10-Q

Table Of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2016

☐ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF1934:

For the transition period from______ to _______

Commission File Number 0-26573

PHYSICAL PROPERTY HOLDINGS INC.

(Exact name of Registrant as specified in its charter)

Delaware	98-0203281
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)

23/F AIA Tower

No. 183 Electric Road, North Point

Hong Kong

(Address of principal executive offices)

(011) (852) 2917-0000

(Registrant's telephone number)

Check whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 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. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act:

Large Accelerated Filer ☐ Accelerated Filer ☐ Non-accelerated Filer ☐ Smaller Reporting Company ☒

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act):    Yes ☐   No ☒

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date:  

November 14, 2016, 90,000,000 shares, $0.001 par value. 

PHYSICAL PROPERTY HOLDINGS INC.

Form 10-Q for the quarter ended September 30, 2016

TABLE OF CONTENTS

			Page
PART I - FINANCIAL INFORMATION
	ITEM 1 - FINANCIAL STATEMENTS
		Unaudited Condensed Consolidated Statements of Operations for the three-month and nine-month periods ended September 30, 2015 and 2016	3
		Condensed Consolidated Balance Sheets as of December 31, 2015 and September 30, 2016 (Unaudited)	4
		Unaudited Condensed Consolidated Statements of Cash Flows for the nine-month periods ended September 30, 2015 and 2016	5
		Notes to Condensed Consolidated Financial Statements	6 – 9
	ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS		10-12
	ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK		13
	ITEM 4 - CONTROLS AND PROCEDURES		13
PART II - OTHER INFORMATION			14
	ITEM 1 - LEGAL PROCEEDINGS		14
	ITEM 2 - UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS		14
	ITEM 3 - DEFAULTS UPON SENIOR SECURITIES		14
	ITEM 4 - MINE SAFETY DISCLOSURES		14
	ITEM 5 - OTHER INFORMATION		14
	ITEM 6 - EXHIBITS		14
	SIGNATURES		15

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PART I - FINANCIAL INFORMATION

ITEM 1 - FINANCIAL STATEMENTS

PHYSICAL PROPERTY HOLDINGS INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

	Three months ended September 30,									Nine months ended September 30,
	2015			2016			2016			2015			2016			2016
	HK$’000			HK$’000			US$’000			HK$’000			HK$’000			US$’000
Operating Revenues
Rental income		254			288			37			776			842			108
Total operating revenues		254			288			37			776			842			108
Operating Expenses
Rent and related expenses		(31	)		(37	)		(5	)		(101	)		(117	)		(15	)
Depreciation		(71	)		(71	)		(9	)		(213	)		(213	)		(27	)
Other selling and administrative expenses		(299	)		(311	)		(40	)		(899	)		(912	)		(117	)
Total operating expenses		(401	)		(419	)		(54	)		(1,213	)		(1,242	)		(159	)
Loss from operations		(147	)		(131	)		(17	)		(437	)		(400	)		(51	)
Non-operating expenses
Other income		--			--			--			1			--			--
Interest expenses		(39	)		(36	)		(5	)		(120	)		(111	)		(14	)
Total non-operating expenses		(39	)		(36	)		(5	)		(119	)		(111	)		(14	)
Loss before income taxes		(186	)		(167	)		(22	)		(556	)		(511	)		(65	)
Provision for income taxes		--			--			--			--			--			--
Net loss and total comprehensive loss		(186	)		(167	)		(22	)		(556	)		(511	)		(65	)
Loss per share of common stock (in cents) – Basic and diluted		(0.21	)		(0.19	)		(0.02	)		(0.62	)		(0.57	)		(0.07	)
Weighted average number of shares of common stock outstanding		90,000,000			90,000,000			90,000,000			90,000,000			90,000,000			90,000,000

The condensed consolidated financial statements should be read in conjunction with the accompanying notes.

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PHYSICAL PROPERTY HOLDINGS INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

	As of December 31, 2015			As of September 30, 2016 (Unaudited)
	HK$’000			HK$’000			US$’000
ASSETS
Current assets
Cash and bank balances		102			131			17
Management fees and utility deposits		26			26			3
Prepayments		1			3			-
Total current assets		129			160			20
Bank deposits, collateralized		82			83			11
Property, plant and equipment, net of accumulated depreciation of HK$4,061,000 (US$521,000) as of September 30, 2016 (December 31, 2015: HK$3,848,000)		8,940			8,727			1,119
Total assets		9,151			8,970			1,150
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities
Bank loans - (Note 3)		7,248			6,794			871
Other payables		370			421			54
Due to Principal Stockholder - (Note 5)		4,657			5,390			691
Total current liabilities		12,275			12,605			1,616
Commitments and contingencies - (Note 6)
Stockholders' deficit
Common stock, par value US$0.001 each, 100 million shares of stock authorized; 90,000,000 shares of stock issued and outstanding		702			702			90
Additional paid-in capital		73,608			73,608			9,437
Accumulated losses		(77,434	)		(77,945	)		(9,993	)
Total stockholders' deficit		(3,124	)		(3,635	)		(466	)
Total liabilities and stockholders' deficit		9,151			8,970			1,150

The condensed consolidated financial statements should be read in conjunction with the accompanying notes.

