DQWS 10-Q
DSwiss Inc (DQWS)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
OF THE SECURITIES EXCHANGE ACT OF 1934
For
The Quarterly Period Ended
or
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______________to _______________
Commission
File Number
(Exact name of registrant issuer as specified in its charter)
| (State or other jurisdiction | (I.R.S. Employer | |
| of incorporation or organization) | Identification No.) |
(Address of principal executive offices, including zip code)
Registrant’s
phone number, including area code
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class: | Trading Symbol(s) | Name of each exchange on which registered: | ||
| The OTC Market – Pink Sheets |
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.
☒ 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 (section 232.405 of this chapter) during the preceding twelve months (or shorter period that the registrant was required to submit and post such files).
YES ☐ ☒
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 ☐
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 of the issuer’s classes of common stock, as of the latest practicable date.
| Class | Outstanding at September 30, 2024 | |
| Common Stock, $ par value |
TABLE OF CONTENTS
| 1 |
DSWISS, INC.
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
| F-1 |
PART I FINANCIAL INFORMATION
Item 1. Unaudited condensed consolidated financial statements:
DSWISS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
As of September 30, 2024 and December 31, 2023
(Currency expressed in United States Dollars (“US$”), except for number of shares)
September 30, 2024 | December 31, 2023 | |||||||
| Unaudited | Audited | |||||||
| ASSETS | ||||||||
| CURRENT ASSETS | ||||||||
| Cash and cash equivalents (including $ | $ | $ | ||||||
| Accounts receivables | ||||||||
| Other receivables, prepaid expenses and deposits | ||||||||
| Tax recoverable | ||||||||
| Inventories | ||||||||
| Total Current Assets | ||||||||
| NON-CURRENT ASSETS | ||||||||
| Plant and equipment, net | ||||||||
| Intangible assets, net | ||||||||
| Total Non-Current Assets | ||||||||
| TOTAL ASSETS | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| CURRENT LIABILITIES | ||||||||
| Accounts payable | $ | $ | ||||||
| Other payables and accrued liabilities (including $ | ||||||||
| Finance lease liability | ||||||||
| Tax payable | ||||||||
| Total Current Liabilities | ||||||||
| NON- CURRENT LIABILITY | ||||||||
| Finance lease liability | ||||||||
| Total non-current liability | ||||||||
| TOTAL LIABILITIES | $ | $ | ||||||
| STOCKHOLDERS’ EQUITY | ||||||||
| Preferred stock, $ par value, shares authorized, issued and outstanding | ||||||||
| Common stock, $ par value, shares authorized, shares issued and outstanding as of September 30, 2024 and December 31, 2023 respectively | $ | $ | ||||||
| Additional paid-in capital | ||||||||
| Accumulated other comprehensive income | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| TOTAL STOCKHOLDERS’ EQUITY | ||||||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | $ | ||||||
See accompanying notes to condensed consolidated financial statements.
| F-2 |
DSWISS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE INCOME
FOR THE THREE MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 2024 AND 2023
(Currency expressed in United States Dollars (“US$”), except for number of shares)
(Unaudited)
| Three months ended September 30 | Nine months ended September 30 | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| $ | $ | $ | $ | |||||||||||||
| REVENUE (including $ | ||||||||||||||||
| COST OF REVENUE (including $ | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| GROSS PROFIT | ||||||||||||||||
| OTHER INCOME | ||||||||||||||||
| SELLING, GENERAL AND ADMINISTRATIVE EXPENSES (including $ | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| OPERATING EXPENSES | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| FINANCE COST | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| LEASE EXPENSES | ( | ) | ( | ) | ||||||||||||
| (LOSS)/ PROFIT BEFORE INCOME TAX | ( | ) | ||||||||||||||
| TAXATION | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| NET (LOSS)/ PROFIT | ( | ) | ||||||||||||||
| Other comprehensive income/(loss) | ||||||||||||||||
| - Foreign currency translation adjustment | ( | ) | ||||||||||||||
| TOTAL COMPREHENSIVE (LOSS)/ INCOME | ( | ) | ||||||||||||||
| NET (LOSS)/ INCOME PER SHARE – BASIC AND DILUTED | ) | |||||||||||||||
| WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING – BASIC AND DILUTED | ||||||||||||||||
See accompanying notes to condensed consolidated financial statements.
