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EX-32 - EXHIBIT 32.1 - UONLIVE CORPex32-1.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

(Mark One)

 

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended March 31, 2012

 

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: 0-26119

 

 

UONLIVE CORPORATION

(Exact name of registrant as specified in its charter)

 

Nevada

 

87-0629754

(State or other jurisdiction of incorporation or organization)

 

(I.R.S. Employer Identification No.)

 

 

5/F, Guangdong Finance Building, 88 Connaught Road West, Hong Kong  

 (Address of principal executive offices)                             

                                           (Zip Code)

 

                        

(011) (852) 2116-3560

(Registrant’s telephone number, including area code)

 

N/A

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

 

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

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes☐ No☒

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, 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 ☒

 

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

 

 
 

 

 

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY

PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

 

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.

 ☐Yes  ☐No

 

APPLICABLE ONLY TO CORPORATE ISSUERS:

 

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

 

As of November 20, 2014, there were 1,996,355 shares of $0.001 par value common stock issued and outstanding.

 

 
 

 

 

FORM 10-Q

UONLIVE CORPORATION

INDEX

 

 

 

Page

 

 

 

PART I.

Financial Information

  1

 

 

 

 

Item 1.  Financial Statements (Unaudited).

  1

 

 

 

 

Item 2.  Management’s Discussion and Analysis of Financial Condition and results of Operation.

  12

 

 

 

 

Item 3.  Quantitative and Qualitative Disclosures About Market Risk.

  16

 

 

 

 

Item 4.  Controls and Procedures.

  16

 

 

 

PART II.

Other Information

  16

 

 

 

 

Item 1.  Legal Proceedings.

  16

 

 

 

 

Item 1A. Risk Factors.

  16

 

 

 

 

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds.

  16

 

 

 

 

Item 3.  Defaults Upon Senior Securities.

  16

 

 

 

 

Item 4.  Mine Safety Disclosures.

  17

 

 

 

 

Item 5.  Other Information.

  17

 

 

 

 

Item 6.  Exhibits.

  17

 

 

 

 

Signatures

  18

 

 
 

 

 

PART I –FINANCIAL INFORMATION

 

 Item 1. Financial Statements

UONLIVE CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

AS OF MARCH 31, 2012 AND DECEMBER 31, 2011

(Currency expressed in United States Dollars (“US$”), except for number of shares)

 

   

March 31, 2012

   

December 31, 2011

 
   

(Unaudited)

   

(Audited)

 

ASSETS

               

Current assets:

               

Cash and cash equivalents

  $ 10,187     $ 21,402  
                 

Non-current assets:

               

Plant and equipment, net

    21,132       24,356  
                 

TOTAL ASSETS

  $ 31,319     $ 45,758  
                 

LIABILITIES AND STOCKHOLDERS DEFICIT

               

Current liabilities:

               

Accounts payable and accrued liabilities

  $ 63,000     $ 20,329  

Amount due to a shareholder

    3,102,134       3,016,673  
                 

Total current liabilities

    3,165,134       3,037,002  
                 

Long-term liabilities:

               

Note payable to a shareholder

    167,398       167,301  
                 

Total liabilities

    3,332,532       3,204,303  
                 

Commitments and contingencies

               
                 

Stockholders’ deficit:

               

Series A, Convertible preferred stock, $0.001 par value; 10,000,000 shares authorized, 500,000 shares issued and outstanding, respectively

    500       500  

Common stock, $0.001 par value; 200,000,000 shares authorized; 1,996,355 shares issued and outstanding, respectively

    1,996       1,996  

Additional paid-in capital

    197,570       197,570  

Accumulated other comprehensive loss

    (3,664 )     (1,894 )

Accumulated deficit

    (3,497,615 )     (3,356,717 )
                 

Total stockholders’ deficit

    (3,301,213 )     (3,158,545 )

TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT

  $ 31,319     $ 45,758  

 

See accompanying notes to the condensed consolidated financial statements.

 

 
1

 

 

UONLIVE CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

FOR THE THREE MONTHS ENDED MARCH 31, 2012 AND 2011

(Currency expressed in United States Dollars (“US$”), except for number of shares)

(Unaudited)

 

   

Three months ended March 31,

 
   

2012

   

2011

 
                 

REVENUES, NET

               

- Related party

  $ -     $ 3,853  
                 

Total revenues, net

    -       3,853  
                 

COST OF REVENUE (exclusive of depreciation)

    -       (10,489 )
                 

GROSS LOSS

    -       (6,636 )
                 

Operating expenses:

               

Sales and marketing

    -       1,536  

General and administrative

    140,898       139,031  
                 

Total operating expenses

    140,898       140,567  
                 

LOSS BEFORE INCOME TAXES

    (140,898 )     (147,203 )
                 

Income tax expense

    -       -  
                 

NET LOSS

  $ (140,898 )   $ (147,203 )
                 

Other comprehensive income:

               

- Foreign currency translation (loss) gain

    (1,770 )     1,847  
                 

COMPREHENSIVE LOSS

  $ (142,668 )   $ (145,356 )
                 

Net loss per share – Basic and diluted

  $ (0.07 )   $ (0.07 )
                 

Weighted average common shares outstanding – Basic and diluted

    1,996,355       1,996,355  

  

See accompanying notes to the condensed consolidated financial statements.