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PHYSICAL PROPERTY HOLDINGS INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

	Nine months ended September 30,
	2015			2016			2016
	HK$’000			HK$’000			US$’000
Cash flows from operating activities
Net loss		(556	)		(511	)		(65	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		213			213			27
Changes in working capital:
Prepayments		(1	)		(2	)		--
Other payables		(10	)		51			6
Net cash used in operating activities		(354	)		(249	)		(32	)
Cash flows from investing activities
Increase in bank deposits, collateralized		--			(1	)		--
Net cash used in investing activities		--			(1	)		--
Cash flows from financing activities
Repayment of bank loans		(396	)		(454	)		(58	)
Net advance from Principal Stockholder - (Note 5)		880			733			94
Net cash provided by financing activities		484			279			36
Net increase in cash and cash equivalents		130			29			4
Cash and cash equivalents at beginning of period		63			102			13
Cash and cash equivalents at end of period		193			131			17

The condensed consolidated financial statements should be read in conjunction with the accompanying notes.

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PHYSICAL PROPERTY HOLDINGS INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial statements include the accounts of Physical Property Holdings Inc. and the subsidiaries that it controls (collectively referred to as the "Company"). The Company, through its subsidiaries, is engaged in the real estate business by holding five residential apartments in Hong Kong. Unless otherwise specified in the text, references to the Company include the Company and its subsidiaries. These financial statements should be read in conjunction with the consolidated financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2015.

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. The condensed consolidated balance sheet at December 31, 2015 has been derived from the audited consolidated financial statements at that date but the unaudited condensed consolidated financial statements do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the nine-month period ended September 30, 2016 are not necessarily indicative of the results that may be expected for the year ending December 31, 2016.

Translation of amounts from Hong Kong Dollars ("HK$") into United States Dollars ("US$") for the convenience of the readers has been made at the exchange rate of US$1.00 = HK$7.8. No representation is made that the Hong Kong Dollar amounts could have been, or could be, converted into United States Dollars, at that rate on September 30, 2016 or at any other certain rate.

The Company had negative working capital of HK$12,445,000 as of September 30, 2016 and incurred losses of HK$511,000 and HK$556,000 for the nine months ended September 30, 2016 and 2015 respectively. These conditions raised substantial doubt about the Company’s ability to continue as a going concern.

Continuation of the Company as a going concern is dependent upon attaining profitable operations in the future, exercising tight cost and cash flow controls measures, and the financial support from the Principal Stockholder.  The unaudited condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

The Principal Stockholder has undertaken to make available adequate funds to the Company as and when required to maintain the Company as a going concern.  Having taken into consideration the undertaking provided by the Principal Stockholder, management believes that the Company will be able to settle its liabilities when they become due.  However, there can be no assurance that the financing from the Principal Stockholder will be continued.

During the nine months ended September 30, 2016, Ngai Keung Luk (“Mr. Luk”), Chairman, Chief Executive Officer and the Principal Stockholder, made a net advance of HK$733,000 or US$94,000 to the Company as described in Note 5 below.  Mr. Luk owns 94.5% of the Company’s issued and outstanding shares of common stock as of the date this quarterly report is filed.

The Company has evaluated subsequent events through the date this quarterly report is filed.

2. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

In February 2016, the FASB issued ASU 2016-02, “Leases” (“ASU 2016-02”). The guidance requires the lessee to recognize the assets and liabilities for the rights and obligations created by leases with terms of 12 months or more. The guidance is effective for fiscal years beginning after December 15, 2018 and interim periods therein, with early adoption permitted. The Company is in the process of evaluating the guidance and its impact on the Company's consolidated financial statements.

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PHYSICAL PROPERTY HOLDINGS INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

3. BANK LOANS

During the nine-month periods ended September 30, 2016 and 2015, the Company repaid HK$454,000 and HK$396,000 of its existing bank loans, respectively. The outstanding loan balances as of September 30, 2016 and December 31, 2015 are analyzed as follows:

End of maturity	Interest rate	Principal
		2015		2016		2016
		HK$’000		HK$’000		US$’000
2026	2.1% per annum		7,248		6,794		871

Payables during the following periods according to bank repayment terms notices

	Principal
	2015		2016		2016
	HK$’000		HK$’000		US$’000
2016 / 2017		607		617		79
2017 / 2018		620		630		81
2018 / 2019		633		644		83
2019 / 2020		647		657		84
2020 / 2021		661		671		86
Thereafter		4,080		3,575		458
		7,248		6,794		871

As the bank loans are repayable on demand upon request at the bank’s discretion, regardless of the expected repayment dates of the outstanding loan principals as set out in the repayment terms notices issued by the bank, the entire balance of the bank loans is presented as current liabilities in the condensed consolidated balance sheet.  

The collateral of the bank loans includes:

(i)	leasehold properties in Hong Kong with a net book value of HK$8,727,000 and HK$8,940,000 as of September 30, 2016 and December 31, 2015 respectively;
(ii)	fixed deposits of HK$83,000 and HK$82,000 as of September 30, 2016 and December 31, 2015 respectively; and
(iii)	joint and several guarantee provided by the Principal Stockholder and his spouse.

4. SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION

	Three months ended September 30,						Nine months ended September 30,
	2015		2016		2016		2015		2016		2016
	HK$’000		HK$’000		US$’000		HK$’000		HK$’000		US$’000
Cash paid for:
Interest expenses		39		36		5		120		111		14

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PHYSICAL PROPERTY HOLDINGS INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

5. RELATED PARTY TRANSACTIONS

During the nine-month periods ended September 30, 2016 and 2015, the Company had net advance from the Principal Stockholder of HK$733,000 and HK$880,000 respectively. The movements of the amount due to the Principal Stockholder are analyzed as follows:

	Nine months ended September 30,
	2015		2016
	HK$’000		HK$’000		US$’000
Balance at beginning of period		3,567		4,657		597
Net advance from the Principal Stockholder		880		733		94
Balance at end of period		4,447		5,390		691

In addition, during the nine-month periods ended September 30, 2016 and 2015, a related company which is controlled by the Principal Stockholder of the Company, provided office space and general support for the Company’s activities with an aggregate charge of HK$630,000.