| F-3 |
DSWISS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
FOR THE THREE MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 2024 AND 2023
(Currency expressed in United States Dollars (“US$”))
(unaudited)
Three Months Ended September 30, 2024 (Unaudited)
| COMMON STOCK | ADDITIONAL | ACCUMULATED OTHER | NON- | |||||||||||||||||||||||||
| Number of shares | Amount | PAID-IN CAPITAL | COMPREHENSIVE INCOME | ACCUMULATED DEFICIT | CONTROLLING INTEREST | TOTAL EQUITY | ||||||||||||||||||||||
| Balance as of June 30, 2024 (unaudited) | ( | ) | ||||||||||||||||||||||||||
| Foreign currency translation adjustment | - | |||||||||||||||||||||||||||
| Net loss | - | ( | ) | ( | ) | |||||||||||||||||||||||
| Balance as of September 30, 2024 (unaudited) | ( | ) | ||||||||||||||||||||||||||
Nine Months Ended September 30, 2024 (Unaudited)
| COMMON STOCK | ADDITIONAL | ACCUMULATED OTHER | NON- | |||||||||||||||||||||||||
| Number of shares | Amount | PAID-IN CAPITAL | COMPREHENSIVE INCOME | ACCUMULATED DEFICIT | CONTROLLING INTEREST | TOTAL EQUITY | ||||||||||||||||||||||
| Balance as of December 31, 2023 (audited) | ( | ) | ||||||||||||||||||||||||||
| Foreign currency translation adjustment | - | |||||||||||||||||||||||||||
| Net profit | - | |||||||||||||||||||||||||||
| Balance as of September 30, 2024 (unaudited) | ( | ) | ||||||||||||||||||||||||||
Three Months Ended September 30, 2023 (Unaudited)
| COMMON STOCK | ADDITIONAL | ACCUMULATED OTHER | NON- | |||||||||||||||||||||||||
| Number of shares | Amount | PAID-IN CAPITAL | COMPREHENSIVE (LOSS)/ INCOME | ACCUMULATED DEFICIT | CONTROLLING INTEREST | TOTAL EQUITY | ||||||||||||||||||||||
| Balance as of June 30, 2023 (audited) | ( | ) | ||||||||||||||||||||||||||
| Foreign currency translation adjustment | - | ( | ) | ( | ) | |||||||||||||||||||||||
| Net profit | - | |||||||||||||||||||||||||||
| Balance as of September 30, 2023 (unaudited) | ( | ) | ||||||||||||||||||||||||||
Nine Months Ended September 30, 2023 (Unaudited)
| COMMON STOCK | ADDITIONAL | ACCUMULATED OTHER | NON- | |||||||||||||||||||||||||
| Number of shares | Amount | PAID-IN CAPITAL | COMPREHENSIVE (LOSS)/ INCOME | ACCUMULATED DEFICIT | CONTROLLING INTEREST | TOTAL EQUITY | ||||||||||||||||||||||
| Balance as of December 31, 2022 (audited) | ( | ) | ( | ) | ||||||||||||||||||||||||
| Foreign currency translation adjustment | - | |||||||||||||||||||||||||||
| Changes in ownership interests in an associate | - | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||
| Net profit | - | |||||||||||||||||||||||||||
| Balance as of September 30, 2023 (unaudited) | ( | ) | ||||||||||||||||||||||||||
| F-4 |
DSWISS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2024 AND 2023
(Currency expressed in United States Dollars (“US$”), except for number of shares)
(Unaudited)
| Nine months ended September 30, | ||||||||
| 2024 | 2023 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
| Profit after income tax | $ | $ | ||||||
| Adjustments to reconcile net profit to net cash generated from operating activities: | ||||||||
| Depreciation and amortization | ||||||||
| Amortization for intangible assets | ||||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts payable | ||||||||
| Accounts receivables | ||||||||
| Other payables and accrued liabilities | ||||||||
| Inventories | ( | ) | ||||||
| Other receivables, prepaid expenses and deposits | ( | ) | ||||||
| Tax payable | ||||||||
| Reduction in lease liability | ( | ) | ||||||
| Net cash generated from operating activities | ||||||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
| Proceed of disposal of plant and equipment | ||||||||
| Purchase of plant and equipment | ( | ) | ( | ) | ||||
| Net cash used in investing activities | ( | ) | ( | ) | ||||
| CASH FLOWS FROM FINANCING ACTIVITY: | ||||||||
| Repayment of finance lease | ( | ) | ( | ) | ||||
| Net cash used in financing activity | ( | ) | ( | ) | ||||
| Effect of exchange rate changes on cash and cash equivalent | ( | ) | ||||||
| Net increase in cash and cash equivalents | ||||||||
| Cash and cash equivalents, beginning of period | ||||||||
| CASH AND CASH EQUIVALENTS, END OF PERIOD | $ | $ | ||||||
| SUPPLEMENTAL CASH FLOWS INFORMATION | ||||||||
| Income taxes paid | $ | ( | ) | $ | ( | ) | ||
| Interest paid | $ | ( | ) | $ | ( | ) | ||
See accompanying notes to condensed consolidated financial statements.
| F-5 |
DSWISS, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2024
(Currency expressed in United States Dollars (“US$”), except for number of shares)
(UNAUDITED)
1. DESCRIPTION OF BUSINESS AND ORGANIZATION
DSwiss, Inc. is organized as a Nevada limited liability company, incorporated on May 28, 2015. For the purposes of financial statement presentation, DSwiss, Inc. and its subsidiaries are herein referred to as “the Company” or “we”. The principal activity of the Company is premier biotech-nutraceutical, beauty supplies, and medical consumables supplies. The Company sells medical consumable supplies, food supplements, skincare, and other related beauty products in Malaysia and around the ASEAN region. We are globally recognized Turnkey Private Label Manufacturing Services for nutraceutical and skincare OEM/ODM products.
Our professionals manage from custom formulation of scientifically proven and naturally effective, sourcing raw materials, production, quality control, stability, and safety test, clinical testing by third-party labs, packaging, and shipping, including import and export.
Our manufacturing facilities which compliant with GMP (Good Manufacturing Practise), FDA (Food Drug Association), HACCP (Hazard Analysis and Critical Control Point), JAKIM HALAL, and Mesti.
The accompanying unaudited condensed consolidated financial statements of DSwiss, Inc. at September 30, 2024 and 2023 have been prepared in accordance with generally accepted accounting principles (“GAAP”) for interim financial statements, instructions to Form 10-Q, and Regulation S-X. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted. These condensed consolidated financial statements should be read in conjunction with the financial statements and notes thereto included in our annual report on Form 10-K for the year ended December 31, 2023. In management’s opinion, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation to make our financial statements not misleading have been included. The results of operations for the periods ended September 30, 2024 and 2023 presented are not necessarily indicative of the results to be expected for the full year. The December 31, 2023 balance sheet has been derived from our audited financial statements included in our annual report on Form 10-K for the year ended December 31, 2023.
