UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549
FORM 10-Q
(Mark One)
☑
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2021
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______ to _______
Commission File Number: 000-55685
VITAXEL GROUP LIMITED (Exact name of registrant as specified in its charter)
Nevada
30-0803939
(State or other jurisdiction of incorporation)
(I.R.S. Employer Identification No.)
Bangunan Cheong Wing Chan Level 4, 41-51, Jalan Maharajalela, 50150 Kuala Lumpur, Malaysia (Address of principal executive offices)
+ 603 – 2143 – 2889 (Registrant’s telephone number, including area code)
N/A
(Former name, former address and former fiscal year, if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer ☐
Accelerated filer ☐
Non-accelerated filer ☐ (Do not check if a smaller reporting company)
Smaller reporting company ☒
Emerging Growth Company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
As of November 15, 2021, the registrant has one class of common equity, and the number of shares issued and outstanding of such common equity was 54,087,903.
VITAXEL GROUP LIMITED
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2021
TABLE OF CONTENTS
PAGE
PART I - FINANCIAL INFORMATION
Item 1.
Financial Statements (unaudited)
3
Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
12
Item 3.
Quantitative and Qualitative Disclosures About Market Risk
15
Item 4.
Controls and Procedures
PART II - OTHER INFORMATION
Legal Proceedings
16
Item 1A.
Risk Factors
Unregistered Sales of Equity Securities And Use of Proceeds
Defaults Upon Senior Securities
Mine Safety Disclosures
Item 5.
Other Information
Exhibits
17
SIGNATURES
18
FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)
Condensed Consolidated Balance Sheets
4
Condensed Consolidated Statements of Operations and Comprehensive Loss
5
Condensed Consolidated Statements of Cash Flows
6
Notes to Unaudited Condensed Consolidated Financial Statements
7
VITAXEL GROUP LIMITED CONDENSED CONSOLIDATED BALANCE SHEETS (In U.S. dollars)
As ofSeptember 30,2021(Unaudited)
As ofDecember 31,2020 (Audited)
ASSETS
Current assets
Cash and cash equivalents
$
38,262
46,551
Amount due from related parties
43,930
34,332
Inventories
2,380
2,525
Other receivables, prepayments and other current assets
32,822
28,905
Total Current Assets
117,394
112,313
Non-current assets
Right-of-use assets
43,261
88,100
Property and equipment, net
27,348
41,068
Total Non-Current Assets
70,609
129,168
TOTAL ASSETS
188,003
241,481
LIABILITIES
Current liabilities
Amounts due to related parties
4,222,590
4,401,809
Commission payables
125,953
131,257
Accounts payable
1,685
230
Accruals and other payables
331,798
353,213
Lease obligation
37,986
47,974
Total Current Liabilities
4,720,012
4,934,483
Non-current liabilities
Lease obligation, net of current portion
5,404
40,260
Total Non-Current Liabilities
TOTAL LIABILITIES
4,725,416
4,974,743
STOCKHOLDERS’ EQUITY
Preferred stock par value $0.0001: 1,000,000 shares authorized; and 0 outstanding
—
Common stock par value $0.0001: 70,000,000 shares authorized; 54,087,903 and 54,087,903 shares issued and outstanding, respectively
5,409
Additional paid-in capital
4,749,798
Accumulated deficit
(9,561,513
)
(9,576,061
Accumulated other comprehensive income
268,893
87,592
Total Stockholders’ Equity
(4,537,413
(4,733,262
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
The accompanying notes are an integral part of these condensed consolidated financial statements.