 

 
2

 

 

UONLIVE CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE THREE MONTHS ENDED MARCH 31, 2012 AND 2011

(Currency expressed in United States Dollars (“US$”))

(Unaudited)

 

   

Three months ended March 31,

 
   

2012

   

2011

 

Cash flow from operating activities:

               

Net loss

  $ (140,898 )   $ (147,203 )

Adjustments to reconcile net loss to net cash used in operating activities:

               

Depreciation

    3,238       3,562  

Changes in operating assets and liabilities:

               

Deposits and other receivables

    -       2,697  

Accounts payable and accrued liabilities

    42,671       (3,000 )
                 

Net cash used in operating activities

    (94,989 )     (143,944 )
                 

Cash flows from financing activities:

               

Advances from a shareholder

    83,755       144,150  
                 

Net cash provided by financing activities

    83,755       144,150  
                 

Effect of exchange rate change on cash and cash equivalents

    19       (14 )
                 

NET CHANGE IN CASH AND CASH EQUIVALENTS

    (11,215 )     192  
                 

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD

    21,402       16,367  
                 

CASH AND CASH EQUIVALENTS, END OF PERIOD

  $ 10,187     $ 16,559  
                 

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION

         

Cash paid for income taxes

  $ -     $ -  

Cash paid for interest

  $ -     $ -  

 

See accompanying notes to the condensed consolidated financial statements

 

 
3

 

 

UONLIVE CORPORATION

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ DEFICIT

FOR THE THREE MONTHS ENDED MARCH 31, 2012

(Currency expressed in United States Dollars (“US$”), except for number of shares)

(Unaudited)

 

   

Series A Convertible

preferred stock

   

Common stock

   

Additional paid

   

Accumulated

   

Accumulated other comprehensive

   

Total stockholders’

 
   

No. of shares

   

Amount

   

No. of shares

   

Amount

      in capital       deficit     income (loss)       deficit  
                                                                 

Balance as of January 1, 2012

    500,000     $ 500       1,996,355     $ 1,996     $ 197,570     $ (3,356,717 )   $ (1,894 )   $ (3,158,545 )
                                                                 

Net loss for the period

    -       -       -       -       -       (140,898 )     -       (140,898 )
                                                                 

Foreign currency translation adjustment

    -       -       -       -       -       -       (1,770 )     (1,770 )
                                                                 

Balance as of March 31, 2012

    500,000     $ 500       1,996,355     $ 1,996     $ 197,570     $ (3,497,615 )   $ (3,664 )   $ (3,301,213 )

 

See accompanying notes to the condensed consolidated financial statements

 

 
4

 

 

UONLIVE CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED MARCH 31, 2012

(Currency expressed in United States Dollars (“US$”), except for number of shares)

(Unaudited)

 

 

NOTE1     BASIS OF PRESENTATION

 

The accompanying unaudited condensed consolidated financial statements have been prepared by management in accordance with both accounting principles generally accepted in the United States (“GAAP”), and the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Certain information and note disclosures normally included in audited financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to those rules and regulations, although the Company believes that the disclosures made are adequate to make the information not misleading.

 

In the opinion of management, the consolidated balance sheet as of December 31, 2011 which has been derived from audited financial statements and these unaudited condensed consolidated financial statements reflect all normal and recurring adjustments considered necessary to state fairly the results for the periods presented. The results for the period ended March 31, 2012 are not necessarily indicative of the results to be expected for the entire fiscal year ending December 31, 2012 or for any future periods.

 

These unaudited condensed consolidated financial statements and notes thereto should be read in conjunction with the Management’s Discussion and the audited financial statements and notes thereto included in the Annual Report on Form 10-K for the year ended December 31, 2011.

 

 

NOTE2     DESCRIPTION OF BUSINESS AND ORGANIZATION

 

Uonlive Corporation (“UOLI” or the “Company”) was incorporated under the laws of the State of Nevada on January 29, 1998 as Weston International Development Corporation. On July 28, 1998, its name was changed to Txon International Development Corporation. On September 15, 2000, the Company changed its name to China World Trade Corporation. On July 2, 2008, the Company further changed its name to Uonlive Corporation.

 

UOLI, through its subsidiaries, engaged in the provision of online multimedia and advertising service and the operation of online radio stations in Hong Kong.

 

UOLI and its subsidiaries are hereinafter collectively referred to as the “Company”.

 

 

NOTE3     GOING CONCERN UNCERTAINTIES

 

These condensed 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 three months ended March 31, 2012, the Company has incurred a continuous loss of $140,898 and experienced negative cash flows from operations of $94,989 with an accumulated deficit of $3,497,615 as of that date. The continuation of the Company is dependent upon the continuing financial support of shareholders. Management believes the existing stockholders will provide the additional cash to meet the Company’s obligations as they become due. However, there is no assurance that the Company will be successful in securing sufficient funds to sustain the operations.

 

These and other factors raise substantial doubt about the Company’s ability to continue as a going concern. These condensed consolidated 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 in the Company not being able to continue as a going concern.

