0001493152-18-011431.txt : 20180813 0001493152-18-011431.hdr.sgml : 20180813 20180813061634 ACCESSION NUMBER: 0001493152-18-011431 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 62 CONFORMED PERIOD OF REPORT: 20180630 FILED AS OF DATE: 20180813 DATE AS OF CHANGE: 20180813 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Greenpro Capital Corp. CENTRAL INDEX KEY: 0001597846 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER PROCESSING & DATA PREPARATION [7374] IRS NUMBER: 981146821 STATE OF INCORPORATION: NV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-38308 FILM NUMBER: 181010199 BUSINESS ADDRESS: STREET 1: ROOM 1701-1703 17F THE METROPOLIS TOWER STREET 2: 10 METROPOLIS DRIVE CITY: HUNG HOM STATE: K3 ZIP: 000000 BUSINESS PHONE: 852-3111-7718 MAIL ADDRESS: STREET 1: ROOM 1701-1703 17F THE METROPOLIS TOWER STREET 2: 10 METROPOLIS DRIVE CITY: HUNG HOM STATE: K3 ZIP: 000000 FORMER COMPANY: FORMER CONFORMED NAME: Greenpro, Inc. DATE OF NAME CHANGE: 20140122 10-Q 1 form10-q.htm

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

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

 

For The Quarterly Period Ended June 30, 2018

 

or

 

[  ] 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 001-38308

 

Greenpro Capital Corp.

(Exact name of registrant issuer as specified in its charter)

 

Nevada   98-1146821

(State or other jurisdiction of

incorporation or organization)

 

(I.R.S. Employer

Identification No.)

 

Room 1701-1703, 17/F, The Metropolis Tower,

10 Metropolis Drive, Hung Hom, Kowloon,

Hong Kong

(Address of principal executive offices, including zip code)

 

Registrant’s phone number, including area code (852) 3111 -7718

 

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 [X] 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 (section 232.405 of this chapter) during the preceding twelve months (or shorter period that the registrant was required to submit and post such files).

 

YES [X] 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 the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” or an “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

 

Large Accelerated Filer [  ] Accelerated Filer [  ] Non-accelerated Filer [  ] Smaller reporting company [X]

Emerging Growth Company [X]

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [  ] No [X]

 

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

 

Class   Outstanding at August 10, 2018
Common Stock, $.0001 par value   54,715,287

 

 

 

 
 

 

TABLE OF CONTENTS

 

    Page
     
PART I FINANCIAL INFORMATION  
     
ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS:  
     
  Condensed Consolidated Balance Sheets - June 30, 2018 (Unaudited) and December 31, 2017 3
     
  Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) – Three and Six Months Ended June 30, 2018 and 2017 4
     
  Condensed Consolidated Statement of Changes in Stockholders’ Equity (Unaudited) - Six Months Ended June 30, 2018 5
     
  Condensed Consolidated Statements of Cash Flows (Unaudited) - Six Months Ended June 30, 2018 and 2017 6
     
  Notes to Condensed Consolidated Financial Statements (Unaudited) - Six Months Ended June 30, 2018 and 2017 7 - 20
     
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 21-28
     
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 28
     
ITEM 4. CONTROLS AND PROCEDURES 28
     
PART II OTHER INFORMATION  
     
ITEM 1 LEGAL PROCEEDINGS 30
     
ITEM 2 UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS 30
     
ITEM 3 DEFAULTS UPON SENIOR SECURITIES 30
     
ITEM 4 MINE SAFETY DISCLOSURES 30
     
ITEM 5 OTHER INFORMATION 30
     
ITEM 6 EXHIBITS 30
     
SIGNATURES 31

 

2
 

 

PART I – FINANCIAL INFORMATION

 

Item 1. Condensed Consolidated Financial Statements.

 

GREENPRO CAPITAL CORP.

CONDENSED CONSOLIDATED BALANCE SHEETS

AS OF JUNE 30, 2018 AND DECEMBER 31, 2017

(In U.S. dollars, except share and per share data)

 

    June 30, 2018     December 31, 2017  
    (Unaudited)        
ASSETS                
Current assets                
Cash and cash equivalents (including $163,995 and $166,610 of restricted cash as of June 30, 2018 and December 31, 2017, respectively)   $ 2,906,791     $ 1,162,394  
Accounts receivable (net of allowance of $32,273 and $76,179 as of June 30, 2018 and December 31, 2017, respectively)     192,299       345,734  
Prepaids and other current assets (includes due from related parties of $2,679 and $1,761 as of June 30, 2018 and December 31, 2017, respectively)     224,904       270,760  
Deferred costs of revenue     141,436       74,990  
Total current assets     3,465,430       1,853,878  
                 
Property and equipment, net     3,174,746       3,266,829  
Real Estate investments:                
Real estate held for sale     3,336,829       3,430,641  
Real estate held for investment, net     853,285       868,984  
Intangible assets, net     207,468       251,655  
Goodwill     1,211,863       1,211,863  
Note receivable, related party     300,000       -  
Other investments (includes investments in related parties of $301,617 and $51,613 as of June 30, 2018 and December 31, 2017, respectively)     396,029       130,457  
TOTAL ASSETS   $ 12,945,650     $ 11,014,307  
                 
LIABILITIES AND STOCKHOLDERS’ EQUITY                
Current liabilities:                
Accounts payable and accrued liabilities   $ 355,713     $ 768,994  
Current portion of loans secured by real estate     797,126       928,147  
Due to related parties     1,548,058       1,813,930  
Income tax payable     66,735       68,008  
Deferred revenue     810,400       345,000  
Derivative liabilities     523,585       -  
Total current liabilities     4,101,617       3,924,079  
                 
Long term portion of loans secured by real estate     1,746,485       1,842,840  
Total liabilities     5,848,102       5,766,919  
                 
Commitments and contingencies                
                 
Stockholders’ Equity:                
Preferred stock, $0.0001 par value; 100,000,000 shares authorized; no shares issued and outstanding     -       -  
Common stock, $0.0001 par value; 500,000,000 shares authorized; 53,769,519 and 53,233,960 shares issued and outstanding at June 30, 2018 and December 31, 2017, respectively     5,377       5,323  
Additional paid in capital     10,722,356       8,465,294  
Accumulated other comprehensive loss     (73,486 )     (40,199 )
Accumulated deficit     (3,673,880 )     (3,266,313 )
Total Greenpro Capital Corp. common shareholders’ equity     6,980,367       5,164,105  
Noncontrolling interests in consolidated subsidiaries     117,181       83,283  
                 
Total Stockholders’ equity     7,097,548       5,247,388  
                 
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY   $ 12,945,650     $ 11,014,307  

 

See accompanying notes to the condensed consolidated financial statements.

 

3
 

 

GREENPRO CAPITAL CORP.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

AND COMPREHENSIVE LOSS

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2018 AND 2017

(In U.S. dollars, except share and per share data)

(Unaudited)

 

    Three months ended June 30     Six months ended June 30,  
    2018     2017     2018     2017  
          (As Restated)           (As Restated)  
REVENUES:                                
Service revenue (including $35,745 and $12,664 of service revenue from related parties for the three months ended June 30, 2018 and 2017, respectively, and $260,816 and $253,451 of service revenue from related parties for the six months ended June 30, 2018 and 2017, respectively)   $ 615,643     $ 487,482     $ 1,314,771     $ 1,313,649  
Sale of real estate properties     146,073       -       146,073       -  
Rental revenue (including $24,973 and $29,489 of rental revenue from related parties for the three and six months ended June 30, 2017, respectively)     46,387       56,661       87,831       85,817  
Total revenues     808,103       544,143       1,548,675       1,399,466  
                                 
OPERATING COSTS AND EXPENSES:                                
Cost of service revenue (including $66,000 cost of service to related parties for the three and six months ended June 30, 2018)     (202,752 )     (93,520 )     (386,315 )     (290,544 )
Cost of real estate properties sold     (95,319 )     -       (95,319 )     -  
Cost of rental revenue     (15,879 )     (18,817 )     (39,435 )     (30,901 )
General and administrative     (845,593 )     (778,290 )     (1,639,570 )     (1,560,444 )
                                 
Total operating costs and expenses     (1,159,543 )     (890,627 )     (2,160,639 )     (1,881,889 )
                                 
LOSS FROM OPERATIONS     (351,440 )     (346,484 )     (611,964 )     (482,423 )
                                 
OTHER INCOME (EXPENSE)                                
Gain on sale of equity method investment     -       -       300,000       -  
Change in fair value of derivative liabilities     (14,996 )     -       (14,996 )     -  
Other income     22,537       -       36,541       -  
Interest expense     (41,474 )     (7,786 )     (87,703 )     (14,748 )
                                 
LOSS BEFORE INCOME TAX     (385,373 )     (354,270 )     (378,122 )     (497,171 )
Income tax (expense) benefit     25,401       (1,143 )     4,453       (13,989 )
NET LOSS     (359,972 )     (355,413 )     (373,669 )     (511,160 )
Net loss (income) attributable to noncontrolling interest     (38,496 )     14,460       (33,898 )     17,768  
                                 
NET LOSS ATTRIBUTED TO COMMON SHAREHOLDERS OF GREENPRO CAPITAL CORP.     (398,468 )     (340,953 )     (407,567 )     (493,392 )
Other comprehensive loss:                                
- Foreign currency translation income (loss)     (206,239 )     19,828       (119,763 )     23,842  
COMPREHENSIVE LOSS   $ (604,707 )   $ (321,125 )   $ (527,330 )   $ (469,550 )
                                 
NET LOSS PER SHARE, BASIC AND DILUTED   $ (0.01 )   $ (0.01 )   $ (0.01 )   $ (0.01 )
                                 
WEIGHTED AVERAGE NUMBER OF COMMON STOCK OUTSTANDING, BASIC AND DILUTED     53,339,892       53,134,942       53,287,220       52,883,811  

 

 

 

See accompanying notes to the condensed consolidated financial statements.

 

4
 

 

GREENPRO CAPITAL CORP.

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY

FOR THE SIX MONTHS ENDED JUNE 30, 2018

(In U.S. dollars, except share data)

(Unaudited)

 

   Common Stock   Additional   Accumulated Other       Non-   Total 
   Number of shares   Amount   Paid-in
Capital
   Comprehensive
Loss
   Accumulated Deficit   Controlling Interest  

Shareholders’

Equity

 
Balance as of January 1, 2018   53,233,960   $5,323   $8,465,294   $(40,199)  $(3,266,313)  $83,283   $5,247,388 
Common stock sold in public offering, net of offering costs of $956,238   535,559    54    2,257,062    -    -    -    2,257,116 
Foreign currency translation   -    -    -    (33,287)   -    -    (33,287)
Net loss   -    -    -    -    (407,567)   33,898    (373,669)
Balance as of June 30, 2018 (unaudited)   53,769,519   $5,377   $10,722,356   $(73,486)  $(3,673,880)  $117,181   $7,097,548 

 

See accompanying notes to the condensed consolidated financial statements.

 

5
 

 

GREENPRO CAPITAL CORP.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE SIX MONTHS ENDED JUNE 30, 2018 AND 2017

(In U.S. dollars)

(Unaudited)

 

    Six months ended June 30,  
    2018     2017  
          (As Restated)  
Cash flows from operating activities:                
Net loss   $ (373,669 )   $ (511,160 )
Adjustments to reconcile net loss to net cash used in operating activities:                
Depreciation and amortization     135,721       87,894  
Provision for bad debts     (43,963 )     30,881  
Write off of unconsolidated investment     1,750       -  
Gain on sale of real estate held for sale     (50,754 )     -  
Change in fair value of derivative liabilities     14,996       -  
Increase in cash surrender value on life insurance     (17,318 )     (2,204 )
Changes in operating assets and liabilities:                
Accounts receivable, net     197,383       (40,433 )
Prepaids and other current assets     46,589       (408,521 )
Deferred costs of revenue     (66,446 )     23,068  
Accounts payable and accrued liabilities     (376,578 )     (177,037 )
Income tax payable     (3,340 )     6,076  
Deferred revenue     465,400       140,000  
Net cash used in operating activities     (70,229 )     (851,436 )
                 
Cash flows from investing activities:                
Purchase of property and equipment     (34,422 )     (38,444 )
Purchase of intangible assets     (1,081 )     -  
Proceeds from real estate held for sale     144,566       -  
Issuance of note receivable to related party     (300,000 )        
Purchase of investment in related party     (250,000 )     (203,250 )
Cash acquired on acquisition of business     -       145,354  
Net cash used in investing activities     (440,937 )     (96,340 )
                 
Cash flows from financing activities:                
Proceeds from shares issued for cash     2,765,705       984,864  
Principal payments of loans secured by real estate     (207,555 )     (6,931 )
Advance from related parties     -       158,179  
Repayment of advances from related parties     (301,484 )     (22,266 )
Net cash provided by financing activities     2,256,666       1,113,846  
                 
Effect of exchange rate changes in cash and cash equivalents     (1,103 )     115,206  
NET CHANGE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH     1,744,397       281,276  
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, BEGINNING OF PERIOD     1,162,394       1,021,351  
                 
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, END OF PERIOD   $ 2,906,791     $ 1,302,627  
                 
SUPPLEMENTAL CASH FLOW INFORMATION:                
Cash paid for income tax   $ 1,440     $ -  
Cash paid for interest   $ 75,152     $ 6,962  
                 
SUPPLEMENTAL NON-CASH INVESTING AND FINANCING ACTIVITIES:                
Fair value of warrants recorded as derivative liabilities included in offering costs   $ 508,589     $ -  

 

See accompanying notes to the condensed consolidated financial statements.

 

6
 

 

GREENPRO CAPITAL CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED JUNE 30, 2018 AND 2018

(In U.S. dollars, except share and per share data)

(Unaudited)

 

NOTE 1 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Greenpro Capital Corp. (the “Company” or “GRNQ”) was incorporated on July 19, 2013 in the state of Nevada. On May 6, 2015, the Company changed its name to Greenpro Capital Corp. The Company currently provides a wide range of business consulting and corporate advisory services including cross-border listing advisory services, tax planning, advisory and transaction services, record management services, and accounting outsourcing services. Our focus is on companies located in Asia and Southeast Asia including Hong Kong, Malaysia, China, Thailand, and Singapore. As part of our business consulting and corporate advisory business segment, Greenpro Venture Capital Limited provides a business incubator for start-up and high growth companies during their critical growth period, and focuses on investments in select start-up and high growth potential companies. In addition to our business consulting and corporate advisory business segment, we operate another business segment that focuses on the acquisition and rental of real estate properties held for investment and the acquisition and sale of real estate properties held for sale.

 

Basis of presentation

 

The accompanying unaudited condensed consolidated financial statements as of and for the six months ended June 30, 2018 and 2017, have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) that permit reduced disclosure for interim periods. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) have been condensed or omitted. 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 period ended June 30, 2018 are not necessarily indicative of the results that may be expected for the year ending December 31, 2018. The Condensed Consolidated Balance Sheet information as of December 31, 2017 was derived from the Company’s audited Consolidated Financial Statements as of and for the year ended December 31, 2017 included in the Company’s Annual Report on Form 10-K filed with the SEC on April 13, 2018. These financial statements should be read in conjunction with that report.

 

The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries and majority-owned subsidiaries over which the Company exercises control, and entities for which the Company is the primary beneficiary. Intercompany transactions and balances were eliminated in consolidation.

 

At June 30, 2018 and December 31, 2017, the consolidated financial statements include noncontrolling interests related to the Company’s ownership of 60% of Forward Win International Limited, Yabez (Hong Kong) Company Limited, Greenpro Global Capital Sdn Bhd (former known as Greenpro Wealthon Sdn Bhd), Billion Sino Holdings Limited and Parich Wealth Management Limited, and the Company’s ownership of 51% of Greenpro Capital Village Sdn Bhd and Greenpro Family Office Limited.

 

Going Concern

 

The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. During the six months ended June 30, 2018, the Company incurred a loss from operations of $611,964 and used cash in operations of $70,229, and at June 30, 2018, the Company had a working capital deficit of $636,187. These factors raise substantial doubt about the Company’s ability to continue as a going concern within one year of the date that the financial statements are issued. In addition, the Company’s independent registered public accounting firm, in its report on the Company’s December 31, 2017 financial statements, has expressed substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

 

7
 

 

The Company’s ability to continue as a going concern is dependent upon improving its profitability and the continuing financial support from its shareholders. Management believes the existing shareholders or external financing will provide the additional cash to meet the Company’s obligations as they become due. On June 12, 2018, the Company sold 535,559 shares of its common stock in an underwritten public offering at $6.00 per share for net proceeds of approximately $2.7 million, after deducting expenses of the offering. On July 18, 2018, the Company sold 906,666 shares of its common stock at $7.50 per share in a private placement for net proceeds of approximately $6.7 million. Despite the amount of funds that we have raised, no assurance can be given that any future financing, if needed, will be available or, if available, that it will be on terms that are satisfactory to the Company. Even if the Company is able to obtain additional financing, if needed, it may contain undue restrictions on its operations, in the case of debt financing, or cause substantial dilution for its stockholders, in the case of equity financing.

 

Use of estimates

 

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions relating to the reporting of assets and liabilities and the disclosure of contingent liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Significant accounting estimates include certain assumptions related to, among others, the allowance for doubtful accounts receivable, impairment analysis of real estate assets and other long term assets including goodwill, valuation allowance on deferred income taxes, the assumptions used in the valuation of the derivative liability, and the accrual of potential liabilities. Actual results may differ from these estimates.

 

Cash, cash equivalents, and restricted cash

 

Cash, cash equivalents, and restricted cash were denominated in the following currencies at:

 

   As of
June 30, 2018
   As of
December 31, 2017
 
   (Unaudited)     
Cash, cash equivalents, and restricted cash          
Denominated in United States Dollars  $1,687,156   $283,674 
Denominated in Hong Kong dollars   975,313    568,008 
Denominated in Chinese Renminbi   171,854    239,502 
Denominated in Malaysian Ringgit   72,468    71,210 
Cash, cash equivalents, and restricted cash  $2,906,791   $1,162,394 

 

At June 30, 2018 and December 31, 2017, cash included funds held by employees of $8,179 and $32,673, respectively, and was held to facilitate payment of expenses in local currencies and to facilitate third-party online payment platforms in which the Company had not set up corporate accounts (WeChat Pay and Alipay).

 

Revenue recognition

 

Effective January 1, 2018, the Company adopted the guidance of Accounting Standards Codification (ASC) 606, Revenue from Contracts. The implementation of ASC 606 did not have a material impact on the Company’s consolidated financial statements. ASC 606 creates a five-step model that requires entities to exercise judgment when considering the terms of contracts, which includes (1) identifying the contracts or agreements with a customer, (2) identifying our performance obligations in the contract or agreement, (3) determining the transaction price, (4) allocating the transaction price to the separate performance obligations, and (5) recognizing revenue as each performance obligation is satisfied. The Company only applies the five-step model to contracts when it is probable that the Company will collect the consideration it is entitled to in exchange for the services it transfers to its clients.

 

The Company’s revenue consists of revenue from providing business consulting and corporate advisory services (“service revenue”), revenue from the sale of real estate properties, and revenue from the rental of real estate properties.

 

8
 

 

Revenue from services

 

For certain of our service contracts providing assistance to clients in capital market listings (“Listing services”), our services provided are considered to be one performance obligation. Revenue and expenses are deferred until the performance obligation is complete and collectability of the consideration is probable. For service contracts where the performance obligation is not completed, deferred costs of revenue are recorded as incurred and deferred revenue is recorded for any payments received on such yet to be completed performance obligations. On an ongoing basis, management monitors these contracts for profitability and when needed may record a liability if a determination is made that costs will exceed revenue.

 

For other services such as company secretarial, accounting, financial analysis and related services (“Non-Listing services”), the Company’s performance obligations are satisfied, and the related revenue is recognized, as services are rendered. For contracts in which we act as an agent, the Company reports revenue net of expenses paid.

 

The Company offers no discounts, rebates, rights of return, or other allowances to clients which would result in the establishment of reserves against service revenue. Additionally, to date, the Company has not incurred incremental costs in obtaining a client contract.

