Attached files
| file | filename |
|---|---|
| EX-31.1 - EXHIBIT 31.1 - CHINAWE COM INC | v417851_ex31-1.htm |
| EX-32.1 - EXHIBIT 32.1 - CHINAWE COM INC | v417851_ex32-1.htm |
| EX-32.2 - EXHIBIT 32.2 - CHINAWE COM INC | v417851_ex32-2.htm |
| EX-31.2 - EXHIBIT 31.2 - CHINAWE COM INC | v417851_ex31-2.htm |
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
| x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended June 30, 2015
OR
| ¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Commission file number: 000-29169
Chinawe.com Inc.
(Exact name of registrant as specified in its charter)
| California | 95-462728 | |
| (State or other jurisdiction
of incorporation or organization) |
(I.R.S. Employer Identification No.) |
Room 1208, Block A
Fuk Keung Industrial Building
66-68 Tong Mei Road
Kowloon, Hong Kong
(Address of principal executive offices) (Zip Code)
(852) 23810818
(Registrant's telephone number, including area code)
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 x 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 x
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. (check one):
| Large accelerated filer ¨ | Accelerated filer ¨ |
| Non-accelerated filer ¨ | Smaller reporting company x |
| (Do not check if a smaller reporting company) |
Indicate by check whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes x No ¨
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practical date:
| Class of Common Stock | Outstanding at August 13, 2015 | |||
| Common Stock, $.001 par value | 43,800,000 | |||
TABLE OF CONTENTS
PART I — FINANCIAL INFORMATION
CHINAWE.COM INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
| For the Six months ended June 30, | ||||||||||||
| Note | 2015 | 2014 | ||||||||||
| U.S.$ | U.S.$ | |||||||||||
| Depreciation | — | — | ||||||||||
| Administrative and general expenses | (7,000 | ) | (8,417 | ) | ||||||||
| LOSS FROM OPERATIONS | (7,000 | ) | (8,417 | ) | ||||||||
| NON-OPERATING INCOME (EXPENSE) | ||||||||||||
| Interest | — | — | ||||||||||
| Other income | — | — | ||||||||||
| LOSS BEFORE INCOME TAXES | (7,000 | ) | (8,417 | ) | ||||||||
| Income tax expense | 5 | — | — | |||||||||
| NET LOSS | (7,000 | ) | (8,417 | ) | ||||||||
| OTHER COMPREHENSIVE INCOME | ||||||||||||
| Foreign currency translation | — | — | ||||||||||
| COMPREHENSIVE LOSS | (7,000 | ) | (8,417 | ) | ||||||||
| Basic and diluted net income per share of common stock | (0.00016 | ) | (0.000019 | ) | ||||||||
| Weighted average number of shares of common stock outstanding | 43,800,000 | 43,800,000 | ||||||||||
The financial statements should be read in conjunction with the accompanying notes.
| 3 |
CHINAWE.COM INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
| As of | As of | |||||||||
| Note | June 30, 2015 | December 31, 2014 | ||||||||
| (unaudited) | (derived from audited financial statements) | |||||||||
| U.S.$ | U.S.$ | |||||||||
| ASSETS | ||||||||||
| TOTAL ASSETS | — | — | ||||||||
| LIABILITIES AND STOCKHOLDERS' DEFICIT | ||||||||||
| Current liabilities: | ||||||||||
| Accrued expenses and other current liabilities | 1,635 | 5,335 | ||||||||
| Due to related parties | 4 | 412,020 | 401,320 | |||||||
| Total current liabilities | 413,655 | 406,655 | ||||||||
| Contingencies and commitments | 5 | |||||||||
| Stockholders' deficit: | ||||||||||
| Preferred stock, par value U.S.$0.001 per share; authorized 20,000,000 shares; none issued, common stock, par value U.S.$0.001 per share; authorized 100,000,000 shares; issued and outstanding 43,800,000 shares | 43,800 | 43,800 | ||||||||
| Capital in excess of par | 84,560 | 84,560 | ||||||||
| Accumulated losses | (542,015 | ) | (535,015 | ) | ||||||
| Accumulated other comprehensive loss | — | — | ||||||||
| Total stockholders' deficit | (413,655 | ) | (406,655 | ) | ||||||
| TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | — | — | ||||||||
The financial statements should be read in conjunction with the accompanying notes.