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PHYSICAL PROPERTY HOLDINGS INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

6. COMMITMENTS AND CONTINGENCIES

The Company leases out its properties under operating leases with average lease terms of two years. The future aggregate minimum rental receivables under non-cancellable operating leases are as follows:

	As of December 31, 2015		As of September 30, 2016
	HK$’000		HK$’000		US$’000
Within one year		769		910		117
In the second year		160		504		64
		929		1,414		181

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ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

PRELIMINARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

THIS REPORT CONTAINS CERTAIN FORWARD-LOOKING STATEMENTS ABOUT OUR OPERATIONS. FORWARD-LOOKING STATEMENTS SHOULD BE READ IN CONJUNCTION WITH OUR UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AND RELATED NOTES INCLUDED IN PART 1, ITEM 1 OF THIS REPORT. THIS DISCUSSION CONTAINS CERTAIN FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF SECTION 27A OF THE SECURITIES ACT OF 1933, AS AMENDED, AND SECTION 21E OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. PROSPECTIVE SHAREHOLDERS SHOULD UNDERSTAND THAT SEVERAL FACTORS GOVERN WHETHER ANY FORWARD-LOOKING STATEMENT CONTAINED HEREIN WILL BE OR CAN BE ACHIEVED. ANY ONE OF THOSE FACTORS COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE PROJECTED HEREIN. THESE FORWARD-LOOKING STATEMENTS INCLUDE PLANS AND OBJECTIVES OF MANAGEMENT FOR FUTURE OPERATIONS, INCLUDING PLANS AND OBJECTIVES RELATING TO THE PRODUCTS AND THE FUTURE ECONOMIC PERFORMANCE OF THE COMPANY. ASSUMPTIONS RELATING TO THE FOREGOING INVOLVE JUDGMENTS WITH RESPECT TO, AMONG OTHER THINGS, FUTURE ECONOMIC, COMPETITIVE AND MARKET CONDITIONS, FUTURE BUSINESS DECISIONS, AND THE TIME AND MONEY REQUIRED TO SUCCESSFULLY COMPLETE DEVELOPMENT PROJECTS, ALL OF WHICH ARE DIFFICULT OR IMPOSSIBLE TO PREDICT ACCURATELY AND MANY OF WHICH ARE BEYOND THE CONTROL OF THE COMPANY. FORWARD-LOOKING STATEMENTS INCLUDE STATEMENTS THAT ARE NOT HISTORICAL FACTS AND CAN BE IDENTIFIED BY TERMS SUCH AS “ANTICIPATE,” “BELIEVE,” “COULD,” “SEEK,” “ESTIMATE,” “EXPECT,” “INTEND,” “MAY,” “PLAN,” “POTENTIAL,” “PREDICT,” “PROJECT,” “SHOULD,” “WILL,” “WOULD” OR SIMILAR EXPRESSIONS AND THE NEGATIVES OF THOSE TERMS. ALTHOUGH THE COMPANY BELIEVES THAT THE ASSUMPTIONS UNDERLYING THE FORWARD-LOOKING STATEMENTS CONTAINED HEREIN ARE REASONABLE, ANY OF THOSE ASSUMPTIONS COULD PROVE INACCURATE AND, THEREFORE, THERE CAN BE NO ASSURANCE THAT THE RESULTS CONTEMPLATED IN ANY OF THE FORWARD-LOOKING STATEMENTS CONTAINED HEREIN WILL BE REALIZED. BASED ON ACTUAL EXPERIENCE AND BUSINESS DEVELOPMENT, THE COMPANY MAY ALTER ITS MARKETING, CAPITAL EXPENDITURE PLANS OR OTHER BUDGETS, WHICH MAY IN TURN AFFECT THE COMPANY'S RESULTS OF OPERATIONS. IN LIGHT OF THE SIGNIFICANT UNCERTAINTIES INHERENT IN THE FORWARD-LOOKING STATEMENTS INCLUDED THEREIN, THE INCLUSION OF ANY SUCH STATEMENT SHOULD NOT BE REGARDED AS A REPRESENTATION BY THE COMPANY OR ANY OTHER PERSON THAT THE OBJECTIVES OR PLANS OF THE COMPANY WILL BE ACHIEVED.

Overview of Company's Business

The Company, through its wholly-owned subsidiary, Good Partner Limited, owns five residential apartments located in Hong Kong.

 RESULTS OF OPERATIONS

The following table sets forth selected data as a percentage of total operating revenue for the periods indicated.

	Three months ended September 30						Nine months ended September 30
	2015			2016			2015			2016
Operating Revenues		100.00	%		100.00	%		100.00	%		100.00	%
Total operating expenses		(157.87	%)		(145.49	%)		(156.31	%)		(147.51	%)
Loss from operations		(57.87	%)		(45.49	%)		(56.31	%)		(47.51	%)
Loss before income taxes		(73.23	%)		(57.99	%)		(71.65	%)		(60.69	%)
Provision for income taxes		--			--			--			--
Net loss		(73.23	%)		(57.99	%)		(71.65	%)		(60.69	%)

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THREE MONTHS ENDED SEPTEMBER 30, 2016 (UNAUDITED) COMPARED TO THREE MONTHS ENDED SEPTEMBER 30, 2015 (UNAUDITED)

OPERATING REVENUES. Operating revenues for the third quarter of 2016 totaled HK$288,000 (US$37,000) compared to HK$254,000 for the corresponding period in 2015. This represented an increase of 13% mainly because a unit being vacant for two months in the third quarter of the last year was rented out subsequently.

