Attached files
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
10-Q
(Mark
One)
☑
QUARTERLY REPORT PURSUANT TO
SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For the quarterly
period ended March 31, 2021
or
☐
TRANSITION REPORT PURSUANT TO
SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For the transition
period from ____________________to
____________________
333-194748
Commission file
number
GigWorld Inc.
(Exact name of
registrant as specified in its charter)
Delaware
|
|
45-4742558
|
(State or other
jurisdiction of incorporation or organization)
|
|
(I.R.S. Employer
Identification No.)
|
|
|
|
4800
Montgomery Lane, Suite 210 Bethesda MD
|
|
20814
|
(Address of
principal executive offices)
|
|
(Zip
Code)
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301-971-3940
Registrant’s
telephone number, including area code
Securities
registered pursuant to Section 12(b) of the Act: None
Indicate by check
mark whether the registrant (1) has filed all reports required 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 every
Interactive Data File required to be submitted 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 such files).
Yes ☑ No
☐
Indicate by check
mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, smaller reporting
company or an emerging growth company. See the definitions of
“large accelerated filer,” “accelerated
filer”, “smaller reporting company” and
“emerging growth company” in Rule 12b-2 of the Exchange
Act.
Large accelerated
filer
|
☐
|
Accelerated
filer
|
☐
|
Non-accelerated
filer
|
☒
|
Smaller reporting
company
|
☒
|
|
|
Emerging growth
company
|
☐
|
If an emerging
growth company, indicate by check mark if the registrant has
elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided
pursuant to Section 13(a) of the Exchange Act.
☐
Indicate by check
mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act). Yes ☐ No ☑
Indicate the number
of shares outstanding of each the registrant’s classes of
common stock, as of the latest practicable date. As of May 17,
2021, there were 506,898,576 shares outstanding of the
registrant’s common stock $0.0001 par value.
Throughout this Report on Form 10-Q, the terms
“Company,” “we,” “us” and
“our” refer to GigWorld Inc., and “our board of
directors” refers to the board of directors of GigWorld
Inc.
CAUTIONARY
NOTE REGARDING FORWARD-LOOKING STATEMENTS
This report
contains forward-looking statements that involve a number of risks
and uncertainties. Although our forward-looking statements reflect
the good faith judgment of our management, these statements can be
based only on facts and factors of which we are currently aware.
Consequently, forward-looking statements are inherently subject to
risks and uncertainties. Actual results and outcomes may differ
materially from results and outcomes discussed in the
forward-looking statements.
Forward-looking
statements can be identified by the use of forward-looking words
such as “may,” “will,”
“should,” “anticipate,”
“believe,” “expect,” “plan,”
“future,” “intend,” “could,”
“estimate,” “predict,” “hope,”
“potential,” “continue,” or the negative of
these terms or other similar expressions. Such forward-looking
statements are based on our management’s current plans and
expectations and are subject to risks, uncertainties and changes in
plans that may cause actual results to differ materially from those
anticipated in the forward-looking statements. You should be aware
that, as a result of any of these factors materializing, the
trading price of our common stock may decline. These factors
include, but are not limited to, the following:
●
the availability
and adequacy of capital to support and grow our
business;
●
economic,
competitive, business and other conditions in our local and
regional markets;
●
actions taken or
not taken by others, including competitors, as well as legislative,
regulatory, judicial and other governmental
authorities;
●
competition in our
industry;
●
changes in our
business and growth strategy, capital improvements or development
plans;
●
the availability of
additional capital to support development; and
●
other factors
discussed elsewhere in this annual report.
The cautionary
statements made in this quarterly report are intended to be
applicable to all related forward-looking statements wherever they
may appear in this report.
We urge you not to
place undue reliance on these forward-looking statements, which
speak only as of the date of this report. We undertake no
obligation to publicly update any forward looking-statements,
whether as a result of new information, future events or
otherwise.
2
TABLE OF CONTENTS
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Page
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4
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4
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5
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6
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7
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8
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9
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13
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18
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18
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19
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19
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19
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19
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19
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19
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19
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19
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20
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3
FINANCIAL INFORMATION
5
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6
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7
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8
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9
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4
GIGWORLD
INC. (FORMERLY KNOWN AS HOTAPP BLOCKCHAIN INC.)