 

Revenue from the sale of real estate properties

 

Effective January 1, 2018, the Company adopted the guidance of ASC 610-20, Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets (“ASC 610-20”), which applies to sales or transfers to noncustomers of nonfinancial assets. Generally, the Company’s sales of its real estate properties is considered a sale of a nonfinancial asset. Under ASC 610-20, the Company derecognizes the asset and recognizes a gain or loss on the sale of the real estate when control of the underlying asset transfers to the buyer. During the three and six months ended June 30, 2018, the Company recognized revenue from the sale of one unit of its real estate property held for sale. During the three and six months ended June 30, 2017, there were no sales of real estate. The adoption of ASU 610-20 had no impact on the Company’s consolidated financial statements.

 

Revenue from the rental of real estate properties

 

Rental revenue represents lease rental income from the Company’s tenants. The tenants pay monthly in accordance with lease agreements and the Company recognizes the income ratably over the lease term as this is the most representative of the pattern in which the benefit is expected to be derived from the underlying asset.

 

Cost of revenues

 

Cost of service revenue primarily consists of employee compensation and related payroll benefits, company formation costs, and other professional fees directly attributable to the services rendered.

 

Cost of real estate properties sold primarily consists of the purchase price of property, legal fees, improvement costs to the building structure, and other acquisition costs. Selling and advertising costs are expensed as incurred.

 

Cost of rental revenue primarily includes costs associated with repairs and maintenance, property insurance, depreciation and other related administrative costs. Property management fees and utility expenses are paid directly by tenants.

 

The following table provides information about disaggregated revenue based on revenue by service lines and revenue by geographic area:

 

   Three Months Ended June 30, 
   2018   2017 
   (Unaudited)   (Unaudited,
As Restated)
 
Revenue by service lines:          
Corporate advisory – Non-Listing services  $615,643   $277,482 
Corporate advisory – Listing services   -    210,000 
Rental of real estate properties   46,387    56,661 
Sale of real estate properties   146,073    - 
Total revenue  $808,103   $544,143 

 

9
 

 

    Three Months Ended June 30,  
    2018     2017  
    (Unaudited)     (Unaudited,
As Restated)
 
Revenue by geographic area:                
Hong Kong   $ 577,571     $ 386,400  
Malaysia     173,551       136,200  
China     56,981       21,543  
Total revenue   $ 808,103     $ 544,143  

 

   Six Months Ended June 30, 
   2018   2017 
   (Unaudited)   (Unaudited,
As Restated)
 
Revenue by service lines:          
Corporate advisory – Non-Listing services  $1,114,771   $1,103,649 
Corporate advisory – Listing services   200,000    210,000 
Rental of real estate properties   87,831    85,817 
Sale of real estate properties   146,073    - 
Total revenue  $1,548,675   $1,399,466 

 

   Six Months Ended June 30, 
   2018   2017 
   (Unaudited)   (Unaudited,
As Restated)
 
Revenue by geographic area:          
Hong Kong  $1,116,518   $993,915 
Malaysia   325,213    350,862 
China   106,944    54,689 
Total revenue  $1,548,675   $1,399,466 

 

Our contract balances include deferred costs of revenue and deferred revenue.

 

Deferred Revenue

 

For service contracts where the performance obligation is not completed, deferred revenue is recorded for any payments received in advance of the performance obligation. Changes in deferred revenue were as follows:

 

   Six Months Ended
June 30, 2018
 
   (Unaudited) 
Deferred revenue, January 1, 2018  $345,000 
New contract liabilities   665,400 
Performance obligations satisfied   (200,000)
Deferred revenue, June 30, 2018  $810,400 

 

10
 

 

 

Deferred Costs of Revenue

 

For service contracts where the performance obligation is not completed, deferred costs of revenue are recorded for any costs incurred in advance of the performance obligation.

 

Deferred revenue and deferred costs of revenue at June 30, 2018 and December 31, 2017 are classified as current assets or current liabilities and totaled:

 

   As of
June 30, 2018
   As of
December 31, 2017
 
    (Unaudited)      
Deferred revenue  $810,400   $345,000 
Deferred costs of revenue  $141,436   $74,990 

 

Impairment of long-lived assets

 

Long-lived assets primarily include real estate held for investment, property and equipment, and intangible assets. In accordance with the provision of ASC 360, the Company generally conducts its annual impairment evaluation of its long-lived assets in the fourth quarter of each year, or more frequently if indicators of impairment exist, such as a significant sustained change in the business climate. The recoverability of long-lived assets is measured at the reporting unit level. If the total of the expected undiscounted future net cash flows is less than the carrying amount of the asset, a loss is recognized for the difference between the fair value and carrying amount of the asset. As at June 30, 2018, the Company determined there were no indicators of impairment of its real estate held for investment, its property and equipment, or its intangible assets. In addition, for real estate held for sale, an impairment loss is the adjustment to fair value less estimated cost to dispose of the asset.

 

Goodwill

 

Goodwill is the excess of cost of an acquired entity over the fair value of amounts assigned to assets acquired and liabilities assumed in a business combination. Under the guidance of ASC 350, goodwill is not amortized, rather it is tested for impairment annually, and will be tested for impairment between annual tests if an event occurs or circumstances change that would indicate the carrying amount may be impaired. An impairment loss generally would be recognized when the carrying amount of the reporting unit’s net assets exceeds the estimated fair value of the reporting unit and would be measured as the excess carrying value of goodwill over the derived fair value of goodwill. The Company’s policy is to perform its annual impairment testing for its reporting units on December 31, of each fiscal year.

 

Derivative Financial Instruments

 

The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the statements of operations. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument could be required within 12 months of the balance sheet date. At each reporting date, the Company reviews its convertible securities to determine that their classification is appropriate.

 

Income (loss) per Share

 

Basic income (loss) per share is computed by dividing the net income (loss) available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted net loss per share is calculated by dividing the net loss by the weighted average number of common shares outstanding during the period plus any potentially dilutive shares related to the issuance of shares from stock warrants. For the three and six months ended June 30, 2018, the dilutive impact of warrants exercisable into 53,556 shares of common stock have been excluded because their impact on the loss per share is anti-dilutive. For the three and six months ended June 30, 2017, there were no potentially dilutive shares outstanding.

 

11
 

 

 

Foreign currency translation

 

The reporting currency of the Company is the United States Dollars (“US$”) and the accompanying condensed consolidated financial statements have been expressed in US$. In addition, the Company’s operating subsidiaries maintain their books and records in their respective local currency, which consists of the Malaysian Ringgit (“MYR”), Chinese Renminbi (“RMB”), and Hong Kong Dollars (“HK$”), which is also the respective functional currency of the subsidiaries.

 

In general, for consolidation purposes, assets and liabilities of the Company’s subsidiaries whose functional currency is not the US$ are translated into US$ using the exchange rate on the balance sheet date. Revenues and expenses are translated at average rates prevailing during the period. The gains and losses resulting from translation of financial statements of a foreign subsidiary are recorded as a separate component of accumulated other comprehensive loss within stockholders’ equity.

 

Translation of amounts from the local currencies of the Company into US$ has been made at the following exchange rates for the respective periods:

 

   As of and for the six months ended
June 30,
 
   2018   2017 
Period-end MYR : US$1 exchange rate   4.04    4.29 
Period-average MYR : US$1 exchange rate   3.94    4.37 
Period-end RMB : US$1 exchange rate   6.62    6.78 
Period-average RMB : US$1 exchange rate   6.38    6.85 
Period-end / average HK$ : US$1 exchange rate   7.75    7.75 

 

Fair value of financial instruments

 

The Company follows the guidance of ASC 820-10, “Fair Value Measurements and Disclosures” (“ASC 820-10”), with respect to financial assets and liabilities that are measured at fair value. ASC 820-10 establishes a three-tier fair value hierarchy that prioritizes the inputs used in measuring fair value as follows:

 

Level 1 : Observable inputs such as quoted prices in active markets;
   
Level 2 : Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and
   
Level 3 : Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions

 

As of June 30, 2018, the Company’s balance sheet included the fair value of derivative liabilities of $523,585 which were based on Level 2 measurements.

 

The Company believes the carrying amount reported in the balance sheet for cash and cash equivalents, accounts receivable, other investments, notes receivable, accounts payable and accrued liabilities, deferred costs of revenue, deferred revenue, and due to related parties, approximate their fair values because of the short-term nature of these financial instruments.

 

Concentrations of risks

 

For the three and six months ended June 30, 2018 and 2017, no customer accounted for 10% or more of revenues or accounts receivable at quarter-end.

 

12
 

 

For the three and six months ended June 30, 2018 and 2017, no vendor accounted for 10% or more of the Company’s cost of revenues, or accounts payable at quarter-end.

 

Exchange rate risk

 

Foreign currency exchange rate movements create a degree of risk by affecting the U.S. dollar value of sales made and costs incurred in foreign currencies. Additionally, we have balance sheet positions denominated in foreign currencies, thereby creating exposure to movements in exchange rates. The Company does not hold any derivative instruments and does not attempt to mitigate its foreign currency exposure through the acquisition of any speculative or leveraged financial instruments.

 

Economic and political risks

 

Substantially all of the Company’s services are conducted in Malaysia, the People’s Republic of China (“PRC”) and the Asian region. Among other risks, the Company’s operations in Malaysia are subject to the risks of restrictions on transfer of funds; export duties, quotas, and embargoes; domestic and international customs and tariffs; changing taxation policies; foreign exchange restrictions; and political conditions and governmental regulations in Malaysia.

 

The Company’s operations in the PRC are subject to special considerations and significant risks not typically associated with companies in North America and Western Europe. These include risks associated with, among others, the political, economic and legal environment and foreign currency exchange. The Company’s results may be adversely affected by changes in the political conditions in the PRC, and by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion, remittances abroad, and rates and methods of taxation.

 

Recent accounting pronouncements

 

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). This update will require the recognition of a right-of-use asset and a corresponding lease liability, initially measured at the present value of the lease payments, for all leases with terms longer than 12 months. For operating leases, the asset and liability will be expensed over the lease term on a straight-line basis, with all cash flows included in the operating section of the statement of cash flows. For finance leases, interest on the lease liability will be recognized separately from the amortization of the right-of-use asset in the statement of comprehensive income and the repayment of the principal portion of the lease liability will be classified as a financing activity while the interest component will be included in the operating section of the statement of cash flows. ASU 2016-02 is effective for annual and interim reporting periods beginning after December 15, 2018 for public business entities. Early adoption is permitted. Upon adoption, leases will be recognized and measured at the beginning of the earliest period presented using a modified retrospective approach. The Company is currently evaluating the impact of the adoption of ASU 2016-02 on its financial statements and related disclosures.

 

In November 2016, the FASB issued Accounting Standards Update No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash, which requires companies to include amounts generally described as restricted cash and restricted cash equivalents in cash and cash equivalents when reconciling beginning-of-period and end-of-period total amounts shown on the statements of cash flows. The Company adopted the guidance of ASU No. 2016-18 on January 1, 2018 and there was no effect to the Company’s consolidated financial statements.

 

Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company’s present or future financial statements.

 

13
 

 

NOTE 2 – RESTATEMENT OF PREVIOUSLY ISSUED UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

The financial statements for the six months ended June 30, 2017 have been restated. On March 15, 2018, our management determined the following:

 

  that the Company’s method of recognizing revenue on service contracts was erroneously accounted for when billed.
  that the Company erroneously used an incorrect exchange rate in the translation of fixed assets into the Company’s reporting currency.
  that the Company’s accounting for the acquisition of Yabez (Hong Kong) Company Limited in 2015 and for the acquisition of Billion Sino Holdings Limited were erroneously recorded using the partial goodwill method.
  that the Company erroneously recorded goodwill on the acquisition of the assets of Greenpro Credit Limited (formerly Gushen Credit Limited), which was an asset acquisition.
  that the Company erroneously did not record an allowance for uncollectible accounts receivable and did not write off long-outstanding receivables as bad debts at June 30, 2017 and December 31, 2016.

 

The effects on the previously issued financial statements are as follows:

 

(A) In 2017, the Company corrected its method of recognizing revenue from certain service contracts to use the performance completion method. Previously the Company had recognized revenues upon billings. The Company has restated its consolidated financial statements as of and for the six months ended June 30, 2017 to reflect the correction of the error. At June 30, 2017 and for the six months ended June 30, 2017, the restatement resulted in the Company recording $335,423 decrease in accounts receivable, $52,139 of deferred costs of revenue, $355,000 of deferred revenue, $185,216 increase in accumulated deficit, $430,000 of decreased service revenue, $23,068 of additional costs of service revenue, and an increase in net loss of $453,068. For the three months ended June 30, 2017, the restatement resulted in the Company recording $510,000 of decreased service revenue, $29,477 of additional costs of service revenue, $1,257 of additional general and administrative expenses, and an increase in net loss of $540,734.
   
(B)

At December 31, 2015, the Company erroneously calculated the cost of real estate held for investment due to an incorrect exchange rate used for translation of amounts from the local currencies of the Company’s operating subsidiaries into the reporting currency of the Company. In preparing its financial statements for the six months ended June 30, 2017, the Company determined that the incorrect exchange rate was used and corrected it. The Company has restated its consolidated financial statements as of June 30, 2017 to reflect the correction of the error and real estate held for investment was decreased by $173,888 and accumulated other comprehensive income was decreased by $175,833.

 

In addition, the Company erroneously calculated the noncontrolling interest of Yabez (Hong Kong) Company Limited for the year ended December 31, 2015. The cumulative effect of the correction of the error was to decrease the accumulated deficit and increase the noncontrolling interest by $3,088 at June 30, 2017. There was no effect on net loss for 2017.

   
(C)

In September 2015, the Company acquired Yabez (Hong Kong) Company Limited and calculated goodwill using the partial goodwill method. The Company has restated its consolidated financial statements as of and for the six months ended June 30, 2017 to reflect the full goodwill method as required by US GAAP. The cumulative effect of the correction of the error was to increase goodwill by $174,001 and noncontrolling interest by $174,001 at June 30, 2017. There was no effect on net loss for 2017.

 

In April 2017, the Company acquired Billion Sino Holdings Limited and calculated goodwill using the partial goodwill method. The Company has restated its consolidated financial statements as of and for the six months ended June 30, 2017 to reflect the full goodwill method as required by US GAAP. The cumulative effect of the correction of the error was to increase goodwill by $179,162, decrease additional paid-in capital by $340,645 and increase noncontrolling interest by $519,807 at June 30, 2017. There was no effect on net loss for 2017.

 

 

14
 

 

   In April 2017, the Company acquired assets in Greenpro Credit Limited (formerly Gushen Credit Limited). The acquisition was initially treated as a business combination instead of an asset acquisition. The Company restated its consolidated financial statements as of and for the six months ended June 30, 2017 to reflect the elimination of goodwill. The cumulative effect of the correction of the error was to decrease goodwill by $93,566 and increase general and administrative expenses and net loss the three and six months ended June 30, 2017 by $93,566.
   
(D) In preparing its financial statements for the six months ended June 30, 2017, the Company erroneously did not record an allowance for uncollectible accounts and did not write off long-outstanding receivables as bad debts. The Company has restated its consolidated financial statements as of and for the six months ended June 30, 2017 to decrease accounts receivable by $45,423, increase the allowance for uncollectible accounts by $82,037, increase accumulated deficit by $54,799, increase bad debt expense by $41,781 and increase provision expense by $30,881.

 

The following table presents the effect of the restatements on the Company’s previously issued consolidated balance sheet:

 

    As of June 30, 2017 (Unaudited)  
    As Previously Reported     Adjustments     Notes   As Restated  
                       
Accounts receivable, net   $ 706,973     $ (417,460 )   A,D   $ 289,513  
Deferred costs related to revenue     -       52,139     A     52,139  
Real estate held for investment, net     1,007,706       (173,888 )   B     833,818  
Goodwill     2,686,650       259,587     C     2,946,237  
Deferred revenue     -       355,000     A     355,000  
Additional paid in capital     8,803,996       (338,702 )   B,C     8,465,294  
Accumulated other comprehensive income (loss)     87,858       (175,834 )   B     (87,976 )
Accumulated deficit     (664,349 )     (810,795 )   A,B,C,D     (1,475,144 )
Noncontrolling interests in consolidated subsidiaries     178,398       690,719     B, C     869,117  

 

The following table presents the effect of the restatements on the Company’s previously issued consolidated statements of operations and comprehensive loss:

 

    For the three months ended June 30, 2017 (Unaudited)  
    As
Previously
Reported
    Adjustments     Notes   As Restated  
                       
Service revenue   $ 997,482     $ (510,000 )   A   $ 487,482  
Cost of service revenue     (122,997 )     29,477     A     (93,520 )
General and administrative     (683,467 )     (94,823 )   C,D     (778,290 )
Net income (loss)     219,932       (575,345 )   A,C,D     (355,413 )
Net income (loss) attribute to common shareholders     234,391       (575,345 )         (340,953 )
Foreign currency translation income (loss)     (2,172 )     22,000     B     19,828  
Comprehensive income (loss)     232,219       (553,345 )         (321,125 )
                             
Net loss per share, basic and diluted   $ (0.00 )   $ (0.01 )       $ (0.01 )

 

15
 

 

   For the six months ended June 30, 2017 (Unaudited) 
   As
Previously
Reported
   Adjustments   Notes  As Restated 
                
Service revenue  $1,743,649   $(430,000)  A  $1,313,649 
Cost of service revenue   (267,476)   (23,068)  A   (290,544)
General and administrative   (1,394,216)   (166,228)  C,D   (1,560,444)
Net income (loss)   108,136    (619,296)  A,C,D   (511,160)
Net income (loss) attribute to common shareholders   125,904    (619,296)      (493,392)
Foreign currency translation income (loss)   (8,606)   32,448   B   23,842 
Comprehensive income (loss)   117,298    (586,848)      (469,550)
                   
Net loss per share, basic and diluted  $(0.00)  $(0.01)     $(0.01)

 

The following table presents the effect of the restatements on the Company’s previously issued consolidated statement of cash flows:

 

   For the six months ended June 30, 2017 (Unaudited) 
   As Previously Reported   Adjustments   Notes  As Restated 
                
Cash flows from operating activities:                  
Net income (loss)  $108,136   $(619,296)  A,C,D  $(511,160)
Provision for bad debt   -    30,881   D   30,881 
Changes in operating assets and liabilities:                  
Accounts receivable, net   (372,214)   331,781   A   (40,433)
Deferred costs of revenue   -    23,068   A   23,068 
Accounts payable and accrued liabilities   (270,603)   93,566   C   (177,037)
Deferred revenue   -    140,000   A   140,000 

 

The information herein amends and supersedes the information contained in our Quarterly Report on Form 10-Q for the six months ended June 30, 2017. The affected financial statements and related financial information contained in our previously filed reports for those periods should no longer be relied upon and should be read only in conjunction with the Unaudited financial information set forth herein.

 

NOTE 3 – NOTE RECEIVABLE, RELATED PARTY

 

On June 16, 2018, the Company entered into a loan agreement with Leader Financial Asset Management Ltd. (“Leader Financial”) and loaned Leader Financial $300,000. The loan is unsecured, bears interest at 6% per annum, and is due on June 15, 2020. The Managing Director of Leader Financial is a consultant to the Company, and is also a director of Aquarius Protection Fund, a shareholder in the Company. Leader Financial is also the investment manager of Aquarius Protection Fund.

 

NOTE 4 – OTHER INVESTMENTS

 

   As of   As of 
   June 30, 2018   December 31, 2017 
    (Unaudited)      
(A) Investment in related parties  $301,617   $51,613 
(B) Investments in unconsolidated entities   1,750    3,500 
Cash surrender value of life insurance, net of policy loan   92,662    56,058 
Total  $396,029   $130,457 

 

(A)

At June 30, 2018 and December 31, 2017, the Company had an investment in Greenpro Trust Limited (the “Trust”) of $51,613, which is approximately 11.76% of the equity interest of the Trust and is recorded at cost, which approximates fair value. The Trust is a trust company organized in Hong Kong and provides trust services to high net worth individuals and families. Mr. Lee Chong Kuang and Mr. Loke Che Chan, Gilbert are common directors of the Trust and the Company.