We
have historically conducted our business through DSwiss Sdn Bhd, a private limited liability company, incorporated in Malaysia. DSwiss
Holding Limited, incorporated in Seychelles, is an investment holding company with
We
have invested in DSwiss Biotech Sdn Bhd, a Company incorporated in Malaysia, and owned
The Company, through its subsidiaries, mainly supplies high quality beauty products. Details of the Company’s subsidiaries:
| Company name | Place and date of incorporation | Particulars of issued capital | Principal activities | Proportional of ownership interest and voting power held | ||||||||
| 1. | % | |||||||||||
| 2. | % | |||||||||||
| 3. | % | |||||||||||
| 4. | % | |||||||||||
| F-6 |
DSWISS, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2024
(Currency expressed in United States Dollars (“US$”), except for number of shares)
(UNAUDITED)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Going Concern
The
accompanying 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 reflected in the accompanying financial statements, for the period
ended September 30, 2024, the Company suffered an accumulated deficit of $
The Company’s ability to continue as a going concern is dependent upon improving its profitability and the continuing financial support from its shareholders. Management believes the existing shareholders or external financing will provide the additional cash to meet the Company’s obligations as they become due. No assurance can be given that any future financing, if needed, will be available or, if available, that it will be on terms that are satisfactory to the Company. Even if the Company is able to obtain additional financing, if needed, it may contain undue restrictions on its operations, in the case of debt financing, or cause substantial dilution for its stock holders, in the case of equity financing.
Basis of presentation
The accompanying condensed consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States of America (“US GAAP”).
Basis of consolidation
The condensed consolidated financial statements include the accounts of the Company and its subsidiaries in which the Company is the primary beneficiary. All inter-company accounts and transactions have been eliminated upon consolidation.
Use of estimates
In preparing these 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.
Revenue recognition
The Company follows the guidance of Accounting Standards Codification (ASC) 606, Revenue from Contracts. ASC 606 creates a five-step model that requires entities to exercise judgment when considering the terms of contracts, which includes (1) identifying the contracts or agreements with a customer, (2) identifying our performance obligations in the contract or agreement, (3) determining the transaction price, (4) allocating the transaction price to the separate performance obligations, and (5) recognizing revenue as each performance obligation is satisfied. The Company only applies the five-step model to contracts when it is probable that the Company will collect the consideration it is entitled to in exchange for the services it transfers to its clients.
Revenue from trading of retail goods is recognized when title and risk of loss are transferred and there are no continuing obligations to the customer. Title and the risks and rewards of ownership transfer to and accepted by the customer when the products are collected by the customer at the Company’s office. Revenue is recorded net of sales discounts, returns, allowances, and other adjustments that are based upon management’s best estimates and historical experience and are provided for in the same period as the related revenues are recorded.
The Company mainly derives its revenue from the sale of healthy food products. Generally, the Company recognizes revenue when OEM, Home brand and medical consumables product are sold and accepted by the customers and there are no continuing obligations to the customer.
Cost of revenue
Cost of revenue includes the purchase cost of retail goods for re-sale to customers and packing materials (such as boxes). It excludes purchasing and receiving costs, inspection costs, warehousing costs, internal transfer costs and other costs of distribution network in cost of revenues.
Shipping and handling fees
Shipping
and handling fees, if billed to customers, are included in revenue. Shipping and handling fees associated with inbound and outbound freight
are expensed as incurred and included in selling and distribution expenses. Shipping and handling fees are expensed as incurred for the
nine months ended September 30, 2024 were $
| F-7 |
DSWISS, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2024
(Currency expressed in United States Dollars (“US$”), except for number of shares)
(UNAUDITED)
Selling and distribution expenses
Selling and distribution expenses are primarily comprised of travelling and accommodation, transportation fees such as petrol, toll and parking and shipping and handling fees.
Cash and cash equivalents
The Company consider all highly liquid instruments with a maturity of three months or less at the time of issuance to be cash equivalent.
Inventories
Inventories consisting of products available for sell, are stated at the lower of cost or market value. Cost of inventory is determined using the first-in, first-out (FIFO) method. Inventory reserve is recorded to write down the cost of inventory to the estimated market value due to slow-moving merchandise and damaged goods, which is dependent upon factors such as historical and forecasted consumer demand, and promotional environment. The Company takes ownership, risks and rewards of the products purchased. Write downs are recorded in cost of revenues in the Condensed Consolidated Statements of Operations and Comprehensive Income.
Plant and equipment
Plant and equipment are stated at cost less accumulated depreciation and impairment. Depreciation of plant, equipment and software are calculated on the straight-line method over their estimated useful lives or lease terms generally as follows:
| Classification | Estimated useful lives | |
| Computer and software | ||
| Furniture and fittings | ||
| Office equipment | ||
| Motor vehicle | ||
| Plant and machinery |
Intangible assets
Intangible
assets are stated at cost less accumulated amortization. Intangible assets represented the registration costs of trademarks in Hong Kong,
which are amortized on a straight-line basis over a useful life of
The
Company follows ASC Topic 350 in accounting for intangible assets, which requires impairment losses to be recorded when indicators of
impairment are present and the undiscounted cash flows estimated to be generated by the assets are less than the assets’ carrying
amounts. There were
Leases
Prior to November 1, 2019, the Company accounted for leases under ASC 840, Accounting for Leases. Effective November 1, 2019, the Company adopted the guidance of ASC 842, Leases, which requires an entity to recognize a right-of-use asset and a lease liability for virtually all leases. The implementation of ASC 842 did not have a material impact on the Company’s consolidated financial statements and did not have a significant impact on our liquidity. The Company adopted ASC 842 using a modified retrospective approach. As a result, the comparative financial information has not been updated and the required disclosures prior to the date of adoption have not been updated and continue to be reported under the accounting standards in effect for those periods (see Note 12).