OPERATING EXPENSES. The Company's operating expenses totaled HK$419,000 (US$54,000), or 145% of operating revenues, for the third quarter of 2016, compared to HK$401,000, or 158% of operating revenues, for the third quarter of 2015. This represented an increase of 4%, mainly because of increase in rates and government rent, and repair costs being incurred in relation to a new tenancy in this quarter.

TOTAL NON-OPERATING EXPENSES. Total non-operating expenses for the third quarter of 2016 totaled HK$36,000 (US$5,000) compared to HK$39,000 for the third quarter of 2015. This represented a decrease of 8% due to reduction in interest expenses attributable to the decrease in average loan balances as a result of the progress on repayment.

PROVISION FOR INCOME TAXES. The Company did not make any tax provision for the third quarter in view of the losses incurred.

NET LOSS AND TOTAL COMPREHENSIVE LOSS. The Company has recorded a net loss and total comprehensive loss of HK$167,000 (US$22,000) for the third quarter of 2016, compared to a net loss and total comprehensive loss of HK$186,000 for the third quarter of 2015. This represented a decrease in loss of 10% due to the net effect of the increase in rental income and the increase in operating expenses as mentioned above.

NINE MONTHS ENDED SEPTEMBER 30, 2016 (UNAUDITED) COMPARED TO NINE MONTHS ENDED SEPTEMBER 30, 2015 (UNAUDITED)

OPERATING REVENUES. Operating revenues for the nine months of 2016 totaled HK$842,000 (US$108,000) compared to HK$776,000 for the corresponding period in 2015. This represented an increase of 9% mainly due to rental increase for a property which was vacant for five months in the same period of the last year and was rented out subsequently.

OPERATING EXPENSES. The Company's operating expenses totaled HK$1,242,000 (US$159,000), or 148% of operating revenues, for the first nine months of 2016, compared to HK$1,213,000, or 156% of operating revenues, for the first nine months of 2015. This represented an increase of 2% mainly because of increase in rates and government rent, and repair costs being incurred in relation to a new tenancy in the first nine months of 2016.

TOTAL NON-OPERATING EXPENSES. Total non-operating expenses for the first nine months of 2016 totaled HK$111,000 (US$14,000) compared to HK$119,000 for the first nine months of 2015. This represented a decrease of 7% due to reduction in interest expenses attributable to the decrease in average loan balances as a result of the progress on repayment.

PROVISION FOR INCOME TAXES. The Company did not make any tax provision for the period under review because there were losses incurred.

NET LOSS AND TOTAL COMPREHENSIVE LOSS. The Company has recorded a net loss and total comprehensive loss of HK$511,000 (US$65,000) for the first nine months of 2016, compared to a net loss and total comprehensive loss of HK$556,000 for the first nine months of 2015. This represented a decrease in loss of 8% due to the net effect of the increase in rental income and the increase in operating expenses as mentioned above.

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LIQUIDITY AND CAPITAL RESOURCES

The Company has financed its operations primarily through advances from the Principal Stockholder.

Cash and cash equivalent balances as of September 30, 2016 and December 31, 2015 were HK$131,000 (US$17,000) and HK$102,000, respectively.

Net cash used in operating activities was HK$249,000 (US$32,000) and HK$354,000 for the nine-month periods ended September 30, 2016 and 2015, respectively.

Net cash used in investing activities which represents increase in bank deposit, was HK$1,000 and NIL for the nine-month periods ended September 30, 2016 and 2015, respectively.

Net cash provided by financing activities, which mainly includes repayment of bank loans and advances from the Principal Stockholder, were HK$279,000 (US$36,000) and HK$484,000 during the nine-month periods ended September 30, 2016 and 2015, respectively.

During the nine-month periods ended September 30, 2016 and 2015, the Company has not entered into any transactions using derivative financial instruments or derivative commodity instruments or held any marketable equity securities of publicly traded companies.

Consistent with the general practice of lessors of residential apartments, the Company receives monthly rentals, which are due on the first day of each billing period and are non-refundable. This practice creates working capital that the Company generally utilizes for working capital purposes.

The Company has no trade receivable balance as of September 30, 2016 and December 31, 2015. The Company obtains rental deposits from its tenants and has never experienced any significant problems with collection of accounts receivable. No provision for doubtful receivables is therefore made for the period under review.

During the nine-month periods ended September 30, 2016 and 2015, the Company had no purchases of investments.

Management believes that cash flow generated from the operations of the Company, the tight cost and cash flow control measures and the existing cash and bank balances on hand should be sufficient to satisfy the working capital requirement of the Company for at least the next 12 months as the Principal Stockholder has confirmed his intention to make available adequate funds to the Company as and when required to maintain the Company as a going concern.  However, there can be no assurance that the financing from him will be continued.

CRITICAL ACCOUNTING POLICIES

The preparation of financial statements in conformity with accounting principles generally accepted in the U.S. (GAAP) requires the Company 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 financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. In recording transactions and balances resulting from business operations, the Company uses estimates based on the best information available for such items as depreciable lives. The Company revises the recorded estimates when better information is available, facts change or actual amounts can be determined. These revisions can affect operating results.

The critical accounting policies and use of estimates are discussed in and should be read in conjunction with the annual consolidated audited financial statements and notes included in the Company’s latest 10-K, as filed with the SEC on March 23, 2016, which includes audited consolidated financial statements for the year ended December 31, 2015. 

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ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The operations of the Company are solely in Hong Kong and they are subject to risks associated with, among others, interest rate and liquidity risk. These risks have similar considerations and risks typically associated with investments in the real estate market of the United States and Western European countries. These are described further in the following:

INTEREST RATE RISK

The Company’s exposure to the risk of changes in market interest rates relates primarily to its long term debt obligations with a floating interest rate.  The Company monitors the movement of interest rates on an ongoing basis and evaluates the exposure of its debt obligations.

