTC Markets under the symbol “HWGG.” The quotation of our common stock under this symbol began on November 8, 2016. Prior to such date our common stock no public market currently existed for our shares of our common stock.

 

 

The following table sets forth the high and low closing bid prices for our common stock for the fiscal quarter indicated as reported on OTC Markets. The quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not represent actual transactions. Our common stock is very thinly traded and, thus, pricing of our common stock on OTC Markets does not necessarily represent its fair market value. All share and per share information included in this Report has been adjusted to reflect our 1,428-for-1 forward stock split and 1-for-2 reverse stock split. The last reported sales price of our common stock on the OTC Markets on April 13, 2018 was $2.20 per share.

 

		High				Low
Year ended December 31, 2016
First Quarter		$	N/A			$	N/A
Second Quarter			N/A				N/A
Third Quarter			N/A				N/A
Fourth Quarter (from November 8, 2016)			0.002				0
Year ended December 31, 2017
First Quarter		$	1.08			$	0.60
Second Quarter			1.10				1.02
Third Quarter			1.40				0.931
Fourth Quarter			1.50				1.00

 

Number of Holders

 

As of April 13, 2018 the Company has 500,027,774 shares issued and outstanding of common capital stock of the Company by approximately 133 stockholders of record and no shares of preferred.

 

Dividends

 

As previously reported in a Current Report on Form 8-K filed with the SEC on November 17, 2016 and November 30, 2016, on November 8, 2016, which Current Reports are hereby incorporated by reference in its entirety, our Board of Directors declared a 1,428-for-1 forward stock split of the Company’s outstanding Common Stock in the form of a dividend (the “Stock Split”) with a record date of November 18, 2016 (the “Record Date”). On November 28, 2016, Financial Industry Regulatory Authority, Inc. (“FINRA”) notified us of its announcement of the payment date of the Stock Split as November 29, 2016 (the “Payment Date”) and ex-dividend date as November 30, 2016 (the “Ex-Dividend Date”). On the Payment Date, as a result of the Stock Split, each holder of the Company’s Common Stock as of the Record Date received 1,428 additional shares of the Company’s Common Stock for each one share owned, rounded up to the nearest whole share. As of the Ex-Dividend Date, our Common Stock began trading on a post-split adjusted basis. 

 

Declaration or payment of dividends, if any, in the future, will be at the discretion of our board of directors and will depend on our then current financial condition, results of operations, capital requirements and other factors deemed relevant by the board of directors. There are no contractual restrictions on our ability to declare or pay dividends.

 

Securities authorized for issuance under equity compensation plans

 

We have no compensation plans (including individual compensation arrangements) under which our equity securities are authorized for issuance.

 

Recent Sales of Unregistered Securities

 

None. 

 

ITEM 6. Selected Financial Data

 

Not applicable to smaller reporting companies.

 

 

ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

The following management’s discussion and analysis should be read in conjunction with the historical financial statements and the related notes thereto contained in this Report. The management’s discussion and analysis contains forward-looking statements, such as statements of our plans, objectives, expectations and intentions. Any statements that are not statements of historical fact are forward-looking statements. When used, the words “believe,” “plan,” “intend,” “anticipate,” “target,” “estimate,” “expect” and the like, and/or future tense or conditional constructions (“will,” “may,” “could,” “should,” etc.), or similar expressions, identify certain of these forward-looking statements. These forward-looking statements are subject to risks and uncertainties that could cause actual results or events to differ materially from those expressed or implied by the forward-looking statements. The Company’s actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of several factors. The Company does not undertake any obligation to update forward-looking statements to reflect events or circumstances occurring after the date of this report.

 

As a result of the Share Exchange and the change in business and operations of the Company, from engaging in the business of computer support services to the business of (1) promoting travel and entertainment through the e-commerce business model by offering a unique membership program that offers its members exclusive travel discounts and rebates, (2) providing junket operator services and (3) developing and investing in real property, a discussion of the past financial results of Ho Wah Genting Group Limited is not pertinent, and under generally accepted accounting principles in the United States the historical financial results of HWGG, the accounting acquirers, prior to the Share Exchange are considered the historical financial results of the Company.

 

The following discussion highlights Ho Wah Genting Group Limited’s results of operations and the principal factors that have affected its financial condition as well as its liquidity and capital resources for the periods described, and provides information that management believes is relevant for an assessment and understanding of the financial condition and results of operations presented herein. The following discussion and analysis is based on Ho Wah Genting Group Limited’s audited financial statements contained in this Report, which have been prepared in accordance with generally accepted accounting principles in the United States. You should read the discussion and analysis together with such financial statements and the related notes thereto.

 

Basis of Presentation

 

The audited consolidated financial statements for the fiscal years ended December 31, 2017 and 2016 include a summary of our significant accounting policies and should be read in conjunction with the discussion below. In the opinion of management, all material adjustments necessary to present fairly the consolidated results of operations for such periods have been included in these audited consolidated financial statements. All such adjustments are of a normal recurring nature.

 

Overview

 

Results of Operations

 

The following discussion should be read in conjunction with the consolidated financial statements of HWGG for the fiscal years ended December 31, 2017 and 2016 and the related notes thereto.

 

For the year ended December 31, 2017 compared to December 31, 2016

 

Revenue

 

We recognized revenue of $260,749 and $96,822 for the year ended December 31, 2017 and 2016 respectively. The increase in revenues from the year ended December 31, 2016 was due to the increase of revenue from the Exclusive Travel Membership business of HWGG as a result of 10% management fees charged which were not charged in the year ended December 31, 2016.

 

Cost of Sales

 

Cost of sales for the year ended December 31, 2017 was $213,389, compared to $20,060 for the year ended December 31, 2016. The increase for the year ended December 31, 2017 was due to commission earned and payable to Exclusive Travel Membership members of $212,706 recorded for the year.

 

Gross Profit

 

Gross profit was $47,360 for the year ended December 31, 2017, compared to $76,762 for the year ended December 31, 2016, a decrease of $29,402, or 38.3%. The decrease was attributable to the increase in cost of sales.

 

Operating Expenses

 

For the year ended December 31, 2017, the total operating expenses was $1,128,995, compared to $685,697 for the year ended December 31, 2016. The operating expenses increased by $443,298 or 64.6%, which was mainly caused by the increase of expenses in supporting a larger customer base, an increase in discount rewards by $256,140, consultation fee by $61,565, commission payables by $100,992.

 

 

Liquidity and Capital Resources

 

As of December 31, 2017, we had a cash balance of $335,591. During the year ended December 31, 2017, net cash used in  operating activities totalled $(356,979). Net cash used in investing activities during the fiscal period ending December 31, 2017 totalled $329,096 . Net cash generated by financing activities during the same period totalled $593,552. The resulting change in cash for the period was a decrease of $27,424 which was primarily due to an increase of other receivables, deposits and prepayments, and an increase in amounts due from related parties.

 

As of December 31, 2016, we had a cash balance of $363,015. During the year ended December 31, 2016, net cash generated from  operating activities totalled $258,177. Net cash provided by investing activities during the fiscal period ending December 31, 2016 totalled $41,855. Net cash used in financing activities during the same period totalled $453,843. 

 

As of December 31, 2017, we had current liabilities of $4,838,504, which was comprised of other payables and accruals of $4,729,249, amount due to related party of $109,255.

 

As of December 31, 2016, we had current liabilities of $2,711,378, which was comprised of other payables and accruals of $2,444,571, and amount due to related party of $266,807.

 

We had net liabilities of $1,217,217 and $352,571 as of December 31, 2017 and December 31, 2016.

 

Beedo SDN BHD (“Beedo”)

 

HWGG acquired a majority ownership interest in Beedo on June 25, 2015. On August 12, 2016, HWGG transferred its shares of Beedo to its related party, Dato’ Lim Hui Boon, for the consideration of $118,881 (RM 510,000).

 

Silver Rhythm SDN BHD (“Silver Rhythm”)

 

Malaysia HWGG agreed to offset the owing from Silver Rhythm by receiving common stock of Vitaxel Group Limited from Lim Chun Yen. Lim Chun Yen owes Silver Rhythm US$1,960,912 and Silver Rhythm owes Malaysia HWGG. To settle the debts, the 3 parties decided to enter into the shares agreement on October 2, 2017 to offset each other’s debt by using the common stock of Vitaxel owned by Lim Chun Yen. 

 

Going Concern Consideration

 

These consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the discharge of liabilities in the normal course of business for the foreseeable future.

 

For the year ended December 31, 2017, the Company reported a net loss of $746,793 and working capital deficit of $1,309,010. The Company had an accumulated deficit of $1,215,994 as of December 31, 2017 due to the fact that the Company incurred losses during the year ended December 31, 2017.

 

Continuation of the Company as a going concern is dependent upon improving the profitability and the continuing financial support from its stockholders or other capital sources. Management believes that the continuing financial support from the existing shareholders or external debt financing will provide the additional cash to meet the Company’s obligations as they become due. Notwithstanding this belief, there is no assurance, however, that the available funds will be available to the Company, and if available, will be sufficient for the needs of the Company. Currently, no person, including existing shareholders, is under any obligation to continue to extend credit to the Company and/or invest in the Company.

 

These consolidation financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the outcome of the Company’s ability to continue as a going concern.

 

Off-Balance Sheet Arrangements

 

We have no “off-balance sheet arrangements” (as the term is defined in Item 303(a)(4)(ii) of Regulation S-K) including arrangements that would affect our liquidity, capital resources, market risk support and credit risk support or other benefits.

 

Critical Accounting Policies and Estimates

 

Use of Estimates and Assumptions

 

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

 

Fair Value Measurements

 

The Company applies the provisions of ASC Subtopic 820-10, “Fair Value Measurements”, for fair value measurements of financial assets and financial liabilities and for fair value measurements of nonfinancial items that are recognized or disclosed at fair value in the financial statements. ASC 820 also establishes a framework for measuring fair value and expands disclosures about fair value measurements.

 

Fair value is defined as the price that would be received to sell 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 Company 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.

 

 

ASC 820 establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 establishes three levels of inputs that may be used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to measurements involving significant unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are as follows:

 

●

Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

 

●

Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments.

 

●

Level 3 inputs to the valuation methodology are unobservable and significant to the fair value.

 

The assets measured at fair value on a recurring basis subject to the disclosure requirements of ASC 820 as of December 31, 2017 and December 31, 2016 are $2,544,644 and $12,660 respectively.

 

Revenue Recognition

 

The Company provides rental and information technology services to customers. Lease revenue is recognized using the straight-line method in accordance with ASC Topic 970-605, “Real Estate-General-Revenue Recognition” (“ASC Topic 970-605”). Revenue from the provision of information technology services is recognized when (a) there is persuasive evidence that an arrangement exists, (b) delivery has occurred, (c) the vendor’s fee is fixed or determinable and (d) collectability is probable in accordance with ASC 985-605, “Software-Revenue Recognition” (“ASC 985-605”).