CONSOLIDATED BALANCE SHEETS AS OF
MARCH 31, 2021 (UNAUDITED) AND DECEMBER
31, 2020
|
March
31,
2021
|
December
31,
2020
|
ASSETS
|
|
|
|
|
|
CURRENT
ASSETS:
|
|
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Cash
|
$154,737
|
$158,057
|
TOTAL CURRENT
ASSETS
|
154,737
|
158,057
|
|
|
|
Other non-current
assets
|
102
|
102
|
TOTAL
ASSETS
|
$154,839
|
$158,159
|
|
|
|
LIABILITIES
AND STOCKHOLDERS' DEFICIT
|
|
|
|
|
|
CURRENT
LIABILITIES:
|
|
|
Accounts payable
and accrued expenses
|
$30,272
|
$18,043
|
Accrued
taxes
|
7,742
|
7,742
|
Amount due to
related parties
|
1,509,876
|
1,522,104
|
TOTAL CURRENT
LIABILITIES
|
1,547,890
|
1,547,889
|
|
|
|
TOTAL
LIABILITIES
|
1,547,890
|
1,547,889
|
|
|
|
STOCKHOLDERS'
(DEFICIT):
|
|
|
Preferred stock,
$0.0001 par value, 15,000,000 shares authorized, 0 issued and
outstanding as of March 31, 2021 and December 31, 2020
|
-
|
-
|
Common stock,
$0.0001 par value, 1,000,000,000 shares authorized, 506,898,576
shares issued and outstanding, as of March 31, 2021 and December
31, 2020
|
50,690
|
50,690
|
Additional paid-in
capital
|
4,604,191
|
4,604,191
|
Accumulated other
comprehensive loss
|
(315,083)
|
(378,361)
|
Accumulated
deficit
|
(5,732,849)
|
(5,666,250)
|
TOTAL
STOCKHOLDERS' DEFICIT
|
(1,393,051)
|
(1,389,730)
|
TOTAL
LIABILITIES AND STOCKHOLDERS' DEFICIT
|
$154,839
|
$158,159
|
The accompanying
notes are an integral part of these unaudited consolidated
financial statements.
5
GIGWORLD
INC. (FORMERLY KNOWN AS HOTAPP BLOCKCHAIN INC.)
CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE LOSS FOR THE THREE
MONTHS ENDED MARCH 31, 2021 AND 2020 (UNAUDITED)
|
Three Months
Ended
March
31,
2021
|
Three Months
Ended
March
31,
2020
|
|
|
|
Operating
expenses:
|
|
|
General and
administrative
|
$30,128
|
$18,049
|
Total
operating expenses
|
30,128
|
18,049
|
|
|
|
(Loss)
from operations
|
(30,128)
|
(18,049)
|
|
|
|
Other
income (loss):
|
|
|
Interest
income
|
-
|
1
|
Foreign exchange
(loss)
|
(36,471)
|
(92,658)
|
Total
other (loss)
|
(36,471)
|
(92,657)
|
|
|
|
(Loss)
before taxes
|
(66,599)
|
(110,706)
|
Income tax
provision
|
-
|
-
|
Net
(loss) applicable to common shareholders
|
$(66,599)
|
$(110,706)
|
|
|
|
Net (loss) per
share - basic and diluted
|
$(0.00)
|
$(0.00)
|
|
|
|
Weighted number of
shares outstanding -
|
|
|
Basic and
diluted
|
506,898,576
|
506,898,576
|
|
|
|
Comprehensive
Income (Loss):
|
|
|
Net
(loss)
|
$(66,599)
|
$(110,706)
|
Foreign currency
translation gain
|
63,278
|
169,540
|
Total
comprehensive (loss) income
|
$(3,321)
|
$58,834
|
The accompanying
notes are an integral part of these unaudited consolidated
financial statements.
6
GIGWORLD
INC. (FORMERLY KNOWN AS HOTAPP BLOCKCHAIN INC.)
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' (DEFICIT) FOR THE THREE MONTHS
ENDED MARCH 31, 2021 AND 2020 (UNAUDITED)
|
Common
Shares
|
Par
Value
|
Paid-In
Capital
|
Accumulated
Other
Comprehensive
Income (Loss)
|
Accumulated
Deficit
|
Stockholders'
Equity
(Deficit)
|
Balance
December 31, 2020
|
506,898,576
|
$50,690
|
$4,604,191
|
$(378,361)
|
$(5,666,250)
|
$(1,389,730)
|
Net loss for
period
|
-
|
-
|
-
|
-
|
(66,599)
|
(66,599)
|
Foreign currency
translation adjustment
|
-
|
-
|
-
|
63,278
|
-
|
63,278
|
|
|
|
|
|
|
|
Balance
March 31, 2021
|
506,898,576
|
$50,690
|
$4,604,191
|
$(315,083)
|
$(5,732,849)
|
$(1,393,051)
|
|
Common
Shares
|
Par
Value
|
Paid-In
Capital
|
Accumulated
Other
Comprehensive
Income (Loss)
|
Accumulated
Deficit
|
Stockholders'
Equity
(Deficit)
|
Balance
December 31, 2019
|
506,898,576
|
$50,690
|
$4,604,191
|
$(310,293)
|
$(5,616,908)
|
$(1,272,320)
|
Net loss for
period
|
-
|
-
|
-
|
-
|
(110,706)
|
(110,706)
|
Foreign currency
translation adjustment
|
-
|
-
|
-
|
169,540
|
-
|
169,540
|
|
|
|
|
|
|
|
Balance
March 31, 2020
|
506,898,576
|
$50,690
|
$4,604,191
|
$(140,753)
|
$(5,727,614)
|
$(1,213,486)
|
The accompanying
notes are an integral part of these unaudited consolidated
financial statements.
7
GIGWORLD
INC. (FORMERLY KNOWN AS HOTAPP BLOCKCHAIN INC.)