Income taxes
The provision of 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 periods 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
The Company conducts much of its business activities in Malaysia and is subject to tax in this jurisdiction. As a result of its business activities, the Company will file separate tax returns that are subject to examination by the foreign tax authorities.
| F-8 |
DSWISS, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2024
(Currency expressed in United States Dollars (“US$”), except for number of shares)
(UNAUDITED)
The Company calculates net income/(loss) per share in accordance with ASC Topic 260, “Earnings per Share.” Basic income/(loss) per share is computed by dividing the net income/(loss) by the weighted-average number of common shares outstanding during the period. Diluted income per share is computed similar to basic income/(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.
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 Statements of Operations and Comprehensive Income.
The reporting currency of the Company is United States Dollars (“US$”) and the accompanying financial statements have been expressed in US$. In addition, the Company’s subsidiaries in Malaysia and Hong Kong maintains their books and record in their local currency, Ringgits Malaysia (“RM”) and Hong Kong Dollars (“HK$”) respectively, which is functional currency as being the primary currency of the economic environment in which the entity operates.
In general, for consolidation purposes, assets and liabilities of its subsidiaries whose functional currency is not US$ 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 subsidiary are recorded as a separate component of accumulated other comprehensive income within the statements of stockholders’ equity.
Translation of amounts from RM into US$1 and HK$ into US$1 has been made at the following exchange rates for the respective periods:
| As of and for the nine months ended September 30, | ||||||||
| 2024 | 2023 | |||||||
| Period-end RM : US$1 exchange rate | ||||||||
| Period-average RM : US$1 exchange rate | ||||||||
| Period-end HK$ : US$1 exchange rate | ||||||||
| Period-average HK$ : US$1 exchange rate | ||||||||
| F-9 |
DSWISS, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2024
(Currency expressed in United States Dollars (“US$”), except for number of shares)
(UNAUDITED)
Related parties
Parties, which can be a corporation or individual, are considered to be related if the Company has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Companies are also considered to be related if they are subject to common control or common significant influence.
Fair value of financial instruments:
The carrying value of the Company’s financial instruments: cash and cash equivalents, accounts receivables, deposits, accounts payable, other payables, and accounts payable approximate at their fair values because of the short-term nature of these financial instruments.
The Company also follows the guidance of the 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: Observable inputs such as quoted prices in active markets;
Level 2: Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and
Level 3: Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.
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. For the nine months ended September 30, 2024, the Company operates in
Recently Issued Accounting Standards
The Company has reviewed all recently issued, but not yet effective, considers the applicability and impact of all accounting standards updates (“ASUs”). Management periodically reviews new accounting standards that are issued.
In November 2023, the FASB issued ASU 2023-07 “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures” which expands annual and interim disclosure requirements for reportable segments, primarily through enhanced disclosures about significant segment expenses. The ASU 2023-07 is effective for annual reporting periods beginning after December 15, 2023 and interim periods in fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company is currently evaluating the impact this ASU may have on its unaudited condensed consolidated financial statements and related disclosures.
In December 2023, the FASB issued ASU 2023-09 “Income Taxes (Topic 740): Improvements to Income Tax Disclosures” to expand the disclosure requirements for income taxes, specifically related to the rate reconciliation and income taxes paid. The ASU 2023-09 is effective for annual reporting periods beginning after December 15, 2024.
Early adoption is permitted. The Company is currently evaluating the impact of this ASU may have on its unaudited condensed consolidated financial statements and related disclosures.
| F-10 |
DSWISS, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2024
(Currency expressed in United States Dollars (“US$”), except for number of shares)
(UNAUDITED)
3. STOCKHOLDERS’ EQUITY
As of September 30, 2024, the Company had a total of of its common stock issued and outstanding. There are shares of preferred stock issued and outstanding.
4. PLANT AND EQUIPMENT
September 30, 2024 | December 31, 2023 | |||||||
| Computer and software | $ | $ | ||||||
| Furniture and fittings | ||||||||
| Office equipment | ||||||||
| Motor vehicle | ||||||||
| Plant and machinery | ||||||||
| Total plant and equipment | $ | $ | ||||||
| Accumulated depreciation | ( | ) | ( | ) | ||||
| Effect of translation exchange | ( | ) | ( | ) | ||||
| Plant and equipment, net | $ | $ | ||||||
Depreciation
expense for the three months and nine months ended September 30, 2024 were $
Depreciation
expense for the three months and nine months ended September 30, 2023 were $
5. INTANGIBLE ASSETS
September 30, 2024 | December 31, 2023 | |||||||
| Trademarks | $ | $ | ||||||
| Amortization | ( | ) | ( | ) | ||||
| Effect of translation exchange | ( | ) | ( | ) | ||||
| Intangible assets, net | $ | $ | ||||||
Amortization
for the three months and nine months ended September 30, 2024 was $
Amortization
for the three months and nine months ended September 30, 2023 was $
6. OTHER RECEIVABLES, PREPAID EXPENSES AND DEPOSITS
September 30, 2024 | December 31, 2023 | |||||||
| Other receivables | $ | $ | ||||||
| Prepaid expenses | ||||||||
| Deposits | ||||||||
| Total other receivables, prepaid expenses and deposits | $ | $ | ||||||
7. INVENTORIES
September 30, 2024 | December 31, 2023 | |||||||
| Finished goods, at cost | $ | $ | ||||||
| Total inventories | $ | $ | ||||||
8. OTHER PAYABLES AND ACCRUED LIABILITIES
September 30, 2024 | December 31, 2023 | |||||||
| Other payables | $ | $ | ||||||
| Accrued audit fees | ||||||||
| Accrued other expenses | ||||||||
| Accrued professional fees | ||||||||
| Total other payables and accrued liabilities | $ | $ | ||||||
| F-11 |
DSWISS, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2024
(Currency expressed in United States Dollars (“US$”), except for number of shares)
(UNAUDITED)
9. FINANCE LEASE LIABILITY
The
Company purchased motor vehicles with finance lease.