 

16
 

 

  At June 30, 2018, the Company had an investment in Acorn Group Holdings Limited (“Acorn”) of $250,000, which approximates a 2% equity interest of Acorn and is recorded at cost, which approximates fair value. Acorn is a company incorporated in the Cayman Islands that provides pension and administrative services. It was determined that the Company can significantly influence Acorn based on common business relationships.
   
(B) At June 30, 2018, the Company had an investment in an unconsolidated entity for $1,750. The Company’s ownership was less than 5% and the investment is recorded at cost, which approximates fair value. At December 31, 2017, the Company had investments in two unconsolidated entities aggregating $3,500.

 

NOTE 5 - DERIVATIVE LIABILITIES

 

On June 12, 2018, warrants exercisable into 53,556 shares of the Company’s common stock were issued as placement agent fees related to the Company’s sale of common stock (See Note 6). The strike price of warrants issued by the Company is denominated in US dollars, a currency other than the Company’s functional currencies, the HK$, RMB, and MYR. As a result, the warrants are not considered indexed to the Company’s own stock, and the Company characterized the fair value of the warrants as a derivative liability upon issuance. The derivative liability is re-measured at the end of every reporting period with the change in value reported in the statement of operations.

 

The derivative liabilities were valued using the Black-Scholes-Merton valuation model with the following assumptions:

 

   As of   As of 
   June 30, 2018   June 12, 2018  
    (Unaudited)    (issuance) 
Risk-free interest rate  $3.0%  $2.9%
Expected volatility   196%   165%
Expected life (in years)   5 years    5 years 
Expected dividend yield   0.00%   0.00%
Fair Value of warrants  $523,585   $508,589 

 

The risk-free interest rate is based on the yield available on U.S. Treasury securities. The Company estimates volatility based on the historical volatility if its common stock. The expected life of the warrants is based on the expiration date of the warrants. The expected dividend yield was based on the fact that the Company has not paid dividends to common shareholders in the past and does not expect to pay dividends to common shareholders in the future.

 

NOTE 6 - DUE TO RELATED PARTIES

 

    As of     As of  
   

June 30, 2018

    December 31, 2017  
    (Unaudited)        
Due to noncontrolling interests   $ 1,332,273      $ 1,617,241  
Due to shareholders     101,113       3,993  
Due to directors     3,745       85,212  
Due to related companies     110,927       107,484  
Total   $ 1,548,058     $ 1,813,930  

 

At June 30, 2018 and December 31, 2017, $1,235,097 and $1,441,548, respectively, was due to the noncontrolling interest in Forward Win International Limited, and is unsecured, bears no interest, and is payable upon demand. At June 30, 2018 and December 31, 2017, $97,176 and $175,693, respectively, was due to the noncontrolling interest in BSHL and is unsecured, bears no interest, and is payable upon demand.

 

17
 

 

Due to shareholders, directors, and related companies represents expenses paid by the related companies or shareholder or director to third parties on behalf of the Company, are non-interest bearing, and are due on demand.

 

NOTE 7 – STOCKHOLDERS’ EQUITY

 

In June 2018, the Company completed an underwritten public offering of 535,559 shares of the Company’s common stock at a price of $6.00 per share. The net proceeds to the Company from the offering were $2,765,705, after deducting underwriting commissions and offering expenses payable by the Company of $447,649. In addition, warrants issued to the placement agent with a fair value of $508,589 were included with the offering costs.

 

NOTE 8 - RELATED PARTY TRANSACTIONS

 

 

    For the six months ended June 30,  
    2018     2017  
Revenue from related parties is comprised of the following:                
Service revenue                
- Related party B   $ 52,150     $ 163,400  
- Related party C     -       90,051  
- Related party D     208,666       -  
Total   $ 260,816     $ 253,451  
                 
Rental revenue                
- Related party A   $ -     $ 3,484  
- Related party C     -       26,005  
Total   $ -     $ 29,489  
                 
Cost of service revenue                
- Related party E   $ 66,000     $ -  
Total   $ 66,000     $ -  

 

Related party A is under common control of Mr. Loke Che Chan, Gilbert, a director of the Company.

 

Related party B represent companies where Greenpro owns a certain percentage of their company shares.

 

Related party C represent companies that we have determined that we can significantly influence based on our common business relationships.

 

Related party D represents companies whose CEO is a consultant to the Company, and who is also a director of Aquarius Protection Fund, a shareholder in the Company.

 

Related party E represent a family member of Mr. Loke Che Chan, Gilbert, a director of the Company.

 

NOTE 9 - SEGMENT INFORMATION

 

ASC 280, “Segment Reporting” establishes standards for reporting information about operating segments on a basis consistent with the Company’s internal organization structure as well as information about services categories, business segments and major customers in financial statements. The Company has two reportable segments that are based on the following business units: service business and real estate business. In accordance with the “Segment Reporting” Topic of the ASC, the Company’s chief operating decision maker has been identified as the Chief Executive Officer and President, who reviews operating results to make decisions about allocating resources and assessing performance for the entire Company. Existing guidance, which is based on a management approach to segment reporting, establishes requirements to report selected segment information quarterly and to report annually entity-wide disclosures about products and services, major customers, and the countries in which the entity holds material assets and reports revenue. All material operating units qualify for aggregation under “Segment Reporting” due to their similar customer base and similarities in: economic characteristics; nature of products and services; and procurement, manufacturing and distribution processes. The Company operates two reportable business segments:

 

18
 

 

Service business – provision of corporate advisory and business solution services
   
Real estate business – leasing and trading of commercial real estate properties in Hong Kong and Malaysia

 

The Company had no inter-segment sales for the periods presented. Summarized financial information concerning the Company’s reportable segments is shown as below:

 

(a) By Categories

 

   For the six months ended June 30, 2018 (Unaudited) 
   Real estate business   Service business   Corporate   Total 
                 
Revenues  $233,904   $1,314,771   $-   $1,548,675 
Cost of revenues   (134,754)   (338,315)   (48,000)   (521,069)
Depreciation and amortization   16,873    110,686    8,162    135,721 
Net income (loss)   79,283    (448,630)   (4,322)   (373,669)
                     
Total assets   3,420,938    6,952,628    2,572,084    12,945,650 
Capital expenditures for long-lived assets  $-   $35,503   $248,250   $283,753 

 

 

   For the six months ended June 30, 2017 (Unaudited, as Restated) 
   Real estate business   Service business   Corporate   Total 
                 
Revenues  $85,817   $1,313,649   $-   $1,399,466 
Cost of revenues   (30,901)   (290,544)   -    (321,445)
Depreciation and amortization   4,271    83,623    -    87,894 
Net income (loss)   18,153    (528,686)   (627)   (511,160)
                     
Total assets   3,792,530    6,650,490    235,622    10,678,642 
Capital expenditures for long-lived assets  $-   $38,444   $-   $38,444 

 

 

(b) By Geography*

 

    For the six months ended June 30, 2018 (Unaudited)  
    Hong Kong     Malaysia     China     Total  
                         
Revenues   $ 1,116,518     $ 325,213     $ 106,944     $ 1,548,675  
Cost of revenues     (360,170 )     (153,155 )     (7,744 )     (521,069 )
Depreciation and amortization     50,250       17,693       67,778       135,721  
Net income (loss)     (172,789 )     (34,764 )     (166,116 )     (373,669 )
                                 
Total assets     8,363,763       1,142,819       3,439,068       12,945,650  
Capital expenditures for long-lived assets   $ 249,331     $ (5 )   $ 34,427     $ 283,753  

 

19
 

 

   For the six months ended June 30, 2017 (Unaudited, as Restated) 
   Hong Kong   Malaysia   China   Total 
                 
Revenues  $993,915   $350,862   $54,689   $1,399,466 
Cost of revenues   (209,282)   (112,163)   -    (321,445)
Depreciation and amortization   39,061    15,557    33,276    87,894 
Net income (loss)   (423,696)   21,907    (109,371)   (511,160)
                     
Total assets   7,107,405    1,297,552    2,273,685    10,678,642 
Capital expenditures for long-lived assets  $16,690   $12,087   $9,667   $38,444 

 

*Revenues and costs are attributed to countries based on the location of customers.

 

NOTE 10 – SUBSEQUENT EVENTS

 

On July 18, 2018, the Company issued 906,666 shares of the Company’s common stock at a price of $7.50 per share. The net proceeds to the Company after deducting underwriting commissions were approximately $6.7 million.

 

On July 3, 2018, the Company acquired 9.74% of KSP Holding Group Company Limited (“KSPH”) for cash consideration of $75,000. On July 31, 2018, the Company acquired 39.26% of KSPH in exchange for 38,524 shares of the Company’s common stock initially valued at $7.50 per share, or an aggregate of $288,930. At July 31, 2018, the Company owns 49% of KSPH. KSPH is incorporated in Thailand and provides accounting, auditing and consulting services in Thailand. On July 31, 2018, the Company also issued 578 shares of its common stock to advisors as a fee for the acquisition.

  

20
 

 

Item 2. Management’s Discussion And Analysis Of Financial Condition And Results Of Operations

 

The information contained in this Form 10-Q is intended to update the information contained in our Annual Report on Form 10-K for the year ended December 31, 2017 filed with the Securities and Exchange Commission on April 13, 2018 (the “Form 10-K”) and presumes that readers have access to, and will have read, the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and other information contained in such Form 10-K. The following discussion and analysis also should be read together with our financial statements and the notes to the financial statements included elsewhere in this Form 10-Q.

 

The following discussion contains certain statements that may be deemed “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements appear in a number of places in this Report, including, without limitation, “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” These statements are not guarantees of future performance and involve risks, uncertainties and requirements that are difficult to predict or are beyond our control. Forward-looking statements speak only as of the date of this quarterly report. You should not put undue reliance on any forward-looking statements. We strongly encourage investors to carefully read the factors described in our Form 10-K in the section entitled “Risk Factors” for a description of certain risks that could, among other things, cause actual results to differ from these forward-looking statements. We assume no responsibility to update the forward-looking statements contained in this quarterly report on Form 10-Q. The following should also be read in conjunction with the unaudited Financial Statements and notes thereto that appear elsewhere in this report.

 

Company Overview

 

Greenpro Capital Corp. (the “Company” or “Greenpro”), was incorporated in the State of Nevada on July 19, 2013. We provide cross-border business solutions and accounting outsourcing services to small and medium-size businesses located in Asia, with an initial focus on Hong Kong, Malaysia and China. Greenpro provides a range of services as a package solution to our clients, which we believe can assist our clients in reducing their business costs and improving their revenues.

 

In addition to our business solution services, we also operate a venture capital business through Greenpro Venture Capital Limited, an Anguilla corporation. One of our venture capital business segments is focused on (1) establishing a business incubator for start-up and high growth companies to support such companies during critical growth periods, which will include education and support services, and (2) searching the investment opportunities in selected start-up and high growth companies, which may generate significant returns to the Company. Our venture capital business is focused on companies located in Asia and Southeast Asia including Hong Kong, Malaysia, China, Thailand and Singapore. Another one of our venture capital business segments is focused on rental activities of commercial properties and the sale of investment properties.

 

Results of Operations

 

Restatement of Previously Issued Consolidated Financial Statements

 

As discussed further in Note 2, Restatement of Previously Issued Consolidated Financial Statements, in the Notes to the Condensed Consolidated Financial Statements included in Part I, Item 1, Condensed Consolidated Financial Statements, of this Quarterly Report, we have restated our condensed consolidated financial statements for the three and six months ended June 30, 2017. Refer to Note 2 to the Condensed Consolidated Financial Statements for additional details regarding the aforementioned restatement adjustments.

 

For information regarding our controls and procedures, see Part I, Item 4 - Controls and Procedures, of this Quarterly Report.

 

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During the three and six months ended June 30, 2018 and 2017, we operated in three regions: Hong Kong, Malaysia and China. We derived revenue from rental activities of our commercial properties and the provision of services.

 

Comparison of the three months ended June 30, 2018 and 2017

 

Total Revenues

 

Total revenue was $808,103 and $544,143 for the three months ended June 30, 2018 and 2017, respectively. The increased amount of $263,960 was due to the sale of real estate properties and increase in our client base. We expect revenue from our business services segment to increase as we continue to grow our business and expand into new territories.

 

Service Revenue

 

Revenue from the provision of business services was $615,643 and $487,482 for the three months ended June 30, 2018 and 2017, respectively. It was derived principally from the provision of business consulting and advisory services as well as company secretarial, accounting and financial analysis services. We experienced an increase in service income as a result of our integration of clients and increased focus on high-end services.

 

Sale of real estate properties

 

Revenue from the sale of real estate properties was $146,073 for the three months ended June 30, 2018, which was derived from the sale of certain commercial properties located in Hong Kong. There was no revenue generated from the sale of real estate properties for the three months ended June 30, 2017.

 

22
 

 

Rental Revenue

 

Revenue from rentals was $46,387 and $56,661 for the three months ended June 30, 2018 and 2017, respectively. It was derived principally from leasing properties in Malaysia and Hong Kong. We believe our rental income will be stable in the near future.

 

Total Operating Costs and Expenses

 

Total operating costs and expenses was $1,159,543 and $890,627 for the three months ended June 30, 2018 and 2017, respectively. They consist of cost of service revenue, cost of real estate properties sold, cost of rental revenue, and general and administrative expenses.

 

The loss from operations for the Company for the three months ended June 30, 2018 and 2017 was $351,440 and $346,484, respectively. The increase in loss from operations was mainly due to increase in general and administrative expenses.

 

Cost of service revenue

 

Costs of revenue on provision of services were $202,752 and $93,520 for the three months ended June 30, 2018 and 2017, respectively. It primarily consists of employee compensation and related payroll benefits, company formation costs, and other professional fees directly attributable to the services rendered.

 

Cost of real estate properties sold

 

Costs of revenue on real estate properties sold were $95,319 for the three months ended June 30, 2018. It primarily consists of the purchase price of property, legal fees, improvement costs to the building structure, and other acquisition costs. Selling and advertising costs are expensed as incurred.

 

Cost of rental revenue

 

Cost of rental revenue was $15,879 and $18,817 for the three months ended June 30, 2018 and 2017, respectively. It includes the costs associated with governmental charges, repairs and maintenance, property insurance, depreciation and other related administrative costs. Property management fees and utility expenses are paid directly by tenants.

 

General and administrative expenses

 

General and administrative expenses were $845,593 and $778,290 for the three months ended June 30, 2018 and 2017, respectively. For the three months ended June 30, 2018, general and administrative expenses consist primarily of salary and wages of $305,496, rental expenses of $92,480, and directors’ remuneration of $82,500. We expect our G&A to continue to increase as we integrate our business acquisitions, expand our offices into new jurisdictions, and deepen our existing businesses.

 

Net Loss

 

The net loss was $359,972 and $355,413 for the three months ended June 30, 2018 and 2017, respectively. The increase in net loss was mainly due to the increase in general and administrative expenses.

 

Loss Attributable to noncontrolling interest

 

The Company records income attributable to noncontrolling interest in the consolidated statements of operations for any noncontrolling interest of consolidated subsidiaries.

 

At June 30, 2018, noncontrolling interests are related to the Company’s ownership of 60% of Forward Win International Limited, Yabez (Hong Kong) Company Limited, Greenpro Global Capital Sdn Bhd (former known as Greenpro Wealthon Sdn Bhd), Billion Sino Holdings Limited, and Parich Wealth Management Limited, and the Company’s ownership of 51% of Greenpro Capital Village Sdn Bhd and Greenpro Family Office Limited.

 

For the three months ended June 30, 2018 and 2017, the Company recorded net loss attributable to noncontrolling interests of ($38,496) and net income attributable to noncontrolling interests of $14,460, respectively.

 

23
 

 

Comparison of the six months ended June 30, 2018 and 2017

 

Total Revenues

 

Total revenue was $1,548,675 and $1,399,466 for the six months ended June 30, 2018 and 2017, respectively. The increased amount of $149,209 was due to the sale of a real estate unit and an increase in our client base. We expect revenue from our business services segment to increase as we continue to grow our business and expand into new territories.

 

Service Revenue

 

Revenue from the provision of business services was $1,314,771 and $1,313,649 for the six months ended June 30, 2018 and 2017, respectively. It was derived principally from the provision of business consulting and advisory services as well as company secretarial, accounting and financial analysis services. We experienced an increase in service income as a result of our integration of clients in connection with our acquisitions and increased focus on high-end services.

 

Sale of real estate properties

 

Revenue from the sale of real estate properties was $146,073 for the six months ended June 30, 2018, which was derived from the sale of certain commercial properties located in Hong Kong. There was no revenue generated from the sale of real estate properties for the six months ended June 30, 2017.

 

Rental Revenue

 

Revenue from rentals was $87,831 and $85,817 for the six months ended June 30, 2018 and 2017, respectively. It was derived principally from leasing properties in Malaysia and Hong Kong. We believe our rental income will be stable in the near future.

 

Total Operating Costs and Expenses

 

Total operating costs and expenses was $2,160,639 and $1,881,889 for the six months ended June 30, 2018 and 2017, respectively. They consist of cost of service revenue, cost of real estate properties sold, cost of rental revenue, general and administrative expenses.

 

The loss from operations for the Company for the six months ended June 30, 2018 and 2017 was $611,964 and $482,423, respectively. The increase in loss from operations was mainly due to increase in general and administrative expenses.

 

Cost of service revenue

 

Costs of revenue on provision of services were $386,315 and $290,544 for the six months ended June 30, 2018 and 2017, respectively. It primarily consists of employee compensation and related payroll benefits, company formation costs, and other professional fees directly attributable to the services rendered.

 

24
 

 

Cost of real estate properties sold

 

Costs of revenue on real estate properties sold were $95,319 for the six months ended June 30, 2018. It primarily consists of the purchase price of property, legal fees, improvement costs to the building structure, and other acquisition costs. Selling and advertising costs are expensed as incurred.

 

Cost of rental revenue

 

Cost of rental revenue was $39,435 and $30,901 for the six months ended June 30, 2018 and 2017, respectively. It includes the costs associated with government rent and rates, repairs and maintenance, property insurance, depreciation and other related administrative costs. Property management fee and utility expenses are paid directly by tenants.

 

General and administrative expenses

 

General and administrative expenses were $1,639,570 and $1,560,444 for the six months ended June 30, 2018 and 2017, respectively. For the six months ended June 30, 2018, general and administrative expenses consist primarily of salary and wages of $640,860, rental expenses of $196,818, and directors’ remuneration of $165,000. We expect our G&A to continue to increase as we integrate our business acquisitions, expand our offices into new jurisdictions, and deepen our existing businesses.

 

Net Loss

 

The net loss was $373,669 and $511,160 for the six months ended June 30, 2018 and 2017, respectively. The decrease in net loss was mainly due to the gain on sale of equity method investment.

 

Loss Attributable to noncontrolling interest

 

The Company records income attributable to noncontrolling interest in the consolidated statements of operations for any noncontrolling interest of consolidated subsidiaries.

 

At June 30, 2018, noncontrolling interests are related to the Company’s ownership of 60% of Forward Win International Limited, Yabez (Hong Kong) Company Limited, Greenpro Global Capital Sdn Bhd (former known as Greenpro Wealthon Sdn Bhd), Billion Sino Holdings Limited, and Parich Wealth Management Limited, and to the Company’s ownership of 51% of Greenpro Capital Village Sdn Bhd and Greenpro Family Office Limited.

 

For the six months ended June 30, 2018 and 2017, the Company recorded net loss attributable to noncontrolling interests of ($33,898) and net income attributable to noncontrolling interests of $17,768, respectively.

 

There were no seasonal aspects that had a material effect on the financial condition or results of operations of the Company.

 

Other than as disclosed elsewhere in this Quarterly Report, we are not aware of any trends, uncertainties, demands, commitments or events for the six months ended June 30, 2018 that are reasonably likely to have a material adverse effect on our financial condition, changes in our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources, or that would cause the disclosed financial information to be not necessarily indicative of future operating results or financial conditions.