 

Recent Accounting Pronouncements

 

Revenue Recognition:  In May 2014, the FASB issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers: Topic  606 (ASU 2014-09), to supersede nearly all existing revenue recognition guidance under U.S. GAAP. The core principle of ASU 2014-09 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. ASU 2014-09 defines a five step process to achieve this core principle and, in doing so, it is possible more judgment and estimates may be required within the revenue recognition process than are required under existing U.S. GAAP, including identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation. ASU 2014-09 is effective for us in our first quarter of fiscal 2018 using either of two methods: (i) retrospective to each prior reporting period presented with the option to elect certain practical expedients as defined within ASU 2014-09 (full retrospective method); or (ii) retrospective with the cumulative effect of initially applying ASU 2014-09 recognized at the date of initial application and providing certain additional disclosures as defined per ASU 2014-09(modified retrospective method). We will apply the new revenue standard beginning January 1, 2018. Each of the revenue streams will has been be analysed in accordance with the new revenue standard to determine the impact on our consolidated financial statements. We do not expect the new revenue standard to have a material impact on our consolidated financial statements.

 

Financial instrument : In January 2016, the FASB issued ASU No. 2016-01, “Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities” (“ASU 2016-01”). The standard addresses certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. ASU 2016-01 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017, and early adoption is not permitted. Accordingly, the standard is effective for us on January 1, 2018. We are currently evaluating the impact that the standard will have on our consolidated financial statements.

 

Leases : In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) (“ASU 2016-2”), which provides guidance on lease amendments to the FASB Accounting Standard Codification. This ASU will be effective for us beginning in January 1, 2019. We are currently in the process of evaluating the impact of the adoption of ASU 2016-2on our consolidated financial statements.

 

 

Financial Instruments - Credit Losses: In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): The amendments in this Update require a financial asset (or a group of financial assets) measured at amortized cost basis to be presented at the net amount expected to be collected. The amendments broaden the information that an entity must consider in developing its expected credit loss estimate for assets measured either collectively or individually. The use of forecasted information incorporates more timely information in the estimate of expected credit loss, which will be more decision useful to users of the financial statements. ASU 2016-13 is effective for the Company for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is allowed as of the fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company is still evaluating the effect that this guidance will have on the Company’s consolidated financial statements and related disclosures.

 

ITEM 7A. Quantitative and Qualitative Disclosures About Market Risk

 

Not applicable to smaller reporting companies.

 

 

ITEM 8. Financial Statements and Supplementary Data

 

HO WAH GENTING GROUP LIMITED

 

FINANCIAL STATEMENTS

 

Table of Contents

 

		Page Number
Reports of Independent Registered Public Accounting Firm		F-2 - F-3
Audited Consolidated Financial Statements of Ho Wah Genting Group Limited for the year ended December 31, 2017 and 2016
Consolidated Balance Sheets as of December 31, 2017 and December 31, 2016		F-4
Consolidated Statements of Operations and Comprehensive Loss for the year ended December 31, 2017 and 2016		F-5
Consolidated Statements of Changes in Stockholders’ Equity		F-6
Consolidated Statements of Cash Flows for the year ended December 31, 2017 and 2016		F-7
Notes to Consolidated Financial Statements		F-8 – F-22

 

 

 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

To the shareholders and the board of directors of Ho Wah Genting Group Limited.

 

Opinion on the Financial Statements

 

We have audited the accompanying consolidated balance sheet of Ho Wah Genting Group Limited. and its subsidiaries (the "Company") as of December 31, 2017, the related consolidated statements of operations and comprehensive loss, changes in stockholders’ deficit, and cash flows for the year then ended, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2017, and the results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States.

 

Going Concern Uncertainty

 

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3 to the financial statements, the Company incurred recurring losses from operations, has net current liabilities and an accumulated deficit that raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 3. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

Basis for Opinion

 

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

 

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

 

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

 

Emphasis a Matter

 

The Company has significant transactions and relationships with related parties, including entities controlled by the Company’s President, which are described in Note 9 to the financial statements. Transactions involving related parties cannot be presumed to be carried out on an arm's length basis, as the requisite conditions of competitive, free market dealings may not exist.

 

/s/ B F Borgers CPA PC

 

We have served as the Company’s auditor since 2017.

 

Lakewood, Colorado

April 17, 2018

 

 

 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

To:	The Board of Directors and Shareholders of Ho Wah Genting Group Limited

 

We have audited the accompanying consolidated balance sheet of Ho Wah Genting Group Limited and its subsidiaries (the “Company”) as of December 31, 2016, and the related consolidated statement of operations and comprehensive loss, changes in stockholders’ deficit and cash flows for the year ended December 31, 2016. Ho Wah Genting Group Limited’s management is responsible for these financial statements. Our responsibility is to express an opinion on these financial statements based on our audit.

 

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

 

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of the Ho Wah Genting Group Limited as of December 31, 2016, and the consolidated results of its operations and its cash flows for the year ended December 31, 2016, in conformity with accounting principles generally accepted in the United States of America.

 

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3 to the consolidated financial statements, the Company had a working capital deficiency and accumulated deficit from recurring net losses as of December 31, 2016. All these factors raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also discussed in Note 3 to the consolidated financial statements. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

As discussed in Note 12 to the consolidated financial statements, the Company effected a two-to-one reverse stock split authorized and approved by the Board of Directors of the Company on June 12, 2017 with a record date of June 14, 2017. As a result, all share and per share amounts as of December 31, 2016 and for the year then ended have been adjusted to reflect the reverse stock split.

 

/s/ Centurion ZD CPA Limited

 

Centurion ZD CPA Limited

 

Hong Kong, China

 

April 17, 2017, except for the effects of the reverse stock split

described in Note 12, as to which the date is April 17, 2018

 

 

HO WAH GENTING GROUP LIMITED

CONSOLIDATED BALANCE SHEETS

(Stated in US Dollars)

 

		As of				As of
		December 31,				December 31,
		2017				2016
ASSETS
CURRENT ASSETS
Cash and cash equivalents		$	335,591			$	363,015
Account Receivable, net			19,642				—
Other receivables, deposits and prepayment			205,204				747,551
Amount due from related party			424,413				1,175,517
Short-term investments			2,544,644				12,660
Total Current Assets			3,529,494				2,298,743
PROPERTY AND EQUIPMENT, NET			91,793				60,064
TOTAL ASSETS		$	3,621,287			$	2,358,807
LIABILITIES AND STOCKHOLDERS’ DEFICIT
CURRENT LIABILITIES
Other payables and accrued expenses		$	4,729,249			$	2,444,571
Amounts due to related party			109,255				266,807
Total Current Liabilities		$	4,838,504			$	2,711,378
Total Liabilities		$	4,838,504			$	2,711,378
Commitments and Contingency (Note 10)
STOCKHOLDERS’ EQUITY
Common stock (Par value of $0.0002: 750,000,000 shares authorized; 500,027,774 shares issued and outstanding as of December 31, 2017 and December 31, 2016)			100,006				100,006
Additional paid in capital			302,166				302,166
Accumulated deficit			(1,215,994	)			(533,282	)
Non-controlling interest			(68,101	)			—
Accumulated other comprehensive loss			(335,294	)			(221,461	)
Total Stockholders’ Equity			(1,217,217	)			(352,571	)
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY		$	3,621,287			$	2,358,807

 

The accompanying notes are an integral part of the consolidated financial statements.

 

 

HO WAH GENTING GROUP LIMITED 

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

 

		For the years ended December 31,
		2017				2016
REVENUE		$	260,749			$	96,822
COST OF REVENUE			(213,389	)			(20,060)
GROSS PROFIT			47,360				76,762
OPERATING EXPENSES
Administrative expenses			(1,128,995	)			(685,697	)
Total Operating Expenses			(1,128,995	)			(685,697	)
LOSS FROM OPERATIONS			(1,081,635	)			(608,935	)
OTHER (EXPENSES) INCOME, NET
Gain (loss) on disposal of short-term investments			(3,257	)			1,604
Fair value gain on short-term investments			341,400				—
Interest income			1,040				—
Other income			—				(4,570	)
Other operating expenses			—				(211,884	)
Exchange (loss) gain			(4,341	)			6,524
Total Other (Expenses) Income, net			334,842				(208,326	)
NET LOSS BEFORE TAXES			(746,793	)			(817,261	)
Income tax expense			—				(725	)
LOSS FROM CONTINUING OPERATIONS			(746,793	)			(817,986	)
Gain (loss) from disposal of subsidiary			—				7,397
NET LOSS			(746,793	)			(810,589	)
OTHER COMPREHENSIVE (LOSS) INCOME
Foreign currency translation (loss) gain			(117,853	)			46,435
TOTAL COMPREHENSIVE LOSS			(864,646	)			(764,154	)
Net loss contributed to non-controlling interest		$	(64,081	)		$	(11,952	)
Net loss contributed to shareholders			(682,712	)			(798,637	)
Total net loss			(746,793	)			(810,589	)
Total comprehensive loss contributed to non-controlling interest		$	(68,101	)		$	(18,619	)
Total comprehensive loss contributed to shareholders			(796,545	)			(745,535	)
Net loss per share
- basic and diluted
Continuing			(0.00	)			(0.00	)
Discontinued			—				(0.00	)
			(0.00	)			(0.00	)
Weighted average number of shares outstanding during the period
- basic and diluted			500,027,774				415,443,013

 

The accompanying notes are an integral part of the consolidated financial statements

 

 

HO WAH GENTING GROUP LIMITED 

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT  

 

																						Accumulated
		Common stock								Additional								Non				other
		Number of								paid in				Accumulated				controlling				comprehensive
		shares				Amount				capital				deficit				interest				income (loss)				Total
Balance at December 31, 2015			100,187,766				20,038				382,134				265,355				101,861				(267,896	)			501,492
Reverse merger recapitalization			399,840,000				79,968				(79,968	)			—				—				—				—
Disposal of subsidiary			—				—				—								(83,242	)			—				(83,242	)
Net loss			—				—				—				(798,637	)			(11,952	)			—				(810,589	)
Foreign currency translation gain			—				—				—				—				(6,667	)			46,435				39,768
Balance at December 31, 2016			500,027,766			$	100,006			$	302,166			$	(533,282	)		$	—			$	(221,461	)		$	(352,571	)
Effect from reverse stock split			8				—				—				—				—				—				—
Net loss			—				—				—				(682,712	)			(64,081	)			—				(746,793	)
Foreign currency translation gain			—				—				—				—				(4,020	)			(113,833	)			(117,853	)
Balance at December 31, 2017			500,027,774			$	100,006			$	302,166			$	(1,215,994	)		$	(68,101	)		$	(335,294	)		$	(1,217,217	)

 

The accompanying notes are an integral part of the consolidated financial statements.