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31,
2021 AND 2020 (UNAUDITED)
|
Three Months
Ended
March
31,
2021
|
Three Months
Ended
March
31,
2020
|
CASH
FLOWS FROM OPERATING ACTIVITIES:
|
|
|
Net
(Loss)
|
$(66,599)
|
$(110,706)
|
Adjustments
to reconcile net loss to cash used in operations:
|
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Foreign exchange
transaction loss
|
-
|
92,479
|
|
|
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Change
in operating assets and liabilities:
|
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|
Accounts payable
and accrued expenses
|
12,229
|
3,141
|
Net
cash used in operating activities
|
$(54,370)
|
$(15,086)
|
|
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CASH
FLOW FROM FINANCING ACTIVITIES:
|
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Advance from
related parties
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14,470
|
10,823
|
Net
cash generated from financing activities
|
$14,470
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$10,823
|
|
|
|
NET
(DECREASE) IN CASH
|
(39,900)
|
(4,263)
|
Effects of exchange
rates on cash
|
36,580
|
279
|
|
|
|
CASH
AND CASH EQUIVALENTS at beginning of period
|
158,057
|
55,752
|
CASH
AND CASH EQUIVALENTS at end of period
|
$154,737
|
$51,768
|
|
|
|
Supplemental
disclosure of cash flows information
|
|
|
Cash paid
for:
|
|
|
Interest
|
$-
|
$-
|
Income
taxes
|
$-
|
$-
|
The accompanying
notes are an integral part of these unaudited consolidated
financial statements.
8
GIGWORLD
INC. (FORMERLY KNOWN AS HOTAPP BLOCKCHAIN INC.)
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
Note
1. THE COMPANY HISTORY AND NATURE OF THE BUSINESS
GigWorld Inc.,
formerly HotApp Blockchain, Inc. (the “Company” or
“Group”) was incorporated in the State of Delaware on
March 7, 2012 and established a fiscal year end of December 31. The
Company’s business is focused on serving business-to-business
(B2B) needs in e-commerce, collaboration and social networking
functions. We will help enterprises and community users to
transform their business model with digital economy in a more
effective manner. With our platform, users can discover and build
their own communities and create valuable content. Enterprises can
in turn enhance the user experience with premium content, all of
which are facilitated by the transactions of every stakeholder via
e-commerce.
Our go-to-market
model includes working closely with business entities, which are
primarily on a membership based business, direct selling being one
of them, to provide membership collaboration tools for
communications, commerce and social media management. We work with
backend systems providers that provide the order processing,
commission management capability and enable them with mobile
friendly interface and access to the relevant backend
services.
The pricing model
will be based on a subscription model with a possible one-time
integration support fee.
GigWorld Inc. will
work closely with business development consultants to promote our
platform to enterprises.
As of March 31,
2021, details of the Company’s subsidiaries are as
follows:
Subsidiaries
|
Date of Incorporation
|
Place of Incorporation
|
Percentage of Ownership
|
1st
Tier Subsidiary:
|
|
|
|
HotApp BlockChain
Pte. Ltd., formerly known as HotApps International Pte Ltd
(“HIP”)
|
May 23,
2014
|
Republic of
Singapore
|
100% by
Company
|
Crypto Exchange
Inc., subsequently known as Gig Stablecoin Inc.
|
December 15,
2017
|
State of Nevada,
the United States of America
|
100% by
Company
|
HWH World
Inc.
|
August 28,
2018
|
State of Delaware,
the United States of America
|
100% by
Company
|
2nd
Tier Subsidiaries:
|
|
|
|
HWH World Pte.
Ltd.
|
September 15,
2014
|
Republic of
Singapore
|
100% owned by
HIP
|
HotApp
International Limited*
|
July 8,
2014
|
Hong Kong (Special
Administrative Region)
|
100% owned by
HIP
|
* On March 25,
2015, HotApp BlockChain Pte. Ltd., formerly known as HotApps
International Pte Ltd acquired 100% of the issued and outstanding
shares of HotApp International Limited.
Going
Concern
These financial
statements have been prepared using accounting principles generally
accepted in the United States of America applicable for a going
concern, which assumes that the Company will realize its assets and
discharge its liabilities in the ordinary course of business. Since
inception, the Company has incurred net losses of $5,732,849 and
has net working capital deficit of $1,393,153 at March 31, 2021.
Management has concluded that due to the conditions described
above, there is substantial doubt about the entities ability to
continue as a going concern through May 17, 2022. We have evaluated
the significance of the conditions in relation to our ability to
meet our obligations and believe that our current cash balance
along with our current operations will not provide sufficient
capital to continue operation through 2021. Our ability to continue
as a going concern is dependent upon achieving sales growth,
management of operating expenses and ability of the Company to
obtain the necessary financing to meet its obligations and pay its
liabilities arising from normal business operations when they come
due, and upon profitable operations.
9
Our majority
shareholder has advised us not to depend solely on them for
financing. We have increased our efforts to raise additional
capital through equity or debt financings from other sources.
However, we cannot be certain that such capital (from our
shareholders or third parties) will be available to us or whether
such capital will be available on terms that are acceptable to us.
Any such financing likely would be dilutive to existing
stockholders and could result in significant financial operating
covenants that would negatively impact our business. If we are
unable to raise sufficient additional capital on acceptable terms,
we will have insufficient funds to operate our business or pursue
our planned growth.
These financial
statements do not include any adjustments relating to the
recoverability and classification of recorded asset amounts, or
amounts and classification of liabilities that might result from
this uncertainty.