VITAXEL GROUP LIMITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (Unaudited) (In U.S. dollars)
For the Three Months EndedSeptember 30,
For the Nine Months EndedSeptember 30,
2021
2020
REVENUE
(1,360
3,006
2,902
18,650
COST OF REVENUE
1,320
(1,466
(2,786
(14,300
GROSS PROFIT (LOSS)
(40
1,540
116
4,350
OPERATING EXPENSES
Selling expense
(30
(23
(620
General and administrative expenses
(103,244
(138,926
(332,938
(520,945
Total operating expenses
(138,956
(332,961
(521,565
LOSS FROM OPERATIONS
(103,284
(137,416
(332,845
(517,215
OTHER INCOME/(EXPENSE), NET
Other income
120,000
234,340
360,000
462,763
Other expense
(5,436
(1,026
(12,607
(2,382
Total Other income / (Expense), net
114,564
233,314
347,393
460,381
Net Income / (Loss)
11,280
95,898
14,548
(56,834
OTHER COMPREHENSIVE INCOME / (LOSS)
Foreign currency translation adjustment
41,147
(124,537
181,301
72,100
TOTAL COMPREHENSIVE INCOME (LOSS)
52,427
(28,639
195,849
15,266
Weighted average number of common shares outstanding - basic and diluted
54,087,903
Net Income (Loss) per share - basic and diluted
0.00
(0.00
VITAXEL GROUP LIMITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (In U.S. dollars)
For the Nine months Ended
September 30,
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)
Items not involving cash:
Depreciation and amortization of– property and equipment and right-of-use assets
47,044
19,633
Interest expenses on lease obligation
1,347
Changes in operating assets and liabilities
(3,917
4,094
145
(2,029
Accounts Payable
1,455
(50
(5,304
(6,921
Accrued expense and other payables
(21,415
1,715
Net cash provided by / (used in) operating activities
33,903
(40,392
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property and equipment
(4,317
Net cash used in investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Payment of principal portion of lease liabilities
(35,220
Proceeds from / (Repayment to) related parties
(5,282
14,151
Net cash provided by (used in) financing activities
(40,502
EFFECT OF EXCHANGE RATES ON CASH
(1,690
(1,407
NET CHANGE IN CASH AND CASH EQUIVALENTS
(8,289
(31,965
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
63,436
CASH AND CASH EQUIVALENTS, END OF PERIOD
31,471
SUPPLEMENTAL OF CASH FLOW INFORMATION
Cash paid for interest expenses
Cash paid for income tax
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Unaudited)(In U.S. dollars)
1.
ORGANIZATION AND BUSINESS
Vitaxel Group Limited (the “Company” or “Vitaxel”), incorporated in Nevada, is engaged in direct selling industry and online shopping platform primarily through its operating entities in Malaysia.
Vitaxel SDN BHD (“Vitaxel SB”), was incorporated in Malaysia on August 10, 2012. Vitaxel SB is primarily engaged in the direct selling industry utilizing a multi-level marketing model with an emphasis on travel, entertainment and lifestyle products and services.
Vitaxel Online Mall SDN BHD (“Vionmall”), was incorporated in Malaysia on September 22, 2015. Vionmall is primarily engaged in developing online shopping platforms geared to Vitaxel and its members and third-party suppliers of products and services.
2.
UNAUDITED INTERIM FINANCIAL STATEMENTS
The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information under Article 8 of Regulation S-X. They do not include all information and foot notes required by U.S. GAAP for complete financial statements. Except as disclosed herein, there have been no material changes in the information disclosed in the notes to the consolidated financial statement for the year ended December 31, 2020, included in the Company’s Form 10-K filed with the Security and Exchange Commission (“SEC”). The interim unaudited consolidated financial statements should be read in conjunction with those audited consolidated financial statements included in Form 10-K.
In the opinion of management, the Company has made all adjustments necessary to present a fair statement of the financial position as of September 30, 2021, results of operations for the nine months ended September 30, 2021 and 2020, and cash flows for the nine months ended September 30, 2021 and 2020. All significant intercompany transactions and balances are eliminated on consolidation. The results of operations for the nine months ended September 30, 2021 are not necessarily indicative of the results of operations for the entire fiscal year.
Recently issued accounting pronouncements
In December 2019, the FASB issued ASU2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, with the intent to reduce the complexity in accounting for income taxes. This ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020, and early adoption is permitted. The accounting update removes certain exceptions to the general principles in ASC 740 as well as provides simplification by clarifying and amending existing guidance. The adoption of this new standard did not have material impact on the consolidated financial statements.
3.
GOING CONCERN
These unaudited condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the discharge of liabilities in the normal course of business for the foreseeable future.
For the period ended September 30, 2021, the Company reported a net income of $14,548 and had negative working capital of $4,602,618. The Company had an accumulated deficit of $9,561,513 as of September 30, 2021 due to the fact that the Company incurred losses during the years prior to September 30, 2021.
The continuation of the Company as a going concern is dependent upon improving the profitability and the continuing financial support from its stockholders or other capital sources. Management believes that the continuing financial support from the existing shareholders or external debt financing will provide the additional cash to meet the Company’s obligations as they become due. There is no certainty that further funding will be available as needed. These factors raise substantial doubt about the ability of the Company to continue operating as a going concern.