LIQUIDITY RISK

The Company’s unaudited condensed consolidated financial statements have been prepared on a going concern basis. For the nine months ended September 30, 2016, the Company reported a negative working capital of HK$12,445,000, of which HK$6,177,000 would be due for repayment over one year according to the latest repayment terms notices issued by the bank, and a net loss of HK$511,000. The Company has relied on private financing from the Principal Stockholder of the Company, who has confirmed his intention to make available adequate funds to the Company as and when required to maintain the Company as a going concern. However, there can be no assurance that the financing from him will be continued. The accompanying unaudited condensed consolidated financial statements do not include or reflect any adjustments that might result from the outcome of these uncertainties.

ITEM 4 - CONTROLS AND PROCEDURES

The Chief Executive Officer and Chief Financial Officer (the principal executive officer and principal financial officer, respectively) of the Company have concluded, based on their evaluation as of September 30, 2016, that the design and operation of the Company's "disclosure controls and procedures" (as defined in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended ("Exchange Act")) are effective to ensure that information required to be disclosed in the reports filed or submitted by the Company under the Exchange Act is accumulated, recorded, processed, summarized and reported to the management, including the Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding whether or not disclosure is required.

During the nine months ended September 30, 2016, there were no changes in the Company’s internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act) that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

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PART II - OTHER INFORMATION

ITEM 1 - LEGAL PROCEEDINGS

None.

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 to our Company.

ITEM 5 - OTHER INFORMATION

None.

ITEM 6 – EXHIBITS

(a)    Exhibits

Exhibit No.	Description
31.1	CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002*
31.2	CERTIFICATION OF THE CHIEF FINANCIAL OFFICER PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002*
32.1	CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002*
32.2	CERTIFICATION OF THE CHIEF FINANCIAL OFFICER PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002*
101	The following materials from our Quarterly Report on Form 10-Q for the quarter ended September 30, 2016, formatted in XBRL (eXtensible Business Reporting Language): (i) the Condensed Consolidated Statements of Operations, (ii) the Consolidated Balance Sheets, (iii) the Consolidated Statements of Cash Flows, and (iv) Notes to Condensed Consolidated Financial Statements,**
*	Filed herewith
**	Information is furnished and not filed or a part of a registration statement or prospectus for purposes of sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.

14

Table Of Contents

SIGNATURES

Pursuant to the requirements of the Exchange Act, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

PHYSICAL PROPERTY HOLDINGS INC.

(Registrant)

November 14, 2016	/s/ Ngai Keung Luk
	Ngai Keung Luk
	Chairman and Chief Executive Officer
	(Principal Executive Officer)
November 14, 2016	/s/ Darrie Lam
	Darrie Lam
	Chief Financial Officer
	(Principal Financial and Accounting Officer)

15

EX-31.1

EXHIBIT 31.1

CERTIFICATION

I, Ngai Keung Luk, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Physical Property Holdings Inc. (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(s) 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 an 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(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 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.

November 14, 2016	/s/ Ngai Keung Luk
	Ngai Keung Luk
	Chairman and Chief Executive Officer

EX-31.2

EXHIBIT 31.2

CERTIFICATION

I, Darrie Lam, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Physical Property Holdings Inc. (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(s) 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 an 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(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 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.

November 14, 2016	/s/ Darrie Lam
	Darrie Lam
	Chief Financial Officer

EX-32.1

EXHIBIT 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO 18 U.S.C. SS. 1350 ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Report of Physical Property Holdings Inc. (the "Company") on Form 10-Q for the quarter ended September 30, 2016 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Ngai Keung Luk, Chairman and Chief Executive Officer of the Company, certify 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) 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 result of operations of the Company.

/s/ Ngai Keung Luk

Ngai Keung Luk

Chairman and Chief Executive Officer

November 14, 2016

EX-32.2

EXHIBIT 32.2

 CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO 18 U.S.C. SS. 1350 ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Report of Physical Property Holdings Inc. (the "Company") on Form 10-Q for the quarter ended September 30, 2016 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Darrie Lam, Chief Financial Officer of the Company, certify 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) 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 result of operations of the Company.

/s/ Darrie Lam

Darrie Lam

Chief Financial Officer

November 14, 2016 

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Document And Entity Information - shares	9 Months Ended
	Sep. 30, 2016	Nov. 14, 2016
Document Information [Line Items]
Entity Registrant Name	PHYSICAL PROPERTY HOLDINGS, INC.
Entity Central Index Key	0001048055
Trading Symbol	ppyh
Current Fiscal Year End Date	--12-31
Entity Filer Category	Smaller Reporting Company
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	No
Entity Common Stock, Shares Outstanding (in shares)		90,000,000
Document Type	10-Q
Document Period End Date	Sep. 30, 2016
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	Q3
Amendment Flag	false