 

 

HO WAH GENTING GROUP LIMITED

CONSOLIDATED STATEMENTS OF CASH FLOWS

 

		For the years ended December 31,
		2017				2016
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss		$	(746,793	)			(798,637	)
Adjusted to reconcile net loss to net cash used in operating activities:
Depreciation – property and equipment			2,672				5,489
Loss from sale of investment			3,257				—
Fair value gain on short-term investment			(341,400	)			—
Other receivables, deposits and prepayment			(1,558,650	)			(745,376	)
Other payables and accrued expenses			2,283,935				1,537,630
Amounts due to related party			—				259,071
Net cash generated from (used in) operating activities			(356,979	)			258,177
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property, plant and equipment			(2,691	)			(5,476	)
Purchase of subsidiary			—				24,937
Purchase of equity instruments			(449,887	)			22,394
Proceed from sale of investments			123,482				—
Net cash generated from (used in) investing activities			(329,096	)			41,855
CASH FLOWS FROM FINANCING ACTIVITIES
Loss attributable to non-controlling interest			—				(92,963	)
Advance from director			23,503				554,855
Amount due from related parties			570,049				(915,735	)
Net cash provided by financing activities			593,552				(453,843	)
EFFECT OF EXCHANGE RATES ON CASH			65,099				44,919
NET INCREASE IN CASH AND CASH EQUIVALENTS			(27,424	)			(108,892	)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD			363,015				471,907
CASH AND CASH EQUIVALENTS AT END OF PERIOD		$	335,591			$	363,015
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid for interest expenses		$	—			$	—
Cash paid for income tax		$	—				725
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
Held for sale securities acquired as a consideration of payment of receivables		$	1,960,912			$	—

 

The accompanying notes are an integral part of the consolidated financial statements.

 

 

HO WAH GENTING GROUP LIMITED

 

NOTES TO FINANCIAL STATEMENTS

 

(In U.S. dollars)

 

1.	ORGANIZATION AND BUSINESS

 

Ho Wah Genting Group Limited (“HWGG”), a Nevada corporation (formerly Computron, Inc.) through Ho Wah Genting Group SDN BHD (“Malaysia HWGG”), a Malaysia company and our wholly owned subsidiary, is engaged to promote travel and entertainment services to members to our partnering resorts and cruises in the Asia region and develop and invest in real estate property.

 

On September 2, 1985, Malaysia HWGG was incorporated under the laws of Malaysia as a private company limited by shares with the name “Ho Wah Genting Holdings SDN. BHD” for the purpose of functioning as a holding company to obtain ownership interests in Malaysian businesses across various industries. Throughout the years, we have expanded our business operations and undergone multiple name changes and restructuring to fit our evolving business objectives. First on February 17, 1989, the company changed its name to “Ho Wah Genting Group (M) SDN. BHD.” On October 2, 1990, the company changed its name to “Ho Wah Genting Group SDN. BHD.” On December 22, 1990 its name was changed to “Ho Wah Genting Group Berhad” and was converted to a public company limited by shares. Lastly, on January 18, 1995, the company converted back into a private company limited by shares and changed its name to “Ho Wah Genting Group Sdn. Bhd.”

 

From 1985 to 2005, Malaysia HWGG was involved in wire and cable, taxi, travel agent and tour bus charterers and general insurance agent services. In August 2006, Malaysia HWGG shifted its operations to primarily focus on commercial and residential property investment by purchasing a condominium in Kuala Lumpur, Malaysia and renting it out for revenue.

 

In 2015, Malaysia HWGG entered the travel and entertainment services business by launching the Exclusive Travel Membership program in Malaysia.

 

On June 25, 2015, Malaysia HWGG acquired 65% of the equity interests of Beedo SDN BHD (“Beedo”). On July 7, 2015, Beedo increased its issued and paid-up shares from 2,500 to 1,000,000. HWGG acquired an additional 508,375 shares on that date, making its balance of shares 510,000 and effectively diluting its shareholding in Beedo from 65% to 51%. Beedo is mainly engaged in the provision of information technology services. On August 12, 2016, HWGG completed the disposal of its subsidiary, Beedo, by wholly transferring the shares it owns to a related party, Dato’ Lim Hui Boon, for the consideration of $ 118,881 (RM 510,000).

 

Ho Wah Genting Property Sdn Bhd was incorporated in March 24, 2015. In January 11, 2017, the company acquired 67% of HWGG Property Sdn Bhd for a consideration of approximately US$16 (MYR67). Ho Wah Genting Property Sdn Bhd business activity is in property investment and property development.

 

REVERSE MERGER

 

On October 28, 2016, Computron acquired all the issued and outstanding shares of Malaysia HWGG, a privately held Malaysia corporation, pursuant to the Share Exchange Agreement and Malaysia HWGG became the wholly owned subsidiary of Computron in a reverse merger, or the Merger. Pursuant to the Merger, all of the issued and outstanding shares of Malaysia HWGG common stock were converted, at an exchange ratio of 0.56-for-1, into an aggregate of 799,680,000 (560,000 pre-reverse split) shares of Computron common stock and Malaysia HWGG became a wholly owned subsidiary of Computron. The holders of Computron’s common stock as of immediately prior to the Merger held an aggregate of 200,375,532 (140,319 pre-reverse split) shares of Computron’s common stock. The accompanying financial statements share and per share information has been retroactively adjusted to reflect the exchange ratio in the Merger. Subsequent to the Merger, Computron’s name was changed from “Computron, Inc.” to “Ho Wah Genting Group Limited.”.

 

On November 4, 2016, we completed and closed a share exchange (the “Share Exchange”) under a Share Exchange Agreement (the “Share Exchange Agreement”) of the same date by and among us, Malaysia HWGG and the shareholders of Malaysia HWGG pursuant to which Malaysia HWGG became a wholly owned subsidiary of ours. In the Share Exchange, all of the outstanding shares of Malaysia HWGG were converted into shares of our Common Stock.

 

In connection with the Share Exchange and pursuant to the Split-Off Agreement (defined below), we transferred our pre-Share Exchange assets and liabilities to our pre-Share Exchange majority stockholder, in exchange for the surrender by him and cancellation of 5,000,000 shares of our Common Stock.

 

Under generally accepted accounting principles in the United States, (“U.S. GAAP”) because Malaysia HWGG’s former stockholders received the greater portion of the voting rights in the combined entity and Malaysia HWGG’s senior management represents all of the senior management of the combined entity, the Merger was accounted for as a recapitalization effected by a share exchange, wherein Malaysia HWGG is considered the acquirer for accounting and financial reporting purposes. The assets and liabilities of Malaysia HWGG have been brought forward at their book value and no goodwill has been recognized. Accordingly, the assets and liabilities and the historical operations that are reflected in Malaysia HWGG’s consolidated financial statements are those of Malaysia HWGG and are recorded at the historical cost basis of Malaysia HWGG.

 

 

2.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Basis of presentation

 

The accompanying consolidated financial statements of the Company have been prepared in accordance with U.S. GAAP.

 

This basis of accounting involves the application of accrual accounting and consequently, revenues and gains are recognized when earned, and expenses and losses are recognized when incurred. The Company’s financial statements are expressed in U.S. dollars.

 

Principles of consolidation

 

For the year ended December 31, 2016, the consolidated financial statements include the accounts of HWGG, Malaysian HWGG and its subsidiary, Beedo, collectively referred to within as the Company. On August 12, 2016, HWGG completed the disposal of its subsidiary, Beedo, by wholly transferring the shares it owns to a related party, Dato’ Lim Hui Boon, for the consideration of $118,881 (RM 510,000). Since selling its interest of Beedo, we no longer participate in the information technology services industry.

 

Ho Wah Genting Property Sdn Bhd, a 67% owned subsidiary, was incorporated in Malaysia on March 24, 2015. The Company is primarily engaged in property investment and property development. In January 11, 2017, the company acquired 67% of HWGG Property Sdn Bhd for a consideration of approximately US$16 (MYR67). Ho Wah Genting Property Sdn Bhd business activity is in property investment and property development.

 

Thus, as of and for the year ended December 31, 2017, the consolidated financial statements include the accounts of HWGG, Malaysian HWGG and Ho Wah Genting Property Sdn Bhd.

 

All material intercompany accounts, transactions, and profits 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 certain reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.

 

Foreign currency translation and transactions

 

The functional currency of the Company is the Malaysian Ringgit (“MYR”) and reporting currency of the Company is the United States Dollar (“USD”). The financial statements of the Company are translated into USD using the exchange rate as of the balance sheet date for assets and liabilities and average exchange rate for the year for income and expense items. Translation gains and losses are recorded in accumulated other comprehensive income or loss as a component of shareholders’ equity.

 

 

Cash and cash equivalents

 

The Company considers highly-liquid investments with maturities of three months or less, when purchased, to be cash equivalents. Cash and cash equivalents include cash on hand and amount on deposit with Malaysia financial institutions, which amounts may at times exceed Malaysia government insured limits. The Company has not experienced any losses on such accounts and it does not believe it is exposed to any significant credit risk.

 

Investments

 

The Company invests its excess cash primarily in equity instruments of high-quality corporate issuers listed on the Main Board of Bursa Malaysia. Such securities are classified as short-term investments and are valued at the last reported closing price on the balance sheet date. If no sale price was reported on that date, they are valued at the last reported trading day closing price. Changes in the value of these investments are recognized as unrealized gain or loss in the statement of income.

 

Fair value of financial instruments

 

FASB ASC 820, “Fair Value Measurement,” specifies a hierarchy of valuation techniques based upon whether the inputs to those valuation techniques reflect assumptions other market participants would use based upon market data obtained from independent sources (observable inputs). In accordance with ASC 820, the following summarizes the fair value hierarchy:

 

Level 1 Inputs – Unadjusted quoted market prices for identical assets and liabilities in an active market that the Company has the ability to access.

 

Level 2 Inputs – Inputs other than the quoted prices in active markets that are observable either directly or indirectly.

 

Level 3 Inputs – Inputs based on prices or valuation techniques that are both unobservable and significant to the overall fair value measurements.

 

ASC 820 requires the use of observable market data, when available, in making fair value measurements. When inputs used to measure fair value fall within different levels of the hierarchy, the level within which the fair value measurement is categorized is based on the lowest level input that is significant to the fair value measurements. Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs. As of December 31, 2017 and 2016, the Company has assets measured at fair value on a recurring basis subject to the disclosure requirements of ASC 820 of $2,544,644 and $12,660 respectively. Carrying values of non-derivative financial instruments, including cash, accounts receivables, payables and accrued liabilities, approximate their fair values due to the short term nature of these financial instruments. There were no changes in methods or assumptions during the periods presented.

 

Property and equipment, net

 

Property and equipment are carried at cost less accumulated depreciation. Depreciation is calculated on a straight-line basis over the following estimated useful lives:

 

	Leasehold building	50 years
	Computer and software	5 years
	Furniture and fixtures	5 years

 

Revenue recognition

 

The Company provides rental and junket operation services to customer. Lease revenue is recognized using the straight-line method in accordance with ASC Topic 970-605, “Real Estate – General – Revenue Recognition” (“ASC Topic 970-605”). Junket operation revenue is recognized when service is performed, vendor’s fee is fixed or determinable and collectability is probable.

 

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 combined 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.

