SUIC Worldwide Holdings Ltd 10-Q for FY2022 Q2
SUIC Worldwide Holdings Ltd. (SUIC)
About this 10-Q
SUIC Worldwide Holdings Ltd filed this 10-Q on August 15, 2022, covering the quarter ended June 30, 2022 (FY2022 Q2).
Headline figures
Quarter ended June 30, 2022, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $45K
- down 30.8% from $65K a year earlier
- Net income
- $8171
- up 138.6% from net income of $3424 a year earlier
- Diluted EPS
- $0.00
- compared with $0.00 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_______________
FORM
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the
For the transition period from ______ to _______
Commission File Number
(Exact name of registrant as specified in its charter)
(Address of Principal Executive Offices)
_______________
(
(Issuer Telephone number)
_______________
Check
whether the issuer (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months
(or for such shorter period that the issuer was required to file such reports), and (2) has been subject to such filing requirements for
the past 90 days.
Indicate
by check mark whether the registrant has submitted electronically and posted on its corporate web site, if any, every Interactive Data
File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12
months (or for such shorter period that the registrant was required to submit and post such files).
Indicate by check mark whether the registrant is a larger accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of "accelerated filer and large accelerated filer" in Rule 12b-2 of the Exchange Act. (Check one)
| Large accelerated filer ☐ | 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 ☐
At June 30, 2022, there were shares of the registrant's common stock issued and outstanding.
SINO UNITED WORLDWIDE CONSOLIDATED LTD.
FORM 10-Q
June 30, 2022
INDEX
PART I-- FINANCIAL INFORMATION
| Item 1. | Financial Statements | 3 |
| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations. | 11 |
| Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 14 |
| Item 4. | Control and Procedures | 14 |
PART II-- OTHER INFORMATION
| Item 1. | Legal Proceedings | 15 |
| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 15 |
| Item 3. | Defaults Upon Senior Securities | 15 |
| Item 4. | Mine Safety Disclosures. | 15 |
| Item 5. | Other Information. | 15 |
| Item 6. | Exhibits | 15 |
| SIGNATURES | 16 | |
Sino United Worldwide Consolidated Ltd.
Index to the consolidated financial statements
| Table of Contents | Page(s) |
| Balance Sheets at June 30, 2022 (Unaudited) and December 31, 2021 | F-2 |
| Unaudited Statements of Operations for the Three and Six Months Ended June 30, 2022 and 2021 | F-3 |
| Unaudited Statement of Stockholders’ Equity for the Six Months Ended June 30, 2022. | F-4 |
| Unaudited Statements of Cash Flows for the Six Months Ended June 30, 2022 and 2021. | F-5 |
| Notes to the Consolidated Financial Statements (Unaudited) | F-6 - F-9 |
| 3 |
Sino United Worldwide Consolidated Ltd.
Balance Sheet
June 30, 2022
June 30, 2022 | December 31, 2021 | |||||||
| ASSETS | ||||||||
| CURRENT ASSETS: | ||||||||
| Cash | $ | $ | ||||||
| Accounts receivable, net | ||||||||
| Short Term Investment- Held-for-Trading | ||||||||
| Total Current Assets | ||||||||
| Loans receivable | ||||||||
| Fixed asset- office equipment laptop | ||||||||
| Other receivables -Income From HFT | ||||||||
| Other interest receivables -Sinoway International | ||||||||
| Other receivable | ||||||||
| Total Assets | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS' DEFICIENCY | ||||||||
| CURRENT LIABILITIES: | ||||||||
| Credit card payable | $ | $ | ||||||
| Convertible promissory notes- other | ||||||||
| Accrued expenses and other liabilities | ||||||||
| Short term debt | ||||||||
| Total Current Liabilities | ||||||||
| COMMITMENTS AND CONTINGENCIES | ||||||||
| Stockholders’ Deficiency | ||||||||
| Common stock, $ par value, shares authorized; shares issued and outstanding | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total Stockholders' Deficiency | ( | ) | ( | ) | ||||
| Total Liabilities and Stockholders' Deficiency | $ | $ | ||||||
See accompanying notes to the financial statements.
| F-2 |
Sino United Worldwide Consolidated Ltd.