Note
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of presentation
The accompanying
financial statements have been prepared in accordance with
accounting principles generally accepted in the United States of
America (“U.S. GAAP”). These consolidated financial
statements should be read in conjunction with the financial
statements and additional information as contained in our Annual
Report on Form 10-K for the year ended December 31, 2020 filed on
March 22, 2021. Results of operations for the three month periods
ended March 31, 2021 are not necessarily indicative of the
operating results that may be expected for the year ending December
31, 2021. The other information in these consolidated financial
statements is unaudited but, in the opinion of management, reflects
all adjustments necessary for a fair presentation of the results
for the periods covered. All such adjustments are of a normal
recurring nature unless disclosed otherwise.
Basis of consolidation
The consolidated
financial statements of the Group include the financial statements
of GigWorld Inc. and its subsidiaries. All inter-company
transactions and balances 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 the
reported amounts of assets and liabilities and revenues, cost and
expenses in the financial statements and accompanying notes.
Significant accounting estimates reflected in the Group’s
consolidated financial statements include revenue recognition, the
useful lives and impairment of property and equipment, valuation
allowance for deferred tax assets.
Cash and cash equivalents
The Company
considers all highly liquid investments with a maturity of three
months or less at the date of acquisition to be cash equivalents.
There were no cash equivalents as of March 31, 2021 and December
31, 2020.
Foreign currency risk
Because of its
foreign operations, the Company holds cash in non-US dollars. As of
March 31, 2021, cash and cash equivalents of the Group includes, on
an as converted basis to US dollars, $21,492 and $122,306 in Hong
Kong Dollars (“HK$”) and Singapore Dollars
(“S$”), respectively. As of December 31, 2020, cash and
cash equivalents of the Group include, on an as converted basis to
US dollars, $24,448, and $122,671, in Hong Kong Dollars
(“HK$”), and Singapore Dollars (“S$”),
respectively.
Concentrations
Financial
instruments that potentially expose the Group to concentration of
credit risk consist primarily of cash. Although the cash at each
particular bank in the United States is insured up to $250,000 by
Federal Deposit Insurance Corporation (FDIC), the Group exposes to
risk due to its concentration of cash in foreign countries. The
Group places its cash with financial institutions with high-credit
ratings and quality.
10
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 consolidated
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 non-current based on their
characteristics.
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 will be classified as a component of the provisions for
income taxes. The Group did not recognize any income tax due to
uncertain tax position or incur any interest and penalties related
to potential underpaid income tax expenses for the period ended
March 31, 2021 or 2020, respectively.
Foreign currency translation
Items included in
the financial statements of each entity in the group are measured
using the currency of the primary economic environment in which the
entity operates (“functional currency”).
The functional and
reporting currency of the Company is the United States dollar
(“U.S. dollar”). The financial records of the
Company’s subsidiaries located in Singapore and Hong Kong are
maintained in their local currencies, the Singapore Dollar (S$) and
Hong Kong Dollar (HK$), which are also the functional currencies of
these entities.
Monetary assets and
liabilities denominated in currencies other than the functional
currency are translated into the functional currency at the rates
of exchange ruling at the balance sheet date. Transactions in
currencies other than the functional currency during the year are
converted into functional currency at the applicable rates of
exchange prevailing when the transactions occurred. Transaction
gains and losses are recognized in the statement of
operations.
The Company’s
entities with functional currency of Hong Kong Dollar and Singapore
Dollar, translate their operating results and financial positions
into the U.S. dollar, the Company’s reporting currency.
Assets and liabilities are translated using the exchange rates in
effect on the balance sheet date. Revenues, expenses, gains and
losses are translated using the average rate for the year.
Translation adjustments are reported as cumulative translation
adjustments and are shown as a separate component of comprehensive
income (loss).
For the three
months ended March 31, 2021, the Company recorded other
comprehensive income from translation gain of $63,278 in the
consolidated financial statements. For the three months ended March
31, 2020, the Company recorded other comprehensive income from
translation gain of $169,540 in the consolidated financial
statements.
Comprehensive income (loss)
Comprehensive
income (loss) includes gains (losses) from foreign currency
translation adjustments. Comprehensive income (loss) is reported in
the consolidated statements of operations and comprehensive
loss.
Loss per share
Basic loss per
share is computed by dividing net loss attributable to shareholders
by the weighted average number of shares outstanding during the
period.
The Company's
convertible preferred shares are not participating securities and
have no voting rights until converted to common stock. As of March
31, 2021, no shares of preferred stock are eligible for conversion
into voting common stock.
As of March 31,
2021, there are no potentially dilutive securities that were
excluded from the computation of diluted EPS.
Recent accounting pronouncements
Management does not
believe that any recently issued, but not effective, accounting
standards, if currently adopted, would have a material effect on
the Company’s consolidated financial statements.