In March 2020 the World Health Organization declared coronavirus COVID-19 a global pandemic. This contagious disease outbreak, which has continued to spread, and any related adverse public health developments, has adversely affected workforces, economies, and financial markets globally, potentially leading to an economic downturn. While the extent of the impact is unknown, the pandemic may hinder the Company’s operation and ability to raise financing and carry out its business plan due to uncertain capital markets, increased government regulations and other unanticipated factors.
These unaudited condensed consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the outcome of the Company’s ability to continue as a going concern.
8
4.
OTHER RECEIVABLES, PREPAYMENTS AND OTHER CURRENT ASSETS
Other receivables, prepayments and other current assets consist of the following:
September 30,2021
December 31,2020
Deposits (1)
14,749
15,371
Prepayments (2)
18,073
13,534
Total other receivables and other assets
5.
LEASES
The Company’s leases consist of operating lease for office space and office equipment, with operating lease for terms between 2 to 5 years. As the operating lease does not provide implicit interest rate, management estimated a current borrowing rate of 3.5% in determining the present value of the lease.
Right-of-use assets consist of the following:
As of September 30,2021
As of December 31,2020
Office space
81,688
92,343
Office equipment
7,505
7,821
89,193
100,164
Less: Accumulated amortization
(45,932
(12,064
Balance at end of period/year
Lease liabilities consist of the following:
Lease payments
38,691
83,628
4,805
6,353
Total lease payments
43,496
89,981
Less: discount
(106
(1,747
43,390
88,234
Less: current obligations
(37,986
(47,974
9
6.
PROPERTY AND EQUIPMENT, NET
Property and equipment, net consist of the following:
As of
27,874
29,048
Computer equipment
103,255
107,603
Furniture and fittings
7,938
8,273
Software and website
16,212
16,894
155,279
161,818
Less: Accumulated depreciation
(127,931
(120,750
Depreciation expenses charged to the statements of operations and comprehensive loss for the nine month periods ended September 30, 2021 and 2020 were $12,224 (3 months $3,734) and $19,633 (3 months $6,386) respectively.
7.
ACCRUED EXPENSE AND OTHER PAYABLES
Accrued expense and other payables consist of the following:
Provisions and accruals
34,826
43,668
Others (1)
296,972
309,545
(1)
Other payables mainly consist of members allocated redemption points for commissions.
10
8.
RELATED PARTY BALANCES AND TRANSACTIONS
Schedule of related party balances and transactions
Asia Food People Sdn Bhd (1)
3,243
3,074
G2lux Sdn Bhd (2)
31,261
21,606
Ho Wah Genting Berhad(3)
5,016
5,226
Snatch Asia Sdn Bhd(4)
4,410
4,426
Total Amount due from related parties
Amount due to related parties
Ho Wah Genting Group Sdn Bhd (5)
485,989
83,339
Dato’ Lim Hui Boon (6)
71,651
49,778
Ho Wah Genting Holding Sdn Bhd (7)
59,709
62,223
Grande Legacy Inc.(8)
3,605,241
4,206,469
Total Amount due to related parties
The related party balances are unsecured, interest-free and repayable on demand.
A director of the Company, Leong Yee Ming, is also a director of Asia Food People Sdn Bhd (“AFP”). The amount due from AFP as at September 30, 2021 and December 31, 2020, were advances made to AFP.
(2)
A director of the Company, Leong Yee Ming, is also a director of G2lux Sdn Bhd (“G2lux”). The amount due from G2lux as at September 30, 2021 and December 31, 2020, were advances made to G2lux.
(3)
The President of the Company, Dato’ Lim Hui Boon, is also the Group President of HWGB.
(4)
A director of the Company, Leong Yee Ming, is also a director of Snatch Asia Sdn Bhd (“SASB”). The amount due from SASB as at September 30, 2021 and December 31, 2020, were advances made to SASB.
(5)
The President of the Company, Dato’ Lim Hui Boon, is also the Group President of Ho Wah Genting Group Sdn Berhad (“HWGGSB”).
(6)
The amount due to the President of the Company, Dato’ Lim Hui Boon, as at September 30, 2021 and December 31, 2020, were advances made to the Company.
(7)
A former director of the Company, Lim Wee Kiat who resigned during period ended December 31, 2020, is also a director of Ho Wah Genting Holding Sdn Bhd.
(8)
A director of the Company, Leong Yee Ming, is also a director of Grande Legacy Inc. (“GL”).
