Aphoenity International Holdings Inc 10-Q for FY2020 Q2

Aphoenity International Holdings Inc. (LDSN)

10-Q 2020-08-14 For: 2020-06-30

Added on August 18, 2026

About this 10-Q

Aphoenity International Holdings Inc filed this 10-Q on August 14, 2020, covering the quarter ended June 30, 2020 (FY2020 Q2).

Headline figures

Quarter ended June 30, 2020, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $1.02M; up 339.0% from $233.36K a year earlier
Net income: $721.35K; up 366.6% from net income of $154.61K a year earlier

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Delaware	82-3184409
(State of other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification Number)

Title of each Class	Trading Symbol	Name of each exchange on which registered
Common Stock, par value US$0.0001	LDSN	N/A

Large accelerated filer [_]		Accelerated filer [_]

Non-accelerated filer [_]		Smaller reporting company [X]

Emerging growth company [_]

	TABLE OF CONTENTS	Page

PART I – FINANCIAL INFORMATION

Item 1.	Financial Statements	3
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operation	10
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	13
Item 4.	Controls and Procedures	13

PART II – OTHER INFORMATION

Item 1.	Legal Proceedings	14
Item 1A.	Risk Factors	14
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	14
Item 3.	Defaults Upon Senior Securities	14
Item 4.	Submission of Matters to a Vote of Security Holders	14
Item 5.	Other Information	14
Item 6.	Exhibits	15

	Page

Condensed Consolidated Balance Sheets	2

Condensed Consolidated Statements of Operations and Comprehensive Income	3

Condensed Consolidated Statements of Cash Flows	4

Condensed Consolidated Statements of Changes in Stockholders’ Equity	5

Notes to Condensed Consolidated Financial Statements	6 – 17

(Mark One)
[X]	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2020.

	June 30, 2020		December 31, 2019
	(Unaudited)		(Audited)
ASSETS
Current asset:
Cash and cash equivalents		`$208,325`		`$269,691`
Accounts receivable		`1,121,547`		`760,733`
Deposits, prepayments and other receivables		`587,702`		`142,001`
Operating lease right-of-use assets		`26,990`		`35,816`

Total current assets		`1,944,564`		`1,208,241`

Non-current asset:
Plant and equipment		`6,703`		`9,172`

TOTAL ASSETS		`$1,951,267`		`$1,217,413`

LIABILTIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accrued liabilities and other payables		`$4,541`		`$1,289`
Tax payable		`270,303`		`139,804`
Operating lease liabilities		`27,649`		`36,690`
Amount due to a director		`16,500`		`-`

Total current liabilities		`318,993`		`177,783`

TOTAL LIABILITIES		`318,993`		`177,783`

Commitments and contingencies		`-`		`-`

STOCKHOLDERS’ EQUITY

Preferred stock, $.0001 par value, 20,000,000 shares authorized, no shares issued and outstanding at June 30, 2020 and December 31, 2019, respectively		`-`		`-`
Common stock, $.0001 par value, 100,000,000 shares authorized, 25,610,000 and 10,000,000 shares issued and outstanding at June 30, 2020 and December 31, 2019, respectively		`2,561`		`1,000`
Additional paid in capital		`7,439`		`9,000`
Accumulated other comprehensive income		`11,380`		`5,435`
Retained earnings		`1,610,894`		`1,024,195`

Stockholders’ equity		`1,632,274`		`1,039,630`

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY		`$1,951,267`		`$1,217,413`

	Three Months ended June 30,				Six Months ended June 30,
	2020		2019		2020		2019

Revenue, net		`$1,024,510`		`$233,360`		`$1,121,029`		`$510,023`

Cost of revenue		`(147,387)`		`(46,020)`		`(151,068)`		`(127,304)`

Gross profit		`877,123`		`187,340`		`969,961`		`382,719`

Operating expenses:
General and administrative expenses		`(30,865)`		`(14,627)`		`(67,557)`		`(54,126)`
Total operating expenses		`(30,865)`		`(14,627)`		`(67,557)`		`(54,126)`

Other income
Interest income		`34`		`-`		`34`		`-`

INCOME BEFORE INCOME TAXES		`846,292`		`172,713`		`902,438`		`328,593`

Income tax expense		`(124,938)`		`(18,100)`		`(129,655)`		`(31,116)`

NET INCOME		`721,354`		`154,613`		`772,783`		`297,477`

Other comprehensive income:
Foreign currency translation gain		`1,210`		`2,119`		`5,945`		`1,623`