11
Note
3. ACCOUNTS PAYABLE AND ACCRUED EXPENSES
Accrued expenses
and other current liabilities consisted of the
following:
|
March
31,
|
December
31,
|
|
2021
|
2020
|
Accrued
professional fees
|
$22,464
|
$16,892
|
Other
|
7,808
|
1,151
|
Total
|
$30,272
|
$18,043
|
Note
4. RELATED PARTY BALANCES AND TRANSACTIONS
Effective as of
September 1, 2020, Chan Heng Fai resigned as the Acting Chief
Executive Officer of the Company, and the Company’s Board of
Directors appointed Lee Wang Kei (“Nathan”) as the
Company’s Chief Executive Officer. Alset International
Limited (“AIL”) is the Company’s majority
stockholder. Chan Heng Fai, the Executive Chairman of the
Company’s Board of Directors, is also the Chief Executive
Officer and a member of AIL’s Board of Directors, as well as
the majority stockholder of AIL. Lui Wai Leung Alan, the
Company’s Chief Financial Officer, is also the Executive
Director and Chief Financial Officer of AIL. Both Chan Heng Fai and
Lui Wai Leung Alan are being paid by AIL, the Company’s
majority stockholder. We have not entered into any employment
arrangement with any employees except for our Chief Executive
Officer, Lee Wang Kei. Mr. Lee is paid $2,000 per month by HotApp
International Limited, a subsidiary of the Company. AIL has
provided staff without charge to our Company.
As of March 31,
2021, the Company has an amount due to AIL of $1,509,773 plus an
amount due to an associated company of AIL of $103. As of December
31, 2020, the Company has amount due to AIL of $1,521,999 plus an
amount due to an associated company of AIL of $105.
The account
receivable as of March 31, 2021 includes a trade receivable from an
affiliate by common ownership amounting to $39,427 resulting from
the revenue earned from that affiliate during the year 2017, and
the Company has put up a full allowance for the said
amount.
Note
5. SUBSEQUENT EVENTS
The Company has
entered into a securities purchase agreement dated April 5, 2021
with Value Exchange International, Inc. (“Value Exchange
International”) in connection with the purchase of 6,500,000
shares of Value Exchange International’s common stock for an
aggregate subscription price of $650,000. The acquisition of
6,500,000 shares of Value Exchange International’s common
stock was completed on April 12, 2021.
12
MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
FORWARD-LOOKING STATEMENTS
Certain
matters discussed herein are forward-looking statements. Such
forward-looking statements contained in this Form 10-Q involve
risks and uncertainties, including statements as to:
1. our future
operating results;
2. our business
prospects;
3. any contractual
arrangements and relationships with third parties;
4. the dependence
of our future success on the general economy;
5. any possible
financings; and
6. the adequacy of
our cash resources and working capital.
These
forward-looking statements can generally be identified as such
because the context of the statement will include words such as we
“believe,” “anticipate,”
“expect,” “estimate” or words of similar
meaning. Similarly, statements that describe our future plans,
objectives or goals are also forward-looking statements. Such
forward-looking statements are subject to certain risks and
uncertainties which are described in close proximity to such
statements and which could cause actual results to differ
materially from those anticipated as of the date of filing of this
Form 10-Q. Shareholders, potential investors and other readers are
urged to consider these factors in evaluating the forward-looking
statements and are cautioned not to place undue reliance on such
forward-looking statements. The forward-looking statements included
herein are only made as of the date of filing of this Form 10-Q,
and we undertake no obligation to publicly update such
forward-looking statements to reflect subsequent events or
circumstances.
This
discussion contains forward-looking statements that reflect our
plans, estimates and beliefs. Our actual results may differ
materially from those anticipated in these forward-looking
statements.
The coronavirus or other adverse public health developments could
have a material and adverse effect on our business operations,
financial condition and results of operations
In
December 2019, a novel strain of coronavirus (COVID-19) was first
identified in Wuhan, Hubei Province, China, and has since spread to
a number of other countries, including the United States. The
COVID-19 pandemic’s far-reaching impact on the global economy
could negatively affect various aspects of our business. The extent
to which the COVID-19 pandemic may impact our business will depend
on future developments, which are highly uncertain and cannot be
predicted.
The
COVID-19 pandemic may adversely impact our potential to expand our
business activities. The COVID-19 pandemic has impacted, and may
continue to impact, the global supply of certain goods and services
in ways that may impact the sale of products to consumers that we,
or companies we may partner with, will attempt to make. The
COVID-19 pandemic may prevent us from pursuing otherwise attractive
opportunities.
In
addition, the COVID-19 pandemic could directly impact the ability
of our management and service providers to continue to work, and
our ability to conduct our operations in a prompt and efficient
manner. Our management has shifted to mostly working from home
since March 2020, but this has had minimal impact on our operations
to date. However our management’s ability to travel has been
significantly limited, and limitations on the mobility of our
management may slow down our ability to enter into new transactions
and expand existing projects.
Background
and business
GigWorld Inc.,
formerly known as HotApp Blockchain Inc. (the “Company”
or “Group”), was incorporated in the State of Delaware
on March 7, 2012. The Company’s initial business plan was to
be a financial acquisition intermediary which would serve buyers
and sellers for companies that are in highly fragmented industries.
Our Board determined it was in the best interest of the Company to
expand our business plan. On October 15, 2014, through a sale and
purchase agreement, the Company acquired all the issued and
outstanding stock of HotApps International Pte Ltd, subsequently
known as HotApp BlockChain Pte. Ltd. (“HIP”) from Alset
International Limited (“AIL”), formerly known as
Singapore eDevelopment Limited. AIL is presently our largest
stockholder. HIP owned certain intellectual property relating to
instant messaging for portable devices (referred to herein as the
“HotApp Application”).