 

U.S. Corporate Income Tax

The Company is subject to U.S. corporate income tax on its taxable income at a rate of up to 21% for taxable years beginning after December 31, 2017 and U.S. corporate income tax on its taxable income of up to 35% for prior tax years. Recent U.S. federal tax legislation, commonly referred to as the Tax Cuts and Jobs Act (the “U.S. Tax Reform”), was signed into law on December 22, 2017. The U.S. Tax Reform significantly modified the U.S. Internal Revenue Code by, among other things, reducing the statutory U.S. federal corporate income tax rate from 35% to 21% for taxable years beginning after December 31, 2017; limiting and/or eliminating many business deductions; migrating the U.S. to a territorial tax system with a one-time transition tax on a mandatory deemed repatriation of previously deferred foreign earnings of certain foreign subsidiaries; subject to certain limitations, generally eliminating U.S. corporate income tax on dividends from foreign subsidiaries; and providing for new taxes on certain foreign earnings. Taxpayers may elect to pay the one-time transition tax over eight years, or in a single lump-sum payment. See Note 8 – Income Tax.

 

To the extent that portions of its U.S. taxable income, such as Subpart F income or global intangible low-taxed income (“GILTI”), are determined to be from sources outside of the U.S., subject to certain limitations, the Company may be able to claim foreign tax credits to offset its U.S. income tax liabilities. Any remaining liabilities are accrued in the Company’s consolidated statements of comprehensive income and estimated tax payments are made when required by U.S. law.

 

 

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 are classified as a component of the provisions for income taxes.

 

Comprehensive loss

 

Comprehensive loss includes net loss and cumulative foreign currency translation adjustments and is reported in the Combined Statement of Comprehensive Loss.

 

Loss per share

 

The loss per share is computed using the weighted average number of shares outstanding during the fiscal years. For the years ended December 31, 2017 and 2016, there is no dilutive effect due to net loss for the periods.

 

Segment reporting

 

ASC Topic 280 requires use of the “management approach” model for segment reporting. The management approach model is based on the way a company’s management organizes segments within the company for making operating decisions and assessing performance. Reportable segments are based on products and services, geography, legal structure, management structure, or any other manner in which management disaggregates a company. During the year ended December 31, 2017, the Company operated in three reportable business segments: (1) investment property holding which generates rental income from the leasing out of its leasehold building, and (2) exclusive membership and junket operations, and (3) information technology services, which generates revenue from the provision of information technology services.

 

The others which comprise of general operating and administrative expenses, and other income/expenses not directly attributable to the sources of revenue of the Company for the years ended December 31, 2017 and 2016.

 

Related party transactions

 

A related party is generally defined as:

 

(i) any person that holds the Company’s securities including such person’s immediate families,

 

(ii) the Company’s management,

 

(iii) someone that directly or indirectly controls, is controlled by or is under common control with the Company, or

 

(iv) anyone who can significantly influence the financial and operating decisions of the Company.

 

A transaction is considered to be a related party transaction when there is a transfer of resources or obligations between related parties.

 

  

 Recently Issued Accounting Pronouncements: 

 

Revenue Recognition: In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606). The amendments in ASU 2015-14 defer the effective date of ASU 2014-09 for all entities by one year. Public business entities, certain not-for-profit entities, and certain employee benefit plans should apply the guidance in ASU 2014-09 to annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period. Earlier application is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. We will apply the new revenue standard beginning January 1, 2018. Each of the revenue streams will has been be analysed in accordance with the new revenue standard to determine the impact on our consolidated financial statements. We do not expect the new revenue standard to have a material impact on our consolidated financial statements.

 

Financial instrument : In January 2016, the FASB issued ASU No. 2016-01, “Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities” (“ASU 2016-01”). The standard addresses certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. ASU 2016-01 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017, and early adoption is not permitted. Accordingly, the standard is effective for us on January 1, 2018. We are currently evaluating the impact that the standard will have on our consolidated financial statements.

 

Leases : In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) (“ASU 2016-2”), which provides guidance on lease amendments to the FASB Accounting Standard Codification. This ASU will be effective for us beginning in January 1, 2019. We are currently in the process of evaluating the impact of the adoption of ASU 2016-2 on our consolidated financial statements.

 

Stock-based Compensation :    In March 2016, the FASB issued ASU 2016-09, Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting (ASU 2016-09). ASU 2016-09 changes how companies account for certain aspects of stock-based awards to employees, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. ASU 2016-09 is effective for us in the first quarter of 2018, and earlier adoption is permitted. We are still evaluating the effect that this guidance will have on our consolidated financial statements and related disclosures.

 

Financial Instruments - Credit Losses: In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): The amendments in this Update require a financial asset (or a group of financial assets) measured at amortized cost basis to be presented at the net amount expected to be collected. The amendments broaden the information that an entity must consider in developing its expected credit loss estimate for assets measured either collectively or individually. The use of forecasted information incorporates more timely information in the estimate of expected credit loss, which will be more decision useful to users of the financial statements. ASU 2016-13 is effective for the Company for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is allowed as of the fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company is still evaluating the effect that this guidance will have on the Company’s consolidated financial statements and related disclosures.

 

Statement of Cash Flows: In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): The amendments in this Update apply to all entities, including both business entities and not-for-profit entities that are required to present a statement of cash flows under Topic 230. The amendments in this Update provide guidance on the following eight specific cash flow issues. The amendments are an improvement to GAAP because they provide guidance for each of the eight issues, thereby reducing the current and potential future diversity in practice described above. ASU 2016-15 is effective for the Company for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. The Company is still evaluating the effect that this guidance will have on the Company’s consolidated financial statements and related disclosures.

 

  

In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): “Restricted Cash”(“ASU 2016-18”). ASU 2016-18 requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. ASU 2016-18 will become effective for us beginning April 1, 2018, or fiscal 2019. ASU 2016-18 is required to be applied retrospectively. Upon the adoption, amounts described as restricted cash will be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period amounts shown on the statements of cash flows.

 

The amendments apply to all organizations that present a classified balance sheet. For public companies, the amendments are effective for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods. For private companies, not-for-profit organizations, and employee benefit plans, the amendments are effective for financial statements issued for annual periods beginning after December 15, 2017, and interim periods within annual periods beginning after December 15, 2018.

 

3.	GOING CONCERN UNCERTAINTIES

 

These consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the discharge of liabilities in the normal course of business for the foreseeable future.

 

For the year ended December 31, 2017, the Company reported a net loss of $746,793 and working capital deficit of $1,309,010. The Company had an accumulated deficit of $1,215,994  as of December 31, 2017 due to the fact that the Company incurred losses during the year ended December 31, 2017.

 

The continuation of the Company as a going concern is dependent upon improving the profitability and the continuing financial support from its stockholders or other capital sources. Management believes that the continuing financial support from the existing shareholders or external debt financing will provide the additional cash to meet the Company’s obligations as they become due.

 

These consolidation financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the outcome of the Company’s ability to continue as a going concern.

 

 

4.	HELD FOR TRADING SECURITIES

 

		Estimated Fair Value
		As of December 31, 2017				As of December 31, 2016
Short-term investments:
Quoted shares in Malaysia			93,504				12,660
Quoted shares in U.S. (OTC) – (Vitaxel Group Limited, stock code VXEL)			2,451,140				—
Total short-term investments			2,544,644				12,660

 

The assets measured at fair value on a recurring basis subject to the disclosure requirements of ASC 820 as of December 31, 2017 and December 31, 2016 are $2,544,644 and $12,660 respectively.

 

5.	OTHER RECEIVABLES

 

Other receivables consist of the following:

 

			As of December 31, 2017				As of December 31, 2016
Deposits (1)			$	196,867			$	746,386
Prepayment (2)				8,337				1,165
			$	205,204			$	747,551

 

(1)	Deposits represented payments for telephone, electricity, water, maintenance fee, rental & utility and parking.

 

(2)	Prepayment represented prepayments for maintenance fee, sinking fund and fire assurance.

 

 

6.	PROPERTY AND EQUIPMENT, NET

 

Property and equipment, net consist of the following:

 

		As of December 31, 2017				As of December 31, 2016
Leasehold building		$	78,227			$	70,543
Computer and software			13,845				3,979
Furniture and fixtures			19,627				505
			111,699				75,027
Less: Accumulated depreciation			(19,906	)			(14,963	)
Balance at end of year		$	91,793			$	60,064

 

Depreciation expenses charged to the statements of operations with the average exchange rate for the year ended December 31, 2017 and the year ended December 31, 2016 were $2,672 and $2,186, respectively.

 

7.	OTHER PAYABLES AND ACCRUALS

 

		As of December 31, 2017				As of December 31, 2016
Other payables (1)		$	4,692,631			$	2,440,117
Accruals			36,618				4,454
		$	4,729,249			$	2,444,571

 

(1)

Other payables mainly consist of members redemption balance

 

8.	INCOME TAX

 

Income taxes consisted of Malaysia income tax and U.S. income tax. There was no provision of income taxes made in respect of the two countries for the years ended December 31, 2017. The provision of income taxes made in Malaysia for the years ended December 31, 2016 is $725.

 

Provision for income taxes consisted of the following: 

 

		For the year ended
		December 31, 2017				December 31, 2016
Current:
Provision for Malaysian income tax		$	—			$	725
Provision for U.S. income tax			—				—
Deferred:
Provision for Malaysian income tax			—				—
Provision for U.S. income tax
		$	—			$	725

 

 

Malaysia

 

Malaysia HWGG recorded a loss before income tax of $523,175 and $583,804 for the years ended December 31, 2017 and 2016, respectively. A reconciliation of the provision for income taxes with amounts determined by applying the Malaysian income tax rate of 24% and 24% for the years ended December 31, 2017 and 2016, respectively, to income before income taxes are as follows:

 

		For the years ended
		December 31, 2017				December 31, 2016
Profit (loss) before income tax		$	(523,175	)		$	(583,804	)
Permanent difference			523,175				586,704
Taxable income		$	—			$	2,900
Malaysian income tax rate			24	%			24	%
Current tax expenses		$	—			$	725
Less: Valuation allowance
Income tax expenses		$	—			$	725

 

United States of America

 

HWGG is a company incorporated in State of Nevada and recorded a loss before income tax of $159,537 and $208,830 for the year ended December 31, 2017 and 2016, respectively. A reconciliation of the provision for income taxes with amounts determined by applying the United States Federal income tax rate of 34% for the years ended December 31, 2017 and 2016, respectively, to income before income taxes are as follows:

 

		For the years ended
		December 31, 2017				December 31, 2016
Profit (loss) before income tax		$	(159,537	)		$	(208,830	)
Permanent difference			159,537				208,830
Taxable income		$	—			$	—
U.S. income tax rate			34	%			34	%
Current tax expenses		$	—			$	—
Less: Valuation allowance			—				—
Income tax expenses		$	—			$	—

 

No deferred tax has been provided as there are no material temporary differences arising during the years ended December 31, 2017 and 2016.

 

U.S. Corporate Income Tax  

 

The Company’s management has yet to evaluate the effect of the U.S. Tax Reform on Ho Wah Genting Group Limited. Management may update its judgment of that effect based on its continuing evaluation and on future regulations or guidance issued by the U.S Department of the Treasury, and specific actions the Company may take in the future.