XML

Unaudited Condensed Consolidated Statements of Operations HKD in Thousands, $ in Thousands	3 Months Ended			9 Months Ended
	Sep. 30, 2016 USD ($) $ / shares shares	Sep. 30, 2016 HKD HKD / shares shares	Sep. 30, 2015 HKD HKD / shares shares	Sep. 30, 2016 USD ($) $ / shares shares	Sep. 30, 2016 HKD HKD / shares shares	Sep. 30, 2015 HKD HKD / shares shares
Operating Revenues
Rental income	$ 37	HKD 288	HKD 254	$ 108	HKD 842	HKD 776
Total operating revenues	37	288	254	108	842	776
Operating Expenses
Rent and related expenses	(5)	(37)	(31)	(15)	(117)	(101)
Depreciation	(9)	(71)	(71)	(27)	(213)	(213)
Other selling and administrative expenses	(40)	(311)	(299)	(117)	(912)	(899)
Total operating expenses	(54)	(419)	(401)	(159)	(1,242)	(1,213)
Loss from operations	(17)	(131)	(147)	(51)	(400)	(437)
Non-operating expenses
Other income						1
Interest expenses	(5)	(36)	(39)	(14)	(111)	(120)
Total non-operating expenses	(5)	(36)	(39)	(14)	(111)	(119)
Loss before income taxes	(22)	(167)	(186)	(65)	(511)	(556)
Provision for income taxes
Net loss and total comprehensive loss	$ (22)	HKD (167)	HKD (186)	$ (65)	HKD (511)	HKD (556)
Loss per share of common stock (in cents) – Basic and diluted (in Hong Kong Dollar per share) | (per share)	$ (0.02)	HKD (0.19)	HKD (0.21)	$ (0.07)	HKD (0.57)	HKD (0.62)
Weighted average number of shares of common stock outstanding (in shares)	90,000,000	90,000,000	90,000,000	90,000,000	90,000,000	90,000,000

XML

Condensed Consolidated Balance Sheets (Current Period Unaudited) HKD in Thousands, $ in Thousands	Sep. 30, 2016 USD ($)	Sep. 30, 2016 HKD	Dec. 31, 2015 HKD
ASSETS
Cash and bank balances	$ 17	HKD 131	HKD 102
Management fees and utility deposits	3	26	26
Prepayments		3	1
Total current assets	20	160	129
Bank deposits, collateralized	11	83	82
Property, plant and equipment, net of accumulated depreciation of HK$4,061,000 (US$521,000) as of September 30, 2016 (December 31, 2015: HK$3,848,000)	1,119	8,727	8,940
Total assets	1,150	8,970	9,151
LIABILITIES AND STOCKHOLDERS' DEFICIT
Bank loans - (Note 3)	871	6,794	7,248
Other payables	54	421	370
Due to Principal Stockholder - (Note 5)	691	5,390	4,657
Total current liabilities	1,616	12,605	12,275
Stockholders' deficit
Common stock, par value US$0.001 each, 100 million shares of stock authorized; 90,000,000 shares of stock issued and outstanding	90	702	702
Additional paid-in capital	9,437	73,608	73,608
Accumulated losses	(9,993)	(77,945)	(77,434)
Total stockholders' deficit	(466)	(3,635)	(3,124)
Total liabilities and stockholders' deficit	$ 1,150	HKD 8,970	HKD 9,151

XML

Condensed Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals)	Sep. 30, 2016 USD ($) $ / shares shares	Sep. 30, 2016 HKD HKD / shares shares	Dec. 31, 2015 HKD HKD / shares shares
Accumulated Depreciation	$ 521,000	HKD 4,061,000	HKD 3,848,000
Common stock, par value (in Hong Kong Dollar per share) | (per share)	$ 0.001	HKD 0.001	HKD 0.001
Common stock, shares authorized (in shares)	100,000,000	100,000,000	100,000,000
Common stock, shares issued (in shares)	90,000,000	90,000,000	90,000,000
Common stock, shares outstanding (in shares)	90,000,000	90,000,000	90,000,000

XML

Unaudited Condensed Consolidated Statements of Cash Flows $ in Thousands	9 Months Ended
	Sep. 30, 2016 USD ($)	Sep. 30, 2016 HKD	Sep. 30, 2015 HKD
Cash flows from operating activities
Net loss	$ (65)	HKD (511,000)	HKD (556,000)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation	27	213,000	213,000
Changes in working capital:
Prepayments		(2,000)	(1,000)
Other payables	6	51,000	(10,000)
Net cash used in operating activities	(32)	(249,000)	(354,000)
Cash flows from investing activities
Increase in bank deposits, collateralized		(1,000)
Net cash used in investing activities		(1,000)
Cash flows from financing activities
Repayment of bank loans	(58)	(454,000)	(396,000)
Net advance from the Principal Stockholder	94	733,000	880,000
Net cash provided by financing activities	36	279,000	484,000
Net increase in cash and cash equivalents	4	29,000	130,000
Cash and cash equivalents at beginning of period	13	102,000	63,000
Cash and cash equivalents at end of period	$ 17	HKD 131,000	HKD 193,000

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Note 1 - Basis of Presentation

9 Months Ended

Sep. 30, 2016

Notes to Financial Statements

Basis of Accounting [Text Block]

1. BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial statements include the accounts of Physical Property Holdings Inc. and the subsidiaries that it controls (collectively referred to as the "Company"). The Company, through its subsidiaries, is engaged in the real estate business by holding five residential apartments in Hong Kong. Unless otherwise specified in the text, references to the Company include the Company and its subsidiaries. These financial statements should be read in conjunction with the consolidated financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2015.

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. The condensed consolidated balance sheet at December 31, 2015 has been derived from the audited consolidated financial statements at that date but the unaudited condensed consolidated financial statements do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the nine-month period ended September 30, 2016 are not necessarily indicative of the results that may be expected for the year ending December 31, 2016.

Translation of amounts from Hong Kong Dollars ("HK$") into United States Dollars ("US$") for the convenience of the readers has been made at the exchange rate of US$1.00 = HK$7.8. No representation is made that the Hong Kong Dollar amounts could have been, or could be, converted into United States Dollars, at that rate on September 30, 2016 or at any other certain rate.

The Company had negative working capital of HK$12,445,000 as of September 30, 2016 and incurred losses of HK$511,000 and HK$556,000 for the nine months ended September 30, 2016 and 2015 respectively. These conditions raised substantial doubt about the Company’s ability to continue as a going concern.