Statements of Operations
(Unaudited)
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||
| Revenues | $ | $ | $ | $ | ||||||||||||
| Operating Expenses | ||||||||||||||||
| General and administrative | ||||||||||||||||
| Total operating expenses | ||||||||||||||||
| Income (Loss) from operations | ( | ) | ||||||||||||||
| Other income from HFT | ||||||||||||||||
| Other income | ||||||||||||||||
| Other expense: | — | — | — | — | ||||||||||||
| Interest expense - related party | ||||||||||||||||
| Interest expense – other | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Total other expense | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Income (Loss) from continuing operations before income tax provision | ||||||||||||||||
| Income tax provision | ||||||||||||||||
| Income (Loss) from continuing operations | ||||||||||||||||
| Net Income (Loss) | ||||||||||||||||
| Earnings (loss) per share | ||||||||||||||||
| Basic - continuing operation | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| - discontinuing operation | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Total | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Diluted - continuing operation | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| - discontinuing operation | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Total | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Weighted average shares outstanding | ||||||||||||||||
| Basic | ||||||||||||||||
| Diluted | ||||||||||||||||
See accompanying notes to the financial statements.
| F-3 |
Sino United Worldwide Consolidated Ltd.
Statements of Stockholders' Equity (Deficiency)
| | ||||||||||||||||||||||||
| Common Stock | ||||||||||||||||||||||||
| Number of Shares | Amount | Additional Paid-in Capital | Accumulated Earnings
(Deficit) | Accumulated Other Income (Loss) | Total | |||||||||||||||||||
| Balance, December 31, 2020 | ( | ) | ( | ) | ||||||||||||||||||||
| Net income (loss) | — | |||||||||||||||||||||||
| Balance, December 31, 2021 | ( | ) | ( | ) | ||||||||||||||||||||
| Shares issued | — | |||||||||||||||||||||||
| Net income (loss) | — | |||||||||||||||||||||||
| Balance, June 30, 2022 | ( | ) | ( | ) | ||||||||||||||||||||
See accompanying notes to the financial statements.
| F-4 |
Sino United Worldwide Consolidated Ltd.
Statements of Cash Flows
(Unaudited)
| Six Months Ended June 30, | ||||||||
| 2022 | 2021 | |||||||
| CASH FLOW FROM OPERATING ACTIVITIES | ||||||||
| Net income (loss) | ||||||||
| Adjustment to reconcile net loss to net cash provided by (used in) operating activities: | ||||||||
| Depreciation | ||||||||
| Change in operating assets and liabilities | ||||||||
| Accounts receivable | ( | ) | ||||||
| Other receivables | ( | ) | ( | ) | ||||
| Credit card payable | ||||||||
| Other payable | ||||||||
| Increase in accrued expenses and other current liabilities | ||||||||
| Net cash used in continuing operation | ( | ) | ||||||
| Net cash provided by discontinued operation | ||||||||
| Net cash used in operating activities | ( | ) | ||||||
| CASH FLOW FROM INVESTING ACTIVITIES | ||||||||
| Increase in Short term investment-Held for Trading | ||||||||
| Capital Expenditure | ||||||||
| Making loans to others | ||||||||
| Net cash used in investing activities | ||||||||
| CASH FLOW FROM FINANCING ACTIVITIES | ||||||||
| Proceeds from non-related party loan | ||||||||
| Net cash provided by(used in) financing activities | ||||||||
| Effect of exchange rate changes on cash | ||||||||
| INCREASE(DECREASE) IN CASH | ( | ) | ||||||
| Cash - beginning of year | $ | $ | ||||||
| Cash - end of year | $ | $ | ||||||
| Supplement disclosure information | ||||||||
| Cash paid for interest | ||||||||
| Cash paid for interest-discontinued operation | ||||||||
| Cash paid for income taxes | ||||||||
| Cash paid for income taxes-discontinued operation | ||||||||
The accompanying notes are an integral part of these financial statements.
| F-5 |
Sino United Worldwide Consolidated Ltd.
Notes to the Financial Statements
June 30, 2022
(Unaudited)
Note 1 – Organization and Basis of presentation
Organization
The accompanying consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) and include the accounts of the Company and its wholly owned subsidiary. All inter-company transactions and balances are eliminated in consolidation.
Certain amounts in last year’s financial statements have been reclassified to conform to current year presentation.
Interim Financial Statements
These interim unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information. They do not include all of the information and footnotes required by generally accepted accounting principles for complete consolidated financial statements. Therefore, these consolidated financial statements should be read in conjunction with the Company's audited financial statements and notes thereto contained in its report on Form 10-K for the years ended December 31, 2021.