 

Off Balance Sheet Arrangements

 

We have no significant off balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to our stockholders as of June 30, 2018.

 

25
 

 

Contractual Obligations

 

As of June 30, 2018, the Company’s subsidiaries lease an office in Hong Kong under a non-cancellable operating lease for three years commencing from May 1, 2018 and expiring on April 30, 2021. As June 30, 2018, the future minimum rental payments under this lease aggregate approximately $754,000 and due as follows: 2019 $272,000, 2020 $263,000, and 2021 $219,000.

 

Critical Accounting Policies and Estimates

 

Use of estimates

 

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions relating to the reporting of assets and liabilities and the disclosure of contingent liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Significant accounting estimates include certain assumptions related to, among others, the allowance for doubtful accounts receivable, impairment analysis of real estate assets and other long term assets including goodwill, valuation allowance on deferred income taxes, and the accrual of potential liabilities. Actual results may differ from these estimates.

 

Revenue recognition

 

Effective January 1, 2018, the Company adopted the guidance of Accounting Standards Codification (ASC) 606, Revenue from Contracts. The implementation of ASC 606 did not have a material impact on the Company’s consolidated financial statements. ASC 606 creates a five-step model that requires entities to exercise judgment when considering the terms of contracts, which includes (1) identifying the contracts or agreements with a customer, (2) identifying our performance obligations in the contract or agreement, (3) determining the transaction price, (4) allocating the transaction price to the separate performance obligations, and (5) recognizing revenue as each performance obligation is satisfied. The Company only applies the five-step model to contracts when it is probable that the Company will collect the consideration it is entitled to in exchange for the services it transfers to its clients.

 

The Company’s revenue consists of revenue from providing business consulting and corporate advisory services (“service revenue”), revenue from the sale of real estate properties, and revenue from the rental of real estate properties.

 

Impairment of long-lived assets

 

Long-lived assets primarily include real estate held for investment, property and equipment, and intangible assets. In accordance with the provision of ASC 360, the Company generally conducts its annual impairment evaluation of its long-lived assets in the fourth quarter of each year, or more frequently if indicators of impairment exist, such as a significant sustained change in the business climate. The recoverability of long-lived assets is measured at the reporting unit level. If the total of the expected undiscounted future net cash flows is less than the carrying amount of the asset, a loss is recognized for the difference between the fair value and carrying amount of the asset. In addition, for real estate held for sale, an impairment loss is the adjustment to fair value less estimated cost to dispose of the asset.

 

Goodwill

 

Goodwill is the excess of cost of an acquired entity over the fair value of amounts assigned to assets acquired and liabilities assumed in a business combination. Under the guidance of ASC 350, goodwill is not amortized, rather it is tested for impairment annually, and will be tested for impairment between annual tests if an event occurs or circumstances change that would indicate the carrying amount may be impaired. An impairment loss generally would be recognized when the carrying amount of the reporting unit’s net assets exceeds the estimated fair value of the reporting unit and would be measured as the excess carrying value of goodwill over the derived fair value of goodwill. The Company’s policy is to perform its annual impairment testing for its reporting units on December 31, of each fiscal year.

 

26
 

 

Derivative Financial Instruments

 

The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the statements of operations. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument could be required within 12 months of the balance sheet date. At each reporting date, the Company reviews its convertible securities to determine that their classification is appropriate.

Derivative Financial Instruments

 

Recent accounting pronouncements

 

Refer to Note 1 in the accompanying financial statements.

 

Liquidity and Capital Resources

 

Our cash balance at June 30, 2018 increased to $2,906,791 as compared to $1,162,394 at December 31, 2017. We estimate the Company currently has sufficient cash and liquidity to meet its anticipated working capital for the next twelve months.

 

During the six months ended June 30, 2018, the Company incurred a loss from operations of $611,964 and used cash in operations of $70,229, and at June 30, 2018, the Company had a working capital deficit of $636,187. These factors raise substantial doubt about the Company’s ability to continue as a going concern within one year of the date that the financial statements are issued. In addition, the Company’s independent registered public accounting firm, in its report on the Company’s December 31, 2017 financial statements, has expressed substantial doubt about the Company’s ability to continue as a going concern. The Company’s financial statements do not include any adjustments that might result from the outcome of this uncertainty be necessary should we be unable to continue as a going concern.

 

The Company’s ability to continue as a going concern is dependent upon improving its profitability and the continuing financial support from its shareholders. Management believes the existing shareholders or external financing will provide the additional cash to meet the Company’s obligations as they become due. On June 12, 2018, the Company sold 535,559 shares of its common stock in an underwritten public offering at $6.00 per share for net proceeds of approximately $2.7 million, after deducting expenses of the offering. On July 18, 2018, the Company sold 906,666 shares of its common stock at $7.50 per share in a private placement for net proceeds of approximately $6.7 million. Despite the amount of funds that we have raised, no assurance can be given that any future financing, if needed, will be available or, if available, that it will be on terms that are satisfactory to the Company. Even if the Company is able to obtain additional financing, if needed, it may contain undue restrictions on its operations, in the case of debt financing, or cause substantial dilution for its stockholders, in the case of equity financing.

 

Operating activities

 

Net cash used in operating activities was $70,229 for the six months ended June 30, 2018 as compared to net cash used in operating activities of $851,436 for the six months ended June 30, 2017. The cash used in operating activities in 2018 was mainly from the net loss for the period of $373,669, a decrease in accounts receivable of $197,383, a decrease in accounts payable and accrued liabilities of $376,578, and offset by an increase in deferred revenue of 465,400. For the six months ended June 30, 2018, non-cash adjustments totaled $38,876 and were primarily composed of depreciation and amortization of $135,721, provision for bad debts of $43,963, and gain on sale of real estate held for sale of $50,574.

 

27
 

 

Investing activities

 

Net cash used in investing activities was $440,937 and $96,340 for the six months ended June 30, 2018 and 2017, respectively. In 2018, the cash used in investing activities was mainly for the purchase of a long-term investment of $248,250, issuance of a note receivable for $300,000, and offset by proceeds from the sale of real estate of $144,566.

 

Financing activities

 

Net cash provided by financing activities for the six months ended June 30, 2018 was $2,256,666 while net cash provided by financing activities for the six months ended June 30, 2017 was $1,113,846.

 

The cash provided by financing activities in 2018 was from the proceeds of a direct public offering of the Company’s common stock of $2,765,705, offset by repayment of advances of $301,484 and principal payments on notes payables of $207,555.

 

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

 

As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide information required by this Item.

 

Item 4. Controls and Procedures.

 

Evaluation of Disclosure Controls and Procedures

 

We conducted an evaluation under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. The term “disclosure controls and procedures”, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities and Exchange Act of 1934, as amended (“Exchange Act”), means controls and other procedures of a company that are designed to ensure that information required to be disclosed by the company in the reports it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures also include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded as of June 30, 2018, that our disclosure controls and procedures were not effective. The matters involving internal controls and procedures that our management considered to be material weaknesses under the standards of the Public Company Accounting Oversight Board were: (1) ineffective controls over period end financial disclosure and reporting process to enable the close process to be completed in a timely and accurate manner, which includes accurately estimating accruals and the overall preparation, review and analysis of the financial results; (2) lack of internal audit function due to the fact that the Company lacks qualified resources to perform the internal audit functions properly and that the scope and effectiveness of the internal audit function are yet to be developed; (3) the Company did not maintain effective controls over the completeness, accuracy, and valuation of revenue and accounts receivable. Specifically, the Company had not implemented effective controls to ensure that (i) that all revenue recognition criteria have been satisfied prior to revenue being recognized, including the collectability criteria is reasonably assured; (ii) the aging of accounts receivables is monitored to verify the completeness and accuracy of computations for the valuation of accounts receivables reserves and (iii) the analysis of the completed performance method of accounting for contract revenues is accurate and complete; (4) the Company did not maintain effective controls over the allocation of the purchase price for acquisitions to the assets acquired and liabilities assumed; (5) the Company did not maintain adequate controls over the proper application of foreign exchange rates in the translation of fixed assets into the Company’s reporting currency. These material weaknesses resulted in the restatement of our consolidated financial statements for the six months ended June 30, 2017. The aforementioned material weaknesses were identified by our Chief Financial Officer in connection with the review of our financial statements as of June 30, 2018.

 

28
 

 

Management’s Report on Internal Control Over Financial Reporting

 

Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Our internal control over financial reporting is designed 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. The internal controls for the Company are provided by executive management’s review and approval of all transactions. Our internal control over financial reporting also includes those policies and procedures that:

 

1. pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets;

 

2. provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. GAAP, and that our receipts and expenditures are being made only in accordance with the authorization of our management; and

 

3. provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.

 

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

 

Management assessed the effectiveness of the Company’s internal control over financial reporting as of June 30, 2018. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control-Integrated Framework. Management’s assessment included an evaluation of the design of our internal control over financial reporting and testing of the operational effectiveness of these controls.

 

Based on this assessment, management has concluded that as of June 30, 2018, our internal control over financial reporting was not effective to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles. In an effort to remediate the identified material weaknesses and other deficiencies and enhance our internal controls, we have initiated, or plan to initiate, the following series of measures:

 

We have increased our personnel resources and technical accounting expertise within the accounting function and intend to hire one or more additional personnel for the function due to turnover. We will create a position to segregate duties consistent with control objectives. We also plan to prepare written policies and procedures for accounting and financial reporting to establish a formal process to close our books monthly on an accrual basis and account for all transactions, including equity and debt transactions. We plan to test our updated controls and remediate our deficiencies in the year 2018.

 

This Quarterly Report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to rules of the Securities and Exchange Commission that permit the Company to provide only management’s report in this Quarterly Report.

 

Changes in Internal Control over Financial Reporting

 

There were no changes in our internal control over financial reporting for the six months ended June 30, 2018, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

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PART II — OTHER INFORMATION

 

Item 1. Legal Proceedings.

 

We know of no material, active or pending legal proceedings against us, nor are we involved as a plaintiff in any material proceedings or pending litigation. There are no proceedings in which any of our directors, officers or affiliates, or any beneficial shareholder are an adverse party or has a material interest adverse to us.

 

Item 1A. Risk Factors.

 

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

 

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

 

All unregistered sale of equity securities were reported in Current Reports on Form 8-k filed with SEC on July 18, 2018 and August 1, 2018.

 

Item 3. Defaults Upon Senior Securities.

 

None.

 

Item 4. Mine Safety Disclosures

 

Not applicable.

 

Item 5. Other Information.

 

None.

 

Item 6. Exhibits

 

Exhibit No.   Description
31.1   Rule 13(a)-14(a)/15(d)-14(a) Certification of principal executive officer
31.2   Rule 13(a)-14(a)/15(d)-14(a) Certification of principal financial officer
32.1   Section 1350 Certification of principal executive officer
32.2   Section 1350 Certification of principal financial officer and principal accounting officer

 

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SIGNATURES

 

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

  Greenpro Capital Corp.
     
Date: August 13, 2018 By: /s/ Lee Chong Kuang
    Lee Chong Kuang
    President and Chief Executive Officer
    (Principal Executive Officer)
     
Date: August 13, 2018 By: /s/ Loke Che Chan, Gilbert
    Loke Che Chan, Gilbert
    Chief Financial Officer
    (Principal Financial and Accounting Officer)

 

31
 

EX-31.1 2 ex31-1.htm

 

EXHIBIT 31.1

 

CERTIFICATION

 

I, LEE CHONG KUANG, certify that:

 

1. I have reviewed this quarterly report on Form 10-Q of Greenpro Capital Corp. (the “Company”) for the quarter ended June 30, 2018;

 

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

 

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

 

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

 

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

 

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

  a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
     
  b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date: August 13, 2018    
  By: /s/ Lee Chong Kuang
  Title: Chief Executive Officer, President, Director
    (Principal Executive Officer)

 

 
 

EX-31.2 3 ex31-2.htm

 

EXHIBIT 31.2

 

CERTIFICATION

 

I, LOKE CHE CHAN, GILBERT, certify that:

 

1. I have reviewed this quarterly report on Form 10-Q of Greenpro Capital Corp. (the “Company”) for the quarter ended June 30, 2018;

 

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

 

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

 

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

 

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

 

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

  a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
     
  b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting

 

Date: August 13, 2018    
  By: /s/ Loke Che Chan, Gilbert
  Title: Chief Financial Officer, Secretary, Treasurer,
    Director (Principal Financial and Accounting Officer)

 

 
 

 

EX-32.1 4 ex32-1.htm

 

EXHIBIT 32.1

 

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,

 

AS ADOPTED PURSUANT TO

 

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

In connection with the Quarterly Report of Greenpro Capital Corp. (the “Company”) on Form 10-Q for the period ending June 30, 2018 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), The undersigned hereby certifies, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge and belief:

 

(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.

 

Date: August 13, 2018    
  By: /s/ Lee Chong Kuang
  Title: Chief Executive Officer, President, Director
    (Principal Executive Officer)

 

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

 

 
 

 

EX-32.2 5 ex32-2.htm

 

EXHIBIT 32.2

 

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

 

AS ADOPTED PURSUANT TO

 

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

In connection with the Quarterly Report of Greenpro Capital Corp. (the “Company”) on Form 10-Q for the period ending June 30, 2018 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), The undersigned hereby certifies, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge and belief:

 

(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.

 

Date: August 13, 2018    
  By: /s/ Loke Che Chan, Gilbert
  Title: Chief Financial Officer, Secretary, Treasurer,
    Director (Principal Financial and Accounting Officer)

 

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

 

 
 

 

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Document and Entity Information - shares
6 Months Ended
Jun. 30, 2018
Aug. 10, 2018
Document And Entity Information    
Entity Registrant Name Greenpro Capital Corp.  
Entity Central Index Key 0001597846  
Document Type 10-Q  
Document Period End Date Jun. 30, 2018  
Amendment Flag false  
Current Fiscal Year End Date --12-31  
Entity Filer Category Smaller Reporting Company  
Entity Common Stock, Shares Outstanding   54,715,287
Trading Symbol GRNQ  
Document Fiscal Period Focus Q2  
Document Fiscal Year Focus 2018  
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Condensed Consolidated Balance Sheets - USD ($)
Jun. 30, 2018
Dec. 31, 2017
Current assets    
Cash and cash equivalents (including $163,995 and $166,610 of restricted cash as of June 30, 2018 and December 31, 2017, respectively) $ 2,906,791 $ 1,162,394
Accounts receivable (net of allowance of $32,273 and $76,179 as of June 30, 2018 and December 31, 2017, respectively) 192,299 345,734
Prepaids and other current assets (includes due from related parties of $2,679 and $1,761 as of June 30, 2018 and December 31, 2017, respectively) 224,904 270,760
Deferred costs of revenue 141,436 74,990
Total current assets 3,465,430 1,853,878
Property and equipment, net 3,174,746 3,266,829
Real Estate investments:    
Real estate held for sale 3,336,829 3,430,641
Real estate held for investment, net 853,285 868,984
Intangible assets, net 207,468 251,655
Goodwill 1,211,863 1,211,863
Note receivable, related party 300,000
Other investments (includes investments in related parties of $301,617 and $51,613 as of June 30, 2018 and December 31, 2017, respectively) 396,029 130,457
TOTAL ASSETS 12,945,650 11,014,307
Current liabilities:    
Accounts payable and accrued liabilities 355,713 768,994
Current portion of loans secured by real estate 797,126 928,147
Due to related parties 1,548,058 1,813,930
Income tax payable 66,735 68,008
Deferred revenue 810,400 345,000
Derivative liabilities 523,585
Total current liabilities 4,101,617 3,924,079
Long term portion of loans secured by real estate 1,746,485 1,842,840
Total liabilities 5,848,102 5,766,919
Commitments and contingencies
Stockholders' Equity:    
Preferred stock, $0.0001 par value; 100,000,000 shares authorized; no shares issued and outstanding
Common stock, $0.0001 par value; 500,000,000 shares authorized; 53,769,519 and 53,233,960 shares issued and outstanding at June 30, 2018 and December 31, 2017, respectively 5,377 5,323
Additional paid in capital 10,722,356 8,465,294
Accumulated other comprehensive loss (73,486) (40,199)
Accumulated deficit (3,673,880) (3,266,313)
Total Greenpro Capital Corp. common shareholders' equity 6,980,367 5,164,105
Noncontrolling interests in consolidated subsidiaries 117,181 83,283
Total Stockholders' equity 7,097,548 5,247,388
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 12,945,650 $ 11,014,307
XML 14 R3.htm IDEA: XBRL DOCUMENT v3.10.0.1
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($)
Jun. 30, 2018
Dec. 31, 2017
Statement of Financial Position [Abstract]    
Restricted cash $ 163,995 $ 166,610
Allowance for doubtful accounts receivable 32,273 76,179
Due from related parties 2,679 1,761
Investments in related party $ 301,617 $ 51,613
Preferred stock, par value $ 0.0001 $ 0.0001
Preferred stock, shares authorized 100,000,000 100,000,000
Preferred stock, shares issued
Preferred stock, shares outstanding
Common stock, par value $ 0.0001 $ 0.0001
Common stock, shares authorized 500,000,000 500,000,000
Common stock, shares issued 53,769,519 53,233,960
Common stock, shares outstanding 53,769,519 53,233,960
XML 15 R4.htm IDEA: XBRL DOCUMENT v3.10.0.1
Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - USD ($)
3 Months Ended 6 Months Ended
Jun. 30, 2018
Jun. 30, 2017
Jun. 30, 2018
Jun. 30, 2017
REVENUES:        
Total revenues $ 808,103 $ 544,143 $ 1,548,675 $ 1,399,466
OPERATING COSTS AND EXPENSES:        
Cost of service revenue (including $66,000 cost of service to related parties for the three and six months ended June 30, 2018) (202,752) (93,520) (386,315) (290,544)
Cost of real estate properties sold (95,319) (95,319)
Cost of rental revenue (15,879) (18,817) (39,435) (30,901)
General and administrative (845,593) (778,290) (1,639,570) (1,560,444)
Total operating costs and expenses (1,159,543) (890,627) (2,160,639) (1,881,889)
LOSS FROM OPERATIONS (351,440) (346,484) (611,964) (482,423)
OTHER INCOME (EXPENSE)        
Gain on sale of equity method investment 300,000
Change in fair value of derivative liabilities (14,996) (14,996)
Other income 22,537 36,541
Interest expense (41,474) (7,786) (87,703) (14,748)
LOSS BEFORE INCOME TAX (385,373) (354,270) (378,122) (497,171)
Income tax (expense) benefit 25,401 (1,143) 4,453 (13,989)
NET LOSS (359,972) (355,413) (373,669) (511,160)
Net loss (income) attributable to noncontrolling interest (38,496) 14,460 (33,898) 17,768
NET LOSS ATTRIBUTED TO COMMON SHAREHOLDERS OF GREENPRO CAPITAL CORP. (398,468) (340,953) (407,567) (493,392)
Other comprehensive loss:        
Foreign currency translation income (loss) (206,239) 19,828 (119,763) 23,842
COMPREHENSIVE LOSS $ (604,707) $ (321,125) $ (527,330) $ (469,550)
NET LOSS PER SHARE, BASIC AND DILUTED $ (0.01) $ (0.01) $ (0.01) $ (0.01)
WEIGHTED AVERAGE NUMBER OF COMMON STOCK OUTSTANDING, BASIC AND DILUTED 53,339,892 53,134,942 53,287,220 52,883,811
Service Revenue [Member]        
REVENUES:        
Total revenues $ 615,643 $ 487,482 $ 1,314,771 $ 1,313,649
Real Estate Properties [Member]        
REVENUES:        
Total revenues 146,073 146,073
Rental Revenue [Member]        
REVENUES:        
Total revenues $ 46,387 $ 56,661 $ 87,831 $ 85,817
XML 16 R5.htm IDEA: XBRL DOCUMENT v3.10.0.1
Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) (Parenthetical) - USD ($)
3 Months Ended 6 Months Ended
Jun. 30, 2018
Jun. 30, 2017
Jun. 30, 2018
Jun. 30, 2017
Service Revenue [Member]        
Revenue from related parties $ 35,745 $ 12,664 $ 260,816 $ 253,451
Cost of service, related parties 66,000   66,000  
Rental Revenue [Member]        
Revenue from related parties $ 24,973 $ 29,489 $ 24,973 $ 29,489
XML 17 R6.htm IDEA: XBRL DOCUMENT v3.10.0.1
Condensed Consolidated Statement of Changes in Stockholders' Equity (Unaudited) - 6 months ended Jun. 30, 2018 - USD ($)
Common Stock [Member]
Additional Paid-in Capital [Member]
Accumulated Other Comprehensive Loss [Member]
Accumulated Deficit [Member]
Non-Controlling Interest [Member]
Total
Balance beginning at Dec. 31, 2017 $ 5,323 $ 8,465,294 $ (40,199) $ (3,266,313) $ 83,283 $ 5,247,388
Balance beginning, shares at Dec. 31, 2017 53,233,960          
Common stock sold in public offering, net of offering costs of $956,238 $ 54 2,257,062 2,257,116
Common stock sold in public offering, net of offering costs of $956,238, shares 535,559          
Foreign currency translation (33,287) (119,763)
Net loss (407,567) 33,898 (373,669)
Balance ending at Jun. 30, 2018 $ 5,377 $ 10,722,356 $ (73,486) $ (3,673,880) $ 117,181 $ 7,097,548
Balance ending, shares at Jun. 30, 2018 53,769,519          
XML 18 R7.htm IDEA: XBRL DOCUMENT v3.10.0.1
Condensed Consolidated Statement of Changes in Stockholders' Equity (Parenthetical)
6 Months Ended
Jun. 30, 2018
USD ($)
Statement of Stockholders' Equity [Abstract]  
Common stock offering costs $ 956,238
XML 19 R8.htm IDEA: XBRL DOCUMENT v3.10.0.1
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)
6 Months Ended
Jun. 30, 2018
Jun. 30, 2017
Cash flows from operating activities:    
Net loss $ (373,669) $ (511,160)
Adjustments to reconcile net loss to net cash used in operating activities:    
Depreciation and amortization 135,721 87,894
Provision for bad debts (43,963) 30,881
Write off of unconsolidated investment 1,750
Gain on sale of real estate held for sale (50,754)
Change in fair value of derivative liabilities 14,996
Increase in cash surrender value on life insurance (17,318) (2,204)
Changes in operating assets and liabilities:    
Accounts receivable, net 197,383 (40,433)
Prepaids and other current assets 46,589 (408,521)
Deferred costs of revenue (66,446) 23,068
Accounts payable and accrued liabilities (376,578) (177,037)
Income tax payable (3,340) 6,076
Deferred revenue 465,400 140,000
Net cash used in operating activities (70,229) (851,436)
Cash flows from investing activities:    
Purchase of property and equipment (34,422) (38,444)
Purchase of intangible assets (1,081)
Proceeds from real estate held for sale 144,566
Issuance of note receivable to related party (300,000)
Purchase of investment in related party (250,000) (203,250)
Cash acquired on acquisition of business 145,354
Net cash used in investing activities (440,937) (96,340)
Cash flows from financing activities:    
Proceeds from shares issued for cash 2,765,705 984,864
Principal payments of loans secured by real estate (207,555) (6,931)
Advance from related parties 158,179
Repayment of advances from related parties (301,484) (22,266)
Net cash provided by financing activities 2,256,666 1,113,846
Effect of exchange rate changes in cash and cash equivalents (1,103) 115,206
NET CHANGE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH 1,744,397 281,276
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, BEGINNING OF PERIOD 1,162,394 1,021,351
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, END OF PERIOD 2,906,791 1,302,627
SUPPLEMENTAL CASH FLOW INFORMATION:    
Cash paid for income tax 1,440
Cash paid for interest 75,152 6,962
SUPPLEMENTAL NON-CASH INVESTING AND FINANCING ACTIVITIES:    
Fair value of warrants recorded as derivative liabilities included in offering costs $ 508,589
XML 20 R9.htm IDEA: XBRL DOCUMENT v3.10.0.1
Organization and Summary of Significant Accounting Policies
6 Months Ended
Jun. 30, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Organization and Summary of Significant Accounting Policies