As of September 30, 2024 | As of December 31, 2023 | |||||||
| Finance lease | $ | $ | ||||||
| Less: interest expense | ( | ) | ( | ) | ||||
| Net present value of finance lease | ||||||||
| Current portion | ||||||||
| Non-current portion | ||||||||
| Total | $ | $ | ||||||
As of September 30, 2024 the maturities of the finance lease for each of the years are as follows:
| 2024 | ||||
| 2025 | ||||
| 2026 | ||||
| Total | $ | |||
| F-12 |
DSWISS, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2024
(Currency expressed in United States Dollars (“US$”), except for number of shares)
(UNAUDITED)
10. INCOME TAXES
For the nine months ended September 30, 2024 and 2023, the local (United States) and foreign components of (loss)/profit before income taxes were comprised of the following:
For the nine months ended September 30, 2024 | For the nine months ended September 30, 2023 | |||||||
| Tax jurisdictions from: | ||||||||
| - Local | $ | ( | ) | $ | ( | ) | ||
| - Foreign, representing | ||||||||
| Seychelles | ( | ) | ( | ) | ||||
| Hong Kong | ( | ) | ( | ) | ||||
| Malaysia | ||||||||
| Profit before income tax | $ | $ | ||||||
The provision for income taxes consisted of the following:
For the nine months ended September 30, 2024 | For the nine months ended September 30, 2023 | |||||||
| Current: | ||||||||
| - Local | $ | $ | ||||||
| - Foreign | ( | ) | ( | ) | ||||
| Deferred: | ||||||||
| - Local | ||||||||
| - Foreign | ||||||||
| Income tax expense | $ | ( | ) | $ | ( | ) | ||
The effective tax rate in the periods presented is the result of the mix of income earned in various tax jurisdictions that apply a broad range of income tax rates. The Company has subsidiaries that operate in various countries: United States, Seychelles, Hong Kong and Malaysia that are subject to taxes in the jurisdictions in which they operate, as follows:
United States of America
The
Company is registered in the State of Nevada and is subject to the tax laws of the United States of America. As of September 30, 2024,
the operations in the United States of America incurred $
Seychelles
Under the current laws of the Seychelles, DSwiss Holding Limited is registered as an international business company which governs by the International Business Companies Act of Seychelles and there is no income tax charged in Seychelles.
Hong Kong
DSwiss
(HK) Limited is subject to Hong Kong Profits Tax, which is charged at the statutory income tax rate of
Malaysia
DSwiss
Sdn. Bhd. and DSwiss Biotech Sdn. Bhd. are subject to Malaysia Corporate Tax, which is charged at the statutory income tax rate range
from
| F-13 |
DSWISS, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2024
(Currency expressed in United States Dollars (“US$”), except for number of shares)
(UNAUDITED)
11. CONCENTRATIONS OF RISK
The Company is exposed to the following concentrations of risk:
(a) Major customers
For three months ended September 30, 2024 and 2023, the customers who accounted for 10% or more of the Company’s revenues and its accounts receivables balance at period-end are presented as follows:
| 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | |||||||||||||||||||
| Revenue | Percentage of revenue | Accounts receivables | ||||||||||||||||||||||
| Customer A | $ | $ | % | % | $ | $ | ||||||||||||||||||
| Customer B | $ | $ | % | % | $ | $ | ||||||||||||||||||
| Customer C | $ | $ | % | % | $ | $ | ||||||||||||||||||
| Customer D | $ | $ | % | % | $ | $ | ||||||||||||||||||
| Customer E | $ | $ | % | % | $ | $ | ||||||||||||||||||
| Customer F | $ | $ | % | % | $ | $ | ||||||||||||||||||
| $ | $ | % | % | $ | $ | |||||||||||||||||||
For nine months ended September 30, 2024 and 2023, the customers who accounted for 10% or more of the Company’s revenues and its accounts receivables balance at period-end are presented as follows:
| 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | |||||||||||||||||||
| Revenue | Percentage of revenue | Accounts receivables | ||||||||||||||||||||||
| Customer A | $ | $ | % | % | $ | $ | ||||||||||||||||||
| Customer B | $ | $ | % | % | $ | $ | ||||||||||||||||||
| Customer C | $ | $ | % | % | $ | $ | ||||||||||||||||||
| Customer D | $ | $ | % | % | $ | $ | ||||||||||||||||||
| Customer E | $ | $ | % | % | $ | $ | ||||||||||||||||||
| $ | $ | % | % | $ | $ | |||||||||||||||||||
(b) Major vendors
For three months ended September 30, 2024 and 2023, the vendors who accounted for 10% or more of the Company’s purchases and its accounts payable balance at period-end are presented as follows:
| 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | |||||||||||||||||||
| Purchase | Percentage of purchase | Accounts payable | ||||||||||||||||||||||
| Vendor A | $ | $ | % | % | $ | $ | ||||||||||||||||||
| Vendor B | $ | $ | % | % | $ | $ | ||||||||||||||||||
| Vendor C | $ | $ | % | % | $ | $ | ||||||||||||||||||
| Vendor D | $ | $ | % | % | $ | $ | ||||||||||||||||||
| $ | $ | % | % | $ | $ | |||||||||||||||||||
For nine months ended September 30, 2024 and 2023, the vendors who accounted for 10% or more of the Company’s purchases and its accounts payable balance at period-end are presented as follows:
| 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | |||||||||||||||||||
| Purchase | Percentage of purchase | Accounts payable | ||||||||||||||||||||||
| Vendor A | $ | $ | % | % | $ | $ | ||||||||||||||||||
| Vendor B | $ | $ | % | % | $ | $ | ||||||||||||||||||
| Vendor C | $ | $ | % | % | $ | $ | ||||||||||||||||||
| Vendor D | $ | $ | % | % | $ | $ | ||||||||||||||||||
| $ | $ | % | % | $ | $ | |||||||||||||||||||
All vendors are located in Malaysia.