The consolidated financial statements included herein are unaudited; however, they contain all normal recurring accruals and adjustments that, in the opinion of management, are necessary to present fairly the Company's financial position at June 30, 2022, and the results of its operations and cash flows for the six months ended June 30, 2022. The results of operations for the period ended June 30, 2022 are not necessarily indicative of the results to be expected for future quarters or the full year.
Note 2 – Going Concern
The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. The Company had a working capital deficit of $ an accumulated deficit of $ and stockholders’ deficiency was $ as of June 30, 2022. The Company did not generate cash or income from its continuing operation. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
The company is developing new businesses in various fields. There are no assurances that the Company will be able to either (1) achieve a level of revenues adequate to generate sufficient cash flow from operations; or (2) obtain additional financing through either private placement, public offerings and/or bank financing necessary to support the Company’s working capital requirements. To the extent that funds generated from any private placements, public offering and/or bank financing are insufficient to support the Company’s working capital requirements, the Company will have to raise additional working capital from additional financing. No assurance can be given that additional financing will be available, or if available, will be on terms acceptable to the Company. If adequate working capital is not available, the Company may not be able continue its operations.
| F-6 |
NOTE 3 – Summary of Significant Accounting Policies
Use of Estimates
The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the amount of revenues and expenses during the reporting periods. Management makes these estimates using the best information available at the time the estimates are made. However, actual results could differ materially from those results. Significant accounting estimates reflected in the Company’s consolidated financial statements included the valuation of accounts receivable, the estimated useful lives of long-term assets, the valuation of short-term investment and the valuation of deferred tax assets.
Cash and cash equivalents
Cash and cash equivalents include cash on hand and deposits placed with banks or other financial institutions, which are unrestricted as to withdrawal and use and with an original maturity of three months or less. The Company maintains its cash in bank deposit accounts. Cash accounts are guaranteed by the Federal Deposit Insurance Corporation up to $250,000. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk on such cash.
Accounts Receivable and Allowance for Doubtful Accounts
Accounts receivable are recorded at the invoiced amount, net of an allowance for doubtful accounts. The Company follows paragraph 310-10-50-9 of the FASB Accounting Standards Codification to estimate the allowance for doubtful accounts. The Company performs on-going credit evaluations of its customers and adjusts credit limits based upon payment history and the customer’s current credit worthiness, as determined by the review of their current credit information; and determines the allowance for doubtful accounts based on historical write-off experience, customer specific facts and economic conditions.
Outstanding account balances are reviewed individually for collectability. The allowance for doubtful accounts is the Company’s best estimate of the amount of probable credit losses in the Company’s existing accounts receivable. Bad debt expense is included in general and administrative expenses, if any. Pursuant to paragraph 310-10-50-2 of the FASB Accounting Standards Codification account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The Company has adopted paragraph 310-10-50-6 of the FASB Accounting Standards Codification and determine when receivables are past due or delinquent based on how recently payments have been received.
Revenue Recognition
The Company’s revenue recognition policies are in compliance with ASC 605 (Originally issued as Staff Accounting Bulletin (SAB) 104). Revenue is recognized at the date of shipment to customers when a formal arrangement exists, the price is fixed or determinable, the delivery is completed, no other significant obligations of the Company exist, and collectability is reasonably assured. Payments received before all of the relevant criteria for revenue recognition are satisfied are recorded as unearned revenue. Discounts provided to customers by the Company at the time of sale are recognized as a reduction in sales as the products are sold. Sales taxes are not recorded as a component of sales.
The Company derives its revenues from sales contracts with customers with revenues being generated upon the shipment of merchandise. Persuasive evidence of an arrangement is demonstrated via sales invoice or contract; product delivery is evidenced by warehouse shipping log as well as a signed acknowledgement of receipt from the customers or a signed bill of lading from the third party trucking company and title transfers upon shipment, based on free on board (“FOB”) warehouse terms; the sales price to the customer is fixed upon acceptance of the signed purchase order or contract and there is no separate sales rebate, discount, or volume incentive. When the Company recognizes revenue, no provisions are made for returns because, historically, there have been very few sales returns and adjustments that have impacted the ultimate collection of revenues.