NOTE 1 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Greenpro Capital Corp. (the “Company” or “GRNQ”) was incorporated on July 19, 2013 in the state of Nevada. On May 6, 2015, the Company changed its name to Greenpro Capital Corp. The Company currently provides a wide range of business consulting and corporate advisory services including cross-border listing advisory services, tax planning, advisory and transaction services, record management services, and accounting outsourcing services. Our focus is on companies located in Asia and Southeast Asia including Hong Kong, Malaysia, China, Thailand, and Singapore. As part of our business consulting and corporate advisory business segment, Greenpro Venture Capital Limited provides a business incubator for start-up and high growth companies during their critical growth period, and focuses on investments in select start-up and high growth potential companies. In addition to our business consulting and corporate advisory business segment, we operate another business segment that focuses on the acquisition and rental of real estate properties held for investment and the acquisition and sale of real estate properties held for sale.

 

Basis of presentation

 

The accompanying unaudited condensed consolidated financial statements as of and for the six months ended June 30, 2018 and 2017, have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) that permit reduced disclosure for interim periods. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) have been condensed or omitted. 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 period ended June 30, 2018 are not necessarily indicative of the results that may be expected for the year ending December 31, 2018. The Condensed Consolidated Balance Sheet information as of December 31, 2017 was derived from the Company’s audited Consolidated Financial Statements as of and for the year ended December 31, 2017 included in the Company’s Annual Report on Form 10-K filed with the SEC on April 13, 2018. These financial statements should be read in conjunction with that report.

 

The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries and majority-owned subsidiaries over which the Company exercises control, and entities for which the Company is the primary beneficiary. Intercompany transactions and balances were eliminated in consolidation.

 

At June 30, 2018 and December 31, 2017, the consolidated financial statements include noncontrolling interests related to the Company’s ownership of 60% of Forward Win International Limited, Yabez (Hong Kong) Company Limited, Greenpro Global Capital Sdn Bhd (former known as Greenpro Wealthon Sdn Bhd), Billion Sino Holdings Limited and Parich Wealth Management Limited, and the Company’s ownership of 51% of Greenpro Capital Village Sdn Bhd and Greenpro Family Office Limited.

 

Going Concern

 

The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. During the six months ended June 30, 2018, the Company incurred a loss from operations of $611,964 and used cash in operations of $70,229, and at June 30, 2018, the Company had a working capital deficit of $636,187. These factors raise substantial doubt about the Company’s ability to continue as a going concern within one year of the date that the financial statements are issued. In addition, the Company’s independent registered public accounting firm, in its report on the Company’s December 31, 2017 financial statements, has expressed substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

 

The Company’s ability to continue as a going concern is dependent upon improving its profitability and the continuing financial support from its shareholders. Management believes the existing shareholders or external financing will provide the additional cash to meet the Company’s obligations as they become due. On June 12, 2018, the Company sold 535,559 shares of its common stock in an underwritten public offering at $6.00 per share for net proceeds of approximately $2.7 million, after deducting expenses of the offering. On July 18, 2018, the Company sold 906,666 shares of its common stock at $7.50 per share in a private placement for net proceeds of approximately $6.7 million. Despite the amount of funds that we have raised, no assurance can be given that any future financing, if needed, will be available or, if available, that it will be on terms that are satisfactory to the Company. Even if the Company is able to obtain additional financing, if needed, it may contain undue restrictions on its operations, in the case of debt financing, or cause substantial dilution for its stockholders, in the case of equity financing.

 

Use of estimates

 

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions relating to the reporting of assets and liabilities and the disclosure of contingent liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Significant accounting estimates include certain assumptions related to, among others, the allowance for doubtful accounts receivable, impairment analysis of real estate assets and other long term assets including goodwill, valuation allowance on deferred income taxes, the assumptions used in the valuation of the derivative liability, and the accrual of potential liabilities. Actual results may differ from these estimates.

 

Cash, cash equivalents, and restricted cash

 

Cash, cash equivalents, and restricted cash were denominated in the following currencies at:

 

    As of
June 30, 2018
    As of
December 31, 2017
 
    (Unaudited)        
Cash, cash equivalents, and restricted cash                
Denominated in United States Dollars   $ 1,687,156     $ 283,674  
Denominated in Hong Kong dollars     975,313       568,008  
Denominated in Chinese Renminbi     171,854       239,502  
Denominated in Malaysian Ringgit     72,468       71,210  
Cash, cash equivalents, and restricted cash   $ 2,906,791     $ 1,162,394  

 

At June 30, 2018 and December 31, 2017, cash included funds held by employees of $8,179 and $32,673, respectively, and was held to facilitate payment of expenses in local currencies and to facilitate third-party online payment platforms in which the Company had not set up corporate accounts (WeChat Pay and Alipay).

 

Revenue recognition

 

Effective January 1, 2018, the Company adopted the guidance of Accounting Standards Codification (ASC) 606, Revenue from Contracts. The implementation of ASC 606 did not have a material impact on the Company’s consolidated financial statements. ASC 606 creates a five-step model that requires entities to exercise judgment when considering the terms of contracts, which includes (1) identifying the contracts or agreements with a customer, (2) identifying our performance obligations in the contract or agreement, (3) determining the transaction price, (4) allocating the transaction price to the separate performance obligations, and (5) recognizing revenue as each performance obligation is satisfied. The Company only applies the five-step model to contracts when it is probable that the Company will collect the consideration it is entitled to in exchange for the services it transfers to its clients.

 

The Company’s revenue consists of revenue from providing business consulting and corporate advisory services (“service revenue”), revenue from the sale of real estate properties, and revenue from the rental of real estate properties.

 

Revenue from services

 

For certain of our service contracts providing assistance to clients in capital market listings (“Listing services”), our services provided are considered to be one performance obligation. Revenue and expenses are deferred until the performance obligation is complete and collectability of the consideration is probable. For service contracts where the performance obligation is not completed, deferred costs of revenue are recorded as incurred and deferred revenue is recorded for any payments received on such yet to be completed performance obligations. On an ongoing basis, management monitors these contracts for profitability and when needed may record a liability if a determination is made that costs will exceed revenue.

 

For other services such as company secretarial, accounting, financial analysis and related services (“Non-Listing services”), the Company’s performance obligations are satisfied, and the related revenue is recognized, as services are rendered. For contracts in which we act as an agent, the Company reports revenue net of expenses paid.

 

The Company offers no discounts, rebates, rights of return, or other allowances to clients which would result in the establishment of reserves against service revenue. Additionally, to date, the Company has not incurred incremental costs in obtaining a client contract.

 

Revenue from the sale of real estate properties

 

Effective January 1, 2018, the Company adopted the guidance of ASC 610-20, Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets (“ASC 610-20”), which applies to sales or transfers to noncustomers of nonfinancial assets. Generally, the Company’s sales of its real estate properties is considered a sale of a nonfinancial asset. Under ASC 610-20, the Company derecognizes the asset and recognizes a gain or loss on the sale of the real estate when control of the underlying asset transfers to the buyer. During the three and six months ended June 30, 2018, the Company recognized revenue from the sale of one unit of its real estate property held for sale. During the three and six months ended June 30, 2017, there were no sales of real estate. The adoption of ASU 610-20 had no impact on the Company’s consolidated financial statements.

 

Revenue from the rental of real estate properties

 

Rental revenue represents lease rental income from the Company’s tenants. The tenants pay monthly in accordance with lease agreements and the Company recognizes the income ratably over the lease term as this is the most representative of the pattern in which the benefit is expected to be derived from the underlying asset.

 

Cost of revenues

 

Cost of service revenue primarily consists of employee compensation and related payroll benefits, company formation costs, and other professional fees directly attributable to the services rendered.

 

Cost of real estate properties sold primarily consists of the purchase price of property, legal fees, improvement costs to the building structure, and other acquisition costs. Selling and advertising costs are expensed as incurred.

 

Cost of rental revenue primarily includes costs associated with repairs and maintenance, property insurance, depreciation and other related administrative costs. Property management fees and utility expenses are paid directly by tenants.

 

The following table provides information about disaggregated revenue based on revenue by service lines and revenue by geographic area:

 

    Three Months Ended June 30,  
    2018     2017  
    (Unaudited)     (Unaudited,
As Restated)
 
Revenue by service lines:                
Corporate advisory – Non-Listing services   $ 615,643     $ 277,482  
Corporate advisory – Listing services     -       210,000  
Rental of real estate properties     46,387       56,661  
Sale of real estate properties     146,073       -  
Total revenue   $ 808,103     $ 544,143  

 

    Three Months Ended June 30,  
    2018     2017  
    (Unaudited)     (Unaudited,
As Restated)
 
Revenue by geographic area:                
Hong Kong   $ 577,571     $ 386,400  
Malaysia     173,551       136,200  
China     56,981       21,543  
Total revenue   $ 808,103     $ 544,143  

 

    Six Months Ended June 30,  
    2018     2017  
    (Unaudited)     (Unaudited,
As Restated)
 
Revenue by service lines:                
Corporate advisory – Non-Listing services   $ 1,114,771     $ 1,103,649  
Corporate advisory – Listing services     200,000       210,000  
Rental of real estate properties     87,831       85,817  
Sale of real estate properties     146,073       -  
Total revenue   $ 1,548,675     $ 1,399,466  

 

    Six Months Ended June 30,  
    2018     2017  
    (Unaudited)     (Unaudited,
As Restated)
 
Revenue by geographic area:                
Hong Kong   $ 1,116,518     $ 993,915  
Malaysia     325,213       350,862  
China     106,944       54,689  
Total revenue   $ 1,548,675     $ 1,399,466  

 

Our contract balances include deferred costs of revenue and deferred revenue.

 

Deferred Revenue

 

For service contracts where the performance obligation is not completed, deferred revenue is recorded for any payments received in advance of the performance obligation. Changes in deferred revenue were as follows:

 

    Six Months Ended
June 30, 2018
 
    (Unaudited)  
Deferred revenue, January 1, 2018   $ 345,000  
New contract liabilities     665,400  
Performance obligations satisfied     (200,000 )
Deferred revenue, June 30, 2018   $ 810,400  

 

Deferred Costs of Revenue

 

For service contracts where the performance obligation is not completed, deferred costs of revenue are recorded for any costs incurred in advance of the performance obligation.

 

Deferred revenue and deferred costs of revenue at June 30, 2018 and December 31, 2017 are classified as current assets or current liabilities and totaled:

 

    As of
June 30, 2018
    As of
December 31, 2017
 
      (Unaudited)          
Deferred revenue   $ 810,400     $ 345,000  
Deferred costs of revenue   $ 141,436     $ 74,990  

 

Impairment of long-lived assets

 

Long-lived assets primarily include real estate held for investment, property and equipment, and intangible assets. In accordance with the provision of ASC 360, the Company generally conducts its annual impairment evaluation of its long-lived assets in the fourth quarter of each year, or more frequently if indicators of impairment exist, such as a significant sustained change in the business climate. The recoverability of long-lived assets is measured at the reporting unit level. If the total of the expected undiscounted future net cash flows is less than the carrying amount of the asset, a loss is recognized for the difference between the fair value and carrying amount of the asset. As at June 30, 2018, the Company determined there were no indicators of impairment of its real estate held for investment, its property and equipment, or its intangible assets. In addition, for real estate held for sale, an impairment loss is the adjustment to fair value less estimated cost to dispose of the asset.

 

Goodwill

 

Goodwill is the excess of cost of an acquired entity over the fair value of amounts assigned to assets acquired and liabilities assumed in a business combination. Under the guidance of ASC 350, goodwill is not amortized, rather it is tested for impairment annually, and will be tested for impairment between annual tests if an event occurs or circumstances change that would indicate the carrying amount may be impaired. An impairment loss generally would be recognized when the carrying amount of the reporting unit’s net assets exceeds the estimated fair value of the reporting unit and would be measured as the excess carrying value of goodwill over the derived fair value of goodwill. The Company’s policy is to perform its annual impairment testing for its reporting units on December 31, of each fiscal year.

 

Derivative Financial Instruments

 

The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the statements of operations. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument could be required within 12 months of the balance sheet date. At each reporting date, the Company reviews its convertible securities to determine that their classification is appropriate.

 

Income (loss) per Share

 

Basic income (loss) per share is computed by dividing the net income (loss) available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted net loss per share is calculated by dividing the net loss by the weighted average number of common shares outstanding during the period plus any potentially dilutive shares related to the issuance of shares from stock warrants. For the three and six months ended June 30, 2018, the dilutive impact of warrants exercisable into 53,556 shares of common stock have been excluded because their impact on the loss per share is anti-dilutive. For the three and six months ended June 30, 2017, there were no potentially dilutive shares outstanding.

 

Foreign currency translation

 

The reporting currency of the Company is the United States Dollars (“US$”) and the accompanying condensed consolidated financial statements have been expressed in US$. In addition, the Company’s operating subsidiaries maintain their books and records in their respective local currency, which consists of the Malaysian Ringgit (“MYR”), Chinese Renminbi (“RMB”), and Hong Kong Dollars (“HK$”), which is also the respective functional currency of the subsidiaries.

 

In general, for consolidation purposes, assets and liabilities of the Company’s subsidiaries whose functional currency is not the US$ are translated into US$ using the exchange rate on the balance sheet date. Revenues and expenses are translated at average rates prevailing during the period. The gains and losses resulting from translation of financial statements of a foreign subsidiary are recorded as a separate component of accumulated other comprehensive loss within stockholders’ equity.

 

Translation of amounts from the local currencies of the Company into US$ has been made at the following exchange rates for the respective periods:

 

    As of and for the six months ended
June 30,
 
    2018     2017  
Period-end MYR : US$1 exchange rate     4.04       4.29  
Period-average MYR : US$1 exchange rate     3.94       4.37  
Period-end RMB : US$1 exchange rate     6.62       6.78  
Period-average RMB : US$1 exchange rate     6.38       6.85  
Period-end / average HK$ : US$1 exchange rate     7.75       7.75  

 

Fair value of financial instruments

 

The Company follows the guidance of ASC 820-10, “Fair Value Measurements and Disclosures” (“ASC 820-10”), with respect to financial assets and liabilities that are measured at fair value. ASC 820-10 establishes a three-tier fair value hierarchy that prioritizes the inputs used in measuring fair value as follows:

 

Level 1 : Observable inputs such as quoted prices in active markets;
   
Level 2 : Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and
   
Level 3 : Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions

 

As of June 30, 2018, the Company’s balance sheet included the fair value of derivative liabilities of $523,585 which were based on Level 2 measurements.

 

The Company believes the carrying amount reported in the balance sheet for cash and cash equivalents, accounts receivable, other investments, notes receivable, accounts payable and accrued liabilities, deferred costs of revenue, deferred revenue, and due to related parties, approximate their fair values because of the short-term nature of these financial instruments.

 

Concentrations of risks

 

For the three and six months ended June 30, 2018 and 2017, no customer accounted for 10% or more of revenues or accounts receivable at quarter-end.

 

For the three and six months ended June 30, 2018 and 2017, no vendor accounted for 10% or more of the Company’s cost of revenues, or accounts payable at quarter-end.

 

Exchange rate risk

 

Foreign currency exchange rate movements create a degree of risk by affecting the U.S. dollar value of sales made and costs incurred in foreign currencies. Additionally, we have balance sheet positions denominated in foreign currencies, thereby creating exposure to movements in exchange rates. The Company does not hold any derivative instruments and does not attempt to mitigate its foreign currency exposure through the acquisition of any speculative or leveraged financial instruments.

 

Economic and political risks

 

Substantially all of the Company’s services are conducted in Malaysia, the People’s Republic of China (“PRC”) and the Asian region. Among other risks, the Company’s operations in Malaysia are subject to the risks of restrictions on transfer of funds; export duties, quotas, and embargoes; domestic and international customs and tariffs; changing taxation policies; foreign exchange restrictions; and political conditions and governmental regulations in Malaysia.

 

The Company’s operations in the PRC are subject to special considerations and significant risks not typically associated with companies in North America and Western Europe. These include risks associated with, among others, the political, economic and legal environment and foreign currency exchange. The Company’s results may be adversely affected by changes in the political conditions in the PRC, and by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion, remittances abroad, and rates and methods of taxation.