| 4 |
CHINAWE.COM INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(Unaudited)
| Number of shares | Amount | Capital in excess of par | Accumulated losses | Accumulated other | Total Stockholders’ deficit | |||||||||||||||||||
| U.S.$ | U.S.$ | U.S.$ | U.S.$ | U.S.$ | ||||||||||||||||||||
| Balance as of December 31, 2013 | 43,800,000 | 43,800 | 84,560 | (516,471 | ) | — | (388,111 | ) | ||||||||||||||||
| Comprehensive income/(loss): | ||||||||||||||||||||||||
| Net loss for the period | — | — | — | (8,417 | ) | — | (8,417 | ) | ||||||||||||||||
| Total comprehensive loss | — | — | — | (8,417 | ) | — | (8,417 | ) | ||||||||||||||||
| Balance as of June 30, 2014 | 43,800,000 | 43,800 | 84,560 | (524,888 | ) | — | (396,528 | ) | ||||||||||||||||
| Balance as of December 31, 2014 | 43,800,000 | 43,800 | 84,560 | (535,015 | ) | — | (406,655 | ) | ||||||||||||||||
| Comprehensive income/(loss): | ||||||||||||||||||||||||
| Net loss for the period | — | — | — | (7,000 | ) | — | (7,000 | ) | ||||||||||||||||
| Total comprehensive loss | — | — | — | (7,000 | ) | — | (7,000 | ) | ||||||||||||||||
| Balance as of June 30, 2015 | 43,800,000 | 43,800 | 84,560 | (542,015 | ) | — | (413,655 | ) | ||||||||||||||||
The financial statements should be read in conjunction with the accompanying notes.
| 5 |
CHINAWE.COM INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
| Six months ended June 30, | ||||||||
| 2015 | 2014 | |||||||
| U.S.$ | U.S.$ | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
| Net loss | (7,000 | ) | (8,417 | ) | ||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
| Depreciation | — | — | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Prepayments, deposits and other receivables | — | — | ||||||
| Accrued expenses and other current liabilities | (3,700 | ) | 4,599 | |||||
| Surcharge on taxes | — | — | ||||||
| Income tax payable | — | — | ||||||
| NET CASH USED IN OPERATING ACTIVITIES | (10,700 | ) | (3,818 | ) | ||||
| CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||
| NET CASH USED IN INVESTING ACTIVITIES | — | — | ||||||
| CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
| Repayment of long-term debt | — | — | ||||||
| Advance from related parties | 10,700 | 3,818 | ||||||
| Repayment to related parties | — | — | ||||||
| NET CASH PROVIDED BY FINANCING ACTIVITIES | 10,700 | 3,818 | ||||||
| NET DECREASE IN CASH AND CASH EQUIVALENTS | — | — | ||||||
| Cash and cash equivalents, beginning of period | — | — | ||||||
| Foreign currency translation on cash and cash equivalents | — | — | ||||||
| CASH AND CASH EQUIVALENTS, END OF PERIOD | — | — | ||||||
| SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION | ||||||||
| Cash paid for interest | — | — | ||||||
The financial statements should be read in conjunction with the accompanying notes.
| 6 |
CHINAWE.COM INC. AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
| 1. | Basis of Presentation |
The accompanying financial statements present the financial position of the Company as of June 30, 2015 and December 31, 2014, and its results of operations for the six months ended June 30, 2015 and 2014. All inter-company accounts and transactions have been eliminated on consolidation.
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the six months ended June 30, 2015 are not necessarily indicative of the results that may be expected for the year ending December 31, 2015.
The balance sheet at December 31, 2014 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. These financial statements should be read in conjunction with the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014.
2. Organization
Chinawe.com Inc. (“Chinawe”) was incorporated under the laws of the State of California. Chinawe’s principal business activity was providing professional management services relating to non-performing loans in the People’s Republic of China, as well as other consulting services. During the first quarter of 2009, the Company’s sole customer, Huizhou One Limited, issued a notice of termination to terminate the services contracts with effect from March 26 and March 27, 2009. Effective from March 27, 2009, the Company became a non-operating company.