Net sales of products represent the invoiced value of goods, net of value added taxes (“VAT”). The Company is subject to VAT which is levied on all of the Company’s products at the rate of 5% on the invoiced value of sales. Sales or Output VAT is borne by customers in addition to the invoiced value of sales and Purchase or Input VAT is borne by the Company in addition to the invoiced value of purchases to the extent not refunded for export sales.
| F-7 |
Property and Equipment
Property and equipment are stated at cost, less accumulated depreciation and amortization. Property and equipment are depreciated using the straight-line method over the estimated useful lives of the assets. Leasehold and tenant improvements are amortized over the shorter of the lease term or the estimated useful lives of the assets. The Company periodically reviews assets’ estimated useful lives based upon actual experience and expected future utilization. A change in useful life is treated as a change in accounting estimate and is applied prospectively.
Upon retirement or disposition of property and equipment, the cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is reflected in selling, general and administrative expenses for that period. Major additions and betterments are capitalized to the asset accounts while maintenance and repairs, which do not improve or extend the lives of assets, are expensed as incurred.
Investments in Non-Consolidated Entities
Investments in non-consolidated entities are accounted for using the equity method or cost basis depending upon the level of ownership and/or the Company's ability to exercise significant influence over the operating and financial policies of the investee. When the equity method is used, investments are recorded at original cost and adjusted periodically to recognize the Company's proportionate share of the investees' net income or losses after the date of investment. When net losses from an investment are accounted for under the equity method exceed its carrying amount, the investment balance is reduced to zero and additional losses are not provided for. The Company resumes accounting for the investment under the equity method if the entity subsequently reports net income and the Company's share of that net income exceeds the share of net losses not recognized during the period the equity method was suspended. Investments are written down only when there is clear evidence that a decline in value that is other than temporary has occurred.
Income Taxes
The Company accounts for income taxes in accordance with ASC 740, Income Taxes, which requires that the Company recognize deferred tax liabilities and assets based on the differences between the financial statement carrying amounts and the tax basis of assets and liabilities, using enacted tax rates in effect in the years the differences are expected to reverse. Deferred income tax benefit (expense) results from the change in net deferred tax assets or deferred tax liabilities. A valuation allowance is recorded when, in the opinion of management, it is more likely than not that some or all of any deferred tax assets will not be realized.
The Company adopted ASC 740-10-25, Income Taxes- Overall-Recognition, on January 1, 2007, which provides criteria for the recognition, measurement, presentation and disclosure of uncertain tax position. The Company must recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate resolution. The Company did not recognize any additional liabilities for uncertain tax positions as a result of the implementation of ASC 740-10-25.
The Company calculates its basic and diluted earnings per share in accordance with ASC 260. Basic earnings per share are calculated by dividing net income by the weighted average number of common shares outstanding for the period. Diluted earnings per share are calculated by adjusting the weighted average outstanding shares to assume conversion. For the six months ended June 30, 2022 and 2021, the difference between numbers of basic and diluted shares of common stock is due to effect of convertible promissory note.
Recently Issued Accounting Pronouncements
The SEC has provided in the Bulletin that in situations where the accounting is incomplete for certain effects of the Tax Act, a measurement period which begins in the reporting period that includes the enactment of the Tax Act and ends when the entity has obtained, prepared and analyzed the information is needed in order to complete the accounting requirements. The measurement period shall not exceed one year from enactment.
In February 2018, the FASB issued ASU 2018-02, “Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income,” which allows a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act. This guidance is effective for all entities for fiscal years, and interim periods within those years, beginning after December 15, 2018, with early adoption permitted. The amendments in ASU 2018-02 should be applied either in the period of adoption or retrospectively to each period in which the effect of the change in the U.S. federal corporate income tax rate in the Tax Cuts and Jobs Act is recognized. The adoption of this guidance is not expected to have a material impact on the Company's Financial Statements and related disclosures.
Management does not believe that any recently issued, but not yet effective accounting pronouncements, when adopted, will have a material effect on the accompanying financial statements.
| F-8 |
NOTE 4 – Loan Receivable
There was no loan receivable made during the period.
NOTE 5 – Convertible Promissory Note
There was no convertible promissory note made during the period.
NOTE 6 – Income Taxes
The Company did not provide any current or deferred
U.S. federal income tax provision or benefit for any of the periods presented because the Company has experienced operating losses for
U.S. federal income tax purposes since inception. When it is more likely than not that the deferred tax asset cannot be realized through
future income the Company must set up allowance for this future tax benefit. As of June
30, 2022, the Company had approximately $
The U.S. Tax Cuts and Jobs Act (the "Act") was enacted on December 22, 2017 and introduces significant changes to U.S. income tax law. Effective in 2018, the Tax Act reduces the U.S. statutory tax rate from 35% to 21% and creates new taxes on certain foreign-sourced earnings and certain related-party payments, which are referred to as the global intangible low-taxed income tax and the base erosion tax, respectively.