 

 
5

 

 

UONLIVE CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED MARCH 31, 2012

(Currency expressed in United States Dollars (“US$”), except for number of shares)

(Unaudited)

 

 

NOTE4     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

The accompanying condensed consolidated financial statements reflect the application of certain significant accounting policies as described in this note and elsewhere in the accompanying condensed consolidated financial statements and notes.

 

Use of estimates

 

In preparing these condensed consolidated financial statements, management makes estimates and assumptions that affect the reported amounts of assets and liabilities in the balance sheets and revenues and expenses during the periods reported. Actual results may differ from these estimates.

 

Basis of consolidation

 

The condensed consolidated financial statements include the financial statements of UOLI and its subsidiaries. All significant inter-company balances and transactions within the Company have been eliminated upon consolidation.

 

Cash and cash equivalents

 

Cash and cash equivalents are carried at cost and represent cash on hand, demand deposits placed with banks or other financial institutions and all highly liquid investments with an original maturity of three months or less as of the purchase date of such investments.

 

Accounts receivable

 

Accounts receivable consist primarily of trade receivables. Accounts receivable are recognized and carried at original invoiced amount less an allowance for any uncollectible accounts. Management reviews and adjusts this allowance periodically based on historical experience, current economic climate as well as its evaluation of the collectibility of outstanding accounts. The Company evaluates the credit risks of its customers utilizing historical data and estimates of future performance. The Company did not provide an allowance for doubtful accounts, nor have been any write-offs during the periods presented.

 

Plant and equipment

 

Plant and equipment are stated at cost less accumulated depreciation and accumulated impairment losses, if any. Depreciation is calculated on the straight-line basis over the following expected useful lives from the date on which they become fully operational:

 

   

Expected useful life

Furniture, fittings and office equipment

 

5 years

Computer and broadcasting equipment

 

5 years

 

Expenditure for maintenance and repairs is expensed as incurred. The gain or loss on the disposal of plant and equipment is the difference between the net sales proceeds and the carrying amount of the relevant assets and is recognized in the statement of operations.

 

Depreciation expense for the three months ended March 31, 2012 and 2011 was $3,238 and $3,562, respectively.

 

Impairment of long-lived assets

 

Long-lived assets primarily include plant and equipment. In accordance with Accounting Standards Codification (“ASC”) ASC Topic 360-10-5, “Impairment or Disposal of Long-Lived Assets”, the Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable or that the useful lives are no longer appropriate. If the total of the expected undiscounted future net cash flows is less than the carrying amount of the asset, a loss is recognized for the difference between the fair value and carrying amount of the asset. There has been no impairment charge for the periods presented.

 

 
6

 

 

UONLIVE CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED MARCH 31, 2012

(Currency expressed in United States Dollars (“US$”), except for number of shares)

(Unaudited)

 

 

Revenue recognition

 

The Company derives revenues from the sale of advertising airtime to customers. Revenue is recognized when the following four revenue criteria are met: persuasive evidence of an arrangement exists, delivery has occurred, the selling price is fixed or determinable, and collectibility is reasonably assured, as defined by ASC Topic 605, “Revenue Recognition”.

 

Income taxes

 

The provision for income taxes is determined in accordance with the provisions of ASC Topic 740, “Income Taxes” (“ASC 740”). Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted income tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Any effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

 

ASC 740 prescribes a comprehensive model for how companies should recognize, measure, present, and disclose in their financial statements uncertain tax positions taken or expected to be taken on a tax return. Under ASC 740, tax positions must initially be recognized in the financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities. Such tax positions must initially and subsequently be measured as the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the tax authority assuming full knowledge of the position and relevant facts.

 

For the three months ended March 31, 2012 and 2011, the Company did not have any interest and penalties associated with tax positions. As of March 31, 2012, the Company did not have any significant unrecognized uncertain tax positions.

 

The Company conducts major businesses in Hong Kong and is subject to tax in this jurisdiction. As a result of its business activities, the Company files tax returns that are subject to examination by the foreign tax authority.

 

Net loss per share

 

The Company calculates net loss per share in accordance with ASC Topic 260, “Earnings per Share.” Basic loss per share is computed by dividing the net loss by the weighted-average number of common shares outstanding during the period. Diluted loss per share is computed similar to basic loss per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common stock equivalents had been issued and if the additional common shares were dilutive.

 

●     Comprehensive income or loss

 

ASC Topic 220, “Comprehensive Income” establishes standards for reporting and display of comprehensive income or loss, its components and accumulated balances. Comprehensive income or loss as defined includes all changes in equity during a period from non-owner sources. Accumulated comprehensive income or loss consists of changes in unrealized gains and losses on foreign currency translation. This comprehensive income or loss is not included in the computation of income tax expense or benefit.

 

Foreign currencies translation

 

Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transaction. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency using the applicable exchange rates at the balance sheet dates. The resulting exchange differences are recorded in the condensed consolidated statement of operations.