13
The HotApp
Application is a cross-platform mobile application that
incorporates instant messaging and ecommerce. This application can
be used on any mobile platform (i.e. IOS Online or Android). The
HotApp Application offered messaging and calling services for
HotApp Application users (text, photo, audio); however, the
messaging and calling services we offered were terminated in
2017.
In December of
2017, the Company’s name was changed from “HotApp
International, Inc.” to “HotApp Blockchain Inc.”
to reflect the Board of Directors’ determination that it was
in the best interest of the Company to expand its activities to
include the development and commercialization of blockchain-related
technologies. One area we are presently exploring is providing
technology consulting for security token offerings
(“STO”). Such services, which have not yet commenced
commercially, would include STO white paper development, technology
design and web development. We intend to outsource certain aspects
of these projects to potential partners we have identified. We have
no plans to launch our own token offering, but rather may develop
technologies that could facilitate such offerings by other
companies.
We believe that the
increasing acceptance of distributed ledger technologies by
potential customers will benefit us. The growth of network
marketing throughout the world would impact our technologies that
target that industry. In this rapidly evolving field, however,
technology is advancing quickly and it is possible that our
competitors could create products that gain market acceptance
before our products.
In 2018, one of our
main developments was a broadening of our scope of planned
operations into a digital transformation technology business. As a
digital transformation technology business, we are committed to
enabling enterprises we work with to engage in a digital
transformation by providing consulting, implementation and
development services with various technologies, including instant
messaging, blockchain, e-commerce, social media and payment
solutions. We continue to advise businesses in network marketing
and brands in block chain services and mobile
collaboration.
We are focused on
serving business-to-business (B2B) needs in e-commerce,
collaboration and supply chains. We will help enterprises and
community users to transform their business model with digital
economy in a more effective manner. With our platform, users can
discover and build their own communities and create valuable
content. Enterprises can in turn enhance the user experience with
premium content, all of which are facilitated by the transactions
of every stakeholder via e-commerce.
Our technology
platform consists of instant messaging systems, social media,
e-commerce and payment systems, network marketing platforms and
e-real estate. We are focused on business-to-business solutions
such as enterprise messaging and workflow. We have successfully
implemented several strategic platform developments for clients,
including a mobile front-end solution for network marketing, a
hotel e-commerce platform for Asia and a real estate agent
management platform in China. We have also enhanced our
technological capability from mobile application development to
include blockchain architectural design, allowing mobile-friendly
front-end solutions to integrate with software platforms. Our main
digital assets at the present time are our applications. We
continue to strengthen our technology architecture and develop
Application Development Interface (API) for collaboration partners
such as network marketing back end service providers. In addition
we are continuing our development activities in blockchain
preparing for future clients opportunities.
In January 2017, we
entered into a revenue-sharing agreement with iGalen, a network
marketing company selling health products (AIL, our majority
stockholder, was a significant stockholder of iGalen). Under the
agreement, we customized a secure app for iGalen’s
communication and management system. The app enables mobile
friendly backend access for iGalen Inc. members, among other
functions. We are continuing to improve this secure app. In
particular, we intend to utilize blockchain supply logistics to
improve its functions (the original iGalen app did not utilize the
latest distributed ledger technology). Once the improvements to
this technology are completed, and initially utilized by iGalen, We
intend to then attempt to sell similar services to other companies
engaged in network marketing, as members of our management have a
particular experience offering services to that industry and we
believe our solutions are particularly suited to that
industry’s needs. This app can be modified to meet the
specific needs of any network marketing company. We believe that
these technologies will, among other benefits, make it easier for
network marketing companies to securely and effectively manage
their systems of compensation. Our current plan is to commence
sales of this technology in 2021.
In February of
2021, the Company’s name was changed to “GigWorld
Inc.”
The direct selling
industry has been adopting gig economy practices and relying
heavily on digital marketing technology in team development and
customer engagement. We have positioned ourselves to serve the
growing demand in the transformation of the direct selling industry
towards the gig economy.
The Group has
relied significantly on AIL, our majority stockholder, as its
principal sources of funding during the period. AIL has advised us
not to depend solely on it for financing. We have increased our
efforts to raise additional capital through equity or debt
financings from other sources. However, we cannot be certain that
such capital (from our stockholders or third parties) will be
available to us or whether such capital will be available on terms
that are acceptable to us. Any such, financing likely would be
dilutive to existing stockholders and could result in significant
financial operating covenants that would negatively impact our
business. If we are unable to raise sufficient additional capital
on acceptable terms, we will have insufficient funds to operate our
business or pursue our planned growth.
14
Trends
in the Market and Our Opportunity
The gig economy has
become very appealing to those seeking flexibility in how and when
they work. Technology has been a key driver along with reducing
complexity to simplicity in how work is done and how the worker is
compensated.
Technology has
changed pretty much every aspect of a business, opening up work
opportunities for those who want to work in the gig economy. This
change has also helped employers increase profitability because
they only have to only hire workers when they need
them.
The share of
independent workers at U.S. businesses stood at 16% last year,
according to a report published Feb. 4 by the ADP Research
Institute, which analyzed payroll data from more than 18 million
workers.
That was a jump of
2.2 percentage points — or 15% — from 2010, according
to ADP research published Feb 2020.