A reconciliation of the provision for income taxes to the Company’s effective income tax rate for is as follows:
| Six Months Ended June 30, | ||||||||
| 2022 | 2021 | |||||||
| Pre-tax income(loss) | $ | $ | ||||||
| U.S. federal corporate income tax rate | % | % | ||||||
| Expected U.S. income tax expense(credit) | ( | ) | ( | ) | ||||
| Change of valuation allowance | ||||||||
| Effective tax expense | $ | $ | ||||||
NOTE 7 –SUBSEQUENT EVENTS
The Company has evaluated the existence of significant events subsequent to the balance sheet date through the date the financial statements were issued and has determined that there were no subsequent events or transactions which would require recognition or disclosure in the financial statements.
| F-9 |
ITEM 8 - MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
This Quarterly Report contains forward-looking statements within the meaning of the federal securities laws. These include statements about our expectations, beliefs, intentions or strategies for the future, which we indicate by words or phrases such as "anticipate," "expect," "intend," "plan," "will," "we believe," "management believes" and similar language. The forward-looking statements are based on the current expectations of the Company and are subject to certain risks, uncertainties and assumptions, including those set forth in the discussion under "Management's Discussion and Analysis of Financial Condition and Results of Operations" in this report. Actual results may differ materially from results anticipated in these forward-looking statements. We base the forward-looking statements on information currently available to us, and we assume no obligation to update them.
Investors are also advised to refer to the information in our previous filings with the Securities and Exchange Commission (SEC), especially on Forms 10-K, 10-Q and 8-K, in which we discuss in more detail various important factors that could cause actual results to differ from expected or historic results. It is not possible to foresee or identify all such factors. As such, investors should not consider any list of such factors to be an exhaustive statement of all risks and uncertainties or potentially inaccurate assumptions.
Overview
From 2018 to 2021, the Company focused in products and services that adopt IoT, cloud computing, mobile payments, Big Data, Blockchain and AI, and other new and exciting business models that will create revolutionary products and services. 0n 20220 to 2021, the Company has signed a total of USD 90,000 Note agreements with Sinoway International Corp. (“Sinoway”). This is in connection with the new business venture between the Company and Sinoway relating to various technology platform development. In 2022, Sinoway has changed its registered company name to Beneway Holdings Group. Beneway Holdings Group Ltd. is a global digital asset management platform, creating a mega fintech new age banking platform that will not only simplify complex cross-border and local digital payments but also create solutions for diversified payment ecosystem for all transactions end-to-end. Beneway’s core objective is to connect various financial service providers comprising of digital wallets, electronic cards, P2P lenders, payment gateways and cross-border payments providers who now can synergize on each other products and services targeting a much larger customer base and leveraging on the power of economies of scale. Learn more about Beneway Holdings Group at their website www.benewaygroup.co
On August 7, 2021, the Company has acquired 49% of the registered shares of Midas Touch Technology Co. Ltd., a digital asset management platform registered in the U.K (company number 13088810), which was founded in 2020. The Company plans to combine the blockchain decentralized financial DeFi technology and the Supply Chain Finance service to assist global buyers and sellers to completely eliminate capital turnover challenges and complexities, while also providing investors with safer and more stable income. Midas Touch will implement smart contracts that leverage digital assets for mortgages and lending in a safe, stable, fast and low-intervention risk SCF platform, allowing investors worldwide to invest in fiat and crypto currencies EC, PSP, and its upstream and downstream supply chain using fiat and crypto currency payments.
On November 4, 2021, the Company signed a joint venture and partnered with Maninderpal Bhullar and Simon Eeu Yin How as directors of Beneway (MY) Sdn. Bhd., the joint venture company. The company joins the group’s global marketing, leading a top technology team that will enable SUIC to take full advantage of growth opportunities. Subsequently on November 21, 2021, the Company registered the joint venture company named Beneway (MY) Sdn. Bhd. in which the company owns 35% of the shares.