 

Recent accounting pronouncements

 

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). This update will require the recognition of a right-of-use asset and a corresponding lease liability, initially measured at the present value of the lease payments, for all leases with terms longer than 12 months. For operating leases, the asset and liability will be expensed over the lease term on a straight-line basis, with all cash flows included in the operating section of the statement of cash flows. For finance leases, interest on the lease liability will be recognized separately from the amortization of the right-of-use asset in the statement of comprehensive income and the repayment of the principal portion of the lease liability will be classified as a financing activity while the interest component will be included in the operating section of the statement of cash flows. ASU 2016-02 is effective for annual and interim reporting periods beginning after December 15, 2018 for public business entities. Early adoption is permitted. Upon adoption, leases will be recognized and measured at the beginning of the earliest period presented using a modified retrospective approach. The Company is currently evaluating the impact of the adoption of ASU 2016-02 on its financial statements and related disclosures.

 

In November 2016, the FASB issued Accounting Standards Update No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash, which requires companies to include amounts generally described as restricted cash and restricted cash equivalents in cash and cash equivalents when reconciling beginning-of-period and end-of-period total amounts shown on the statements of cash flows. The Company adopted the guidance of ASU No. 2016-18 on January 1, 2018 and there was no effect to the Company’s consolidated financial statements.

 

Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company’s present or future financial statements.

XML 21 R10.htm IDEA: XBRL DOCUMENT v3.10.0.1
Restatement of Previously Issued Unaudited Condensed Consolidated Financial Statements
6 Months Ended
Jun. 30, 2018
Accounting Changes and Error Corrections [Abstract]  
Restatement of Previously Issued Unaudited Condensed Consolidated Financial Statements

NOTE 2 – RESTATEMENT OF PREVIOUSLY ISSUED UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

The financial statements for the six months ended June 30, 2017 have been restated. On March 15, 2018, our management determined the following:

 

  that the Company’s method of recognizing revenue on service contracts was erroneously accounted for when billed.
  that the Company erroneously used an incorrect exchange rate in the translation of fixed assets into the Company’s reporting currency.
  that the Company’s accounting for the acquisition of Yabez (Hong Kong) Company Limited in 2015 and for the acquisition of Billion Sino Holdings Limited were erroneously recorded using the partial goodwill method.
  that the Company erroneously recorded goodwill on the acquisition of the assets of Greenpro Credit Limited (formerly Gushen Credit Limited), which was an asset acquisition.
  that the Company erroneously did not record an allowance for uncollectible accounts receivable and did not write off long-outstanding receivables as bad debts at June 30, 2017 and December 31, 2016.

 

The effects on the previously issued financial statements are as follows:

 

(A) In 2017, the Company corrected its method of recognizing revenue from certain service contracts to use the performance completion method. Previously the Company had recognized revenues upon billings. The Company has restated its consolidated financial statements as of and for the six months ended June 30, 2017 to reflect the correction of the error. At June 30, 2017 and for the six months ended June 30, 2017, the restatement resulted in the Company recording $335,423 decrease in accounts receivable, $52,139 of deferred costs of revenue, $355,000 of deferred revenue, $185,216 increase in accumulated deficit, $430,000 of decreased service revenue, $23,068 of additional costs of service revenue, and an increase in net loss of $453,068. For the three months ended June 30, 2017, the restatement resulted in the Company recording $510,000 of decreased service revenue, $29,477 of additional costs of service revenue, $1,257 of additional general and administrative expenses, and an increase in net loss of $540,734.
   
(B)

At December 31, 2015, the Company erroneously calculated the cost of real estate held for investment due to an incorrect exchange rate used for translation of amounts from the local currencies of the Company’s operating subsidiaries into the reporting currency of the Company. In preparing its financial statements for the six months ended June 30, 2017, the Company determined that the incorrect exchange rate was used and corrected it. The Company has restated its consolidated financial statements as of June 30, 2017 to reflect the correction of the error and real estate held for investment was decreased by $173,888 and accumulated other comprehensive income was decreased by $175,833.

 

In addition, the Company erroneously calculated the noncontrolling interest of Yabez (Hong Kong) Company Limited for the year ended December 31, 2015. The cumulative effect of the correction of the error was to decrease the accumulated deficit and increase the noncontrolling interest by $3,088 at June 30, 2017. There was no effect on net loss for 2017.

   
(C)

In September 2015, the Company acquired Yabez (Hong Kong) Company Limited and calculated goodwill using the partial goodwill method. The Company has restated its consolidated financial statements as of and for the six months ended June 30, 2017 to reflect the full goodwill method as required by US GAAP. The cumulative effect of the correction of the error was to increase goodwill by $174,001 and noncontrolling interest by $174,001 at June 30, 2017. There was no effect on net loss for 2017.

 

In April 2017, the Company acquired Billion Sino Holdings Limited and calculated goodwill using the partial goodwill method. The Company has restated its consolidated financial statements as of and for the six months ended June 30, 2017 to reflect the full goodwill method as required by US GAAP. The cumulative effect of the correction of the error was to increase goodwill by $179,162, decrease additional paid-in capital by $340,645 and increase noncontrolling interest by $519,807 at June 30, 2017. There was no effect on net loss for 2017.

 

 

   In April 2017, the Company acquired assets in Greenpro Credit Limited (formerly Gushen Credit Limited). The acquisition was initially treated as a business combination instead of an asset acquisition. The Company restated its consolidated financial statements as of and for the six months ended June 30, 2017 to reflect the elimination of goodwill. The cumulative effect of the correction of the error was to decrease goodwill by $93,566 and increase general and administrative expenses and net loss the three and six months ended June 30, 2017 by $93,566.
   
(D) In preparing its financial statements for the six months ended June 30, 2017, the Company erroneously did not record an allowance for uncollectible accounts and did not write off long-outstanding receivables as bad debts. The Company has restated its consolidated financial statements as of and for the six months ended June 30, 2017 to decrease accounts receivable by $45,423, increase the allowance for uncollectible accounts by $82,037, increase accumulated deficit by $54,799, increase bad debt expense by $41,781 and increase provision expense by $30,881.

 

The following table presents the effect of the restatements on the Company’s previously issued consolidated balance sheet:

 

    As of June 30, 2017 (Unaudited)  
    As Previously Reported     Adjustments     Notes   As Restated  
                       
Accounts receivable, net   $ 706,973     $ (417,460 )   A,D   $ 289,513  
Deferred costs related to revenue     -       52,139     A     52,139  
Real estate held for investment, net     1,007,706       (173,888 )   B     833,818  
Goodwill     2,686,650       259,587     C     2,946,237  
Deferred revenue     -       355,000     A     355,000  
Additional paid in capital     8,803,996       (338,702 )   B,C     8,465,294  
Accumulated other comprehensive income (loss)     87,858       (175,834 )   B     (87,976 )
Accumulated deficit     (664,349 )     (810,795 )   A,B,C,D     (1,475,144 )
Noncontrolling interests in consolidated subsidiaries     178,398       690,719     B, C     869,117  

 

The following table presents the effect of the restatements on the Company’s previously issued consolidated statements of operations and comprehensive loss:

 

    For the three months ended June 30, 2017 (Unaudited)  
    As
Previously
Reported
    Adjustments     Notes   As Restated  
                       
Service revenue   $ 997,482     $ (510,000 )   A   $ 487,482  
Cost of service revenue     (122,997 )     29,477     A     (93,520 )
General and administrative     (683,467 )     (94,823 )   C,D     (778,290 )
Net income (loss)     219,932       (575,345 )   A,C,D     (355,413 )
Net income (loss) attribute to common shareholders     234,391       (575,345 )         (340,953 )
Foreign currency translation income (loss)     (2,172 )     22,000     B     19,828  
Comprehensive income (loss)     232,219       (553,345 )         (321,125 )
                             
Net loss per share, basic and diluted   $ (0.00 )   $ (0.01 )       $ (0.01 )

 

    For the six months ended June 30, 2017 (Unaudited)  
    As
Previously
Reported
    Adjustments     Notes   As Restated  
                       
Service revenue   $ 1,743,649     $ (430,000 )   A   $ 1,313,649  
Cost of service revenue     (267,476 )     (23,068 )   A     (290,544 )
General and administrative     (1,394,216 )     (166,228 )   C,D     (1,560,444 )
Net income (loss)     108,136       (619,296 )   A,C,D     (511,160 )
Net income (loss) attribute to common shareholders     125,904       (619,296 )         (493,392 )
Foreign currency translation income (loss)     (8,606 )     32,448     B     23,842  
Comprehensive income (loss)     117,298       (586,848 )         (469,550 )
                             
Net loss per share, basic and diluted   $ (0.00 )   $ (0.01 )       $ (0.01 )

 

The following table presents the effect of the restatements on the Company’s previously issued consolidated statement of cash flows:

 

    For the six months ended June 30, 2017 (Unaudited)  
    As Previously Reported     Adjustments     Notes   As Restated  
                       
Cash flows from operating activities:                            
Net income (loss)   $ 108,136     $ (619,296 )   A,C,D   $ (511,160 )
Provision for bad debt     -       30,881     D     30,881  
Changes in operating assets and liabilities:                            
Accounts receivable, net     (372,214 )     331,781     A     (40,433 )
Deferred costs of revenue     -       23,068     A     23,068  
Accounts payable and accrued liabilities     (270,603 )     93,566     C     (177,037 )
Deferred revenue     -       140,000     A     140,000  

 

The information herein amends and supersedes the information contained in our Quarterly Report on Form 10-Q for the six months ended June 30, 2017. The affected financial statements and related financial information contained in our previously filed reports for those periods should no longer be relied upon and should be read only in conjunction with the Unaudited financial information set forth herein.

XML 22 R11.htm IDEA: XBRL DOCUMENT v3.10.0.1
Note Receivable, Related Party
6 Months Ended
Jun. 30, 2018
Debt Disclosure [Abstract]  
Note Receivable, Related Party

NOTE 3 – NOTE RECEIVABLE, RELATED PARTY

 

On June 16, 2018, the Company entered into a loan agreement with Leader Financial Asset Management Ltd. (“Leader Financial”) and loaned Leader Financial $300,000. The loan is unsecured, bears interest at 6% per annum, and is due on June 15, 2020. The Managing Director of Leader Financial is a consultant to the Company, and is also a director of Aquarius Protection Fund, a shareholder in the Company. Leader Financial is also the investment manager of Aquarius Protection Fund.

XML 23 R12.htm IDEA: XBRL DOCUMENT v3.10.0.1
Other Investments
6 Months Ended
Jun. 30, 2018
Other Investments [Abstract]  
Other Investments

NOTE 4 – OTHER INVESTMENTS

 

    As of     As of  
    June 30, 2018     December 31, 2017  
      (Unaudited)          
(A) Investment in related parties   $ 301,617     $ 51,613  
(B) Investments in unconsolidated entities     1,750       3,500  
Cash surrender value of life insurance, net of policy loan     92,662       56,058  
Total   $ 396,029     $ 130,457  

 

(A) At June 30, 2018 and December 31, 2017, the Company had an investment in Greenpro Trust Limited (the “Trust”) of $51,613, which is approximately 11.76% of the equity interest of the Trust and is recorded at cost, which approximates fair value. The Trust is a trust company organized in Hong Kong and provides trust services to high net worth individuals and families. Mr. Lee Chong Kuang and Mr. Loke Che Chan, Gilbert are common directors of the Trust and the Company.

 

  At June 30, 2018, the Company had an investment in Acorn Group Holdings Limited (“Acorn”) of $250,000, which approximates a 2% equity interest of Acorn and is recorded at cost, which approximates fair value. Acorn is a company incorporated in the Cayman Islands that provides pension and administrative services. It was determined that the Company can significantly influence Acorn based on common business relationships.
   
(B) At June 30, 2018, the Company had an investment in an unconsolidated entity for $1,750. The Company’s ownership was less than 5% and the investment is recorded at cost, which approximates fair value. At December 31, 2017, the Company had investments in two unconsolidated entities aggregating $3,500.

XML 24 R13.htm IDEA: XBRL DOCUMENT v3.10.0.1
Derivative Liabilities
6 Months Ended
Jun. 30, 2018
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivative Liabilities

NOTE 5 - DERIVATIVE LIABILITIES

 

On June 12, 2018, warrants exercisable into 53,556 shares of the Company’s common stock were issued as placement agent fees related to the Company’s sale of common stock (See Note 6). The strike price of warrants issued by the Company is denominated in US dollars, a currency other than the Company’s functional currencies, the HK$, RMB, and MYR. As a result, the warrants are not considered indexed to the Company’s own stock, and the Company characterized the fair value of the warrants as a derivative liability upon issuance. The derivative liability is re-measured at the end of every reporting period with the change in value reported in the statement of operations.

 

The derivative liabilities were valued using the Black-Scholes-Merton valuation model with the following assumptions:

 

    As of     As of  
    June 30, 2018     June 12, 2018  
      (Unaudited)       (issuance)  
Risk-free interest rate   $ 3.0 %   $ 2.9 %
Expected volatility     196 %     165 %
Expected life (in years)     5 years       5 years  
Expected dividend yield     0.00 %     0.00 %
Fair Value of warrants   $ 523,585     $ 508,589  

 

The risk-free interest rate is based on the yield available on U.S. Treasury securities. The Company estimates volatility based on the historical volatility if its common stock. The expected life of the warrants is based on the expiration date of the warrants. The expected dividend yield was based on the fact that the Company has not paid dividends to common shareholders in the past and does not expect to pay dividends to common shareholders in the future.

XML 25 R14.htm IDEA: XBRL DOCUMENT v3.10.0.1
Due to Related Parties
6 Months Ended
Jun. 30, 2018
Due to Related Parties [Abstract]  
Due to Related Parties

NOTE 6 - DUE TO RELATED PARTIES

 

    As of     As of  
    June 30, 2018     December 31, 2017  
    (Unaudited)        
Due to noncontrolling interests   $ 1,332,273      $ 1,617,241  
Due to shareholders     101,113       3,993  
Due to directors     3,745       85,212  
Due to related companies     110,927       107,484  
Total   $ 1,548,058     $ 1,813,930  

 

At June 30, 2018 and December 31, 2017, $1,235,097 and $1,441,548, respectively, was due to the noncontrolling interest in Forward Win International Limited, and is unsecured, bears no interest, and is payable upon demand. At June 30, 2018 and December 31, 2017, $97,176 and $175,693, respectively, was due to the noncontrolling interest in BSHL and is unsecured, bears no interest, and is payable upon demand.

 

Due to shareholders, directors, and related companies represents expenses paid by the related companies or shareholder or director to third parties on behalf of the Company, are non-interest bearing, and are due on demand.

XML 26 R15.htm IDEA: XBRL DOCUMENT v3.10.0.1
Stockholders' Equity
6 Months Ended
Jun. 30, 2018
Equity [Abstract]  
Stockholders' Equity

NOTE 7 – STOCKHOLDERS’ EQUITY

 

In June 2018, the Company completed an underwritten public offering of 535,559 shares of the Company’s common stock at a price of $6.00 per share. The net proceeds to the Company from the offering were $2,765,705, after deducting underwriting commissions and offering expenses payable by the Company of $447,649. In addition, warrants issued to the placement agent with a fair value of $508,589 were included with the offering costs.

XML 27 R16.htm IDEA: XBRL DOCUMENT v3.10.0.1
Related Party Transactions
6 Months Ended
Jun. 30, 2018
Related Party Transactions [Abstract]  
Related Party Transactions

NOTE 8 - RELATED PARTY TRANSACTIONS

 

 

    For the six months ended June 30,  
    2018     2017  
Revenue from related parties is comprised of the following:                
Service revenue                
- Related party B   $ 52,150     $ 163,400  
- Related party C     -       90,051  
- Related party D     208,666       -  
Total   $ 260,816     $ 253,451  
                 
Rental revenue                
- Related party A   $ -     $ 3,484  
- Related party C     -       26,005  
Total   $ -     $ 29,489  
                 
Cost of service revenue                
- Related party E   $ 66,000     $ -  
Total   $ 66,000     $ -  

 

Related party A is under common control of Mr. Loke Che Chan, Gilbert, a director of the Company.

 

Related party B represent companies where Greenpro owns a certain percentage of their company shares.

 

Related party C represent companies that we have determined that we can significantly influence based on our common business relationships.

 

Related party D represents companies whose CEO is a consultant to the Company, and who is also a director of Aquarius Protection Fund, a shareholder in the Company.

 

Related party E represent a family member of Mr. Loke Che Chan, Gilbert, a director of the Company.

XML 28 R17.htm IDEA: XBRL DOCUMENT v3.10.0.1
Segment Information
6 Months Ended
Jun. 30, 2018
Segment Reporting [Abstract]  
Segment Information

NOTE 9 - SEGMENT INFORMATION

 

ASC 280, “Segment Reporting” establishes standards for reporting information about operating segments on a basis consistent with the Company’s internal organization structure as well as information about services categories, business segments and major customers in financial statements. The Company has two reportable segments that are based on the following business units: service business and real estate business. In accordance with the “Segment Reporting” Topic of the ASC, the Company’s chief operating decision maker has been identified as the Chief Executive Officer and President, who reviews operating results to make decisions about allocating resources and assessing performance for the entire Company. Existing guidance, which is based on a management approach to segment reporting, establishes requirements to report selected segment information quarterly and to report annually entity-wide disclosures about products and services, major customers, and the countries in which the entity holds material assets and reports revenue. All material operating units qualify for aggregation under “Segment Reporting” due to their similar customer base and similarities in: economic characteristics; nature of products and services; and procurement, manufacturing and distribution processes. The Company operates two reportable business segments:

 

Service business – provision of corporate advisory and business solution services
   
Real estate business – leasing and trading of commercial real estate properties in Hong Kong and Malaysia

 

The Company had no inter-segment sales for the periods presented. Summarized financial information concerning the Company’s reportable segments is shown as below:

 

(a) By Categories

 

    For the six months ended June 30, 2018 (Unaudited)  
    Real estate business     Service business     Corporate     Total  
                         
Revenues   $ 233,904     $ 1,314,771     $ -     $ 1,548,675  
Cost of revenues     (134,754 )     (338,315 )     (48,000 )     (521,069 )
Depreciation and amortization     16,873       110,686       8,162       135,721  
Net income (loss)     79,283       (448,630 )     (4,322 )     (373,669 )
                                 
Total assets     3,420,938       6,952,628       2,572,084       12,945,650  
Capital expenditures for long-lived assets   $ -     $ 35,503     $ 248,250     $ 283,753  

 

 

    For the six months ended June 30, 2017 (Unaudited, as Restated)  
    Real estate business     Service business     Corporate     Total  
                         
Revenues   $ 85,817     $ 1,313,649     $ -     $ 1,399,466  
Cost of revenues     (30,901 )     (290,544 )     -       (321,445 )
Depreciation and amortization     4,271       83,623       -       87,894  
Net income (loss)     18,153       (528,686 )     (627 )     (511,160 )
                                 
Total assets     3,792,530       6,650,490       235,622       10,678,642  
Capital expenditures for long-lived assets   $ -     $ 38,444     $ -     $ 38,444  

 

 

(b) By Geography*

 

    For the six months ended June 30, 2018 (Unaudited)  
    Hong Kong     Malaysia     China     Total  
                         
Revenues   $ 1,116,518     $ 325,213     $ 106,944     $ 1,548,675  
Cost of revenues     (360,170 )     (153,155 )     (7,744 )     (521,069 )
Depreciation and amortization     50,250       17,693       67,778       135,721  
Net income (loss)     (172,789 )     (34,764 )     (166,116 )     (373,669 )
                                 
Total assets     8,363,763       1,142,819       3,439,068       12,945,650  
Capital expenditures for long-lived assets   $ 249,331     $ (5 )   $ 34,427     $ 283,753  

 

    For the six months ended June 30, 2017 (Unaudited, as Restated)  
    Hong Kong     Malaysia     China     Total  
                         
Revenues   $ 993,915     $ 350,862     $ 54,689     $ 1,399,466  
Cost of revenues     (209,282 )     (112,163 )     -       (321,445 )
Depreciation and amortization     39,061       15,557       33,276       87,894  
Net income (loss)     (423,696 )     21,907       (109,371 )     (511,160 )
                                 
Total assets     7,107,405       1,297,552       2,273,685       10,678,642  
Capital expenditures for long-lived assets   $ 16,690     $ 12,087     $ 9,667     $ 38,444  

 

*Revenues and costs are attributed to countries based on the location of customers.