 

 
7

 

 

UONLIVE CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED MARCH 31, 2012

(Currency expressed in United States Dollars (“US$”), except for number of shares)

(Unaudited)

 

 

The reporting currency of the Company is the United States Dollars ("US$") and the accompanying condensed consolidated financial statements have been expressed in US$. In addition, the Company’s subsidiary in Hong Kong maintain its books and record in its local currency, Hong Kong Dollars ("HK$"), which is its functional currency and the primary currency of the economic environment in which their operations are conducted.

 

In general, for consolidation purposes, assets and liabilities of its subsidiaries whose functional currency is not US$ are translated into US$, in accordance with ASC Topic 830-30, “Translation of Financial Statement, using the exchange rate on the balance sheet date. Revenues and expenses are translated at average rates prevailing during the period. The gains and losses resulting from translation of financial statements of foreign subsidiaries are recorded as a separate component of accumulated other comprehensive income within the statement of stockholders’ deficit.

 

Translation of amounts from HK$ into US$1 has been made at the following exchange rates for the respective period:

 

   

March 31, 2012

   

March 31, 2011

 

Period-end HK$:US$1 exchange rate

    7.7646       7.7887  

Period average HK$:US$1 exchange rate

    7.7608       7.7879  

 

Segment reporting

 

ASC Topic 280, “Segment Reporting” establishes standards for reporting information about operating segments on a basis consistent with the Company’s internal organization structure as well as information about geographical areas, business segments and major customers in financial statements. The Company operates in one reportable segment in Hong Kong.

 

Related parties

 

For the purposes of these financial statements, parties are considered to be related if one party has the ability, directly or indirectly, to control the party or exercise significant influence over the party in making financial and operating decisions, or vice versa, or where the Company and the party are subject to common control or common significant influence. Related parties may be individuals or other entities.

 

Fair value of financial instruments

 

The carrying value of the Company’s financial instruments: cash and cash equivalents, accounts receivable, deposits and other receivables, accounts payable and accrued liabilities and amount due to a shareholder approximate at their fair values because of the short-term nature of these financial instruments.

 

The Company also follows the guidance of ASC Topic 820-10, “Fair Value Measurements and Disclosures” ("ASC 820-10"), with respect to financial assets and liabilities that are measured at fair value. ASC 820-10 establishes a three-tier fair value hierarchy that prioritizes the inputs used in measuring fair value as follows:

 

Level 1 : Inputs are based upon unadjusted quoted prices for identical instruments traded in active markets;

 

Level 2 : Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and

 

●

Level 3 : Inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques, including option pricing models and discounted cash flow models.

 

Fair value estimates are made at a specific point in time based on relevant market information about the financial instrument. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and, therefore, cannot be determined with precision. Changes in assumptions could significantly affect the estimates.

 

 
8

 

 

UONLIVE CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED MARCH 31, 2012

(Currency expressed in United States Dollars (“US$”), except for number of shares)

(Unaudited)

 

 

Recent accounting pronouncements

 

The Company has reviewed all recently issued, but not yet effective, accounting pronouncements and do not believe the future adoption of any such pronouncements may be expected to cause a material impact on its financial condition or the results of its operations.

 

In April 2012, the Financial Accounting Standards Board (“FASB”) issued new accounting guidance for purposes of measuring the impairment of receivables and evaluating whether a troubled debt restructuring has occurred. An entity should disclose the total amount of receivables and the allowance for credit losses as of the end of the period of adoption related to those receivables that are newly considered impaired under Section 310-10-35 for which impairment was previously measured under ASC Topic 450-20, “Contingencies–Loss Contingencies. Currently, this guidance is anticipated to be effective for interim and annual periods ending after June 15, 2012. The Company does not expect the adoption of this guidance to have a material impact on its consolidated financial position, results of operations, cash flows, or disclosures.

 

In December 2011, the FASB issued ASU 2011-28, Intangibles – Goodwill and Other (ASC Topic 350): When to Perform Step 2 of the Goodwill Impairment Test for Reporting Units with Zero or Negative Carrying Amounts . The ASU does not prescribe a specific method of calculating the carrying value of a reporting unit in the performance of step 1 of the goodwill impairment test (i.e. equity-value-based method or enterprise-value-based method). However, it requires entities with a zero or negative carrying value to assess, considering qualitative factors such as those used to determine whether a triggering event would require an interim goodwill impairment test (listed in ASC Topic 350-20-35-30, “Intangibles – Goodwill and Other – Subsequent Measurement”), whether it is more likely than not that a goodwill impairment exists and perform step 2 of the goodwill impairment test if so concluded. ASU 2011-28 is effective for the Company beginning January 1, 2012 and early adoption is not permitted. The Company does not expect the adoption of ASU 2011-28 to have a material impact on its consolidated financial position or results of operations.

 

 

NOTE5     AMOUNT DUE TO AND NOTE PAYBLE TO A SHAREHOLDER

 

(a)     Amount due to a stockholder

 

As of March 31, 2012, the balance represented temporary advances made by a major shareholder, Mr. Samuel Tsun for working capital purposes, which was unsecured, interest-free with no fixed terms of repayment.

 

(b)     Note payable to a shareholder

 

As of March 31, 2012, the note payable due to a major shareholder, Mr. Samuel Tsun, was unsecured, interest free and not repayable within the next twelve months.