The Company is working new businesses in various fields through careful review and critical selection of new growth businesses. The Company is working to strengthen our core competencies in high technology and blockchain related businesses, such as blockchain apps technology, fintech services, professional consultancy for ICO’s, and other high potential critical blockchain projects.
| 11 |
Results of Operations
Three and Six Months ended June 30, 2022 and 2021.
Revenue
The Company recognized $45,000 and $65,000 of revenue during the three months ended June 30, 2022 and 2021, and $131,000 and $98,000 of revenue during six months ended June 30, 2022 and 2021 respectively. Our revenues were generated from the I.T. management consulting services.
General and Administrative Expenses:
General and administrative expenses were $44,653 and $57,413 for the three months ended June 30, 2022 and 2021, and $132,215 and $73,633 for the six months ended June 30, 2022 and 2021, respectively. The increase was primarily due to professional fees paid.
Interest expense
During the three months ended June 30, 2022 and 2021, the Company had interest expense of $5,298 and $4,475 and during the six months ended June 30, 2022 and 2021, the company had interest expenses of $10,619 and $9,000, from convertible promissory note respectively.
Net income
As a result of the foregoing, the Company generated net income (loss) of $8,171 and $3,424 for the three months ended June 30, 2022 and 2021, and $3,411 and $17,486 for the six months ended June 30, 2022 and 2021, respectively.
Liquidity and Capital Resources
We have funded our operations to date primarily through operations, and non-related party loans and capital contributions. Due to our net loss and negative cash flow from operating activities, there is substantial doubt about the Company’s ability to continue as a going concern. The Company’s management recognizes that the Company must generate sales and obtain additional financial resources to continue to develop its operations
As of June 30, 2022, we had a working capital deficit of $52,756. Our current assets on June 30, 2022 were $396,661primarily consisting of cash of $9,136, accounts receivable of $357,525 and Short Term Investment- Held-for-Trading in iDrink Technology Co. Ltd. $30,000. Other assets include loans receivable of $50,000 and other receivables $146,107 and accounts receivables-income from HFT $9,000. Our current liabilities were primarily composed of credit card payable of $5,499, convertible promissory notes of $287,000, accrued expenses and accrued expenses and other liabilities of $189,466 and short term debt $172,734.
Cash Flow from Operating Activities
Net cash used in operating activities was $20,714 during the six months ended June 30, 2022 which consisted of our net income of $3,411 offset by the changes in accounts receivable $18,500, other receivables $11,753, a change of accrued expenses of $ 2,832 and a change of credit card payable of $ 3,271.
Net cash provided used in operating activities was ($33,935) during the six months ended June 30, 2021 which consisted of our net income of ($17,486), offset by the changes in accounts receivable $11,975, other receivables ($8,966), a change of accrued expenses of $7,402 and a change of credit card payable of $6,013.
Cash Flow from Investing Activities
Net cash used in investing activities totaled $0 for the six months ended June 30, 2022.
Net cash used in investing activities totaled $0 for the six months ended June 30, 2021.
Cash Flow from Financing Activities
Net cash provided by financing activities totaled $0 of proceeds from non-related party for the six months ended June 30, 2022.
Net cash provided by financing activities totaled $10,000 of proceeds from non-related party for the six months ended June 30, 2021.
| 12 |
Off-Balance Sheet Arrangements
There are no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues, expenses, results of operations, liquidity, capital expenditures or capital resources.
Inflation
We do not believe our business and operations have been materially affected by inflation
Critical Accounting Policies and Estimates
This discussion and analysis of our financial condition and results of operations are based on our financial statements that have been prepared under accounting principle generally accepted in the United States of America. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
A summary of significant accounting policies is included in Note 3 to the consolidated financial statements included in this Annual Report. Of these policies, we believe that the following items are the most critical in preparing our financial statements.
Accounts Receivable and Allowance for Doubtful Accounts
Accounts receivable are recorded at the invoiced amount, net of an allowance for doubtful accounts. The Company follows paragraph 310-10-50-9 of the FASB Accounting Standards Codification to estimate the allowance for doubtful accounts. The Company performs on-going credit evaluations of its customers and adjusts credit limits based upon payment history and the customer’s current credit worthiness, as determined by the review of their current credit information; and determines the allowance for doubtful accounts based on historical write-off experience, customer specific facts and economic conditions.