(c) Credit risk
Financial instruments that are potentially subject to credit risk consist principally of accounts receivables. The Company believes the concentration of credit risk in its accounts receivables is substantially mitigated by its ongoing credit evaluation process and relatively short collection terms. The Company does not generally require collateral from customers. The Company evaluates the need for an allowance for doubtful accounts based upon factors surrounding the credit risk of specific customers, historical trends and other information.
(d) Exchange rate risk
The Company cannot guarantee that the current exchange rate will remain stable, therefore there is a possibility that the Company could post the same amount of income for two comparable periods and because of the fluctuating exchange rate actually post higher or lower income depending on exchange rate of RM converted to US$ and HK$ converted into US$ on that date. The exchange rate could fluctuate depending on changes in political and economic environments without notice.
| F-14 |
DSWISS, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2024
(Currency expressed in United States Dollars (“US$”), except for number of shares)
(UNAUDITED)
12. LEASE RIGHT-OF-USE ASSET AND LEASE LIABILITIES
The Company officially adopted ASC 842 for the period on and after January 1, 2019 as permitted by ASU 2016-02. ASC 842 originally required all entities to use a “modified retrospective” transition approach that is intended to maximize comparability and be less complex than a full retrospective approach. On July 30, 2018, the FASB issued ASU 2018-11 to provide entities with relief from the costs of implementing certain aspects of the new leasing standard, ASU 2016-02 of which permits entities may elect not to recast the comparative periods presented when transitioning to ASC 842. As permitted by ASU 2018-11, the Company elect not to recast comparative periods, thusly.
As
of January 1, 2022, the Company recognized approximately US$
As of December 31, 2023, the tenancy agreement had expired, a new and fresh tenancy agreement for renewal term has yet to be executed. The lease on premises had continued on a month- to-month basis which is terminable by the end of each month.
A single lease cost is recognized over the lease term on a generally straight-line basis. All cash payments of operating lease cost are classified within operating activities in the statement of cash flows.
The initial recognition of operating lease right and lease liability as follow:
As of September 30, 2024 and December 31, 2023, operating lease right of use asset as follow:
As of September 30, 2024 | As of December 31, 2023 | |||||||
| As of beginning of the period/year | $ | $ | ||||||
| Accumulated amortization | ( | ) | ||||||
| Effect of translation exchange | ( | ) | ||||||
| Balance as of end of the period/year | $ | $ | ||||||
As
of September 30, 2024 and December 31, 2023, the amortization of the operating lease right of use asset are $ and $
| F-15 |
DSWISS, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2024
(Currency expressed in United States Dollars (“US$”), except for number of shares)
(UNAUDITED)
As of September 30, 2024, operating lease liability as follow:
| As of January 1, 2024 | $ | |||
| Less: gross repayment | ||||
| Add: imputed interest | ||||
| Effect of translation exchange | ||||
| Balance as of September 30, 2024 | $ | |||
| Less: lease liability current portion | ||||
| Lease liability non-current portion | $ |
Maturities of operating lease obligation as follow:
| Year ending | ||||
| December 31, 2024 | ||||
| Total | $ |
Other information:
As of September 30, 2024 | As of December 31, 2023 | |||||||
| (unaudited) | (audited) | |||||||
| Cash paid for amounts included in the measurement of lease liabilities: | ||||||||
| Operating cash flow from operating lease | $ | $ | ||||||
| Right-of-use assets obtained in exchange for operating lease liabilities | ||||||||
| Remaining lease term for operating lease (years) | ||||||||
| Weighted average discount rate for operating lease | % | |||||||
As
of September 30, 2024 and December 31, 2023, lease expenses were $ and $
13. RELATED PARTY TRANSACTIONS
For the period ended September 30, 2024 and 2023, the Company has the following transactions with related party:
For the period ended September 30, 2024 (Unaudited) | For the period ended September 30, 2023 (Unaudited) | |||||||
| Professional Fees: | ||||||||
| - Related party A | $ | $ | ||||||
| Sales | ||||||||
| - Related party B | $ | $ | ||||||
| Purchases | ||||||||
- Related party B | $ | $ | ||||||
| Total | $ | $ | ||||||
The
related party A, is a wholly owned subsidiary of a
The related party B’s director is the founder of the Company.
The related party transaction is generally transacted in an arm-length basis at the current market value in the normal course of business.
14. SEGMENTED INFORMATION
ASC 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 services categories, business segments and major customers in financial statements. In accordance with the “Segment Reporting” Topic of the ASC, the Company’s chief operating decision maker has been identified as the Chief Executive Officer and President, who reviews operating results to make decisions about allocating resources and assessing performance for the entire Company. Existing guidance, which is based on a management approach to segment reporting, establishes requirements to report selected segment information quarterly and to report annually entity-wide disclosures about products and services, major customers, and the countries in which the entity holds material assets and reports revenue. All material operating units qualify for aggregation under “Segment Reporting” due to their similar customer base and similarities in economic characteristics; nature of products and services; and procurement, manufacturing and distribution processes.