Continuation of the Company as a going concern is dependent upon attaining profitable operations in the future, exercising tight cost and cash flow controls measures, and the financial support from the Principal Stockholder.  The unaudited condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

The Principal Stockholder has undertaken to make available adequate funds to the Company as and when required to maintain the Company as a going concern.  Having taken into consideration the undertaking provided by the Principal Stockholder, management believes that the Company will be able to settle its liabilities when they become due.  However, there can be no assurance that the financing from the Principal Stockholder will be continued.

During the nine months ended September 30, 2016, Ngai Keung Luk (“Mr. Luk”), Chairman, Chief Executive Officer and the Principal Stockholder, made a net advance of HK$733,000 or US$94,000 to the Company as described in Note 5 below.  Mr. Luk owns 94.5% of the Company’s issued and outstanding shares of common stock as of the date this quarterly report is filed.

The Company has evaluated subsequent events through the date this quarterly report is filed.

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Note 2 - Recently Issued Accounting Pronouncements

9 Months Ended

Sep. 30, 2016

Notes to Financial Statements

Description of New Accounting Pronouncements Not yet Adopted [Text Block]

2. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

In February 2016, the FASB issued ASU 2016-02,

“Leases”

(“ASU 2016-02”). The guidance requires the lessee to recognize the assets and liabilities for the rights and obligations created by leases with terms of 12 months or more. The guidance is effective for fiscal years beginning after December 15, 2018 and interim periods therein, with early adoption permitted. The Company is in the process of evaluating the guidance and its impact on the Company's consolidated financial statements.

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Note 3 - Bank Loans

9 Months Ended

Sep. 30, 2016

Notes to Financial Statements

Debt Disclosure [Text Block]

3. BANK LOANS

During the nine-month periods ended September 30, 2016 and 2015, the Company repaid HK$454,000 and HK$396,000 of its existing bank loans, respectively. The outstanding loan balances as of September 30, 2016 and December 31, 2015 are analyzed as follows:

End of maturity	Interest rate	Principal
		2015		2016		2016
		HK$’000		HK$’000		US$’000
2026	2.1% per annum		7,248		6,794		871

Payables during the following periods according to bank repayment terms notices

	Principal
	2015		2016		2016
	HK$’000		HK$’000		US$’000
2016 / 2017		607		617		79
2017 / 2018		620		630		81
2018 / 2019		633		644		83
2019 / 2020		647		657		84
2020 / 2021		661		671		86
Thereafter		4,080		3,575		458
		7,248		6,794		871

As the bank loans are repayable on demand upon request at the bank’s discretion, regardless of the expected repayment dates of the outstanding loan principals as set out in the repayment terms notices issued by the bank, the entire balance of the bank loans is presented as current liabilities in the condensedconsolidated balance sheet.  

The collateral of the bank loans includes:

(i)	leasehold properties in Hong Kong with a net book value of HK$8,727,000 and HK$8,940,000 as of September 30, 2016  and December 31, 2015 respectively;
(ii)	fixed deposits of HK$83,000 and HK$82,000 as of September 30, 2016 and December 31, 2015 respectively; and
(iii)	joint and several guarantee provided by the Principal Stockholder and his spouse.

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Note 4 - Supplemental Disclosures of Cash Flow Information

9 Months Ended

Sep. 30, 2016

Notes to Financial Statements

Cash Flow, Supplemental Disclosures [Text Block]

4. SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION

	Three months ended September 30 ,						Nine months ended September 30 ,
	2015		2016		2016		2015		2016		2016
	HK$’000		HK$’000		US$’000		HK$’000		HK$’000		US$’000
Cash paid for:
Interest expenses		39		36		5		120		111		14

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Note 5 - Related Party Transactions

9 Months Ended

Sep. 30, 2016

Notes to Financial Statements

Related Party Transactions Disclosure [Text Block]

5. RELATED PARTY TRANSACTIONS

During the nine-month periods ended September 30, 2016 and 2015, the Company had net advance from the Principal Stockholder of HK$733,000 and HK$880,000 respectively. The movements of the amount due to the Principal Stockholder are analyzed as follows:

	Nine months ended September 30 ,
	2015		2016
	HK$’000		HK$’000		US$’000
Balance at beginning of period		3,567		4,657		597
Net advance from the Principal Stockholder		880		733		94
Balance at end of period		4,447		5,390		691

In addition, during the nine-month periods ended September 30, 2016 and 2015, a related company which is controlled by the Principal Stockholder of the Company, provided office space and general support for the Company’s activities with an aggregate charge of HK$63

0,000.

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Note 6 - Commitments and Contingencies

9 Months Ended

Sep. 30, 2016

Notes to Financial Statements

Commitments and Contingencies Disclosure [Text Block]

6. COMMITMENTS AND CONTINGENCIES

The Company leases out its properties under operating leases with average lease terms of two years. The future aggregate minimum rental receivables under non-cancellable operating leases are as follows:

	As of December 31, 2015		As of September 30, 2016
	HK$’000		HK$’000		US$’000
Within one year		769		910		117
In the second year		160		504		64
		929		1,414		181

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Note 3 - Bank Loans (Tables)

9 Months Ended

Sep. 30, 2016

Notes Tables

Schedule of Debt [Table Text Block]

End of maturity	Interest rate	Principal
		2015		2016		2016
		HK$’000		HK$’000		US$’000
2026	2.1% per annum		7,248		6,794		871

Schedule of Maturities of Long-term Debt [Table Text Block]

	Principal
	2015		2016		2016
	HK$’000		HK$’000		US$’000
2016 / 2017		607		617		79
2017 / 2018		620		630		81
2018 / 2019		633		644		83
2019 / 2020		647		657		84
2020 / 2021		661		671		86
Thereafter		4,080		3,575		458
		7,248		6,794		871

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Note 4 - Supplemental Disclosures of Cash Flow Information (Tables)