Outstanding account balances are reviewed individually for collectability. The allowance for doubtful accounts is the Company’s best estimate of the amount of probable credit losses in the Company’s existing accounts receivable. Bad debt expense is included in general and administrative expenses, if any. Pursuant to paragraph 310-10-50-2 of the FASB Accounting Standards Codification account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The Company has adopted paragraph 310-10-50-6 of the FASB Accounting Standards Codification and determine when receivables are past due or delinquent based on how recently payments have been received.
Inventories
Inventories consists of products purchased and are valued at the lower of cost or net realizable value. Cost is determined on the weighted average cost method. The Company reduces inventories for the diminution of value, resulting from product obsolescence, damage or other issues affecting marketability, equal to the difference between the cost of the inventory and its estimated net realizable value. Factors utilized in the determination of estimated net realizable value include (i) current sales data and historical return rates, (ii) estimates of future demand, (iii) competitive pricing pressures, (iv) new product introductions, (v) product expiration dates, and (vi) component and packaging obsolescence.
The Company evaluates its current level of inventories considering historical sales and other factors and, based on this evaluation, classify inventory markdowns in the income statement as a component of cost of goods sold pursuant to Paragraph 420-10-S99 of the FASB Accounting Standards Codification to adjust inventories to net realizable value. These markdowns are estimates, which could vary significantly from actual requirements if future economic conditions, customer demand or competition differ from expectations.
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Revenue Recognition
The Company’s revenue recognition policies are in compliance with ASC 605 (Originally issued as Staff Accounting Bulletin (SAB) 104). Revenue is recognized at the date of shipment to customers when a formal arrangement exists, the price is fixed or determinable, the delivery is completed, no other significant obligations of the Company exist and collectability is reasonably assured. Payments received before all of the relevant criteria for revenue recognition are satisfied are recorded as unearned revenue. Discounts provided to customers by the Company at the time of sale are recognized as a reduction in sales as the products are sold. Sales taxes are not recorded as a component of sales.
The Company derives its revenues from sales contracts with customers with revenues being generated upon the shipment of merchandise. Persuasive evidence of an arrangement is demonstrated via sales invoice or contract; product delivery is evidenced by warehouse shipping log as well as a signed acknowledgement of receipt from the customers or a signed bill of lading from the third party trucking company and title transfers upon shipment, based on free on board (“FOB”) warehouse terms; the sales price to the customer is fixed upon acceptance of the signed purchase order or contract and there is no separate sales rebate, discount, or volume incentive. When the Company recognizes revenue, no provisions are made for returns because, historically, there have been very few sales returns and adjustments that have impacted the ultimate collection of revenues.
Net sales of products represent the invoiced value of goods, net of value added taxes (“VAT”). The Company is subject to VAT which is levied on all of the Company’s products at the rate of 5% on the invoiced value of sales. Sales or Output VAT is borne by customers in addition to the invoiced value of sales and Purchase or Input VAT is borne by the Company in addition to the invoiced value of purchases to the extent not refunded for export sales.
Foreign Currency Translation
The Company follows Section 830-10-45 of the FASB Accounting Standards Codification (“Section 830-10-45”) for foreign currency translation to translate the financial statements of the foreign subsidiary from the functional currency, generally the local currency, into U.S. Dollars. Section 830-10-45 sets out the guidance relating to how a reporting entity determines the functional currency of a foreign entity (including of a foreign entity in a highly inflationary economy), re-measures the books of record (if necessary), and characterizes transaction gains and losses. the assets, liabilities, and operations of a foreign entity shall be measured using the functional currency of that entity. An entity’s functional currency is the currency of the primary economic environment in which the entity operates; normally, that is the currency of the environment, or local currency, in which an entity primarily generates and expends cash.
The functional currency of each foreign subsidiary is determined based on management’s judgment and involves consideration of all relevant economic facts and circumstances affecting the subsidiary. Generally, the currency in which the subsidiary transacts a majority of its transactions, including billings, financing, payroll and other expenditures, would be considered the functional currency, but any dependency upon the parent and the nature of the subsidiary’s operations must also be considered. If a subsidiary’s functional currency is deemed to be the local currency, then any gain or loss associated with the translation of that subsidiary’s financial statements is included in accumulated other comprehensive income. However, if the functional currency is deemed to be the U.S. Dollar, then any gain or loss associated with the re-measurement of these financial statements from the local currency to the functional currency would be included in the consolidated statements of comprehensive income (loss). If the Company disposes of foreign subsidiaries, then any cumulative translation gains or losses would be recorded into the consolidated statements of comprehensive income (loss). If the Company determines that there has been a change in the functional currency of a subsidiary to the U.S. Dollar, any translation gains or losses arising after the date of change would be included within the statement of comprehensive income (loss). Based on an assessment of the factors discussed above, the management of the Company determined the relevant subsidiaries’ local currencies to be their respective functional currencies.