| F-16 |
DSWISS, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2024
(Currency expressed in United States Dollars (“US$”), except for number of shares)
(UNAUDITED)
The Company had no inter-segment sales for the periods presented. Summarized financial information concerning the Company’s reportable segments is shown as below:
By Geography*:
| For the period ended September 30, 2024 | ||||||||||||||||||||
| Nevada | Seychelles | Hong Kong | Malaysia | Total | ||||||||||||||||
| Revenue | $ | $ | $ | $ | $ | |||||||||||||||
| Cost of revenue | ( | ) | ( | ) | ||||||||||||||||
| Depreciation and amortization | ( | ) | ( | ) | ||||||||||||||||
| Net (loss)/profit before taxation | ( | ) | ( | ) | ( | ) | ||||||||||||||
| Total assets | $ | $ | $ | $ | $ | |||||||||||||||
| For the period ended September 30, 2023 | ||||||||||||||||||||
| Nevada | Seychelles | Hong Kong | Malaysia | Total | ||||||||||||||||
| Revenue | $ | $ | $ | $ | $ | |||||||||||||||
| Cost of revenue | ( | ) | ( | ) | ||||||||||||||||
| Depreciation and amortization | ( | ) | ( | ) | ( | ) | ||||||||||||||
| Net (loss)/profit before taxation | ( | ) | ( | ) | ( | ) | ||||||||||||||
| Total assets | $ | $ | $ | $ | $ | |||||||||||||||
| * |
15. SUBSEQUENT EVENTS
In accordance with ASC Topic 855, “Subsequent Events”, which establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued, the Company has evaluated all events or transactions that occurred after September 30, 2024 up through the date the Company issued the consolidated financial statements.
| F-17 |
Item 2. Management’s discussion and analysis of financial condition and results of operations
The information contained in this quarter report on Form 10-Q is intended to update the information contained in our Annual Report on Form 10-K for the year ended December 31, 2023 and presumes that readers have access to, and will have read, the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and other information contained in such Form 10-K. The following discussion and analysis also should be read together with our consolidated financial statements and the notes to the consolidated financial statements included elsewhere in this Form 10-Q.
The following discussion contains certain statements that may be deemed “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements appear in a number of places in this Report, including, without limitation, “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” These statements are not guarantees of future performance and involve risks, uncertainties and requirements that are difficult to predict or are beyond our control. Forward-looking statements speak only as of the date of this quarterly report. You should not put undue reliance on any forward-looking statements. We strongly encourage investors to carefully read the factors described in our Form S-1 Amendment No.8, dated July 20, 2016 in the section entitled “Risk Factors” for a description of certain risks that could, among other things, cause actual results to differ from these forward-looking statements. We assume no responsibility to update the forward-looking statements contained in this transition report on Form 10-Q. The following should also be read in conjunction with the unaudited Condensed Consolidated Financial Statements and notes thereto that appear elsewhere in this report.
Company Overview
DSwiss, Inc., a Nevada corporation (“the Company”) was incorporated under the laws of the State of Nevada on May 28, 2015. DSwiss Holding Limited owns 100% of DSwiss (HK) Limited, a Hong Kong Company, which owns 100% of DSwiss Sdn Bhd, the operating Malaysia Company of which is described below. In 2016, DSwiss (HK) Limited invested in DSwiss Biotech Sdn Bhd, incorporated in Malaysia, and owned 40% equity interest.
DSwiss is the leading corporation for premier nutraceutical biotechnology in USA, and has gone into Asian countries such as China, Hong Kong, Singapore, Thailand, and Malaysia with our high quality functional health supplement, skin care solution, wellness products and private labelled supplies turnkey provider (OEM/ODM). Our unique and innovative patented biotechnology, natural ingredients into products & services that has been proven to give better, faster and visible positive results to the end user including health improvement, slimming, anti-aging and beauty effects.
Currently, we are fulfilling in Talent Development, product research and development, and providing Original Equipment Manufacturer (OEM) and Original Design Manufacturer (ODM) services into functional food and beauty product of which is currently under research and development with Malaysia biotech and research professionals. Our professionals manage from custom formulation of scientifically-proven and naturally-effective, sourcing raw materials, production, quality control, stability and safety test, clinical testing by third-party labs, packaging and shipping including import and export, all licenses needed so customer can concentrate on what they should do. In 2020, with our experience and expertise, we have successfully expanded our client base in OEM/ODM services and developed products and Business-to-business (B2B) DNA genotyping private label services that exceed the clients’ expectation.
| 2 |
DSwiss has continuously expanding through launching health and beauty projects to provide premier experiences to the customers. DSwiss has shown a solid growth and is set to advance the biotechnology industry to drive nutraceutical and skincare biotechnology growth.
At this time, we operate exclusively online through our website: http://www.dswissbeauty.com.
Products which meet the definition of a functional food and cosmetics related products need to be registered or notified with the Drug Control Authority (DCA), Ministry of Health Malaysia. Manufacturing, marketing, importation and the sale of unregistered products is a violation of the Drug Control Regulations and Cosmetics Act 1984 of Malaysia and enforcement action can be taken.
At DSwiss, research and development is an ongoing effort whose purpose is to ensure our products on the forefront of quality and effectiveness. Equipped with state of the art machinery, our innovative research and development team are constantly exploring on new development and product lines that will enable us to provide the highest quality standard and remain competitive in the industry.
DSwiss’s products are certified and approved by the Ministry of Health (“MOH”) Malaysia. Due to the stringent requirements from MOH Malaysia, we strive to upkeep the highest possible standard in our products to provide assurance and as a prove of our continuing commitment to providing quality products.
Our expected growth is planned to occur primarily through the implementation of our social media marketing strategy. DSwiss already has a strong relationship with new retail tech company (eg. Facebook, E-Marketplace). The global presence social media has helped provide to us has been an invaluable resource, and as we continue to expand our business operations and spread our brand awareness, we intend to primarily utilize social media to reach our customers. The benefits of social media are countless, but perhaps the most imperative to our future success is our ability to connect with customers directly, to receive their feedback almost instantaneously. On that note, the feedback we have received from our clients has been overwhelmingly positive, which has helped us to create a robust brand image.
While DSwiss has been focused almost exclusively upon pursuing operations within Asia, we do have plans to expand outward and become a household name across the world. Our strategy to do so going forward is by forming partnerships with local companies in various countries that may be willing to stock our products or promote them to their own customers. We believe that by forging strategic relationships and partnerships we can expand our operations across the globe at a greater pace and with greater certainty than we would if we tried to expand on our own.