 

 

NOTE6     INCOME TAXES

 

The Company generated an operating loss for the three months ended March 31, 2012 and 2011 and did not record income tax expense. The Company has operations in various countries and is subject to tax in the jurisdictions in which they operate, as follows:

 

United States of America

 

UOLI is registered in the State of Nevada and is subject to United States of America tax law. No provision for income taxes have been made as UOLI has generated no taxable income for the periods presented. The Company has not completed filings of these US tax returns. The Company’s policy is to recognize accrued interest and penalties related to unrecognized tax benefits in its income tax provision. The Company has adopted ASC 740-10 "Accounting for Income Taxes" and recorded a liability for an uncertain income tax position, tax penalties and any imputed interest thereon. The amount, recorded as an obligation, is $50,000 at March 31, 2012.

 

 
9

 

 

UONLIVE CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED MARCH 31, 2012

(Currency expressed in United States Dollars (“US$”), except for number of shares)

(Unaudited)

 

 

British Virgin Island

 

Under the current BVI law, the Company is not subject to tax on income.

 

Hong Kong

 

The Company’s subsidiary operating in Hong Kong is subject to Hong Kong Profits Tax at the statutory rate of 16.5% on its assessable income for the three months ended March 31, 2012 and 2011, respectively. For the three months ended March 31, 2012, the Company incurred an operating loss of $81,033 for income tax purposes, with approximately $2,419,364 of net operating loss carryforwards for Hong Kong tax purpose at no expiration.

 

The following table sets forth the significant components of the aggregate net deferred tax assets of the Company as of March 31, 2012 and December 31, 2011:

 

   

March 31, 2012

   

December 31, 2011

 

Deferred tax assets:

               

Net operating loss carryforwards

  $ 399,195     $ 385,245  

Less: valuation allowance

    (399,195 )     (385,245 )
                 

Net deferred tax assets

  $ -     $ -  

 

As of March 31, 2012, the Company has provided for a full valuation allowance against the deferred tax assets of $399,195 on the expected future tax benefits from the net operating loss carryforwards as the management believes it is more likely than not that these assets will not be realized in the future. For the three months ended March 31, 2012, the valuation allowance is increased by $13,950, primarily relating to net operating loss carryforwards from the foreign tax regime.

 

 

NOTE7     RELATED PARTY TRANSACTIONS

 

(a)     Accounts receivable and sales – related company

 

For the three months ended March 31, 2012 and 2011, the Company earned sales revenue of $0 and $3,853 from Dbtronix (Far East) Ltd., which was controlled by a director of the Company, Mr. Samuel Tsun, at the current market value in a normal course of business.

 

(b)     IT service cost paid to a related company

 

For the three months ended March 31, 2012 and 2011, the Company paid IT service cost of $8,504 and $8,475, respectively to the related company, which was controlled by a director of the Company, Mr. Samuel Tsun, at the current market value in a normal course of business.

 

(c)     Rent charge paid to a related company

 

For the three months ended March 31, 2012 and 2011, the Company paid rent charge of $21,783 and $23,113, respectively to the related company, which was controlled by a director of the Company, Mr. Samuel Tsun, at the current market value in a normal course of business.

 

 
10

 

 

UONLIVE CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED MARCH 31, 2012

(Currency expressed in United States Dollars (“US$”), except for number of shares)

(Unaudited)

 

 

NOTE8     CONCENTRATIONS OF RISK

 

The Company is exposed to the following concentrations of risk:

 

(a)     Major customers

 

There were no major customers for the three months ended March 31, 2012.

 

For the three months ended March 31, 2011, there was one single customer who accounted for 100% of the Company’s revenues with the outstanding balances of $3,853 at period-end date.

 

(b)     Credit risk

 

Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash and trade accounts receivable. The Company performs ongoing credit evaluations of its customers’ financial condition, but does not require collateral to support such receivables.

 

(c)     Exchange rate risk

 

The Company cannot guarantee that the current exchange rate will remain steady; therefore there is a possibility that the Company could post the same amount of profit for two comparable periods and because of the fluctuating exchange rate actually post higher or lower profit depending on exchange rate of HK$ converted to US$ on that date. The exchange rate could fluctuate depending on changes in political and economic environments without notice.

 

 

NOTE9     COMMITMENTS AND CONTINGENCIES

 

The Company rented office spaces from a related party under a non-cancelable operating lease agreement in Hong Kong for a term of two years, with fixed monthly rentals, expiring in March 2013. The lease agreement was terminated in March 2012. Costs incurred under the operating lease, which are considered to equivalent to the market rate, are recorded as rental expense and totaled approximately $21,783 and $23,113 for the three months ended March 31, 2012 and 2011.

 

 

NOTE10     SUBSEQUENT EVENT

 

The Company evaluated subsequent events through the date the financial statements were issued and filed with this Form 10-Q. There were no subsequent events that required recognition or disclosure.