The Company recognized management fee income of $360,000 charged to GL for the nine months ended September 30, 2021 and 2020 respectively.
The Company also recognized royalty income of $nil and $293 charged to GL for the nine months ended September 30, 2021 and 2020 respectively.
The Company billed GL for product sales of $2,770 and $13,697 for the nine months ended September 30, 2021 and 2020 respectively.
(9)
Total payment made in the form of compensation, which includes salary, bonus, stock awards and all other compensation have been made to the following officer and former officers of the Company:
September 31,2020
Lim Wee Kiat
39,215
35,856
Leong Yee Ming
32,679
33,864
71,894
69,720
11
ITEM 2.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Statement Regarding Forward-Looking Information
The following management’s discussion and analysis should be read in conjunction with the historical financial statements and the related notes thereto contained in this report. The management’s discussion and analysis contains forward-looking statements, such as statements of our plans, objectives, expectations and intentions. Any statements that are not statements of historical fact are forward-looking statements. When used, the words “believe,” “plan,” “intend,” “anticipate,” “target,” “estimate,” “expect” and the like, and/or future tense or conditional constructions (“will,” “may,” “could,” “should,” etc.), or similar expressions, identify certain of these forward-looking statements. These forward-looking statements are subject to risks and uncertainties that could cause actual results or events to differ materially from those expressed or implied by the forward-looking statements. The Company’s actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of several factors. The Company does not undertake any obligation to update forward-looking statements to reflect events or circumstances occurring after the date of this report.
The following discussion highlights the Company’s results of operations and the principal factors that have affected our financial condition, as well as our liquidity and capital resources for the periods described, and provides information that management believes is relevant for an assessment and understanding of the statements of financial condition and results of operations presented herein. The following discussion and analysis are based on the Company’s unaudited financial statements contained in this Quarterly Report, which we have prepared in accordance with United States generally accepted accounting principles. You should read this discussion and analysis together with such financial statements and the related notes thereto.
As used in this Quarterly Report, the terms “we,”“us,”“Company,” and “our” mean Vitaxel Group Limited and its subsidiaries on a consolidated basis, unless otherwise indicated or the context requires otherwise.
Overview
Vitaxel Group Limited is the holding company for Vitaxel SDN BHD (“VitaxelSB”), and Vitaxel Online Mall SDN BHD (“Vionmall”), both of which are wholly owned subsidiaries of the Company, Incorporated under the laws of the Country of Malaysia.
VitaxelSB is a global direct selling, multi-level marketing (“MLM”) company offering travel, entertainment, lifestyle and other products and services principally through electronic commerce commonly referred to as e-commerce.
Vionmall is involved in e-commerce business, through its platforms: Vionmarket, VTrips and VMall. Vionmarket is a rebate website that provide retail sales direct to consumers. However, Vionmarket do not develop or manufacture the products and services. VTrips is a platform that provides concessionary and travel packages to the public and members of Vitaxel. VMall is an e-commerce platform launched in prior year first quarter.
We presently have approximately 5,700 total members. As of September 30, 2021, approximately: 62.3% of our members reside in Malaysia, 28.9% of our members reside in Singapore, 3.7% members reside in China, approximately 2.7% members reside in Hong Kong and approximately 2.4% members reside in other countries
Results of Operations
Three Months Ended September 30, 2021 Compared to Three Months Ended September 30, 2020
The following discussion should be read in conjunction with our unaudited consolidated financial statements in Item 1, Financial Statements, for the three months ended September 30, 2021 and 2020 and the related notes thereto.
Revenue
We recognized $(1,360) and $3,006 revenues for the periods ended September 30, 2021 and 2020, respectively. The decrease in revenue was attributable to decrease in sales from VTrip under Vionmall in current period as compare to the same period last year.
Cost of Sales
Cost of sales for the period ended September 30, 2021 was $(1,320) compared to $1,466 for the period ended September 30, 2020. The decrease was due to decrease in revenue in current period.
Gross Profit
Gross profit for the period ended September 30, 2021 was $(40) compared to $1,540 for the period ended September 30, 2020. The decrease was due to decrease in VTrip sales in the same period as compare to the same period last year.