XML 29 R18.htm IDEA: XBRL DOCUMENT v3.10.0.1
Subsequent Events
6 Months Ended
Jun. 30, 2018
Subsequent Events [Abstract]  
Subsequent Events

NOTE 10 – SUBSEQUENT EVENTS

 

On July 18, 2018, the Company issued 906,666 shares of the Company’s common stock at a price of $7.50 per share. The net proceeds to the Company after deducting underwriting commissions were approximately $6.7 million.

 

On July 3, 2018, the Company acquired 9.74% of KSP Holding Group Company Limited (“KSPH”) for cash consideration of $75,000. On July 31, 2018, the Company acquired 39.26% of KSPH in exchange for 38,524 shares of the Company’s common stock initially valued at $7.50 per share, or an aggregate of $288,930. At July 31, 2018, the Company owns 49% of KSPH. KSPH is incorporated in Thailand and provides accounting, auditing and consulting services in Thailand. On July 31, 2018, the Company also issued 578 shares of its common stock to advisors as a fee for the acquisition.

XML 30 R19.htm IDEA: XBRL DOCUMENT v3.10.0.1
Organization and Summary of Significant Accounting Policies (Policies)
6 Months Ended
Jun. 30, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Basis of Presentation

Basis of presentation

 

The accompanying unaudited condensed consolidated financial statements as of and for the six months ended June 30, 2018 and 2017, have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) that permit reduced disclosure for interim periods. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) have been condensed or omitted. 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 period ended June 30, 2018 are not necessarily indicative of the results that may be expected for the year ending December 31, 2018. The Condensed Consolidated Balance Sheet information as of December 31, 2017 was derived from the Company’s audited Consolidated Financial Statements as of and for the year ended December 31, 2017 included in the Company’s Annual Report on Form 10-K filed with the SEC on April 13, 2018. These financial statements should be read in conjunction with that report.

 

The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries and majority-owned subsidiaries over which the Company exercises control, and entities for which the Company is the primary beneficiary. Intercompany transactions and balances were eliminated in consolidation.

 

At June 30, 2018 and December 31, 2017, the consolidated financial statements include noncontrolling interests related to the Company’s ownership of 60% of Forward Win International Limited, Yabez (Hong Kong) Company Limited, Greenpro Global Capital Sdn Bhd (former known as Greenpro Wealthon Sdn Bhd), Billion Sino Holdings Limited and Parich Wealth Management Limited, and the Company’s ownership of 51% of Greenpro Capital Village Sdn Bhd and Greenpro Family Office Limited.

Going Concern

Going Concern

 

The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. During the six months ended June 30, 2018, the Company incurred a loss from operations of $611,964 and used cash in operations of $70,229, and at June 30, 2018, the Company had a working capital deficit of $636,187. These factors raise substantial doubt about the Company’s ability to continue as a going concern within one year of the date that the financial statements are issued. In addition, the Company’s independent registered public accounting firm, in its report on the Company’s December 31, 2017 financial statements, has expressed substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

 

The Company’s ability to continue as a going concern is dependent upon improving its profitability and the continuing financial support from its shareholders. Management believes the existing shareholders or external financing will provide the additional cash to meet the Company’s obligations as they become due. On June 12, 2018, the Company sold 535,559 shares of its common stock in an underwritten public offering at $6.00 per share for net proceeds of approximately $2.7 million, after deducting expenses of the offering. On July 18, 2018, the Company sold 906,666 shares of its common stock at $7.50 per share in a private placement for net proceeds of approximately $6.7 million. Despite the amount of funds that we have raised, no assurance can be given that any future financing, if needed, will be available or, if available, that it will be on terms that are satisfactory to the Company. Even if the Company is able to obtain additional financing, if needed, it may contain undue restrictions on its operations, in the case of debt financing, or cause substantial dilution for its stockholders, in the case of equity financing.

Use of Estimates

Use of estimates

 

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions relating to the reporting of assets and liabilities and the disclosure of contingent liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Significant accounting estimates include certain assumptions related to, among others, the allowance for doubtful accounts receivable, impairment analysis of real estate assets and other long term assets including goodwill, valuation allowance on deferred income taxes, the assumptions used in the valuation of the derivative liability, and the accrual of potential liabilities. Actual results may differ from these estimates.

Cash, Cash Equivalents, and Restricted Cash

Cash, cash equivalents, and restricted cash

 

Cash, cash equivalents, and restricted cash were denominated in the following currencies at:

 

    As of
June 30, 2018
    As of
December 31, 2017
 
    (Unaudited)        
Cash, cash equivalents, and restricted cash                
Denominated in United States Dollars   $ 1,687,156     $ 283,674  
Denominated in Hong Kong dollars     975,313       568,008  
Denominated in Chinese Renminbi     171,854       239,502  
Denominated in Malaysian Ringgit     72,468       71,210  
Cash, cash equivalents, and restricted cash   $ 2,906,791     $ 1,162,394  

 

At June 30, 2018 and December 31, 2017, cash included funds held by employees of $8,179 and $32,673, respectively, and was held to facilitate payment of expenses in local currencies and to facilitate third-party online payment platforms in which the Company had not set up corporate accounts (WeChat Pay and Alipay).

Revenue Recognition

Revenue recognition

 

Effective January 1, 2018, the Company adopted the guidance of Accounting Standards Codification (ASC) 606, Revenue from Contracts. The implementation of ASC 606 did not have a material impact on the Company’s consolidated financial statements. ASC 606 creates a five-step model that requires entities to exercise judgment when considering the terms of contracts, which includes (1) identifying the contracts or agreements with a customer, (2) identifying our performance obligations in the contract or agreement, (3) determining the transaction price, (4) allocating the transaction price to the separate performance obligations, and (5) recognizing revenue as each performance obligation is satisfied. The Company only applies the five-step model to contracts when it is probable that the Company will collect the consideration it is entitled to in exchange for the services it transfers to its clients.

 

The Company’s revenue consists of revenue from providing business consulting and corporate advisory services (“service revenue”), revenue from the sale of real estate properties, and revenue from the rental of real estate properties.

 

Revenue from services

 

For certain of our service contracts providing assistance to clients in capital market listings (“Listing services”), our services provided are considered to be one performance obligation. Revenue and expenses are deferred until the performance obligation is complete and collectability of the consideration is probable. For service contracts where the performance obligation is not completed, deferred costs of revenue are recorded as incurred and deferred revenue is recorded for any payments received on such yet to be completed performance obligations. On an ongoing basis, management monitors these contracts for profitability and when needed may record a liability if a determination is made that costs will exceed revenue.

 

For other services such as company secretarial, accounting, financial analysis and related services (“Non-Listing services”), the Company’s performance obligations are satisfied, and the related revenue is recognized, as services are rendered. For contracts in which we act as an agent, the Company reports revenue net of expenses paid.

 

The Company offers no discounts, rebates, rights of return, or other allowances to clients which would result in the establishment of reserves against service revenue. Additionally, to date, the Company has not incurred incremental costs in obtaining a client contract.

 

Revenue from the sale of real estate properties

 

Effective January 1, 2018, the Company adopted the guidance of ASC 610-20, Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets (“ASC 610-20”), which applies to sales or transfers to noncustomers of nonfinancial assets. Generally, the Company’s sales of its real estate properties is considered a sale of a nonfinancial asset. Under ASC 610-20, the Company derecognizes the asset and recognizes a gain or loss on the sale of the real estate when control of the underlying asset transfers to the buyer. During the three and six months ended June 30, 2018, the Company recognized revenue from the sale of one unit of its real estate property held for sale. During the three and six months ended June 30, 2017, there were no sales of real estate. The adoption of ASU 610-20 had no impact on the Company’s consolidated financial statements.

 

Revenue from the rental of real estate properties

 

Rental revenue represents lease rental income from the Company’s tenants. The tenants pay monthly in accordance with lease agreements and the Company recognizes the income ratably over the lease term as this is the most representative of the pattern in which the benefit is expected to be derived from the underlying asset.

 

Cost of revenues

 

Cost of service revenue primarily consists of employee compensation and related payroll benefits, company formation costs, and other professional fees directly attributable to the services rendered.

 

Cost of real estate properties sold primarily consists of the purchase price of property, legal fees, improvement costs to the building structure, and other acquisition costs. Selling and advertising costs are expensed as incurred.

 

Cost of rental revenue primarily includes costs associated with repairs and maintenance, property insurance, depreciation and other related administrative costs. Property management fees and utility expenses are paid directly by tenants.

 

The following table provides information about disaggregated revenue based on revenue by service lines and revenue by geographic area:

 

    Three Months Ended June 30,  
    2018     2017  
    (Unaudited)     (Unaudited,
As Restated)
 
Revenue by service lines:                
Corporate advisory – Non-Listing services   $ 615,643     $ 277,482  
Corporate advisory – Listing services     -       210,000  
Rental of real estate properties     46,387       56,661  
Sale of real estate properties     146,073       -  
Total revenue   $ 808,103     $ 544,143  

 

    Three Months Ended June 30,  
    2018     2017  
    (Unaudited)     (Unaudited,
As Restated)
 
Revenue by geographic area:                
Hong Kong   $ 577,571     $ 386,400  
Malaysia     173,551       136,200  
China     56,981       21,543  
Total revenue   $ 808,103     $ 544,143  

 

    Six Months Ended June 30,  
    2018     2017  
    (Unaudited)     (Unaudited,
As Restated)
 
Revenue by service lines:                
Corporate advisory – Non-Listing services   $ 1,114,771     $ 1,103,649  
Corporate advisory – Listing services     200,000       210,000  
Rental of real estate properties     87,831       85,817  
Sale of real estate properties     146,073       -  
Total revenue   $ 1,548,675     $ 1,399,466  

 

    Six Months Ended June 30,  
    2018     2017  
    (Unaudited)     (Unaudited,
As Restated)
 
Revenue by geographic area:                
Hong Kong   $ 1,116,518     $ 993,915  
Malaysia     325,213       350,862  
China     106,944       54,689  
Total revenue   $ 1,548,675     $ 1,399,466  

 

Our contract balances include deferred costs of revenue and deferred revenue.

 

Deferred Revenue

 

For service contracts where the performance obligation is not completed, deferred revenue is recorded for any payments received in advance of the performance obligation. Changes in deferred revenue were as follows:

 

    Six Months Ended
June 30, 2018
 
    (Unaudited)  
Deferred revenue, January 1, 2018   $ 345,000  
New contract liabilities     665,400  
Performance obligations satisfied     (200,000 )
Deferred revenue, June 30, 2018   $ 810,400  

 

Deferred Costs of Revenue

 

For service contracts where the performance obligation is not completed, deferred costs of revenue are recorded for any costs incurred in advance of the performance obligation.

 

Deferred revenue and deferred costs of revenue at June 30, 2018 and December 31, 2017 are classified as current assets or current liabilities and totaled:

 

    As of
June 30, 2018
    As of
December 31, 2017
 
      (Unaudited)          
Deferred revenue   $ 810,400     $ 345,000  
Deferred costs of revenue   $ 141,436     $ 74,990  

Impairment of Long-lived Assets

Impairment of long-lived assets

 

Long-lived assets primarily include real estate held for investment, property and equipment, and intangible assets. In accordance with the provision of ASC 360, the Company generally conducts its annual impairment evaluation of its long-lived assets in the fourth quarter of each year, or more frequently if indicators of impairment exist, such as a significant sustained change in the business climate. The recoverability of long-lived assets is measured at the reporting unit level. If the total of the expected undiscounted future net cash flows is less than the carrying amount of the asset, a loss is recognized for the difference between the fair value and carrying amount of the asset. As at June 30, 2018, the Company determined there were no indicators of impairment of its real estate held for investment, its property and equipment, or its intangible assets. In addition, for real estate held for sale, an impairment loss is the adjustment to fair value less estimated cost to dispose of the asset.

Goodwill

Goodwill

 

Goodwill is the excess of cost of an acquired entity over the fair value of amounts assigned to assets acquired and liabilities assumed in a business combination. Under the guidance of ASC 350, goodwill is not amortized, rather it is tested for impairment annually, and will be tested for impairment between annual tests if an event occurs or circumstances change that would indicate the carrying amount may be impaired. An impairment loss generally would be recognized when the carrying amount of the reporting unit’s net assets exceeds the estimated fair value of the reporting unit and would be measured as the excess carrying value of goodwill over the derived fair value of goodwill. The Company’s policy is to perform its annual impairment testing for its reporting units on December 31, of each fiscal year.

Derivative Financial Instruments

Derivative Financial Instruments

 

The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the statements of operations. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument could be required within 12 months of the balance sheet date. At each reporting date, the Company reviews its convertible securities to determine that their classification is appropriate.

Income (Loss) Per Share

Income (loss) per Share

 

Basic income (loss) per share is computed by dividing the net income (loss) available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted net loss per share is calculated by dividing the net loss by the weighted average number of common shares outstanding during the period plus any potentially dilutive shares related to the issuance of shares from stock warrants. For the three and six months ended June 30, 2018, the dilutive impact of warrants exercisable into 53,556 shares of common stock have been excluded because their impact on the loss per share is anti-dilutive. For the three and six months ended June 30, 2017, there were no potentially dilutive shares outstanding.

Foreign Currencies Translation

Foreign currency translation

 

The reporting currency of the Company is the United States Dollars (“US$”) and the accompanying condensed consolidated financial statements have been expressed in US$. In addition, the Company’s operating subsidiaries maintain their books and records in their respective local currency, which consists of the Malaysian Ringgit (“MYR”), Chinese Renminbi (“RMB”), and Hong Kong Dollars (“HK$”), which is also the respective functional currency of the subsidiaries.

 

In general, for consolidation purposes, assets and liabilities of the Company’s subsidiaries whose functional currency is not the US$ are translated into US$ using the exchange rate on the balance sheet date. Revenues and expenses are translated at average rates prevailing during the period. The gains and losses resulting from translation of financial statements of a foreign subsidiary are recorded as a separate component of accumulated other comprehensive loss within stockholders’ equity.

 

Translation of amounts from the local currencies of the Company into US$ has been made at the following exchange rates for the respective periods:

 

    As of and for the six months ended
June 30,
 
    2018     2017  
Period-end MYR : US$1 exchange rate     4.04       4.29  
Period-average MYR : US$1 exchange rate     3.94       4.37  
Period-end RMB : US$1 exchange rate     6.62       6.78  
Period-average RMB : US$1 exchange rate     6.38       6.85  
Period-end / average HK$ : US$1 exchange rate     7.75       7.75

Fair Value of Financial Instruments

Fair value of financial instruments

 

The Company follows the guidance of ASC 820-10, “Fair Value Measurements and Disclosures” (“ASC 820-10”), with respect to financial assets and liabilities that are measured at fair value. ASC 820-10 establishes a three-tier fair value hierarchy that prioritizes the inputs used in measuring fair value as follows:

 

Level 1 : Observable inputs such as quoted prices in active markets;
   
Level 2 : Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and
   
Level 3 : Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions

 

As of June 30, 2018, the Company’s balance sheet included the fair value of derivative liabilities of $523,585 which were based on Level 2 measurements.

 

The Company believes the carrying amount reported in the balance sheet for cash and cash equivalents, accounts receivable, other investments, notes receivable, accounts payable and accrued liabilities, deferred costs of revenue, deferred revenue, and due to related parties, approximate their fair values because of the short-term nature of these financial instruments.

Concentrations of Risks

Concentrations of risks

 

For the three and six months ended June 30, 2018 and 2017, no customer accounted for 10% or more of revenues or accounts receivable at quarter-end.

 

For the three and six months ended June 30, 2018 and 2017, no vendor accounted for 10% or more of the Company’s cost of revenues, or accounts payable at quarter-end.

Exchange Rate Risk

Exchange rate risk

 

Foreign currency exchange rate movements create a degree of risk by affecting the U.S. dollar value of sales made and costs incurred in foreign currencies. Additionally, we have balance sheet positions denominated in foreign currencies, thereby creating exposure to movements in exchange rates. The Company does not hold any derivative instruments and does not attempt to mitigate its foreign currency exposure through the acquisition of any speculative or leveraged financial instruments.

Economic and Political Risks

Economic and political risks

 

Substantially all of the Company’s services are conducted in Malaysia, the People’s Republic of China (“PRC”) and the Asian region. Among other risks, the Company’s operations in Malaysia are subject to the risks of restrictions on transfer of funds; export duties, quotas, and embargoes; domestic and international customs and tariffs; changing taxation policies; foreign exchange restrictions; and political conditions and governmental regulations in Malaysia.

 

The Company’s operations in the PRC are subject to special considerations and significant risks not typically associated with companies in North America and Western Europe. These include risks associated with, among others, the political, economic and legal environment and foreign currency exchange. The Company’s results may be adversely affected by changes in the political conditions in the PRC, and by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion, remittances abroad, and rates and methods of taxation.

Recent Accounting Pronouncements

Recent accounting pronouncements

 

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). This update will require the recognition of a right-of-use asset and a corresponding lease liability, initially measured at the present value of the lease payments, for all leases with terms longer than 12 months. For operating leases, the asset and liability will be expensed over the lease term on a straight-line basis, with all cash flows included in the operating section of the statement of cash flows. For finance leases, interest on the lease liability will be recognized separately from the amortization of the right-of-use asset in the statement of comprehensive income and the repayment of the principal portion of the lease liability will be classified as a financing activity while the interest component will be included in the operating section of the statement of cash flows. ASU 2016-02 is effective for annual and interim reporting periods beginning after December 15, 2018 for public business entities. Early adoption is permitted. Upon adoption, leases will be recognized and measured at the beginning of the earliest period presented using a modified retrospective approach. The Company is currently evaluating the impact of the adoption of ASU 2016-02 on its financial statements and related disclosures.

 

In November 2016, the FASB issued Accounting Standards Update No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash, which requires companies to include amounts generally described as restricted cash and restricted cash equivalents in cash and cash equivalents when reconciling beginning-of-period and end-of-period total amounts shown on the statements of cash flows. The Company adopted the guidance of ASU No. 2016-18 on January 1, 2018 and there was no effect to the Company’s consolidated financial statements.

 

Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company’s present or future financial statements.