In total, there are
6 million more gig workers today than a decade ago. Half, or 3
million, of that growth reflects the shift of the labor force
toward this type of work and away from more traditional
employment.
Based upon the
above trends, we believe significant opportunities
exist for:
●
Enterprises in
various industries are exploring gig economy opportunities in order
to capitalize on the independent workers resources.
●
Technology has made
the workforce digital, and jobs are changing to compensate. People
who work as gig workers often don’t work at a company’s
site and instead work at home, in coffee shops, and other places.
They communicate with potential employers mostly via email,
messaging apps and collaboration tools. These workers find
potential gigs on job boards or through their networking
efforts.
●
Industries such as
Network Marketing and Hospitality and Franchising businesses are
utilizing Mobile friendly solutions to reach out effectively to
their marketing network on a global basis.
●
The application of
Block Chain technology enable trusted transactions in the highly
connected gig economy.
●
Payment services
are also changing as a result of globalized gig economy workers
earning their income through building a global
network.
Our
Plan of Operations and Growth Strategy
We believe that we
have significant opportunities to further enhance the value we
deliver to our users. We intend to pursue the following growth
strategy:
●
focus in developing
technologies enabling enterprise to capture the gig economy
opportunities
●
partner with
technology providers offer services for membership management,
ecommerce, logistics and payment services in the gig economy
marketplace
●
identify solutions
and licensing opportunities in accelerating the digital
transformation for direct selling companies
Results
of Operations
Summary of Key Results
For the unaudited three months period ending March 31, 2021 and
2020
Revenue
The Company had no
revenue during the three months ended March 31, 2021 and
2020.
15
Cost of revenue
Total cost of
revenue for the three months ended March 31, 2021 and 2020 were
$0.
General and Administrative
General and
administrative expenses consist primarily of professional fees, and
maintenance expenses of existing software framework. We expect our
general and administrative expenses to maintain with moderate
changes in line with business activities. Total general and
administrative expenses for the three months ended March 31, 2021
and 2020 were $30,128 and $18,049, respectively, of which $0 and
$(179) related to bad debt expense, respectively.
Other (Expense) / Income
For the three
months ended March 31, 2021 and 2020, we have incurred $(36,471)
and $(92,658) in foreign exchange (loss), and $0 and $1 in interest
income respectively.
Liquidity
and Capital Resources
At March 31, 2021,
we had cash of $154,737 and working capital deficit of
$1,389,832.
We had a total
stockholders’ deficit of $1,393,051 and an accumulated
deficit of $5,732,849 as of March 31, 2021 compared with a total
stockholders’ deficit of $1,389,730 and an accumulated
deficit of $5,666,250 as of December 31, 2020. This difference is
primarily due to the net effect of the net loss incurred and the
gain in the foreign currency translation during the
period.
For the three
months ended March 31, 2021, we recorded a net loss of
$66,599.
We had net cash
used in operating activities of $54,370 for the three months ended
March 31, 2021. We had a positive change of $12,229 due to accounts
payable and accrued expenses.
For the three
months ended March 31, 2020, we recorded a net loss of
$110,706.
We had net cash
used in operating activities of $15,086 for the three months ended
March 31, 2020. We had a positive change of $3,141 due to accounts
payable and accrued expenses.
For the three
months ended March 31, 2021 and 2020, we had no investing
activities for the period.
For the three
months ended March 31, 2021, we had net cash provided by financial
activities of $14,470 due to advances from an
affiliate.
For the three
months ended March 31, 2020, we had net cash provided by financial
activities of $10,823 due to advances from an
affiliate.
As of March 31,
2021, we do not have any fixed operating office lease
agreements.
16
We will need to
raise additional capital through equity or debt financings.
However, we cannot be certain that such capital (from AIL or third
party) will be available to us or whether such capital will be
available on terms that are acceptable to us. Any such financing
likely would be dilutive to existing shareholders and could result
in significant financial and operating covenants that would
negatively impact our business. If we are unable to raise
sufficient additional capital on acceptable terms, we will have
insufficient funds to operate our business and pursue our business
plan.
Consistent with
Section 144 of the Delaware General Corporation Law, it is our
current policy that all transactions between us and our officers,
directors and their affiliates will be entered into only if such
transactions are approved by a majority of the disinterested
directors, are approved by vote of the stockholders, or are fair to
us as corporation as of the time it is authorized, approved or
ratified by the board. We will conduct an appropriate review of all
related party transactions on an ongoing basis.
Critical
Accounting Policies
Our discussion and
analysis of the financial condition and results of operations are
based upon the Company’s financial statements, which have
been prepared in accordance with generally accepted accounting
principles in the United States (“GAAP”). The
preparation of these financial statements requires us to make
estimates and judgments that affect the reported amounts of assets,
liabilities, revenues and expenses, and related disclosure of
contingent assets and liabilities. We believe that the estimates,
assumptions and judgments involved in the accounting policies
described below have the greatest potential impact on our financial
statements, so we consider these to be our critical accounting
policies. Because of the uncertainty inherent in these matters,
actual results could differ from the estimates we use in applying
the critical accounting policies. Certain of these critical
accounting policies affect working capital account balances,
including the policies for revenue recognition, allowance for
doubtful accounts, inventory reserves and income taxes. These
policies require that we make estimates in the preparation of our
financial statements as of a given date.