COMPREHENSIVE INCOME		`$722,564`		`$156,732`		`$778,728`		`$299,100`

Basic and diluted weighted average shares outstanding		`21,620,778`		`10,000,000`		`15,810,389`		`10,000,000`

Basic and diluted net loss per share		`$0.03`		`$0.16`		`$0.05`		`$0.03`

	Six Months ended June 30,
	2020			`2019`

Cash flow from operating activities:
NET INCOME			`$772,783`		`$297,477`
Adjustments to reconcile net income to net cash generated from operating activities:
Depreciation of plant and equipment			`2,510`		`3,167`
Non-cash lease expense			`9,445`		`-`

Change in operating assets and liabilities:
Accounts receivables			`(360,814)`		`(6,365)`
Deposits, prepayments and other receivables			`(445,701)`		`-`
Lease liabilities			`(9,677)`		`-`
Accrued liabilities and other payables			`3,252`		`20,527`
Income tax payable			`129,655`		`31,116`
Net cash generated from operating activities			`101,453`		`345,922`

Cash flow from financing activities:
Advance from a director			`16,500`		`104,641`
Dividends paid			`(186,084)`		`-`

Net cash (used in) generated from financing activities			`(169,584)`		`104,641`

Effect on exchange rate change on cash and cash equivalents			`6,765`		`1,712`

Net change in cash and cash equivalents			`(61,366)`		`452,275`

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD			`269,691`		`26,815`

CASH AND CASH EQUIVALENTS, END OF PERIOD			`$208,325`		`$479,090`

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid for tax		`-`			`-`
Cash paid for interest		`-`			`-`

	Common stock		Additional paid-in	Accumulated other comprehensive		Total stockholders’
	No. of shares	Amount	capital	(loss) income	Retained earnings	equity

Balance as at January 1, 2019 (restated)	10,000,000.00	`$1,000`	`$9,000`	`$(717)`	`$184,919`	`$194,202`
						`-`
Foreign currency translation adjustment	-	`-`	`-`	`(496)`	`-`	`(496)`
Net income for the period	-	`-`	`-`	`-`	`142,864`	`142,864`
Balance as at March 31, 2019	10,000,000	`1,000`	`9,000`	`(1,213)`	`327,783`	`336,570`

Foreign currency translation adjustment	-	`-`	`-`	`2,119`	`-`	`2,119`
Net income for the period	-	`-`	`-`	`-`	`154,613`	`154,613`
Balance as at June 30, 2019	10,000,000	`$1,000`	`$9,000`	`$906`	`$482,396`	`$493,302`

Balance as at January 1, 2020	10,000,000	`$1,000`	`$9,000`	`$5,435`	`$1,024,195`	`$1,039,630`

Dividends paid	-	`-`	`-`	`-`	`(186,084)`	`(186,084)`
Foreign currency translation adjustment	-	`-`	`-`	`4,735`	`-`	`4,735`
Net income for the period	-	`-`	`-`	`-`	`51,429`	`51,429`
Balance as at March 31, 2020	10,000,000	`1,000`	`9,000`	`10,170`	`889,540`	`909,710`

Shares issued for acquisition of legal acquirer	15,610,000	`1,561`	`(1,561)`	`-`	`-`	`-`
Foreign currency translation adjustment	-	`-`	`-`	`1,210`	`-`	`1,210`
Net income for the period	-	`-`	`-`	`-`	`721,354`	`721,354`
Balance as at June 30, 2020	25,610,000.00	`$2,561`	`$7,439`	`$11,380`	`$1,610,894`	`$1,632,274`

Name	Place of incorporation and kind of legal entity	Principal activities and place of operation	Particulars of registered/ paid up share capital	Effective interest held

Luduson Holding Company Limited	British Virgin Island	Investment holding	10,000 ordinary shares	100%

Luduson Entertainment Limited	Hong Kong	Sales and marketing	10,000 ordinary shares at par value of HK$1	100%

G Music Asia Limited	British Virgin Islands	Event planning	2 ordinary shares at par value of US$1	100%

		Expected useful lives
Computer equipment		3.33 years
Furniture and equipment		5 years

	•	identify the contract with a customer;
	•	identify the performance obligations in the contract;
	•	determine the transaction price;
	•	allocate the transaction price to performance obligations in the contract; and
	•	recognize revenue as the performance obligation is satisfied.

	June 30, 2020	June 30, 2019
Period-end HKD:US$ exchange rate	0.12903	0.12842
Period average HKD:US$ exchange rate	0.12885	0.12764

Level 1		Quoted market prices available in active markets for identical assets or liabilities as of the reporting date.