 

One-Time Transition Tax Related to U.S. Tax Reform

 

The Company’s management has evaluated the on-time transition tax and estimated that there will not be such tax due for the Company.

 

9.	RELATED PARTY TRANSACTIONS

 

As of December 31, 2017 and 2016, amounts due from related parties were as follows:

 

		As of December 31, 2017				As of December 31, 2016
Ho Wah Genting Berhad (1)		$	247,280			$	544,096
Vitaxel Sdn Bhd (2)			—				585,619
Vitaxel Online Mall Sdn Bhd (3)			24,728				22,299
Ho Wah Genting Holiday Sdn Bhd (2)			14,837				—
Ho Wah Genting ShenZhen Limited (2)			133,974				—
Marvel Theme Park City Sdn Bhd (4)			3,594				—
Lim Chun Hoo (2)			—				23,503
		$	424,413			$	1,175,517

 

The amounts due from related parties are unsecured, interest-free and repayable on demand.

 

(1)

Our President Dato’ Lim Hui Boon is also the Group President and shareholder of Ho Wah Genting Berhad.

 

(2)

Lim Chun Hoo, our Chief Executive Officer, Chief Financial Officer, Chief Operating Officer and director, is also a director of Ho Wah Genting Holiday Sdn Bhd, Ho Wah Genting Shenzhen Limited and Beedo Sdn Bhd. He was also director of Vitaxel Group Limited, parent company of its wholly owned subsidiary Vitaxel Sdn Bhd, until his resignation from that position on March 31, 2017.

 

During the year 2017, Malaysia HWGG agreed to offset the owing from Silver Rhythm by receiving common stock of Vitaxel Group Limited from Lim Chun Yen. Lim Chun Yen owes Silver Rhythm US$1,960,912 and Silver Rhythm owes Malaysia HWGG. To settle the debts, the 3 parties decided to enter into the shares agreement on October 2, 2017 to offset each other’s debt by using the common stock of Vitaxel owned by Lim Chun Yen. As a result,  HWGG Malaysia has acquired 1,960,912 shares of Vitaxel Group Limited, a Nevada corporation in U.S for the price of USD1 per share from Lim Chun Yen, a nephew of Dato Lim Hui Boon, the President of the Company. The share closing market price at the end December 31, 2017 was USD1.25. 

 

(3)

Liew Jenn Lim, one of our directors since March 1, 2017, is also a director of Vitaxel Online Mall Sdn Bhd, Beedo Sdn Bhd and Vspark Malaysia Sdn Bhd.

 

(4)

Marvel Theme Park City Sdn Bhd is a shareholder of our subsidiary company, Ho Wah Genting Property Sdn Bhd.

 

 

As of December 31, 2017 and 2016, amounts due to related parties were as follows:

 

		As of December 31, 2017				As of December 31, 2016
Dato’ Lim Boon Hui		$	—			$	208,830
Beedo SDN BHD			59,347				57,977
Vspark Malaysia Sdn Bhd			7,031				—
Vitaxel Sdn Bhd			42,877				—
		$	109,255			$	266,807

 

During the years ended December 31, 2017 and 2016, the Company recognized rental income of $5,584 and $5,801 respectively from Ho Wah Genting Berhad (“HWGB”). Our president, Dato’ Lim Hui Boon, is also the Group President and shareholder of HWGB. In addition, two sons of Dato’ Lim Hui Boon are directors of HWGB.

 

On April 1, 2016, we entered into the Travel and Junket Service Contract with our partner, Ho Wah Genting Holiday SDN BHD (“HWGH”), pursuant to which HWGH shall render HWGG tour agency services, including but not limited to providing HWGG with tour packages, hotel bookings, and transportation arrangements to offer HWGG’s members and to share in junket operation profits. Lim Chun Hoo, our Chief Executive Officer, Chief Financial Officer, Chief Operating Officer and director, is the Executive Director of HWGH. In addition, two sons of Dato Lim Hui Boon, our president, are the directors of HWGB, the parent company of HWGH. During the years ended December 31, 2017 and 2016, the Company recognized junket commission revenue of $7,932 and $16,730, respectively, from HWGH.

 

As of December 31, 2017 and 2016, HWGB owed the Company $247,280 and $544,096, respectively. Such debt is unsecured, interest-free and repayable on demand.

 

During the years ending December 31, 2017 and 2016, the Company loaned $0 and $585,619, respectively, to Vitaxel Sdn Bhd, a Malaysian corporation (“Vitaxel”). During the years ending December 31, 2017 and 2016, the Company loaned $24,728 and $22,299, respectively,  to Vitaxel Online Mall Sdn Bhd, a Malaysian corporation (“Vionmall”). Such debt is unsecured, interest-free and repayable on demand. Vitaxel and Vionmall are wholly owned subsidiaries of Vitaxel Group Limited, a Nevada corporation. Lim Chun Hoo, our Chief Executive Officer, Chief Financial Officer, Chief Operating Officer and director, was a director of Vitaxel Group Limited, Vionmall and Vitaxel’s parent company, until his resignation on March 31, 2017. In addition, Leong Yee Ming, our former Chief Financial Officer, Chief Operating Officer and director, is a director and Chief Executive Officer of Vitaxel Group Limited.

 

From January 1, 2016 to August 12, 2016, the Company, through its subsidiary Beedo recognized revenue from the provision of information technology services of $9,668 from HWGH and $55,545 from Vitaxel. Beedo was disposed of by the Company after August 12, 2016 and stopped earning revenue from the provision of information technology services.

 

During the years ended December 31, 2017 and 2016, the recognized junket commission revenue of the Company from HWGH was $7,932 and $16,730, respectively.

 

During the years ended December 31, 2017 and 2016, the Company recognized revenue of $240,802 and $0, respectively, from the 10% management charges to ETM member from HWGB.

 

 

10.	Commitments and Contingencies

 

Capital Commitments

 

As of December 31, 2017 and 2016, Company has no capital commitments.

 

Operation Commitments

 

As of December 31, 2017 and 2016, Company has no operation commitments and lease commitments.

 

11.	EARNINGS (LOSS) PER SHARE

 

The Company has adopted ASC Topic No. 260, “Earnings Per Share,” (“EPS”) which requires presentation of basic and diluted EPS on the face of the income statement and requires a reconciliation of the numerator and denominator of the basic EPS computation to the numerator and denominator of the diluted EPS computation. In the accompanying financial statements, basic earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the year.

 

The following table sets forth the computation of basic and diluted earnings per share:

 

		For the years ended
		December 31, 2017				December 31, 2016
Net loss applicable to common shares		$	(682,712	)		$	(798,637	)
Weighted average common shares outstanding (Basic/Diluted)			500,027,774				415,443,013
		$	(0.00	)		$	(0.00	)

 

The Company has no potentially dilutive securities, such as options or warrants, currently issued and outstanding.

 

12.	CAPITAL STOCK

 

FORWARD STOCK SPLIT

On November 8, 2016, the Board of Directors of Ho Wah Genting Group Limited (formerly Computron, Inc.) (the “Company”) authorized and declared a 1,428-for-1 forward stock split of the Company’s issued and outstanding common stock, par value $0.0001 per share (the “Common Stock”) in the form of a dividend (the “Stock Split”) with a record date of November 17, 2016 (the “Record Date”). On the Record Date, each holder of the Company’s Common Stock will receive 1,428 additional shares of the Company’s Common Stock for each one share owned, rounded up to the nearest whole share

 

On November 28, 2016, Financial Industry Regulatory Authority, Inc. (“FINRA”) notified us of its announcement of the payment date of the Stock Split as November 29, 2016 (the “Payment Date”) and ex-dividend date as November 30, 2016 (the “Ex-Dividend Date”). On the Payment Date, as a result of the Stock Split, each holder of the Company’s Common Stock as of the Record Date received 1427 additional shares of the Company’s Common Stock for each one share owned, rounded up to the nearest whole share. As of the Ex-Dividend Date, our Common Stock began trading on a post-split adjusted basis.

 

REVERSE STOCK SPLIT

On July 12, 2017, the Board of Directors of Ho Wah Genting Group Limited (“ HWGG “) authorized and approved an amendment (the “Amendment”) to HWGG’s Amended and Restated Articles of Incorporation, which authorized a two-to-one reverse stock split (the “Reverse Split”) of HWGG’s outstanding common stock, par value $0.0001 per share, with a record date of July 14, 2017 (the “ Record Date “). In connection with the reverse stock split, the Board of Directors of HWGG, also authorized and approved a related increase in the par value of the HWGG common stock from $0.0001 per share to $0.0002 per share. We expect that the Reverse Stock Split will (i) increase the marketability and liquidity of our common stock, as market price no longer deemed as micro penny stock (below $0.01); (ii) address the reluctance of brokerage firms and institutional investors to recommend lower-priced stocks to their clients or to hold in their own portfolios; and (iii) enable us to strengthen the quotation of our common stock on the OTC Markets, Inc. QB Tier.

 

On August 9, 2017 we received approval from the Financial Industry Regulatory Authority (“FINRA”) to effectuate the Reverse Split at the open of business on August 11, 2017.

 

As of December 31, 2017 and December 31, 2016, the Company has 750,000,000 shares authorized and 500,027,774 shares issued respectively. 

 

 

12.	SEGMENT INFORMATION

 

Our reported segments for the years ended December 31, 2017 and 2016 are described as follows:

 

Investment property holding

 

The Company generates rental income from the leasing out of its leasehold building.

 

Information technology services

 

The Company generates revenue from the provision of information technology services. This line of business commenced in the year 2015. This line of business ended on August 12, 2016 when the Company completed the disposal of its subsidiary, Beedo.

 

Exclusive Travel Membership

 

The company generates revenue from management fee billing on the member 10% for the deposit that put into the account

 

Junket operations

 

The Company generates revenue from junket operations with commissions receivable from Ho Wah Genting Holiday SDN BHD. This line of business commenced in the year 2016.

 

Others

 

These comprise of general operating and administrative expenses, and other income/expenses not directly attributable to the sources of revenue of the Company for the years ended December 31, 2017 and 2016.

 

The Company’s reportable segments are managed separately based on the fundamental differences in their operations.

 

Information with respect to these reportable business segments for the years ended December 31, 2017 and 2016 was as follows:

 

		For the years ended
		December 31, 2017				December 31, 2016
Revenues:
Investment property holding		$	5,584			$	5,801
Information technology services			—				74,291
Junket operations			7,932				16,730
Management fee			240,802				—
Others			6,431				—
		$	260,749			$	96,822
Cost of revenues:
Investment property holding		$	—			$	—
Information technology services			—				14,586
Junket operations			683				5,474
Management fee			212,706				—
Others			—				—
		$	213,389			$	20,060
Depreciation:
Investment property holding		$	1,472			$	1,411
Information technology services			—				—
Junket operations			—				—
Others			632				3,909
		$	2,104			$	5,320
Net income (loss):
Investment property holding		$	4,112			$	4,390
Information technology services			—				59,705
Junket operations			7,249				11,256
Management fee			28,096				—
Others			(786,250	)			(885,940	)
		$	(746,793	)		$	(810,589	)

 

		December 31, 2017
		Investment property holding				Junket operation				Others				Total
Identifiable long-lived assets, net		$	60,887			$	—			$	30,906			$	91,793

		December 31, 2016
		Investment property holding				Junket operation				Others				Total
Identifiable long-lived assets, net		$	56,317			$	—			$	3,747			$	60,064

 

The Company does not allocate any administrative expenses and other income/expenses to its reportable segments because these activities are managed at a corporate level. In addition, the specified amounts for income tax expense are not included in the measure of segment profit or loss reviewed by the chief operating decision maker and these specified amounts are not regularly provided to the chief operating decision maker. Therefore, the Company has not disclosed income tax expense for each reportable segment.