Results of Operation
For the Three Months and Nine Months Ended September 30, 2024 and September 30, 2023.
For the three months and nine months ended September 30, 2024, we realized revenue in the amount of $1,027,198 and $2,077,942, while for the three months and nine months ended September 30, 2023, we realized revenue in the amount of $425,569 and $1,046,764. Our gross profits for the three months and nine months ended September 30, 2024 were $113,201 and $515,271, which are less than $31,358 for the three months ended September 30, 2023 and more than $197,015 for the nine months ended September 30, 2023 respectively. We attribute this increase in gross profits as a result of increase in revenue.
| 3 |
*Our gross margins may not be comparable to those of other entities, since some entities include all the costs related to their distribution network in cost of revenue. Our cost of revenue includes only the purchase cost of products and packing materials, and does not include any allocation of inbound freight charges, purchasing and receiving costs, inspection costs, warehousing costs, internal transfer costs, and the other costs associated with the distribution network.
Our net loss for the three months ended September 30, 2024 were $61,468 and net profit for the nine months ended September 30, 2024 $137,343 respectively, while the net profit for three months and nine months ended September 30, 2023 were $44,996 and $16,070 respectively.
Liquidity and Capital Resources
For the nine months ended September 30, 2024 and 2023, we had cash and cash equivalents of $473,250 and $288,932 respectively. We have positive operating cash flow and our working capital has been and will continue to be significant. As a result, we have increased our sales resulting an increase in our overall revenue. We need to meet our working capital requirements to make capital investments in connection with ongoing operations. The Company expects its current capital resources to meet our basic operating requirements for approximately twelve months.
Operating Activities
For the nine months ended September 30, 2024, net cash generated from operating activities was $217,204, compared to net cash generated from operating activities was $111,389 in the prior period. The operating cash flow performance primarily reflects increase in accounts payable, increase in other payables and accrued liabilities and increase in other receivables, prepaid expenses and deposits to the prior period.
Investing Activities
For the nine months ended September 30, 2024, net cash used in investing activities was $1,313, reflecting the proceed of disposal of plant and equipment and cost in purchase of plant and equipment. For the nine months ended September 30, 2023, net cash used in investing activities was $364, reflecting the cost in purchase of plant and equipment.
Financing Activity
For the nine months ended September 30, 2024 and 2023, net cash used in financing activity were $13,756 and $11,586 respectively resulted from the repayment of finance lease.
| 4 |
Off-balance Sheet Arrangements
We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to our stockholders as of September 30, 2024.
Recent accounting pronouncements
The Company has reviewed all recently issued, but not yet effective, considers the applicability and impact of all accounting standards updates (“ASUs”). Management periodically reviews new accounting standards that are issued.
In November 2023, the FASB issued ASU 2023-07 “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures” which expands annual and interim disclosure requirements for reportable segments, primarily through enhanced disclosures about significant segment expenses. The ASU 2023-07 is effective for annual reporting periods beginning after December 15, 2023 and interim periods in fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company is currently evaluating the impact this ASU may have on its unaudited condensed consolidated financial statements and related disclosures.
In December 2023, the FASB issued ASU 2023-09 “Income Taxes (Topic 740): Improvements to Income Tax Disclosures” to expand the disclosure requirements for income taxes, specifically related to the rate reconciliation and income taxes paid. The ASU 2023-09 is effective for annual reporting periods beginning after December 15, 2024.
Early adoption is permitted. The Company is currently evaluating the impact of this ASU may have on its unaudited condensed consolidated financial statements and related disclosures.
Item 3 Quantitative and Qualitative Disclosures About Market Risk.
As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide information required by this Item.
Item 4 Controls and Procedures.
Evaluation of Disclosure Controls and Procedures:
We carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of September 30, 2024. This evaluation was carried out under the supervision and with the participation of our Chief Executive Officer and our Chief Financial Officer. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of September 30, 2024, our disclosure controls and procedures were not effective due to the presence of material weaknesses in internal control over financial reporting.
A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis. Management has identified the following material weaknesses which have caused management to conclude that, as of September 30, 2024, our disclosure controls and procedures were not effective: (i) inadequate segregation of duties and effective risk assessment; and (ii) insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of both US GAAP and SEC guidelines.
Changes in Internal Control over Financial Reporting:
There were no changes in our internal control over financial reporting during the quarter ending September 30, 2024, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
| 5 |
PART II — OTHER INFORMATION
Item 1. Legal Proceedings
We know of no material, active or pending legal proceedings against us, nor are we involved as a plaintiff in any material proceedings or pending litigation. There are no proceedings in which any of our directors, officers or affiliates, or any beneficial shareholder are an adverse party or has a material interest adverse to us.
Item 1A. Risk Factors.
We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
None.
Item 3. Defaults Upon Senior Securities
None
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information.
None.
| 6 |
ITEM 6. Exhibits
| Exhibit No. | Description | |
| 31.1 | Rule 13(a)-14(a)/15(d)-14(a) Certification of principal executive officer* | |
| 32.1 | Section 1350 Certification of principal executive officer * | |
| 101.INS | Inline XBRL Instance Document* | |
| 101.SCH | Inline XBRL Schema Document* | |
| 101.CAL | Inline XBRL Calculation Linkbase Document* | |
| 101.DEF | Inline XBRL Definition Linkbase Document* | |
| 101.LAB | Inline XBRL Label Linkbase Document* | |
| 101.PRE | Inline XBRL Presentation Linkbase Document* | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
* Filed herewith.
| 7 |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| DSWISS, INC. | ||
| (Name of Registrant) | ||
| Date: November 14, 2024 | ||
| By: | /s/ Leong Ming Chia | |
| Title: | President,
Chief Executive Officer, Chief Financial Officer, Treasurer, Secretary and Director | |
| (Principal Executive Officer, Principal Financial Officer) | ||
| 8 |