9 Months Ended

Sep. 30, 2016

Notes Tables

Schedule of Cash Flow, Supplemental Disclosures [Table Text Block]

	Three months ended September 30 ,						Nine months ended September 30 ,
	2015		2016		2016		2015		2016		2016
	HK$’000		HK$’000		US$’000		HK$’000		HK$’000		US$’000
Cash paid for:
Interest expenses		39		36		5		120		111		14

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Note 5 - Related Party Transactions (Tables)

9 Months Ended

Sep. 30, 2016

Notes Tables

Schedule of Related Party Transactions [Table Text Block]

	Nine months ended September 30 ,
	2015		2016
	HK$’000		HK$’000		US$’000
Balance at beginning of period		3,567		4,657		597
Net advance from the Principal Stockholder		880		733		94
Balance at end of period		4,447		5,390		691

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Note 6 - Commitments and Contingencies (Tables)

9 Months Ended

Sep. 30, 2016

Notes Tables

Schedule Of Future Minimum Rental Receivable For Operating Leases [Table Text Block]

	As of December 31, 2015		As of September 30, 2016
	HK$’000		HK$’000		US$’000
Within one year		769		910		117
In the second year		160		504		64
		929		1,414		181

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Note 1 - Basis of Presentation (Details Textual)	9 Months Ended
	Sep. 30, 2016 USD ($)	Sep. 30, 2016 HKD HKD / $	Sep. 30, 2015 HKD
Hong Kong, Dollars
Foreign Currency Exchange Rate, Translation | HKD / $		7.8
Majority Shareholder [Member]
Proceeds from (Repayments of) Related Party Debt	$ 94,000	HKD 733,000	HKD 880,000
Principal Shareholder Ownership Percentage		94.50%
Property Subject to or Available for Operating Lease, Number of Units		5
Working Capital | HKD		HKD (12,445,000)
Net Income (Loss) Attributable to Parent	(65,000)	(511,000)	(556,000)
Proceeds from (Repayments of) Related Party Debt	$ 94,000	HKD 733,000	HKD 880,000

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Note 3 - Bank Loans (Details Textual) $ in Thousands	9 Months Ended
	Sep. 30, 2016 USD ($)	Sep. 30, 2016 HKD	Sep. 30, 2015 HKD	Dec. 31, 2015 HKD
Repayments of Bank Debt	$ 58	HKD 454,000	HKD 396,000
Real Estate Investments, Net		8,727,000		HKD 8,940,000
Security Deposit		HKD 83,000		HKD 82,000

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Note 3 - Bank Loans - Summary of Outstanding Loan Balances (Details) HKD in Thousands, $ in Thousands	Sep. 30, 2016 USD ($)	Sep. 30, 2016 HKD	Dec. 31, 2015 HKD	Sep. 30, 2015 HKD
Loans Payable [Member]
Interest Rate	2.10%	2.10%
Bank loans - (Note 3)	$ 871	HKD 6,794		HKD 7,248
Bank loans - (Note 3)	$ 871	HKD 6,794	HKD 7,248

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Note 3 - Bank Loans - Long-term Debt Maturities (Details) HKD in Thousands, $ in Thousands	Sep. 30, 2016 USD ($)	Sep. 30, 2016 HKD	Dec. 31, 2015 HKD
2016 / 2017	$ 79	HKD 617	HKD 607
2017 / 2018	81	630	620
2018 / 2019	83	644	633
2019 / 2020	84	657	647
2020 / 2021	86	671	661
Thereafter	458	3,575	4,080
Bank Loans	$ 871	HKD 6,794	HKD 7,248

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Note 4 - Supplemental Disclosures of Cash Flow Information - Summary Disclosure of Supplemental Cash Flow Information (Details) HKD in Thousands, $ in Thousands	3 Months Ended			9 Months Ended
	Sep. 30, 2016 USD ($)	Sep. 30, 2016 HKD	Sep. 30, 2015 HKD	Sep. 30, 2016 USD ($)	Sep. 30, 2016 HKD	Sep. 30, 2015 HKD
Interest expenses	$ 5	HKD 36	HKD 39	$ 14	HKD 111	HKD 120

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Note 5 - Related Party Transactions (Details Textual)	9 Months Ended
	Sep. 30, 2016 USD ($)	Sep. 30, 2016 HKD	Sep. 30, 2015 HKD
Majority Shareholder [Member]
Related Party Transaction, Expenses from Transactions with Related Party		HKD 630,000	HKD 630,000
Proceeds from (Repayments of) Related Party Debt	$ 94,000	733,000	880,000
Proceeds from (Repayments of) Related Party Debt	$ 94,000	HKD 733,000	HKD 880,000

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Note 5 - Related Party Transactions - Amounts Due to Principal Stockholder (Details) HKD in Thousands, $ in Thousands	9 Months Ended
	Sep. 30, 2016 USD ($)	Sep. 30, 2016 HKD	Sep. 30, 2015 HKD
Balance at beginning of period	$ 597	HKD 4,657	HKD 3,567
Net advance from the Principal Stockholder	94	733	880
Balance at end of period	$ 691	HKD 5,390	HKD 4,447

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Note 6 - Commitments and Contingencies (Details Textual)	9 Months Ended
	Sep. 30, 2016
Lessor Leasing Arrangements, Operating Leases, Term of Contract	2 years

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Note 6 - Commitments and Contingencies - Future Aggregate Minimum Rental Receivables (Details) HKD in Thousands, $ in Thousands	Sep. 30, 2016 USD ($)	Sep. 30, 2016 HKD	Dec. 31, 2015 HKD
Within one year	$ 117	HKD 910	HKD 769
In the second year	64	504	160
	$ 181	HKD 1,414	HKD 929