 

Asset information by reportable segment is not reported to or reviewed by the chief operating decision maker and, therefore, the Company has not disclosed asset information for each reportable segment. The Company’s operations are located in Malaysia. All revenues are derived from customers in Malaysia. All of the Company’s operating assets are located in Malaysia.

 

13.	FAIR VALUE MEASUREMENTS

 

Fair Value of Financial Assets

 

The Company’s financial assets measured at fair value on a recurring basis subject to disclosure requirements at December 31, 2017 and 2016 were as follows:

 

						Quoted Prices
						in Active				Significant
						Markets for				Other				Significant
		Balance at				Identical				Observable				Unobserved
		December 31,				Assets				Inputs				Inputs
		2017				(Level 1)				(Level 2)				(Level 3)
Short-term investments:
Short-term investment		$	2,544,644			$	2,544,644			$	—			$	—
Total short-term investments			2,544,644				2,544,644				—				—
Total financial assets measured at fair value		$	2,544,644			$	2,544,644			$	—			$	—

 

						Quoted Prices
						in Active				Significant
						Markets for				Other				Significant
		Balance at				Identical				Observable				Unobserved
		December 31,				Assets				Inputs				Inputs
		2016				(Level 1)				(Level 2)				(Level 3)
Short-term investments:
Short-term investment		$	12,660			$	12,660			$	—			$	—
Total short-term investments			12,660				12,660				—				—
Total financial assets measured at fair value		$	12,660			$	12,660			$	—			$	—

 

14.	DISPOSAL OF SUBSIDIARY AND LOSS FROM DISCONTINUED OPERATIONS

 

On June 25, 2015 the Company acquired 65% of the equity interests of Beedo, a Malaysian company founded by Lim Chun Hoo, our Chief Executive Officer, Chief Financial Officer, Chief Operating Officer and director, who served as its director since May 2014. On July 7, 2015, Beedo increased its number of authorized shares from 2,500 the Company acquired an additional 508,375 shares in Beedo for MYR 508,375 ($133,403) and its equity interest in Beedo became 51%.

 

On August 12, 2016, the Company completed the disposal of its subsidiary, Beedo, by wholly transferring the shares it owns to a related party, Dato’ Lim Hui Boon, for the consideration of $118,881 (RM 510,000).

 

 

Summarized financial information for discontinued operations is shown in the tables below.

 

		For the years ended December 31,
		2017				2016
Total revenue		$	—			$	74,291
Income (loss) from discontinued operations		$	—			$	(24,392	)
Gain on disposal		$	—			$	7,397
Total gain (loss) from discontinued operations, before income taxes		$	—			$	(16,995	)
Provision for income taxes		$	—			$	—
Gain (loss) from discontinued operations, net of tax		$	—			$	(16,995	)

 

As of the date of disposal, Beedo had net assets of $194,726, and non-controlling interests of $83,242. The Company recognized a gain on disposal of $7,397 accordingly.

 

		As of				As of
		December 31,				December 31,
		2017				2016
ASSETS
CURRENT ASSETS
Cash and cash equivalents		$	—			$	—
Other receivables, deposits and prepayment			—				—
Other current assets			—				—
Total Current Assets			—				—
PROPERTY AND EQUIPMENT, NET			—				—
TOTAL ASSETS		$	—			$	—
LIABILITIES
Other payables and accrued expenses		$	—			$	—
Amount due to directors			—				—
Total Liabilities			—				—

 

15.	SUBSEQUENT EVENTS

 

On April 13, 2018 Ho Wah Genting Group Sdn Bhd disposed Ho Wah Genting Property Sdn Bhd to Lim Chun Hoo at cost for MYR67.00. Ho Wah Genting Property Sdn Bhd has not generate any revenue since acquisition and continue to incur losses to the group. Due to this, the Board of Directors decided to dispose the subsidiary.

 

 

ITEM 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

 

On May 8, 2017, the Company dismissed Centurion ZD CPA Limited (“Centurion”) as the Company's independent registered public accounting firm, effective immediately.

 

The audit reports of Centurion on the consolidated financial statements of the Company for each of the two most recent fiscal years ended December 31, 2016 and December 31, 2015 did not contain an adverse opinion or a disclaimer of opinion and were not qualified or modified as to uncertainty, audit scope or accounting principles.

 

During the Company's two most recent fiscal years ended December 31, 2016 and December 31, 2015 and during the subsequent interim period from January 1, 2017 through May 7, 2017, (i) there were no disagreements with Centurion on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedures that, if not resolved to Centurion's satisfaction, would have caused Centurion to make reference to the subject matter of the disagreement in connection with its reports and (ii) there were no “reportable events” as defined in Item 304(a)(1)(v) of Regulation S-K.

 

On May 8, 2017, the Board of Directors of the Company engaged BF Borgers CPA PC ("BFB") as the Company’s independent registered public accounting firm for the year ending December 31, 2017.

 

During the two most recent fiscal years ended December 31, 2016 and December 31, 2015 and during the subsequent interim period from January 1, 2017 through May 7, 2017, neither the Company nor anyone on its behalf consulted BFB regarding either (i) the application of accounting principles to a specified transaction, either completed or proposed, or the type of audit opinion that might be rendered on the Company's financial statements, and neither a written report nor oral advice was provided to the Company that BFB concluded was an important factor considered by the Company in reaching a decision as to any accounting, auditing or financial reporting issue, or (ii) any matter that was either the subject of a “disagreement” or a “reportable event”, each as defined in Regulation S-K Item 304(a)(1)(iv) and Item 304(a)(1)(v), respectively. 

 

ITEM 9A. Controls and Procedures

 

Evaluation of disclosure controls and procedures.

 

We maintain controls and procedures that are designed to ensure that information required to be disclosed in the reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management including our principal executive and principal financial officer, as appropriate, to allow timely decisions regarding required disclosures. Based upon their evaluation of those controls and procedures performed as of the end of the period covered by this report, our principal executive and principal financial officer concluded that our disclosure controls and procedures were not effective in ensuring that: (i) information required to be disclosed by us in reports that we file or submit to the SEC under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in applicable rules and forms and (ii) material information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to our management, including our CEO and CFO, as appropriate, to allow for accurate and timely decisions regarding required disclosure.

 

Management’s annual report on internal control over financial reporting.

 

Lim Chun Hoo, our Chief Executive Officer and Chief Financial Officer, is responsible for establishing and maintaining adequate internal control over financial reporting.  Internal control over financial reporting is defined in Rule 13a-15(f) and 15d-15(f) promulgated under the Securities Exchange Act of 1934 as a process designed by, or under the supervision of, our principal executive and principal financial officer and effected by our Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that:

 

	a)	pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets;
	b)	provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of management and our directors; and
	c)	provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.

 

Because of its inherent limitations, our internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

 

Our Chief Executive and Chief Financial Officer assessed the effectiveness of our internal control over financial reporting as of December 31, 2017.  In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control — Integrated Framework (2013).  A material weakness, as defined by SEC rules, is a control deficiency, or combination of control deficiencies, such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis. The material weaknesses in internal control over financial reporting that were identified are:

 

a)

We did not maintain sufficient personnel with an appropriate level of technical accounting knowledge, experience, and training in the application of GAAP commensurate with our complexity and our financial accounting and reporting requirements. We have limited experience in the areas of financial reporting and disclosure controls and procedures. Also, we do not have an independent audit committee. As a result, there is a lack of monitoring of the financial reporting process and there is a reasonable possibility that material misstatements of the financial statements, including disclosures, will not be prevented or detected on a timely basis; and

 

b)

Due to our small size, our segregation of duties in certain areas of our financial reporting process are limited. This control deficiency, which is pervasive in nature, results in a reasonable possibility that material misstatements of the financial statements will not be prevented or detected on a timely basis. This control is being implemented on stages.

 

Based on our assessment, our Chief Executive and Chief Financial Officer believes that, as of December 31, 2017, our internal control over financial reporting is not effective based on those criteria.

 

 

Accordingly, management believes, based on its knowledge, that (1) this report does not contain any untrue statement of a material fact or omit to state a material face necessary to make the statements made not misleading with respect to the period covered by this report, and (2) the financial statements, and other financial information included in this report, fairly present in all material respects our financial condition, results of operations and cash flows for the years and periods then ended.

 

This report does not include an attestation report of our independent registered public accounting firm regarding internal control over financial reporting.  Management’s report was not subject to attestation by our independent registered public accounting firm pursuant to rules of the SEC that permit us to provide only management’s report in this report.

 

Changes in internal control over financial reporting.

 

There were no changes in our internal control over financial reporting during the fourth quarter of the year ended December 31, 2017, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

PART III

 

ITEM 10. Directors, Executive Officers and Corporate Governance.

 

The following table sets forth information regarding our executive officers and directors.

 

Name and Address		Age		Position(s)
Dato Lim Hui Boon		66		President
Lim Chun Hoo		28		Chief Executive Officer, Chief Financial Officer, Chief Operation Officer and Director
Ong Kooi Tatt		42		Secretary and Director
Liew Jenn Lim		28		Director
Mok Lip Bin		28		Director

 

Directors are elected to serve until the next annual meeting of stockholders and until their successors are elected and qualified. Directors are elected by a plurality of the votes cast at the annual meeting of stockholders and hold office until the expiration of the term for which he or she was elected and until a successor has been elected and qualified.

 

A majority of the authorized number of directors constitutes a quorum of the Board of Directors for the transaction of business. The directors must be present at the meeting to constitute a quorum. However, any action required or permitted to be taken by the Board of Directors may be taken without a meeting if all members of the Board of Directors individually or collectively consent in writing to the action.

 

Executive officers are appointed by the Board of Directors and serve at its pleasure.

 

The principal occupation and business experience during at least the past five years for our executive officers and directors are as follows:

 

Dato Lim Hui Boon – President

Dato Lim Hui Boon has served as our President since November 8, 2016. He is the founder of HWGG and has more than 30 years business experience in a diversified range of businesses such as hospitality, gaming operation, resorts, transportation services, travel and tours, construction, mining and capital finance markets. In June 2011, he was appointed as the Group President of HWGB in Kuala Lumpur, Malaysia. He is the founder of Ho Wah Genting and has managed Ho Wah Genting since its inception in 1979. He also holds positions as an Honorable Committee Member of the Kuala Lumpur and Selangor Hwee Ann Association and a member of the Kuala Lumpur and Selangor Chinese Chamber of Commerce and Industry. In May 2015, Dato’ Lim Hui Boon received an Honorary Professorship from the University of International Business and Economics, Beijing, China.

