x
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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California
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95-462728
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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Large accelerated filer o
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Accelerated filer o
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Non-accelerated filer o
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Smaller reporting company x
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(Do not check if a smaller reporting company)
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Class of Common Stock
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Outstanding at November 10, 2011
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Common Stock, $.001 par value
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43,800,000
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PAGE
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PART I — FINANCIAL INFORMATION
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ITEM 1. FINANCIAL STATEMENTS
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Condensed Consolidated Statements of Operations for the Nine months ended September 30, 2011 and 2010 (unaudited)
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3
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Condensed Consolidated Balance Sheets at September 30, 2011 (unaudited) and December 31, 2010
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4
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Condensed Consolidated Statements of Stockholders’ Equity for the Nine months ended September 30, 2011 and 2010 (unaudited)
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5
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Condensed Consolidated Statements of Cash Flows for the Nine months ended September 30, 2011 and 2010 (unaudited)
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6
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Notes to Financial Statements
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7
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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
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10
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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
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12
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ITEM 4. CONTROLS AND PROCEDURES
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12
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PART II — OTHER INFORMATION
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ITEM 6. EXHIBITS
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13
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SIGNATURES
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14
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Exhibit 31.1
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Exhibit 31.2
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Exhibit 32.1
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Exhibit 32.2
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Nine months ended September 30,
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NOTE
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2011
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2010
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U.S.$
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U.S.$
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OPERATING REVENUES
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Depreciation
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— | (3,149 | ) | |||||||||
Administrative and general expenses
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(11,045 | ) | (132,321 | ) | ||||||||
INCOME/(LOSS) FROM OPERATIONS
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(11,045 | ) | (135,470 | ) | ||||||||
NON-OPERATING INCOME (EXPENSE)
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||||||||||||
Interest
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— | (1,143 | ) | |||||||||
Other income
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— | 1,396 | ||||||||||
Gain on disposal of subsidiaries
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— | 1,824,761 | ||||||||||
INCOME/(LOSS) BEFORE INCOME TAXES
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(11,045 | ) | 1,689,544 | |||||||||
Income tax expense
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5 | — | — | |||||||||
NET INCOME/(LOSS)
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(11,045 | ) | 1,689,544 | |||||||||
OTHER COMPREHENSIVE INCOME/(LOSS)
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Foreign currency translation
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— | 6,414 | ||||||||||
COMPREHENSIVE INCOME/(LOSS)
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(11,045 | ) | 1,695,958 | |||||||||
Basic and diluted net income per share of common stock
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(0.0003 | ) | 0.039 | |||||||||
Weighted average number of shares of common stock outstanding
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43,800,000 | 43,800,000 |
As of
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As of
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Note
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September 30, 2011
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December 31, 2010
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U.S.$
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U.S.$
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ASSETS
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TOTAL ASSETS
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— | — | ||||||||||
LIABILITIES AND STOCKHOLDERS' DEFICIT
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Current liabilities:
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Accrued expenses and other current liabilities
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1,435 | 5,135 | ||||||||||
Due to related parties
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4 | 344,067 | 329,322 | |||||||||
Total current liabilities
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345,502 | 334,457 | ||||||||||
Contingencies and commitments
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6 | |||||||||||
Stockholders' deficit:
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Preferred stock, par value U.S.$0.001 per share; authorized 20,000,000 shares; none issued, common stock, par value U.S.$0.001 per share; authorized 100,000,000 shares; issued and outstanding 43,800,000 shares
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43,800 | 43,800 | ||||||||||
Capital in excess of par
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84,560 | 84,560 | ||||||||||
Accumulated losses
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(473,862 | ) | (462,817 | ) | ||||||||
Accumulated other comprehensive loss
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— | — | ||||||||||
Total stockholders' deficit
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(345,502 | ) | (334,457 | ) | ||||||||
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT
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— | — |
Number
of shares
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Amount
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Capital
in excess
of par
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Accumulated
Income (loss)
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Accumulated
other comprehensive (loss) income
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Total
stockholders’
equity
(deficit)
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U.S.$
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U.S.$
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U.S.$
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U.S.$
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U.S.$
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Balance as of December 31, 2009
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43,800,000 | 43,800 | 85,948 | (2,290,734 | ) | (4,796 | ) | (2,165,782 | ) | |||||||||||||||
Comprehensive loss:
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Net income for the period
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— | — | — | 1,689,544 | — | 1,689,544 | ||||||||||||||||||
Currency translation adjustment
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— | — | — | — | 6,414 | 6,414 | ||||||||||||||||||
Total comprehensive loss
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— | — | — | 1,689,544 | 6,414 | 1,695,958 | ||||||||||||||||||
Balance as of September 30, 2010
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43,800,000 | 43,800 | 85,948 | (601,190 | ) | 1,618 | (469,824 | ) | ||||||||||||||||
Balance as of December 31, 2010
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43,800,000 | 43,800 | 84,560 | (462,817 | ) | — | (334,457 | ) | ||||||||||||||||
Comprehensive income:
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Net loss for the period
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— | — | — | (11,045 | ) | — | (11,045 | ) | ||||||||||||||||
Total comprehensive income
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— | — | — | (11,045 | ) | — | (11,045 | ) | ||||||||||||||||
Balance as of September 30, 2011
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43,800,000 | 43,800 | 84,560 | (473,862 | ) | — | (345,502 | ) |
Nine months ended September 30,
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2011
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2010
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U.S.$
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U.S.$
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CASH FLOWS FROM OPERATING ACTIVITIES
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Net income/(loss)
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(11,045 | ) | 1,689,544 | |||||
Adjustments to reconcile net income to net cash provided by operating activities:
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Depreciation
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— | 3,149 | ||||||
Gain on disposal
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— | (1,824,761 | ) | |||||
Prepayments, deposits and other receivables
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— | (3,445 | ) | |||||
Accrued expenses and other current liabilities
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(3,700 | ) | (7,802 | ) | ||||
Surcharge on taxes
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— | (192 | ) | |||||
Income tax payable
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— | (214 | ) | |||||
NET CASH USED IN OPERATING ACTIVITIES
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(14,745 | ) | (143,721 | ) | ||||
CASH FLOWS FROM INVESTING ACTIVITIES
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— | (16,367 | ) | |||||
NET CASH USED IN INVESTING ACTIVITIES
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— | (16,367 | ) | |||||
CASH FLOWS FROM FINANCING ACTIVITIES
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Repayment of long-term debt