The consolidated financial statements include the accounts of Chinawe and the following subsidiary (collectively referred to as the “Company”): Officeway Technology Limited, a company incorporated in the British Virgin Islands in December 1999, which was formed for the purpose of acquiring (in March 2000) its wholly-owned subsidiary, Chinawe Asset Management Limited (“CAM (HK)”). CAM (HK) was disposed of as of July 26, 2010.
3. Going concern consideration
The Company’s financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. As of June 30, 2015, the Company had negative working capital and stockholders’ deficit of U.S.$413,655 and U.S.$413,655, respectively, which raise substantial doubt about its ability to continue as a going concern.
The Company has relied on private financing by cash inflows from the principal stockholders of the Company, who have agreed not to demand repayment of amounts due to them as long as the Company has negative working capital. These stockholders have indicated their intention to finance the Company for a reasonable period of time to enable the Company to continue as a going concern, assuming that in such a period of time the Company would not be able to raise additional capital to support its continuation. However, it is uncertain for how long or to what extent such a period of time would be “reasonable” and there can be no assurance that the financing from these stockholders will be continued. The accompanying financial statements do not include or reflect any adjustments that might result from the outcome of these uncertainties.
| 7 |
4. Due to related parties
The balances with related parties are as follows:
| As of | As of | |||||||||||
| Note | June 30, 2015 | December 31, 2014 | ||||||||||
| (Unaudited) | ||||||||||||
| U.S.$ | U.S.$ | |||||||||||
| Advances from stockholders | (a | ) | 412,020 | 401,320 | ||||||||
| (a) | The amounts due are unsecured, non-interest bearing and repayable on demand. During the six months ended June 30, 2015 and 2014, the Company received advances from related parties of U.S.$10,700 and U.S.$3,818, respectively. In addition, during the three months ended June 30, 2015 and 2014, the Company repaid advances of U.S.$0 and U.S.$0, respectively, to related parties. |
5. Contingencies
The Company is currently suspended in the State of California due to failure to file reports with the Franchise Tax Board. The Company is also delinquent in filing its U.S. Federal tax returns. The Company has decided not to pursue reinstatement in California or prepare and file past due U.S. Federal tax returns until it has formulated a plan for once again becoming an operating company.
| 8 |
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
The following discussion should be read in conjunction with the Consolidated Condensed Financial Statements and notes thereto appearing elsewhere in this Form 10-Q. The following discussion contains forward-looking statements. Our actual results may differ significantly from those projected in the forward-looking statements. Factors that might cause future results to differ materially from those projected in the forward-looking statements include, but are not limited to, those discussed elsewhere in this report.
Overview — Results of Operations
Effective March 27, 2009, the Company ceased providing professional management services relating to non-performing loans in the People’s Republic of China. The Company has terminated its employees and closed down its offices. The Company has not identified a specific line of business or territory for any new business. There can be no assurance that the Company will be successful in identifying a new line of business that it can enter into or that if such new line of business is identified, that the Company will have adequate funding to commence operations of a new line of business. The principal stockholders of the Company have indicated their intention to finance the Company for a reasonable period of time to enable the Company to continue as a going concern, assuming that in such a period of time the Company would not be able to raise additional capital to support its continuation. However, it is uncertain for how long or to what extent such a period of time would be “reasonable” and there can be no assurance that financing from these stockholders will be continued.
| Six months ended June 30, | ||||||||
| 2015 | 2014 | |||||||
| U.S.$ | U.S.$ | |||||||
| Loss from operations | (7,000 | ) | (8,417 | ) | ||||
| Finance costs | — | — | ||||||
| Other income | — | — | ||||||
| Loss before taxation | (7,000 | ) | (8,417 | ) | ||||
| Taxation | — | — | ||||||
| Net loss attributable to discontinued operations | (7,000 | ) | (8,417 | ) | ||||
SIX MONTHS ENDED JUNE 30, 2015 (UNAUDITED) COMPARED TO THE SIX MONTHS ENDED JUNE 30, 2014 (UNAUDITED)
LOSS FROM OPERATIONS
The Company’s operating expenses totaled U.S.$7,000 for the six months ended June 30, 2015, compared to U.S.$8,417 for the six months ended June 30, 2014.
NET NON-OPERATING EXPENSES
Net non-operating expenses for the second quarter of 2015 totaled US$0, compared to US$0 for the second quarter of 2014.