 

Lim Chun Hoo – Chief Executive Officer, Chief Financial Officer, Chief Operating Officer and Director

Lim Chun Hoo has served as our Chief Executive Officer and director since November 8, 2016 and November 4, 2016, respectively. On March 1, 2017, he was also appointed to serve as our Chief Financial Officer and Chief Operating Office. He also serves as executive director of Ho Wah Genting Holiday Sdn Bhd, a travel agency specialized in promoting vacation packages, tours and entertainment facilities. In May, 2014, he founded an information technology company, Beedo and serves as its director. From August, 2013 to May, 2014, he was Senior Share Investment Executive at Public Bank Berhad. From August, 2010 to August, 2013, he served as a costing executive under PT. Ho Wah Genting, Indonesia. He holds a Bachelor of Arts (Honours) in Finance and Investment Management from University of Northumbria, Newcastle Upon Tyne, United Kingdom in 2010. Lim Chun Hoo’s expertise in the Company’s industry led us to conclude that he would be a valuable member of the Board of Directors. As our director, he brings knowledge and strategic insight to the Board.

 

Ong Kooi Tatt – Secretary and Director

Ong Kooi Tatt has served as our Secretary and director since November 8, 2016 and November 4, 2016, respectively. In January 2016 he helped list Vitaxel Group Limited on the OTC Market. In July, 2007, he co-founded AsiaCrux Sdn Bhd and took them public as CVM Magnesium Ltd in the Stock Exchange of Hong Kong in December 2008. From January to December 2004, he was involved in listing NagaCorp, a gaming corporation in the Stock Exchange of Hong Kong. From April 2001 to December 2004, he set-up and led the internal audit department and the Night Audit Department at Naga Corp Ltd. From January 1996 to December 1998, he handled the internal audit files for Metroplex Berhad. He is a Charted Accountant and is a member of the Association of Chartered Certified Accountants. Ong Kooi Tatt’s expertise in the Company’s industry led us to conclude that he would be a valuable member of the Board of Directors. As our director, he brings knowledge and strategic insight to the Board.

 

 

Liew Jenn Lim – Director

Liew Jenn Lim has served as our director since March 1, 2017. He is also a director of Ho Wah Genting Group Sdn Bhd and Vitaxel Online Mall Sdn Bhd since March 1, 2017 and January 25, 2016, respectively. Since 2013, he has served and continues to serve as the Executive Director of Beedo and the Marketing Director of Vitaxel Online Mall Sdn Bhd. From 2010 to 2013, he was a student at Swinburne University of Technology, Melbourne, where he received his Bachelors of Information and Communication Technology. He also has a diploma in Information Technology from the Asia Pacific University of College of Technology and Innovation, Malaysia. Liew Jenn Kim’s expertise in the Company’s industry led us to conclude that he would be a valuable member of the Board of Directors. As our director, he brings knowledge and strategic insight to the Board.

 

Mok Lip Bin – Director

Mok Lip Bin has served as our director since March 1, 2017. He originally joined HWGG as its Business Development Executive in March 2015. He is also the director of our wholly owned subsidiary, Ho Wah Genting Group Sdn Bhd. From September 2012 to August 2014, he worked at CIMB Bank BHD as an Assistant Sales Manager and Mortgage Advisor. He received his Bachelor of Arts in Management and Marketing from the Keele University, Malaysia and a diploma in Business Administration from KDU University College, Malaysia. Mok Lip Bin’s expertise in the Company’s industry led us to conclude that he would be a valuable member of the Board of Directors. As our director, he brings knowledge and strategic insight to the Board.

 

Director Independence

 

We are not currently subject to listing requirements of any national securities exchange or inter-dealer quotation system which has requirements that a majority of the board of directors be “independent” and, as a result, we are not at this time required to have our Board of Directors comprised of a majority of “independent directors.” None of our directors are independent directors under the applicable standards of the SEC and the NASDAQ stock market.

 

Family Relationships.

 

Except for the father and son relationship between Dato Lim Hui Boon, our President, and Lim Chun Hoo, our Chief Executive Officer, Chief Financial Officer, Chief Operating Officer and director, there are no family relationships among our directors or executive officers.  

 

Involvement in Legal Proceedings.

 

There are no orders, judgments, or decrees of any governmental agency or administrator, or of any court of competent jurisdiction, revoking or suspending for cause any license, permit or other authority to engage in the securities business or in the sale of a particular security or temporarily or permanently restraining any of our officers or directors from engaging in or continuing any conduct, practice or employment in connection with the purchase or sale of securities, or convicting such person of any felony or misdemeanor involving a security, or any aspect of the securities business or of theft or of any felony. Nor are any of the officers or directors of any corporation or entity affiliated with us so enjoined.

 

Section 16(a) Beneficial Ownership Reporting Compliance .

 

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires our directors and officers, and persons who own more than ten percent of our common stock, to file with the SEC initial reports of ownership and reports of changes in ownership of our common stock. Directors, officers and persons who own more than ten percent of our common stock are required by SEC regulations to furnish us with copies of all Section 16(a) forms they file.

 

To our knowledge, based solely on a review of the copies of such reports furnished to us, during the fiscal year ended December 31, 2017, each of our directors, officers and greater than ten percent shareholders complied with all Section 16(a) filing requirements applicable to our directors, officers and greater than ten percent shareholders, other than the filing of a Form 4 by Leong Yee Ming when he resigned in March 2017.

 

Board Committees.

 

Our Board of Directors does not currently have a compensation committee or nominating and corporate governance committee because, due to the Board of Director’s composition and our relatively limited operations, the Board of Directors is able to effectively manage the issues normally considered by such committees. Our Board of Directors may undertake a review of the need for these committees in the future.

 

Audit Committee and Financial Expert.

 

We do not have an audit committee financial expert because we believe the cost related to retaining a financial expert at this time is prohibitive. Further, because we have no operations, at the present time, we believe the services of a financial expert are not warranted.

 

Code of Ethics.

 

We do not have a code of ethics.

 

 

ITEM 11. Executive Compensation

 

The table below summarizes all compensation awarded to, earned by, or paid to our executive officers by any person for all services rendered in all capacities to us for the last two fiscal years ended on December 31, 2017 and 2016.

 

SUMMARY COMPENSATION TABLE

 

Name and Principal Position		Year		Salary (US$)			Bonus (US$)			Stock Awards (US$) (2)			Option Awards (#shares)			Non-Equity Incentive Plan Compensation (US$)			Nonqualified Deferred Compensation Earnings (US$)			All Other Compensation (US$)			Total (US$)
Lim Chun Hoo		2017			6,980			-0-			-0-			-0-			-0-			-0-			-0-			6,980
(principal executive officer)		2016			-0-			-0-			-0-			-0-			-0-			-0-			-0-			-0-

 

We have no plans in place and have never maintained any plans that provide for the payment of retirement benefits or benefits that will be paid primarily following retirement including, but not limited to, tax qualified deferred benefit plans, supplemental executive retirement plans, tax-qualified deferred contribution plans and nonqualified deferred contribution plans.

 

Except as indicated below, we have no contracts, agreements, plans or arrangements, whether written or unwritten, that provide for payments to the named executive officers listed above.

 

Employment Agreements

 

On July 1, 2016, we entered into a Consulting Services Agreement (the “Consulting Agreement”) with Ong Kooi Tatt pursuant to which Ong Kooi Tatt provides management services. Pursuant to the Consulting Agreement, Ong Kooi Tatt receives a monthly consulting fee of RM 12,000 (approximately US $2,856 per month). The Consulting Agreement may be terminated by either party by providing the other with written notice of termination not less than one month prior to the date of termination.

 

None of the Company’s executive officers have employment agreements directly with the Company, although they may enter into such agreements in the future.

 

Director Compensation

 

Other than the Consulting Agreement referenced above, our directors receive no compensation for their services as directors.  

 

 

ITEM 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

 

The following table lists, as of April 16, 2018, the number of shares of common stock of our Company that are beneficially owned by (i) each person or entity known to our Company to be the beneficial owner of more than 5% of the outstanding common stock; (ii) each officer and director of our Company; and (iii) all officers and directors as a group. Information relating to beneficial ownership of common stock by our principal shareholders and management is based upon information furnished by each person using “beneficial ownership” concepts under the rules of the Securities and Exchange Commission. Under these rules, a person is deemed to be a beneficial owner of a security if that person has or shares voting power, which includes the power to vote or direct the voting of the security, or investment power, which includes the power to vote or direct the voting of the security. The person is also deemed to be a beneficial owner of any security of which that person has a right to acquire beneficial ownership within 60 days. Under the Securities and Exchange Commission rules, more than one person may be deemed to be a beneficial owner of the same securities, and a person may be deemed to be a beneficial owner of securities as to which he or she may not have any pecuniary beneficial interest. Except as noted below, each person has sole voting and investment power.

 

The percentages below are calculated based on 500,027,774 shares of our common stock issued as of April 16, 2018. Unless otherwise indicated, the address of each stockholder listed below is c/o Ho Wah Genting Group Limited Wisma Ho Wah Genting, No. 35, Jalan Maharajalela, 50150 WP Kuala Lumpur, Malaysia.

 

Name and address of beneficial owner		Amount and nature of beneficial ownership				Percent of class
Directors and Executive Officers
Dato Lim Hui Boon			29,765,600				5.95	%
Lim Chun Hoo			283,935,591				56.78	%
Ong Kooi Tatt			0				0	%
Liew Jenn Lim			13,889				0.00	%
Mok Lip Bin			750,000				0.15	%
5% Stockholders:
Lim Ooi Hong(1)			75,000,000				15.00	%
All directors and executive officers as a group (5 persons)			314,465,080				62.89	%

 

(1) Lim Ooi Hong’s address is No.2A Jalan Setia Tropika u13/20B Setia Eco Park, Selangor, Shan Alam 40170, Malaysia. 

 

Changes in Control.

 

Our management is not aware of any arrangements which may result in “changes in control” as that term is defined by the provisions of Item 403(c) of Regulation S-K, currently.

 

ITEM 13. Certain Relationships and Related Transactions and Director Independence.

 

SEC rules require us to disclose any transaction or currently proposed transaction in which the Company is a participant and in which any related person has or will have a direct or indirect material interest involving the lesser of $120,000 or one percent (1%) of the average of the Company’s total assets as of the end of last two completed fiscal years. A related person is any executive officer, director, nominee for director, or holder of 5% or more of the Company’s Common Stock, or an immediate family member of any of those persons.

 

The descriptions set forth above under “Item 1: Description of the Business – Corporate History” and “Executive Compensation—Employment Agreements” and “—Director Compensation” are incorporated herein by reference.