Operating Expenses
For the period ended September 30, 2021, we incurred total operating expenses in the amount of $103,244, composed of selling expenses of $nil and general and administrative expenses totalling $103,244. Whilst, for the period ended September 30, 2020, we incurred total operating expenses in the amount of $138,956, composed of selling expenses of $30 and general and administrative expenses totalling $138,926. The decrease of $30 or 100% for the selling expenses, along with the decrease of $35,682 or 26% for the administrative expenses, caused total operating expenses to decrease by $35,712 or 26%.
Nine Months Ended September 30, 2021 Compared to Nine Months Ended September 30, 2020
The following discussion should be read in conjunction with our unaudited consolidated financial statements in Item 1, Financial Statements, for the nine months ended September 30, 2021 and 2020 and the related notes thereto.
We recognized $2,902 and $18,650 revenues for the periods ended September 30, 2021 and 2020, respectively. The overall decrease in revenue was attributable to decrease in sales from VTrip under Vionmall in current period as compare to the same period last year.
Cost of sales for the period ended September 30, 2021 was $2,786 compared to $14,300 for the period ended September 30, 2020. The decrease was due to decrease in revenue in current period.
Gross profit for the period ended September 30, 2021 was $116 compared to $4,350 for the period ended September 30, 2020. The decrease was due to decrease in revenue in current period.
For the period ended September 30, 2021, we incurred total operating expenses in the amount of $332,961, composed of selling expenses of $23 and general and administrative expenses totalling $332,938. Whilst, for the period ended September 30, 2020, we incurred total operating expenses in the amount of $521,565, composed of selling expenses of $620 and general and administrative expenses totalling $520,945. The decrease of $597 or 96% for the selling expenses, along with the decrease of $188,007 or 64% for the administrative expenses, caused total operating expenses to decrease by $188,604 or 36%.
Liquidity and Capital Resources
As of September 30, 2021, we had a cash balance of $38,262. During the period ended September 30, 2021, net cash provided by operating activities totalled $33,903. Net cash used in investing activities totalled $nil. Net cash used in financing activities during the period totalled $40,502. The resulting change in cash for the period was a decrease of $8,289, which was primarily due to lease payments in current period.
As of September 30, 2021, we had current liabilities of $4,720,012, which was composed of amount due to related parties of $4,222,590, commission payables of $125,953, accounts payable of $1,685, accruals and other payable of $331,798 and lease obligation of $37,986.
As of September 30, 2020, we had a cash balance of $31,471. During the period ended September 30, 2020, net cash used in operating activities totalled $40,392. Net cash used in investing activities totalled $4,317. Net cash provided by financing activities during the period totalled $14,151. The resulting change in cash for the period was a decrease of $31,965, which was primarily due to operating expenses in current period.
As of December 31, 2020, we had current liabilities of $4,934,483, including $4,401,809 due to related parties, other payable of $353,213, commission payables of $131,257, lease obligation of $47,974 and accounts payable of $230.
13
We had net liabilities of $4,537,413 and $4,733,262 as of September 30, 2021 and December 31, 2020, respectively.
Management estimates that the general operating costs for the next 12 months will be approximately $400,000. At present, the Company may not have sufficient capital resources to meet its anticipated operating and capital requirements for the next 12 months. Management is also evaluating other options, including obtaining financing through private placements, charging licensees administration fees, and entering additional licensing agreements. The Company will continue to monitor the current economic and financial market conditions and evaluate their impact on the Company’s liquidity and future prospects.
Recent Developments:
Impact of Current Coronavirus (COVID-19) Pandemic on the Company
As many parts of the world is currently under lockdown or restrictive movement orders due to the current COVID-19 pandemic, we believe that all companies related to the travel, entertainment and lifestyle industry have been negatively impacted. Our Company is not spared either. We do not foresee any income contribution from this business from January 2020, until the destination areas (in particular South-East Asia and Europe) reopen their countries to allow foreign visitors again.
Our multi-level marketing (“MLM”) business is negatively impacted due to the fact that being a business built on fostering personal relationship and expanding new contacts, most distributors are unable to carry out the more important aspects of regular face to face visits and appointments, promotional events and direct coaching to continuously improve their team’s skills, motivation and knowledge of our products. Fortunately, we are still able to connect to our leaders via calls, emails and backoffice announcements and other form of online communication such as Skype and Zoom to keep the leaders and members abreast with our status and development. As such, our MLM operation is still ongoing amid slower than usual.