PROVISION FOR INCOME TAXES
No income tax expense for the three months ended June 30, 2015 and 2014 was incurred because the Company and its subsidiaries incurred losses for taxation purposes.
| 9 |
LIQUIDITY AND CAPITAL RESOURCES
The Company is currently financing its operations through cash generated from financing activities.
Cash and cash equivalent balances as of June 30, 2015 and June 30, 2014 were U.S.$0 and U.S.$0, respectively.
Net cash used in operating activities was U.S.$10,700 and U.S.$3,818 for the six months ended June 30, 2015 and 2014, respectively.
Net cash provided by financing activities was U.S.$10,700 and U.S.$3,818 for the six months ended June 30, 2015 and 2014, respectively. The increase in net cash provided by financing activities resulted from the increase in net advances from related parties.
During the three months ended June 30, 2015 and 2014, the Company did not enter into any transactions using derivative financial instruments or derivative commodity instruments nor held any marketable equity securities of publicly traded companies. Accordingly, the Company believes its exposure to market interest rate risk and price risk is not material.
During the three months ended June 30, 2015 and 2014, the Company had no purchases or investments.
CRITICAL ACCOUNTING POLICIES
Given that the Company currently has no operating business, there are no critical accounting policies that currently affect our financial condition and results of operations.
Related party transactions
We do not have any of the following:
| • | Trading activities that include non-exchange traded contracts accounted for at fair value. | |
| • | Relationships and transactions with persons or entities that derive benefits from any non-independent relationships other than related party transactions discussed in this report. |
Off-Balance Sheet Arrangements
The Company has no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on the Company’s financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to the Company.
Future Operations
The Company is seeking investment opportunities that may provide revenues for the Company. However, the Company has not identified a specific line of business or territory for any such new business. There can be no assurance that the Company will be successful in identifying a new line of business that it can enter into or that if such new line of business is identified, that the receipt of revenues is probable.
The Company is considering de-registering its common stock with the Securities and Exchange Commission (“SEC”) in which case the Company would not be required to make further periodic filings with the SEC.
As a result of changes to the OTCQB Marketplace effective May 1, 2014, the Company was required to move from the OTCQB Marketplace to the OTC Pink marketplace.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
We are not exposed to a material level of market risk due to changes in interest rates, since we have never registered or issued debt instruments. Our outstanding long term liabilities are loans from a director or other related parties, which are unsecured and interest rate fixed or interest-free. Currently we do not maintain a portfolio of interest-sensitive debt instruments or any fixed-income derivatives.
| 10 |
Item 4. Controls and Procedures.
| (a) | Evaluation of Disclosure Controls and Procedures |
As of the end of the period covered by this report, the Company conducted an evaluation, under the supervision and with the participation of its Chief Executive Officer and Chief Financial Officer, of its disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) of the Securities Exchange Act of 1934, as amended (“Exchange Act”)). Based upon this evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures are effective to ensure that information required to be disclosed by the Company in the reports that the Company files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and which also are effective in ensuring that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.
Management’s assessment of the effectiveness of the Company’s internal control over financial reporting is as of the six months ended June 30, 2015. We believe that our internal control over financial reporting is effective. We have not identified any current material weaknesses considering the nature and extent of our current operations and any risks or errors in financial reporting under current operations.
(b) Changes in Internal Control
There were no changes in the Company’s internal control over financial reporting for the six months ended June 30, 2015 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
| 11 |
| 31.1 | Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer | |
| 31.2 | Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer | |
| 32.1 | Section 1350 Certification of Chief Executive Officer | |
| 32.2 | Section 1350 Certification of Chief Financial Officer |
| 12 |
In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| Date: August 14, 2015 | CHINAWE.COM INC. | |
| (Registrant) | ||
| By: | /s/ Man Keung Wai | |
| Man Keung Wai | ||
| Chief Executive Officer | ||
| (Principal Executive Officer) | ||
| By: | /s/ Man Keung Wai | |
| Man Keung Wai | ||
| Chief Financial Officer | ||
| (Principal Financial Officer) | ||
| 13 |
EXHIBIT INDEX
| Exhibit No. | Description | |||
| 31.1 | Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer | |||
| 31.2 | Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer | |||
| 32.1 | Section 1350 Certification of Chief Executive Officer | |||
| 32.2 | Section 1350 Certification of Chief Financial Officer | |||
| 14 |