 

In addition, on April 1, 2016, we entered into the Travel and Junket Service Contract with our partner, HWGH, pursuant to which HWGH shall render HWGG tour agency services, including but not limited to providing HWGG with tour packages, hotel bookings, and transportation arrangements to offer HWGG’s members and to share in junket operation profits. Lim Chun Hoo, our executive officer and director, is the Executive Director of HWGH. In addition, two sons of Dato Lim Hui Boon, our president, are the directors of HWGB, the parent company of HWGH. Dato Lim Hui Boon is also the Group President and shareholder of HWGB. During the year ended December 31, 2017, the recognized junket commission revenue from HWGH was $7,932.  

 

As of December 31, 2017, HWGB owed the Company $247,280. Such debt is unsecured, interest-free and repayable on demand.  

 

 

During the period ending December 31, 2017, the Company loaned $24,728 to Vitaxel Online Mall Sdn Bhd, a Malaysian corporation (“Vionmall”). Such debt is unsecured, interest-free and repayable on demand. Vitaxel and Vionmall are wholly owned subsidiaries of Vitaxel Group Limited, a Nevada corporation. Lim Chun Hoo, our Chief Executive Officer, Chief Financial Officer, Chief Operating Officer and director, was a director of Vitaxel Group Limited until his resignation on March 31, 2017. In addition, Leong Yee Ming, our former Chief Financial Officer, Chief Operating Officer and director, is a director and Chief Executive Officer of Vitaxel Group Limited.  

 

During the period ended December 31, 2017, the Company recognized rental income of $5,584 from HWGB. The president of the Company, Dato’ Lim Hui Boon, is also the Group President of HWGB. In addition, two sons of Dato’ Lim Hui Boon are directors of HWGB.

 

From January 1, 2016 to August 12, 2016, the Company, through its subsidiary Beedo recognized revenue from the provision of information technology services of $9,668 from HWGH and $55,545 from Vitaxel. Beedo was disposed of by the Company after August 12, 2016 and we stopped earning revenue from the provision of information technology services.

 

During the period ended December 31, 2017, the Company recognized junket commission revenue from HWGH was $7,932.  

 

As of December 31, 2017 and 2016, amounts due from related parties were as follows:

 

		As of December 31, 2017				As of December 31, 2016
Ho Wah Genting Berhad (1)		$	247,280			$	544,096
Vitaxel Sdn Bhd (2)			—				585,619
Vitaxel Online Mall Sdn Bhd (3)			24,728				22,299
Ho Wah Genting Holiday Sdn Bhd (2)			14,837				—
Ho Wah Genting ShenZhen Limited (2)			133,974				—
Marvel Theme Park City Sdn Bhd (4)			3,594				—
Lim Chun Hoo (2)			—				23,503
		$	424,413			$	1,175,517

 

The amounts due from related parties are unsecured, interest-free and repayable on demand.

 

(1)

Our President Dato’ Lim Hui Boon is also the Group President and shareholder of Ho Wah Genting Berhad.

 

(2)

Lim Chun Hoo, our Chief Executive Officer, Chief Financial Officer, Chief Operating Officer and director, is also a director of Ho Wah Genting Holiday Sdn Bhd, Ho Wah Genting Shenzhen Limited and Beedo Sdn Bhd. He was also director of Vitaxel Group Limited, parent company of its wholly owned subsidiary Vitaxel Sdn Bhd, until his resignation from that position on March 31, 2017.

  

During the year 2017, HWGG Malaysia has acquired 1,960,912 shares of Vitaxel Group Limited, a Nevada corporation in U.S for the price of USD1 per share. The share closing market price at the end December 31, 2017 was USD1.25  

 

(3)

Liew Jenn Lim, one of our directors since March 1, 2017, is also a director of Vitaxel Online Mall Sdn Bhd, Beedo Sdn Bhd and Vspark Malaysia Sdn Bhd.

 

(4)

Marvel Theme Park City Sdn Bhd is a shareholder of our subsidiary company, Ho Wah Genting Property Sdn Bhd.

 

 

As of December 31, 2017 and 2016, amounts due to related parties were as follows:

 

		As of December 31, 2017				As of December 31, 2016
Dato’ Lim Boon Hui		$	—			$	208,830
Beedo SDN BHD			59,347				57,977
Vspark Malaysia Sdn Bhd			7,031				—
Vitaxel Sdn Bhd			42,877				—
		$	109,255			$	266,807

 

During the years ended December 31, 2017 and 2016, the Company recognized rental income of $5,584 and $5,801 respectively from Ho Wah Genting Berhad (“HWGB”). Our president, Dato’ Lim Hui Boon, is also the Group President and shareholder of HWGB. In addition, two sons of Dato’ Lim Hui Boon are directors of HWGB.

 

On April 1, 2016, we entered into the Travel and Junket Service Contract with our partner, Ho Wah Genting Holiday SDN BHD (“HWGH”), pursuant to which HWGH shall render HWGG tour agency services, including but not limited to providing HWGG with tour packages, hotel bookings, and transportation arrangements to offer HWGG’s members and to share in junket operation profits. Lim Chun Hoo, our Chief Executive Officer, Chief Financial Officer, Chief Operating Officer and director, is the Executive Director of HWGH. In addition, two sons of Dato Lim Hui Boon, our president, are the directors of HWGB, the parent company of HWGH. During the years ended December 31, 2017 and 2016, the Company recognized junket commission revenue of $7,932 and $16,730, respectively, from HWGH.

 

As of December 31, 2017 and 2016, HWGB owed the Company $247,280 and $544,096, respectively. Such debt is unsecured, interest-free and repayable on demand.

 

During the period ending December 31, 2017, the Company loaned $24,728 to Vitaxel Online Mall Sdn Bhd, a Malaysian corporation (“Vionmall”). Such debt is unsecured, interest-free and repayable on demand. Vitaxel and Vionmall are wholly owned subsidiaries of Vitaxel Group Limited, a Nevada corporation. Lim Chun Hoo, our Chief Executive Officer, Chief Financial Officer, Chief Operating Officer and director, was a director of Vitaxel Group Limited, Vionmall and Vitaxel’s parent company, until his resignation on March 31, 2017. In addition, Leong Yee Ming, our former Chief Financial Officer, Chief Operating Officer and director, is a director and Chief Executive Officer of Vitaxel Group Limited.

 

From January 1, 2016 to August 12, 2016, the Company, through its subsidiary Beedo recognized revenue from the provision of information technology services of $9,668 from HWGH and $55,545 from Vitaxel. Beedo was disposed of by the Company after August 12, 2016 and stopped earning revenue from the provision of information technology services.

 

During the year ended December 31, 2017 and 2016, the recognized junket commission revenue of the Company from HWGH was $7,932 and $16,730, respectively.

 

During the year ended December 31, 2017 and 2016, the Company recognized revenue of $240,802 and $0, respectively, from the 10% management charges to ETM member from HWGB.

 

We currently do not have a policy in place for dealing with related party matters.

 

Director independence

 

We are not subject to listing requirements of any national securities exchange or national securities association and, as a result, we are not at this time required to have our board comprised of a majority of “independent directors.”

 

ITEM 14. Principal Accountant Fees and Services.

 

Audit Fees.

 

The aggregate fees billed in each of the fiscal years ended December 31, 2017 and December 31, 2016 for professional services rendered by the principal accountant for the audit of our annual financial statements and quarterly review of the financial statements included in our Form 10-K, and Form 8-K, respectively, or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those fiscal years were $38,500and $36,500, respectively.  

 

Audit-Related Fees.

 

For each of the fiscal years ended December 31, 2017 and 2016, there were no fees billed for services reasonably related to the performance of the audit or review of the financial statements outside of those fees disclosed above under “Audit Fees.”

 

Tax Fees.

 

None.

 

All Other Fees.

 

None.

 

Pre-Approval Policies and Procedures.

 

Prior to engaging our accountants to perform a particular service, our Board of Directors obtains an estimate for the service to be performed. All of the services described above were approved by the Board of Directors in accordance with its procedures.

 

 

PART IV

 

ITEM 15. Exhibits, Financial Statement Schedules.

 

The following exhibits are filed as part of this Annual Report.

 

Exhibits:

 

Exhibit No.		Exhibit Description
2.1		Share Exchange Agreement, dated as of November 4, 2016, by and among the Registrant, Ho Wah Genting Group SDN BHD (“HWGG”) and the Shareholders of HWGG (incorporated by reference from the Registrant’s Current Report on Form 8-K filed on November 9, 2016)
3.1		Articles of Incorporation of the Company (incorporated by reference from the Registrant’s Registration Statement on Form S-1 filed on November 7, 2014)
3.2		Amended and Restated Articles of Incorporation of the Registrant as filed with the Nevada Secretary of State on September 28, 2016 (incorporated by reference from the Registrant’s Current Report on Form 8-K filed on November 4, 2016)
3.3		Bylaws of the Company ( incorporated by reference to Exhibit 3.2 to the Form S-1 filed with the SEC on November 7, 2014 )
10.1†		Consulting Service Agreement by and between the Company and Ong Kooi Tatt dated July 1, 2016 (incorporated by reference from the Registrant’s Current Report on Form 8-K filed on November 9, 2016)
10.2		Split-Off Agreement, dated as of  November 4, 2016, by and among the Registrant and David Breier (incorporated by reference from the Registrant’s Current Report on Form 8-K filed on November 9, 2016)
10.3		General Release Agreement, dated as of  November 4, 2016, by and among the Registrant and David Breier (incorporated by reference from the Registrant’s Current Report on Form 8-K filed on November 9, 2016)
21.1		Subsidiaries of the Registrant (incorporated by reference from the Registrant’s Current Report on Form 8-K filed on November 9, 2016)
23.1*		Consent of Independent Registered Public Accounting Firm
31.1*		Certification of the Chief Executive and Financial Officer required under Rule 13a-14(a)/15d-14(a) of the Exchange Act
32.1*		Certification of the Chief Executive and Financial Officer required under Section 1350 of the Exchange Act
101 INS*		XBRL Instance Document
101 SCH*		XBRL Taxonomy Schema
101 CAL*		XBRL Taxonomy Extension Calculation Linkbase
101 DEF*		XBRL Taxonomy Extension Definition Linkbase
101 LAB*		XBRL Taxonomy Extension Label Linkbase
101 PRE*		XBRL Taxonomy Extension Presentation Linkbase

* Filed herewith

† Management contract or compensatory plan or arrangement

 

 

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.

 

	HO WAH GENTING GROUP LIMITED
Date: April 17, 2018	By:	/s/ Lim Chun Hoo
		Lim Chun Hoo
		Chief Executive Officer, Chief Financial Officer and Chief Operation Officer (principal executive officer and principal financial and accounting officer)

 

Pursuant to the requirements of the Securities Act of 1933, this annual report has been signed by the following persons in the capacities and on the dates indicated.

 

Signatures		Title(s)		Date
/s/ Lim Chun Hoo		Chief Executive Officer, Chief Financial Officer and Chief Operation Officer (principal executive officer and principal financial and accounting officer) and Director		April 17, 2018
Lim Chun Hoo
/s/ Ong Kooi Tatt   Ong Kooi Tatt		Secretary and Director		April 17, 2018
/s/ Liew Jenn Lim   Liew Jenn Lim		Director		April 17, 2018
/s/ Mok Lip Bin   Mok Lip Bin		Director		April 17, 2018