In our previously Form 8-K and Form 10-Q, filed on April 22, 2020 and August 19, 2020 respectively, we announced that in connection with the COVID-19 pandemic, the Malaysian government has enforced a Movement Control Order (the “MCO”) effective March 18, 2020, closing all offices within the country that are non-essential forcing all of the Company’s staff to work from home. Subsequently, the MCO was replaced with the Conditional Movement Control Order on May 4, 2020 easing restrictions on most of Malaysia’s economic sectors until June 9, 2020. The Company opened its offices, but on an alternative day basis allowing staff to work on the Company’s backlogs. Afterwards, the Malaysian government announced the Recovery Movement Control Order beginning on June 10, 2020 and lasting till August 31, 2020, allowing most business to reopen and further eases COVID regulations on the country’s list of restricted activities. On August 28,2020, the Malaysian government extended the Recovery Movement Control Order to last till December 31, 2020.
However, our e-commerce business is marginally affected by the current outbreak. This is because members that are staying at home are still able to place orders from our e-commerce website. Whilst almost all of our merchants who showcase their products on our website are able to fulfil the orders to our customers as courier services are exempted from the lockdown.
We hope that in the middle of 2021, there will be improvement towards the restriction caused by the pandemic, hence enabling more merchants to sign up with us, and that our members will be more encouraged and enthusiastic to promote our e-commerce website to their family, friends and prospects.
14
Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements, financings, or other relationships with unconsolidated entities or other persons.
Critical Accounting Policies and Estimates
There are no material changes from the critical accounting policies set forth in “Management’s Discussion and Analysis of Financial Condition and Results of Operations”. Please refer to Note 2 Summary of Significant Accounting Policies of the Financial Statements on Form 10-K filed with the SEC on March 30, 2021, for disclosures regarding the critical accounting policies related to our business.
Recently Issued Accounting Standards
The recently issued accounting pronouncement are included in Note 2 Unaudited Interim Financial Statements for disclosures on accounting policies related to our business.
ITEM 3.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not applicable.
ITEM 4.
CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
We maintain controls and procedures that are designed to ensure that information required to be disclosed in the reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management including our principal executive and principal financial officers, as appropriate, to allow timely decisions regarding required disclosures. Based upon their evaluation of those controls and procedures performed as of the end of the period covered by this report, our principal executive and principal financial officers concluded that our disclosure controls and procedures were not effective in ensuring that: (i) information required to be disclosed by us in reports that we file or submit to the SEC under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in applicable rules and forms and (ii) material information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow for accurate and timely decisions regarding required disclosure.
As required by Rule 13a-15(e), our management has carried out an evaluation, with the participation and under the supervision of Leong Yee Ming, our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), of the effectiveness of the design and operation of our disclosure controls and procedures, as of September 30, 2021. Based upon the participation in that evaluation, it has been concluded that the disclosure controls and procedures were effective as of September 30, 2021.
Changes in Internal Controls
During the fiscal quarter ended September 30, 2021, there have been no changes in our internal control over financial reporting that have materially affected or are reasonably likely to materially affect our internal controls over financial reporting.
ITEM 1.
LEGAL PROCEEDINGS
As of the date of this Quarterly Report, our management is not aware of any proceedings to which any of our directors, officers, or affiliates, or any associate of any such director, officer, affiliate, or security holder is a party adverse to our company or has a material interest adverse to us.
ITEM 1A.
RISK FACTORS
Smaller reporting companies are not required to provide the information required by this item.
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
DEFAULTS UPON SENIOR SECURITIES
None.
MINE SAFETY DISCLOSURES
ITEM 5.
OTHER INFORMATION
None
ITEM 6.
EXHIBITS
The following exhibits are included as part of this report:
ExhibitNumber
Description of Exhibit
31.1
Certification of Principal Executive Officer and Pursuant to Rule 13a-14
31.2
Certification of Principal Financial Officer Pursuant to Rule 13a-14
32.1
CEO Certification Pursuant to Section 906 of the Sarbanes-Oxley Act
32.2
CFO Certification Pursuant to Section 906 of the Sarbanes-Oxley Act
101.INS
XBRL Instance Document
101.SCH
XBRL Taxonomy Extension Schema Document
101.CAL
XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB
XBRL Taxonomy Extension Labels Linkbase Document
101.PRE
XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF
XBRL Taxonomy Extension Definition Linkbase Document
In accordance with the requirements of the Securities Exchange Act of 1934, the Registrant has caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Date: November 15, 2021
By:
/s/ Leong Yee Ming
Chief Executive Officer and Chief Financial Officer (Principal Executive Officer and Principal Financial Officer)