Within the context
of these critical accounting policies, we are not currently aware
of any reasonably likely events or circumstances that would result
in materially different amounts being reported.
Revenue recognition
Accounting
Standards Codification ("ASC") 606, Revenue from Contracts with
Customers ("ASC 606"), establishes principles for reporting
information about the nature, amount, timing and uncertainty of
revenue and cash flows arising from the entity's contracts to
provide goods or services to customers. Under the new standard,
revenue is recognized when a customer obtains control of promised
goods or services in an amount that reflects the consideration the
entity expects to receive in exchange for those goods or services.
The Company adopted this new standard on January 1, 2018 under the
modified retrospective method to all contracts not completed as of
January 1, 2018 and the adoption did not have a material effect on
our financial statements but we expanded our disclosures related to
contracts with customers below.
Revenue is
recognized when (or as) the Company transfers promised goods or
services to its customers in amounts that reflect the consideration
to which the Company expects to be entitled to in exchange for
those goods or services, which occurs when (or as) the Company
satisfies its contractual obligations and transfers over control of
the promised goods or services to its customers. Costs to obtain or
fulfill a contract are expensed as incurred.
The Company had no
revenue for the period ended March 31, 2021 and 2020.
Contract assets and contract liabilities
Based on our
contracts, we normally invoice customers once our performance
obligations have been satisfied, at which point payment is
unconditional. Accordingly, our contracts do not give rise to
contract assets or liabilities under ASC 606. Accounts receivable
are recorded when the right to consideration becomes
unconditional.
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 consolidated
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 non-current based on their
characteristics.
17
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 will be classified as a component of the provisions for
income taxes. The Group did not recognize any income tax due to
uncertain tax position or incur any interest and penalties related
to potential underpaid income tax expenses for the period ended
March 31, 2021 or 2020, respectively.
Off-Balance
Sheet Arrangements
As of March 31,
2021, the Company did not have any off-balance sheet
arrangements.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
MARKET RISK
As
a “smaller reporting company” as defined by Item
10(f)(1) of Regulation S-K, the Company is not required to provide
the information required by this Item.
Evaluation of Disclosure Controls and Procedures
In
connection with the preparation of our Quarterly Report on Form
10-Q, an evaluation was carried out by management, with the
participation of our Chief Executive Officer and Chief Financial
Officer, of the effectiveness of our disclosure controls and
procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the
Securities Exchange Act of 1934 (Exchange Act)) as of March 31,
2021. Disclosure controls and procedures are designed to ensure
that information required to be disclosed in reports filed or
submitted under the Exchange Act is recorded, processed, summarized
and reported within the time periods specified, and that such
information is accumulated and communicated to management,
including the Chief Executive Officer and Chief Financial Officer,
to allow timely decisions regarding required
disclosure.
During
evaluation of disclosure controls and procedures as of March 31,
2021 conducted as part of our preparation of our interim financial
statements, management conducted an evaluation of the effectiveness
of the design and operations of our disclosure controls and
procedures and concluded that our disclosure controls and
procedures were not effective. Management determined that at March
31, 2021, we had a material weakness that relates to the relatively
small number of employees, provided by AIL, who have bookkeeping
and accounting functions and therefore prevents us from segregating
duties within our internal control system.
Changes in the Company’s Internal Controls over Financial
Reporting
There
have been no changes in the Company’s internal control over
financial reporting during the most recently completed fiscal
quarter that have materially affected or are reasonably likely to
materially affect, the Company’s internal control over
financial reporting.
18
OTHER INFORMATION
We
are not a party to any legal proceedings. Management is not aware
of any legal proceedings proposed to be initiated against us.
However, from time to time, we may become subject to claims and
litigation generally associated with any business venture operating
in the ordinary course.
Not
applicable to a “smaller reporting company” as defined
in Item 10(f)(1) of Regulation S-K.
None.
None.
Not
Applicable.
None.
ITEM
6.
EXHIBITS
Exhibit
Number
Description
Certificate of
Amendment to the Certificate of Incorporation (incorporated herein
by reference to Exhibit 3.1.3 to the Company’s Current Report
on Form 8-K filed on February 5, 2021).
Certification of Chief Executive Officer pursuant to Section 302
of the Sarbanes-Oxley Act of 2002.
Section 1350
Certification of Chief Executive Officer and Chief Financial
Officer
101.INS
XBRL Instance
Document
101.SCH
XBXRL Taxonomy
Extension Schema.
101.CAL
XBRL Taxonomy
Extension Calculation Linkbase.
101.DEF
XBRL Taxonomy
Extenstion Definition Linkbase.
101.LAB
XBRL Taxonomy
Extension Label Linkbase
101.PRE
XBRL Taxonomy
Extension Presentation Linkbase
19
SIGNATURES
Pursuant to the
requirements of the Securities Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
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GIGWORLD
INC.
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Date: May 17,
2021
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By:
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/s/ Lee Wang Kei
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Lee
Wang Kei
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Chief Executive
Officer
(Principal
Executive Officer)
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Date: May 17,
2021
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By:
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/s/ Lui Wai Leung,
Alan
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Lui Wai Leung,
Alan
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Chief Financial
Officer
(Principal
Financial Officer and
Principal
Accounting Officer)
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20