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PART II — OTHER INFORMATION
Item 1. Legal Proceedings.
To the best knowledge of the officers and directors, the Company was not a party to any legal proceeding or litigation as of June 30, 2022.
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.
Item 6. Exhibits.
| Exhibit No. | Description |
| 31.1 | Chief Executive Officer Certification of Periodic Financial Report Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
| 31.2 | Chief Financial Officer Certification of Periodic Financial Report Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
| 32.1 | Chief Executive Officer Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002. |
| 32.2 | Chief Financial Officer Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002 |
| 101 | The following materials from Sino United Worldwide Consolidated Ltd.’s Quarterly Report on Form 10-Q for the period ended June 30, 2022 are formatted in eXtensible Business Reporting Language (XBRL): (i) the Consolidated Balance Sheet; (ii) the Consolidated Statement of Comprehensive Income; (iii) the Consolidated Statements of Cash Flows, and (iv) Notes to Consolidated Financial Statements. This Exhibit 101 is deemed not filed for purposes of Sections 11 or 12 of the Securities Act of 1933 and Section 18 of the Securities Exchange Act of 1934, and otherwise is not subject to liability under these sections. |
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SINO UNITED WORLDWIDE CONSOLIDATED LTD.
In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
SIGNATURES
Date: August 1, 2022.
By: /s/ Yanru Zhou
Yanru Zhou
Chief Executive Officer
Date: August 1, 2022.
By: /s/ Yanru Zhou
Yanru Zhou
Chief Finance Officer
16
Exhibit 31.1
Certification Pursuant to Section 302 of the Sarbanes- Oxley Act of 2002
I, Yanru Zhou, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Sino United Worldwide Consolidated Ltd. (the “Registrant”);
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 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 control 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 procedures 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 on 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 fiscal quarter in the case of annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and
5. The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions):
(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.
Dated: August 1, 2022.
By: /s/ Yanru Zhou
Name: Yanru Zhou
Title: Chief Executive Officer (Principal Executive Officer)
Exhibit 31.2
Certification Pursuant to Section 302 of the Sarbanes- Oxley Act of 2002
I, Yanru Zhou, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Sino United Worldwide Consolidated Ltd.;
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 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 control 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 procedures 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 on 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 fiscal quarter in the case of annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and
5. The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions):
(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.
Dated: August 1, 2022.
By: /s/ Yanru Zhou
Name: Yanru Zhou
Title: Chief Executive Officer (Principal Executive Officer)
Exhibit 32.1
Certification Pursuant to 18 U.S.C. Section 1350
As Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002
In connection with the Quarter Report of Sino United Worldwide Consolidated, Ltd. (the “Registrant”) on Form 10-Q for the period ended June 30, 2022 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), Yanru Zhou, as CEO of the Company, hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 that:
(1) The Report fully complies with the requirements of section 13(a) or 15(d), as applicable 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 Registrant.
Dated: August 1, 2022.
By: /s/ Yanzu Zhou
Name: Yanru Zhou
Title: Chief Executive Officer (Principal Executive Officer)
A signed original of this written statement required by Section 906 has been provided to Sino United Worldwide Consolidated Ltd. and will be retained by Sino United Worldwide Consolidated Ltd. and furnished to the Securities and Exchange Commission or its staff.
Exhibit 32.2
Certification Pursuant to 18 U.S.C. Section 1350
As Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002
In connection with the Quarterly Report of Sino United Worldwide Consolidated Ltd. (the “Registrant”) on Form 10-Q for the period ended June 30, 2022 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), Yanru Zhou as Chief Financial Officer hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 that:
(1) The Report fully complies with the requirements of section 13(a) or 15(d), as applicable 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 Registrant.
Dated: August 1, 2022.
By: /s/ Yanzu Zhou
Name: Yanru Zhou
Title: Chief Financial Officer (Principal Accounting Officer)
A signed original of this written statement required by Section 906 has been provided to Sino United Worldwide Consolidated Ltd. and will be retained by Sino United Worldwide Consolidated Ltd. and furnished to the Securities and Exchange Commission or its staff.