Level 2		Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date.

Level 3		Pricing inputs that are generally observable inputs and not corroborated by market data.

			(Audited)

Prepayments for business project	$	`139,455`		`138,791`
Prepayments for equipment		`445,021`		`-`
Rental deposit		`3,226`		`3,210`
	$	`587,702`		`142,001`

		Three months ended June 30, 2020				June 30, 2020
Customer		Revenues		Percentage of revenues		Accounts receivable

Customer A	Total:	$	`928,913`	`89%`	Total:		`916,107`

		Three months ended June 30, 2019				June 30, 2019
Customer		Revenues		Percentage of revenues		Accounts receivable

Customer D		$	`96,762`	`41%`			`-`
Customer A			`45,155`	`19%`			`-`
Customer C			`38,705`	`17%`			`11,521`
Customer B			`25,771`	`11%`			`-`

	Total:	$	`206,393`	`88%`	Total:		`11,521`

		Six months ended June 30, 2020				June 30, 2020
Customer		Revenues		Percentage of revenues		Accounts receivable

Customer A	Total:	$	966,404	86 %	Total:	$	916,107

		Six months ended June 30, 2019				June 30, 2019
Customer		Revenues		Percentage of revenues		Accounts receivable

Customer B		$	`184,888`	`36%`			`-`
Customer C			`119,221`	`23%`			`11,521`
Customer D			`95,632`	`19%`			`-`
Customer A			`63,755`	`13%`			`-`

	Total:	$	`463,496`	`91%`	Total:		`11,521`


	Three Months Ended June 30,
	2020		2019
Revenues	$	`1,024,510`		`233,360`
Cost of revenue		`(147,387`		`(46,020`	)
Gross profit		`877,123`		`187,340`
Total operating expenses		`(30,865`		`(14,627`	)
Other income		`34`		`-`
Income before Income Taxes		`846,292`		`172,713`
Income tax expense		`(124,938`		`(18,100`	)
Net income		`721,354`		`154,613`


	Six Months Ended June 30,
	2020		2019
Revenues	$	`1,121,029`		`510,023`
Cost of revenue		`(151,068`		`(127,304`	)
Gross profit		`969,961`		`382,719`
Total operating expenses		`(67,557`		`(54,126`	)
Other income		`34`		`-`
Income before Income Taxes		`902,438`		`328,593`
Income tax expense		`(129,655`		`(31,116`	)
Net income		`772,783`		`297,477`


Exhibit Number	Description
2.1	Plan of Reorganization (1)
3.1	Certificate of Incorporation (1)
3.2	Certificate of Amendment to Certificate of Incorporation (1)
3.3	Certificate of Amendment to Certificate of Incorporation (2)
3.4	Amended and Restated Bylaws (2)
4.1	Form of “A” Common Stock Purchase Warrant (1)
4.2	Form of “B” Common Stock Purchase Warrant (1)
4.3	Form of “C” Common Stock Purchase Warrant (1)
4.4	Form of “D” Common Stock Purchase Warrant (1)
4.5	Form of “E” Common Stock Purchase Warrant (1)
4.6	Description of Securities (3)
10.1	Lease Agreement, dated December 28, 2018, by and between Luduson Entertainment Limited and Chen Xiu Ying (3)
10.2	Memorandum of Understanding dated August 6, 2020, by and between G Music Asia Limited and I-Generation Company Limited*
22	List of Subsidiaries (3)


(1)	Incorporated by reference to the Exhibits to Registration Statement on Form 10 filed with the Securities and Exchange Commission on April 30, 2018.
(2)	Incorporated by reference to the Exhibits to the Definitive Information Statement of Schedule 14C filed with the Securities and Exchange Commission on June 8, 2020.
(3)	Incorporated by reference to the Current Report on Form 8-K filed with the Securities and Exchange Commission on May 22, 2020.

	Luduson G Inc.
	Registrant


	By: /s/ Ka Leung Wong
	Ka Leung Wong Chief Executive Officer and Director

	1.	I have reviewed this quarterly report on Form 10-Q of Luduson G Inc.;

	2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

	3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

	4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal controls over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

	a.	Designed such disclosure controls and procedures, or caused such disclosure controls and procedure to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

	b.	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

	c.	Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based upon such evaluation; and

	d.	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

	a.	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

	b.	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

	1.	The Report fully complies with the requirements of Rule 13(a) or 15(d) of the Securities Exchange Act of 1934; and

	2.	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.