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— | (6,572 | ) | |||||
Advance from related parties
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14,745 | 84,924 | ||||||
Repayment to related parties
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— | — | ||||||
NET CASH PROVIDED BY FINANCING ACTIVITIES
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14,745 | 78,352 | ||||||
NET DECREASE IN CASH AND CASH EQUIVALENTS
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— | (81,736 | ) | |||||
Cash and cash equivalents, beginning of period
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— | 33,427 | ||||||
Foreign currency translation on cash and cash equivalents
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— | 48,309 | ||||||
CASH AND CASH EQUIVALENTS, END OF PERIOD
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— | — | ||||||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
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Cash paid for interest
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— | 1,143 |
As of
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As of
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Note
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September 30, 2011
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December 31, 2010
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(Unaudited)
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U.S.$
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U.S.$
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Advances from stockholders
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(a)
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344,067
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329,322
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(a)
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The amounts due are unsecured, non-interest bearing and repayable on demand. During the nine months ended September 30, 2011 and 2010, the Company received advances from related parties of U.S.$14,745 and U.S.$84,924, respectively.
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Nine months ended September 30,
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2011
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2010
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U.S.$
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U.S.$
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Loss from operations
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(11,045 | ) | (135,470 | ) | ||||
Finance costs
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— | (1,143 | ) | |||||
Gain on disposal
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— | 1,824,761 | ||||||
Other income
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— | 1,396 | ||||||
Loss (gain) before taxation
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(11,045 | ) | 1,689,544 | |||||
Taxation
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— | — | ||||||
Net (loss) income attributable to discontinued operations
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(11,045 | ) | 1,689,544 |
•
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Trading activities that include non-exchange traded contracts accounted for at fair value.
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•
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Relationships and transactions with persons or entities that derive benefits from any non-independent relationships other than related party transactions discussed in this Report.
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31.1 |
Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer
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31.2 |
Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer
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32.1 |
Section 1350 Certification of Chief Executive Officer
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32.2 |
Section 1350 Certification of Chief Financial Officer
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CHINAWE.COM INC.
(Registrant)
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Date: November 14, 2011
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By:
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/s/ Man Keung Wai
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Man Keung Wai
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Chief Executive Officer
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(Principal Executive Officer)
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By:
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/s/ Man Keung Wai
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Man Keung Wai
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Chief Financial Officer
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(Principal Financial Officer)
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Exhibit No.
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Description
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31.1
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Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer
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31.2
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Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer
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32.1
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Section 1350 Certification of Chief Executive Officer
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32.2
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Section 1350 Certification of Chief Financial Officer
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1.
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I have reviewed this quarterly report on Form 10-Q of Chinawe.com Inc.;
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2.
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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;
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3.
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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;
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4.
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The registrant’s other certifying officer(s) and I am 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:
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(a)
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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;
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(b)
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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;
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(c)
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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
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(d)
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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 an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer(s) 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):
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(a)
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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 small business issuer’s ability to record, process, summarize and report financial information; and
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(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the small business issuer's internal control over financial reporting.
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Date: November 14, 2011
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/s/ Man Keung Wai
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Man Keung Wai
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Chief Executive Officer
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1.
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I have reviewed this quarterly report on Form 10-Q of Chinawe.com Inc.;
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2.
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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;
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3.
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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;
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4.
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The registrant’s other certifying officer(s) and I am 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:
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(a)
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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;
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(b)
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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;
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(c)
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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
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(d)
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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 an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the small business issuer's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
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(a)
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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 small business issuer’s ability to record, process, summarize and report financial information; and
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(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the small business issuer's internal control over financial reporting.
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Date: November 14, 2011
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/s/ Man Keung Wai
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Man Keung Wai
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Chief Financial Officer
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(1)
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The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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(2)
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The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.
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/s/ Man Keung Wai
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Chief Executive Officer
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November 14, 2011
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(1)
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The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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(2)
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The information contained in the Report fairly represents, in all material respects, the financial condition and result of operations of the Company.
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/s/ Man Keung Wai
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Chief Financial Officer
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November 14, 2011
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