 

 
11

 

 

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

 

PRELIMINARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

 

This discussion contains forward-looking statements. The reader should understand that several factors govern whether any forward-looking statement contained herein will be or can be achieved. Any one of those factors could cause actual results to differ materially from those projected herein. These forward-looking statements include plans and objectives of management for future operations, including plans and objectives relating to the products and the future economic performance of the Company. Assumptions relating to the foregoing involve judgments with respect to, among other things, future economic, competitive and market conditions, future business decisions, and the time and money required to successfully complete development projects, all of which are difficult or impossible to predict accurately and many of which are beyond the control of the Company. Although the Company believes that the assumptions underlying the forward-looking statements contained herein are reasonable, any of those assumptions could prove inaccurate and, therefore, there can be no assurance that the results contemplated in any of the forward-looking statements contained herein will be realized. Based on actual experience and business development, the Company may alter its marketing, capital expenditure plans or other budgets, which may in turn affect the Company's results of operations. In light of the significant uncertainties inherent in the forward-looking statements included therein, the inclusion of any such statement should not be regarded as a representation by the Company or any other person that the objectives or plans of the Company will be achieved.

 

OVERVIEW

 

The predecessor of Uonlive Corporation was incorporated in the State of Nevada on January 29, 1998 under the name Txon International Development Corporation to conduct any lawful business, to exercise any lawful purpose and power, and to engage in any lawful act or activity for which corporations may be organized under the General Corporation Laws of Nevada.  On August 1, 2008, the Company changed its name to Uonlive Corporation.

 

On March 28, 2008, the Company entered into the Exchange Agreement with Tsang William, Uonlive Limited, Tsun Samuel, Hui Chi Kit and Parure Capital Limited. Upon closing of the Share Exchange on March 31, 2008, Tsun and Hui delivered all of their share capital in Parure Capital to the Company in exchange for 150,000,000 shares of common stock of the Company and 500,000 shares of Series A Convertible Preferred Stock, resulting in Parure Capital becoming a wholly owned subsidiary of the Company and Uonlive becoming an indirect wholly owned subsidiary of the Company.

 

As a result, , 495,566 post reverse split shares of the Company’s common stock were outstanding immediately prior to the closing of the Share Exchange, and 1,995,659 shares of the Company’s common stock were outstanding immediately after the closing of the Share Exchange. In addition, 500,000 shares of Series A Convertible Preferred Stock were outstanding immediately after the closing of the Share Exchange. Of these shares, approximately 263,559 shares represented the Company’s “public float” prior to and after the Share Exchange. The 1,500,000 shares of common stock and 500,000 shares of Series A Convertible Preferred Stock issued in the Share Exchange were issued in reliance upon an exemption from registration pursuant to Regulation S under the Securities Act of 1933, as amended (the “Securities Act”). The shares in the public float will continue to represent the shares of the Company’s common stock held for resale without further registration by the holders thereof. After the Share Exchange, Uonlive becomes our operating subsidiary.

 

On May 19, 2009, we approved a 1:100 reverse stock split (the “Reverse Split”) of our common stock and an amendment to our Articles of Incorporation to effectuate the Reverse Split.

 

Uonlive was a private online multimedia company incorporated in April 2007 with its headquarters in Hong Kong, China. Until December 31, 2011, the main business of Uonlive was operating an online radio station, a kind of virtual community able to provide the public with free online radio services, and mainly targets the younger listening audience.

 

Uonlive provided multi-division entertainment programs through live-audio-radio and audio-on-demand. Audio-on-demand allows the listener to choose his or her own programming.  Uonlive also utilized the most advanced technology for DJs and audiences to control their broadcasting techniques. Uonlive had planned to distribute online radio programs for communication products including mobile and family electronics with new radio receiving techniques.

 

 
12

 

 

Different than traditional radio stations, Uonlive was continuously adding more interactive features, including online live voting, chat rooms, blogs, download service, an online player and more in order to reach increased audiences.

 

In addition, Uonlive provided professional training courses to DJs.  It was committed to developing new radio personalities by providing professional and systematic training programs. After completion of the courses, the participants would be qualified to take part in large-scale activities and ceremonies. Such opportunities worked for the mutual benefit of the online station and the participant.

 

Our objective was to develop and provide diversified programming that had an upbeat message for anyone who listens.

 

During the first quarter of 2012, our management, after consulting the Board of Directors, decided to cease our operation because of minimal revenue and no improvement in developing the market for internet radio in Hong Kong.

 

 

Business Plan

 

Our current business plan is to seek and identify a privately owned company which is looking to become a publicly listed company by combining their operation with us through a reverse merger. Private companies wishing to have their securities publicly traded may seek to merge or effect an exchange transaction with a shell company with a significant stockholder base. As a result of the merger or exchange transaction, the stockholders of the private company will hold a majority of the issued and outstanding shares of the shell company. Typically, the directors and officers of the private company become the directors and officers of the shell company. Often the name of the private company becomes the name of the shell company.

 

We have no capital and must depend on our controlling shareholders to provide us funding for our daily operation and expenses, including professional fee and fees charged by regulators, although they are under no obligation to do so. Mr. Hui Chi Kit is primarily tasked to investigate acquisition opportunities although we believe that business opportunities may also come to our attention from various sources, including our controlling shareholders, professional advisors such as attorneys and accountants, securities broker-dealers, venture capitalists, members of the financial community, and others who may present unsolicited proposals.

 

We cannot give assurance that we will successfully find a suitable candidate to implement its operation with us by a reverse merge. We also cannot give assurance that any acquisition, if occurs, will be on terms that are favorable to us or to our shareholders.

 

We do not propose to restrict our search for candidate in any particular geographical area of industry. Our management’s discretion in the selection of the business opportunities is unrestricted, subject to the availability of such opportunities, economic conditions, and other factors.

 

Any entity which has an interest in being acquired by, or merging into us, is expected to be an entity that desires to become a public company and establish a public trading market for its securities. In connection with such a merger or acquisition, it is anticipated that an amount of common stock constituting control of us would be issued by us.

 

Investigation and Selection of Business Opportunities

 

Certain types of business acquisition transactions may be completed without requiring us to first submit the transaction to our stockholders for their approval. If the proposed transaction is structured in such a fashion our stockholders (other than our controlling stockholders) will not be provided with financial or other information relating to the candidate prior to the completion of the transaction.

 

If a proposed business combination or business acquisition transaction is structured that requires our stockholder approval, and we are a reporting company, we will be required to provide our stockholders with information as applicable under Regulations 14A and 14C under the Exchange Act.

 

 
13

 

 

The analysis of business opportunities will be undertaken by or under the supervision of Mr.Hui Chi Kit, our Chief Financial Officer. In analyzing potential merger candidates, our management will consider, among other things, the following factors:

 

*

Potential for future earnings and appreciation of value of securities;

*

Perception of how any particular business opportunity will be received by the investment community and by our stockholders;

*

Eligibility of a candidate, following the business combination, to qualify its securities for listing on a national exchange or on a national automated securities quotation system, such as NASDAQ.

*

Historical results of operations;

*

Liquidity and availability of capital resources;

*

Competitive position as compared to other companies of similar size and experience within the industry segment as well as within the industry as a whole;

*

Strength and diversity of existing management or management prospects that are scheduled for recruitment;

*

Amount of debt and contingent liabilities; and

*

The products and/or services and marketing concepts of the target company.

 

There is no single factor that will be controlling in the selection of a business opportunity. Our management will attempt to analyze all factors appropriate to each opportunity and make a determination based upon reasonable measures and available data. Potentially available business opportunities may occur in many different industries and at various stages of development, all of which will make the task of comparative investigation and analysis of such business opportunities extremely difficult and complex. Because of our limited working capital available and limited personnel to perform due diligence and investigation we may not discover or adequately evaluate adverse facts about the business opportunity to be acquired.

 

We are unable to predict when we may participate in a business opportunity. Prior to making a decision to participate in a business transaction, we will generally request that we be provided with written materials regarding the business opportunity, including, but not limited to, a description of products, services and company history; financial information; available projections, with related assumptions upon which they are based; an explanation of proprietary products and services; evidence of existing patents, trademarks, or service marks, or rights thereto; present and proposed forms of compensation to management; a description of transactions between such company and its affiliates during the relevant periods; a description of present and required facilities; an analysis of risks and competitive conditions; audited financial statements, or if audited financial statements are not available, unaudited financial statements, together with reasonable assurance that audited financial statements would be able to be produced to comply with the requirements of a Current Report on Form 8-K to be filed with the Securities and Exchange Commission, upon consummation of the business combination.

 

We believe that various types of potential candidates might find a business combination with us to be attractive. These include candidates desiring to create a public market for their securities in order to enhance liquidity for current stockholders, candidates which have long-term plans for raising capital through public sale of securities and believe that the prior existence of a public market for their securities would be beneficial, and candidates which plan to acquire additional assets through issuance of securities rather than for cash, and believe that the development of a public market for their securities will be of assistance in that process.

 

 

RESULTS OF OPERATIONS

 

The following discussion should be read in conjunction with the unaudited consolidated Financial Statements of the Company for the three-month period ended March 31, 2012 and 2011 and related notes thereto.

 

THREE-MONTH PERIOD ENDED MARCH 31, 2012 COMPARED TO THREE-MONTH PERIOD ENDED MARCH 31, 2011

 

Operating Revenue

 

We recorded no consolidated revenue for the three-month period ended March 31, 2012 compared to $3,853 for the same corresponding period in 2011. The decrease was mainly due to a difficult business environment the Company was facing and the decision to cease operations.  The consolidated gross loss for the three-month period ended March 31, 2012 was zero due to no revenue being generated during the period compared to a gross loss of $6,636 for the same corresponding period in 2011. We do not anticipate receiving further revenue for so long as we have no operations.

 

 
14

 

 

Operating Expenses

 

Operating expenses for the three-month period ended March 31, 2012 slightly increased to $140,898 from $140,567 in the corresponding period of 2011. The operating expense included approximately $50,000 of accrual for potential tax penalty, $25,500 of salaries expense and labor charges, approximately $21,700 of rental expense, approximately $10,300 of consulting and professional fees and approximately $9,000 of computer system maintenance expense. We are expecting approximately $100,000 of annual operating expense for the forthcoming years.

  

Impairment and Depreciation

 

During the three-month period ended March 31, 2012, we incurred $3,238 of depreciation expenses, compared to $3,562 for the same period in 2011.

 

Net Loss/ Comprehensive loss

 

We incurred a net loss of $140,898 for the three-month period ended March 31, 2012, compared to $147,203 for the corresponding period in the year 2011, which was the result of a decrease in operating expenses from the computer maintenance.  We accounted for a comprehensive loss of $142,668 for the three-month period ended March 31, 2012 compared to $145,356 for the same corresponding period in the year of 2011.

 

LIQUIDITY AND CAPITAL RESOURCES

 

During the quarter ended March 31, 2012, net cash used in operating activities was $94,989, which included a net loss of $140,898 compared to $143,944 and $147,203 for the same period in 2011. The operating activities also included the use in depreciation of approximately $3,238; which was offset by the increase of accounts payable and accrued liabilities of $42,671.  Net cash provided by financing activities accounted for $83,755 and $144,150 for the three months ended March 31, 2012 and 2011 respectively, which was an amount due to a shareholder.

 

We believe that the level of financial resources is a significant factor for our future development and, accordingly, may choose at any time to raise capital through private debt or equity financing to strengthen our financial position, facilitate growth and provide us with additional flexibility to take advantage of business opportunities. However, there is no assurance that the Company will be successful in securing sufficient funds to sustain the operations.

 

 
15

 

 

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

 

Not applicable.

 

Item 4. Controls and Procedures.

 

Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures

 

We conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934, as amended (Exchange Act), under the supervision of and with the participation of our management, including the Chief Executive Officer and Chief Financial Officer. Based on that evaluation, our management, including the Chief Executive Officer and Chief Financial Officer, concluded that our disclosure controls and procedures, subject to limitations as noted below, as of March 31, 2012, and during the period prior to and including the date of this report, were not effective to ensure that all information required to be disclosed by us in the reports that we file or submit under the Exchange Act is: (i) recorded, processed, summarized and reported, within the time periods specified in the Commission’s rule and forms; and (ii) accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. The Chief Executive Officer and Chief Financial Manager concluded that (i) there continue to be material weaknesses in the Company’s internal controls over financial reporting, that the weaknesses constitute a “deficiency” which could result in misstatements of the foregoing accounts and disclosures that could result in a material misstatement to the financial statements for the period covered by this report that would not be detected, and (ii) accordingly, our disclosure controls and procedures were not effective as of March 31, 2012.

 

Inherent Limitations

 

Because of its inherent limitations, our disclosure controls and procedures may not prevent or detect misstatements. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. Also, 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 and procedures may deteriorate.

 

Changes in Internal Controls over Financial Reporting

 

Subject to the foregoing disclosure, there were no changes in our internal control over financial reporting that occurred during our first fiscal quarter ended March 31, 2012, that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

 

PART II - OTHER INFORMATION

 

Item 1. Legal Proceedings.

 

None.

 

Item 1A. Risk Factors

 

Not applicable.

 

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

 

None.

 

Item 3. Defaults Upon Senior Securities.

 

None.

 

 
16

 

 

Item 4. Mine Safety Disclosures.

 

Not applicable.

 

Item 5. Other Information.

 

Not applicable.

 

Item 6. Exhibits.

 

Copies of the following documents are included as exhibits to this report pursuant to Item 601 of Regulation S-K.

 

Exhibit

No.

 

Description

 

 

 

 

 

3.1

 

Articles of Incorporation of the Company, as amended (1)

 

3.2

3.3

 

By-laws of the Company (2)

Certificate of Designation for Series A Convertible Preferred Stock filed with the State of Nevada on March 26, 2008 (3)

 

31.1

 

Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*

 

31.2

 

Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*

 

32.1

 

Certification of the Principal Executive Officer pursuant to U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.**

 

32.2

 

Certification of the Principal Financial Officer pursuant to U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.**

 

101.INS

 

XBRL Instance Document*

 

101.SCH

 

XBRL Taxonomy Extension Schema Document*

 

101.CAL

 

XBRL Taxonomy Calculation Linkbase Document*

 

101.DEF

 

XBRL Taxonomy Extension Definition Linkbase Document*

 

101.LAB

 

XBRL Taxonomy Label Linkbase Document*

 

101.PRE

 

XBRL Taxonomy Presentation Linkbase Document*

 

 

(1) Incorporated herein by reference to Exhibit 3.6 to the Company’s Current Report on Form 8-K filed with the Commission on September 8, 2014.

(2) Incorporated herein by reference to Exhibit 3.2 to the Company’s Registration Statement on Form 10-SB filed with the Commission on September 9, 1999.

(3) Incorporated herein by reference to Exhibit 3.3 to the Company’s Current Report on Form 8-K filed with the Commission on September 8, 2014.

 

*Filed herewith.

**Furnished herewith.

 

 
17

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

 

 
 

UONLIVE CORPORATION

 

 

 

Date: November 21, 2014

By:

/s/ Tsun Sin Man Samuel

 

 

Tsun Sin Man Samuel

 

 

Chief Executive Officer and Chairman

 

 

(Principal Executive Officer)

 

 

 

Date: November 21, 2014

By:

/s/ Hui Chi Kit

 

 

Hui Chi Kit

 

 

Chief Financial Officer

 

 

(Principal Financial Officer)

 

 

18