XML 31 R20.htm IDEA: XBRL DOCUMENT v3.10.0.1
Organization and Summary of Significant Accounting Policies (Tables)
6 Months Ended
Jun. 30, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Schedule of Cash, Cash Equivalents, and Restricted Cash

Cash, cash equivalents, and restricted cash were denominated in the following currencies at:

 

    As of
June 30, 2018
    As of
December 31, 2017
 
    (Unaudited)        
Cash, cash equivalents, and restricted cash                
Denominated in United States Dollars   $ 1,687,156     $ 283,674  
Denominated in Hong Kong dollars     975,313       568,008  
Denominated in Chinese Renminbi     171,854       239,502  
Denominated in Malaysian Ringgit     72,468       71,210  
Cash, cash equivalents, and restricted cash   $ 2,906,791     $ 1,162,394  

Schedule of Disaggregated Revenue Based on Revenue by Service

The following table provides information about disaggregated revenue based on revenue by service lines and revenue by geographic area:

 

    Three Months Ended June 30,  
    2018     2017  
    (Unaudited)     (Unaudited,
As Restated)
 
Revenue by service lines:                
Corporate advisory – Non-Listing services   $ 615,643     $ 277,482  
Corporate advisory – Listing services     -       210,000  
Rental of real estate properties     46,387       56,661  
Sale of real estate properties     146,073       -  
Total revenue   $ 808,103     $ 544,143  

 

    Three Months Ended June 30,  
    2018     2017  
    (Unaudited)     (Unaudited,
As Restated)
 
Revenue by geographic area:                
Hong Kong   $ 577,571     $ 386,400  
Malaysia     173,551       136,200  
China     56,981       21,543  
Total revenue   $ 808,103     $ 544,143  

 

    Six Months Ended June 30,  
    2018     2017  
    (Unaudited)     (Unaudited,
As Restated)
 
Revenue by service lines:                
Corporate advisory – Non-Listing services   $ 1,114,771     $ 1,103,649  
Corporate advisory – Listing services     200,000       210,000  
Rental of real estate properties     87,831       85,817  
Sale of real estate properties     146,073       -  
Total revenue   $ 1,548,675     $ 1,399,466  

 

    Six Months Ended June 30,  
    2018     2017  
    (Unaudited)     (Unaudited,
As Restated)
 
Revenue by geographic area:                
Hong Kong   $ 1,116,518     $ 993,915  
Malaysia     325,213       350,862  
China     106,944       54,689  
Total revenue   $ 1,548,675     $ 1,399,466  

Schedule of Changes in Deferred Revenue

Changes in deferred revenue were as follows:

 

    Six Months Ended
June 30, 2018
 
    (Unaudited)  
Deferred revenue, January 1, 2018   $ 345,000  
New contract liabilities     665,400  
Performance obligations satisfied     (200,000 )
Deferred revenue, June 30, 2018   $ 810,400  

Schedule of Deferred Revenue and Deferred Costs of Revenue

Deferred revenue and deferred costs of revenue at June 30, 2018 and December 31, 2017 are classified as current assets or current liabilities and totaled:

 

    As of
June 30, 2018
    As of
December 31, 2017
 
      (Unaudited)          
Deferred revenue   $ 810,400     $ 345,000  
Deferred costs of revenue   $ 141,436     $ 74,990  

Schedule of Foreign Currencies Translation

Translation of amounts from the local currencies of the Company into US$ has been made at the following exchange rates for the respective periods:

 

    As of and for the six months ended
June 30,
 
    2018     2017  
Period-end MYR : US$1 exchange rate     4.04       4.29  
Period-average MYR : US$1 exchange rate     3.94       4.37  
Period-end RMB : US$1 exchange rate     6.62       6.78  
Period-average RMB : US$1 exchange rate     6.38       6.85  
Period-end / average HK$ : US$1 exchange rate     7.75       7.75  

XML 32 R21.htm IDEA: XBRL DOCUMENT v3.10.0.1
Restatement of Previously Issued Unaudited Condensed Consolidated Financial Statements (Tables)
6 Months Ended
Jun. 30, 2018
Accounting Changes and Error Corrections [Abstract]  
Schedule of Restated Statements

The following table presents the effect of the restatements on the Company’s previously issued consolidated balance sheet:

 

    As of June 30, 2017 (Unaudited)  
    As Previously Reported     Adjustments     Notes   As Restated  
                       
Accounts receivable, net   $ 706,973     $ (417,460 )   A,D   $ 289,513  
Deferred costs related to revenue     -       52,139     A     52,139  
Real estate held for investment, net     1,007,706       (173,888 )   B     833,818  
Goodwill     2,686,650       259,587     C     2,946,237  
Deferred revenue     -       355,000     A     355,000  
Additional paid in capital     8,803,996       (338,702 )   B,C     8,465,294  
Accumulated other comprehensive income (loss)     87,858       (175,834 )   B     (87,976 )
Accumulated deficit     (664,349 )     (810,795 )   A,B,C,D     (1,475,144 )
Noncontrolling interests in consolidated subsidiaries     178,398       690,719     B, C     869,117  

 

The following table presents the effect of the restatements on the Company’s previously issued consolidated statements of operations and comprehensive loss:

 

    For the three months ended June 30, 2017 (Unaudited)  
    As
Previously
Reported
    Adjustments     Notes   As Restated  
                       
Service revenue   $ 997,482     $ (510,000 )   A   $ 487,482  
Cost of service revenue     (122,997 )     29,477     A     (93,520 )
General and administrative     (683,467 )     (94,823 )   C,D     (778,290 )
Net income (loss)     219,932       (575,345 )   A,C,D     (355,413 )
Net income (loss) attribute to common shareholders     234,391       (575,345 )         (340,953 )
Foreign currency translation income (loss)     (2,172 )     22,000     B     19,828  
Comprehensive income (loss)     232,219       (553,345 )         (321,125 )
                             
Net loss per share, basic and diluted   $ (0.00 )   $ (0.01 )       $ (0.01 )

 

    For the six months ended June 30, 2017 (Unaudited)  
    As
Previously
Reported
    Adjustments     Notes   As Restated  
                       
Service revenue   $ 1,743,649     $ (430,000 )   A   $ 1,313,649  
Cost of service revenue     (267,476 )     (23,068 )   A     (290,544 )
General and administrative     (1,394,216 )     (166,228 )   C,D     (1,560,444 )
Net income (loss)     108,136       (619,296 )   A,C,D     (511,160 )
Net income (loss) attribute to common shareholders     125,904       (619,296 )         (493,392 )
Foreign currency translation income (loss)     (8,606 )     32,448     B     23,842  
Comprehensive income (loss)     117,298       (586,848 )         (469,550 )
                             
Net loss per share, basic and diluted   $ (0.00 )   $ (0.01 )       $ (0.01 )

 

The following table presents the effect of the restatements on the Company’s previously issued consolidated statement of cash flows:

 

    For the six months ended June 30, 2017 (Unaudited)  
    As Previously Reported     Adjustments     Notes   As Restated  
                       
Cash flows from operating activities:                            
Net income (loss)   $ 108,136     $ (619,296 )   A,C,D   $ (511,160 )
Provision for bad debt     -       30,881     D     30,881  
Changes in operating assets and liabilities:                            
Accounts receivable, net     (372,214 )     331,781     A     (40,433 )
Deferred costs of revenue     -       23,068     A     23,068  
Accounts payable and accrued liabilities     (270,603 )     93,566     C     (177,037 )
Deferred revenue     -       140,000     A     140,000  

XML 33 R22.htm IDEA: XBRL DOCUMENT v3.10.0.1
Other Investments (Tables)
6 Months Ended
Jun. 30, 2018
Other Investments [Abstract]  
Schedule of Other Investments

    As of     As of  
    June 30, 2018     December 31, 2017  
      (Unaudited)          
(A) Investment in related parties   $ 301,617     $ 51,613  
(B) Investments in unconsolidated entities     1,750       3,500  
Cash surrender value of life insurance, net of policy loan     92,662       56,058  
Total   $ 396,029     $ 130,457  

 

(A) At June 30, 2018 and December 31, 2017, the Company had an investment in Greenpro Trust Limited (the “Trust”) of $51,613, which is approximately 11.76% of the equity interest of the Trust and is recorded at cost, which approximates fair value. The Trust is a trust company organized in Hong Kong and provides trust services to high net worth individuals and families. Mr. Lee Chong Kuang and Mr. Loke Che Chan, Gilbert are common directors of the Trust and the Company.

 

  At June 30, 2018, the Company had an investment in Acorn Group Holdings Limited (“Acorn”) of $250,000, which approximates a 2% equity interest of Acorn and is recorded at cost, which approximates fair value. Acorn is a company incorporated in the Cayman Islands that provides pension and administrative services. It was determined that the Company can significantly influence Acorn based on common business relationships.
   
(B) At June 30, 2018, the Company had an investment in an unconsolidated entity for $1,750. The Company’s ownership was less than 5% and the investment is recorded at cost, which approximates fair value. At December 31, 2017, the Company had investments in two unconsolidated entities aggregating $3,500.

XML 34 R23.htm IDEA: XBRL DOCUMENT v3.10.0.1
Derivative Liabilities (Tables)
6 Months Ended
Jun. 30, 2018
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Schedule of Derivative Liabilities at Fair Value

The derivative liabilities were valued using the Black-Scholes-Merton valuation model with the following assumptions:

 

    As of     As of  
    June 30, 2018     June 12, 2018  
      (Unaudited)       (issuance)  
Risk-free interest rate   $ 3.0 %   $ 2.9 %
Expected volatility     196 %     165 %
Expected life (in years)     5 years       5 years  
Expected dividend yield     0.00 %     0.00 %
Fair Value of warrants   $ 523,585     $ 508,589

XML 35 R24.htm IDEA: XBRL DOCUMENT v3.10.0.1
Due to Related Parties (Tables)
6 Months Ended
Jun. 30, 2018
Due to Related Parties [Abstract]  
Schedule of Amounts Due to Related Parties

    As of     As of  
    June 30, 2018     December 31, 2017  
    (Unaudited)        
Due to noncontrolling interests   $ 1,332,273      $ 1,617,241  
Due to shareholders     101,113       3,993  
Due to directors     3,745       85,212  
Due to related companies     110,927       107,484  
Total   $ 1,548,058     $ 1,813,930

XML 36 R25.htm IDEA: XBRL DOCUMENT v3.10.0.1
Related Party Transactions (Tables)
6 Months Ended
Jun. 30, 2018
Related Party Transactions [Abstract]  
Schedule of Related Parties Transactions

    For the six months ended June 30,  
    2018     2017  
Revenue from related parties is comprised of the following:                
Service revenue                
- Related party B   $ 52,150     $ 163,400  
- Related party C     -       90,051  
- Related party D     208,666       -  
Total   $ 260,816     $ 253,451  
                 
Rental revenue                
- Related party A   $ -     $ 3,484  
- Related party C     -       26,005  
Total   $ -     $ 29,489  
                 
Cost of service revenue                
- Related party E   $ 66,000     $ -  
Total   $ 66,000     $ -

XML 37 R26.htm IDEA: XBRL DOCUMENT v3.10.0.1
Segment Information (Tables)
6 Months Ended
Jun. 30, 2018
Segment Reporting [Abstract]  
Schedule of Summarized Financial Information

. Summarized financial information concerning the Company’s reportable segments is shown as below:

 

(a) By Categories

 

    For the six months ended June 30, 2018 (Unaudited)  
    Real estate business     Service business     Corporate     Total  
                         
Revenues   $ 233,904     $ 1,314,771     $ -     $ 1,548,675  
Cost of revenues     (134,754 )     (338,315 )     (48,000 )     (521,069 )
Depreciation and amortization     16,873       110,686       8,162       135,721  
Net income (loss)     79,283       (448,630 )     (4,322 )     (373,669 )
                                 
Total assets     3,420,938       6,952,628       2,572,084       12,945,650  
Capital expenditures for long-lived assets   $ -     $ 35,503     $ 248,250     $ 283,753  

 

 

    For the six months ended June 30, 2017 (Unaudited, as Restated)  
    Real estate business     Service business     Corporate     Total  
                         
Revenues   $ 85,817     $ 1,313,649     $ -     $ 1,399,466  
Cost of revenues     (30,901 )     (290,544 )     -       (321,445 )
Depreciation and amortization     4,271       83,623       -       87,894  
Net income (loss)     18,153       (528,686 )     (627 )     (511,160 )
                                 
Total assets     3,792,530       6,650,490       235,622       10,678,642  
Capital expenditures for long-lived assets   $ -     $ 38,444     $ -     $ 38,444  

 

 

(b) By Geography*

 

    For the six months ended June 30, 2018 (Unaudited)  
    Hong Kong     Malaysia     China     Total  
                         
Revenues   $ 1,116,518     $ 325,213     $ 106,944     $ 1,548,675  
Cost of revenues     (360,170 )     (153,155 )     (7,744 )     (521,069 )
Depreciation and amortization     50,250       17,693       67,778       135,721  
Net income (loss)     (172,789 )     (34,764 )     (166,116 )     (373,669 )
                                 
Total assets     8,363,763       1,142,819       3,439,068       12,945,650  
Capital expenditures for long-lived assets   $ 249,331     $ (5 )   $ 34,427     $ 283,753  

 

    For the six months ended June 30, 2017 (Unaudited, as Restated)  
    Hong Kong     Malaysia     China     Total  
                         
Revenues   $ 993,915     $ 350,862     $ 54,689     $ 1,399,466  
Cost of revenues     (209,282 )     (112,163 )     -       (321,445 )
Depreciation and amortization     39,061       15,557       33,276       87,894  
Net income (loss)     (423,696 )     21,907       (109,371 )     (511,160 )
                                 
Total assets     7,107,405       1,297,552       2,273,685       10,678,642  
Capital expenditures for long-lived assets   $ 16,690     $ 12,087     $ 9,667     $ 38,444  

 

*Revenues and costs are attributed to countries based on the location of customers.

XML 38 R27.htm IDEA: XBRL DOCUMENT v3.10.0.1
Organization and Summary of Significant Accounting Policies (Details Narrative) - USD ($)
1 Months Ended 3 Months Ended 6 Months Ended
Jun. 12, 2018
Jun. 30, 2018
Jun. 30, 2018
Jun. 30, 2017
Jun. 30, 2018
Jun. 30, 2017
Dec. 31, 2017
Incurred a loss from operations     $ 351,440 $ 346,484 $ 611,964 $ 482,423  
Net cash used in operating activities         70,229 $ 851,436  
Working capital deficiency   $ 636,187 636,187   636,187    
Number of common stock sold during period         2,257,116    
Funds held by employees   8,179 $ 8,179   $ 8,179   $ 32,673
Potentially antidilutive shares outstanding     53,556   53,556    
Fair value of derivative liabilities   523,585 $ 523,585   $ 523,585    
Public Offering [Member]              
Number of common stock sold during period $ 535,559 $ 535,559          
Stock issued price per share $ 6.00 $ 6.00 $ 6.00   $ 6.00    
Proceeds from issuance public offering $ 2,700,000 $ 2,765,705          
Private Placement [Member] | July 18, 2018 [Member]              
Number of common stock sold during period         $ 906,666    
Stock issued price per share   $ 7.50 $ 7.50   $ 7.50    
Proceeds from issuance of private placement         $ 6,700,000    
Win International Limited, Yabez (Hong Kong) Company Limited, Greenpro Global Capital Sdn Bhd, Billion Sino Holdings Limited, and Parich Wealth Management Limited (Hong Kong) [Member]              
Percentage of holds of shareholdings   60.00% 60.00%   60.00%   60.00%
Greenpro Capital Village Sdn Bhd and Greenpro Family Office Limited [Member]              
Percentage of holds of shareholdings   51.00% 51.00%   51.00%   51.00%
XML 39 R28.htm IDEA: XBRL DOCUMENT v3.10.0.1
Organization and Summary of Significant Accounting Policies - Schedule of Cash, Cash Equivalents, and Restricted Cash (Details) - USD ($)
Jun. 30, 2018
Dec. 31, 2017
Property, Plant and Equipment [Line Items]    
Cash, cash equivalents, and restricted cash $ 2,906,791 $ 1,162,394
United States Dollars [Member]    
Property, Plant and Equipment [Line Items]    
Cash, cash equivalents, and restricted cash 1,687,156 283,674
Hong Kong Dollar [Member]    
Property, Plant and Equipment [Line Items]    
Cash, cash equivalents, and restricted cash 975,313 568,008
Renminbi [Member]    
Property, Plant and Equipment [Line Items]    
Cash, cash equivalents, and restricted cash 171,854 239,502
Malaysian Ringgit [Member]    
Property, Plant and Equipment [Line Items]    
Cash, cash equivalents, and restricted cash $ 72,468 $ 71,210
XML 40 R29.htm IDEA: XBRL DOCUMENT v3.10.0.1
Organization and Summary of Significant Accounting Policies - Schedule of Disaggregated Revenue Based on Revenue by Service (Details) - USD ($)
3 Months Ended 6 Months Ended
Jun. 30, 2018
Jun. 30, 2017
Jun. 30, 2018
Jun. 30, 2017
Total revenue $ 808,103 $ 544,143 $ 1,548,675 $ 1,399,466
Hong Kong [Member]        
Total revenue 577,571 386,400 1,116,518 993,915
Malaysia [Member]        
Total revenue 173,551 136,200 325,213 350,862
China [Member]        
Total revenue 56,981 21,543 106,944 54,689
Corporate Advisory Non Listing Services [Member]        
Total revenue 615,643 277,482 1,114,771 1,103,649
Corporate Advisory - Listing Services [Member]        
Total revenue 210,000 200,000 210,000
Rental of Real Estate Properties [Member]        
Total revenue 46,387 56,661 87,831 85,817
Sale of Real Estate Properties [Member]        
Total revenue $ 146,073 $ 146,073
XML 41 R30.htm IDEA: XBRL DOCUMENT v3.10.0.1
Organization and Summary of Significant Accounting Policies - Schedule of Changes in Deferred Revenue (Details)
6 Months Ended
Jun. 30, 2018
USD ($)
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Deferred revenue, January 1, 2018 $ 345,000
New contract liabilities 665,400
Performance obligations satisfied (200,000)
Deferred revenue, June 30, 2018 $ 810,400
XML 42 R31.htm IDEA: XBRL DOCUMENT v3.10.0.1
Organization and Summary of Significant Accounting Policies - Schedule of Deferred Revenue and Deferred Costs of Revenue (Details) - USD ($)
Jun. 30, 2018
Dec. 31, 2017
Jun. 30, 2017
Accounting Policies [Abstract]      
Deferred revenue $ 810,400 $ 345,000  
Deferred costs of revenue $ 141,436 $ 74,990 $ 52,139
XML 43 R32.htm IDEA: XBRL DOCUMENT v3.10.0.1
Organization and Summary of Significant Accounting Policies - Schedule of Foreign Currencies Translation (Details)
Jun. 30, 2018
Jun. 30, 2017
Period-End MYR : US$1 Exchange Rate [Member]    
Foreign Currency Exchange Rate, Translation 4.04 4.29
Period-Average MYR : US$1 Exchange Rate [Member]    
Foreign Currency Exchange Rate, Translation 3.94 4.37
Period-End RMB : US$1 Exchange Rate [Member]    
Foreign Currency Exchange Rate, Translation 6.62 6.78
Period-Average RMB : US$1 Exchange Rate [Member]    
Foreign Currency Exchange Rate, Translation 6.38 6.85
Period-End /Average HK$ : US$1 Exchange Rate [Member]    
Foreign Currency Exchange Rate, Translation 7.75 7.75
XML 44 R33.htm IDEA: XBRL DOCUMENT v3.10.0.1
Restatement of Previously Issued Unaudited Condensed Consolidated Financial Statements (Details Narrative) - USD ($)
3 Months Ended 6 Months Ended
Jun. 30, 2018
Jun. 30, 2017
Jun. 30, 2018
Jun. 30, 2017
Dec. 31, 2017
Deferred costs of revenue $ 141,436 $ 52,139 $ 141,436 $ 52,139 $ 74,990
Deferred revenue   355,000   355,000  
Additional costs (202,752) (93,520) (386,315) (290,544)  
Decrease real estate held for investment (853,285) (833,818) (853,285) (833,818) (868,984)
Decrease accumulated other comprehensive income 73,486 87,976 73,486 87,976 40,199
Minority interest 117,181 869,117 117,181 869,117 83,283
Increase goodwill 1,211,863 2,946,237 1,211,863 2,946,237 1,211,863
Decreased in additional paid in capital 10,722,356 8,465,294 10,722,356 8,465,294 8,465,294
Decreased in allowance for uncollectible accounts and bad debts and accounts receivable $ 32,273   $ 32,273   $ 76,179
Yabez [Member]          
Minority interest   3,088   3,088  
Restatement Adjustment [Member]          
Decrease in accounts receivable   335,423   335,423  
Deferred costs of revenue   52,139   52,139  
Deferred revenue   355,000   355,000  
Increase accumulated deficit   185,216   185,216  
Decreased service revenue   510,000   430,000  
Additional costs   29,477   (23,068)  
Increase in net income (loss)   540,734   453,068  
Additional general and administrative expenses   1,257      
Decrease real estate held for investment   173,888   173,888  
Decrease accumulated other comprehensive income   175,833   175,833  
Minority interest   690,719   690,719  
Increase goodwill   259,587   259,587  
Decreased in additional paid in capital   (338,702)   (338,702)  
Restatement Adjustment [Member] | Yabez Company Limited [Member]          
Minority interest   174,001   174,001  
Increase goodwill   174,001   174,001  
Restatement Adjustment [Member] | Billion Sino Holding Limited [Member]          
Minority interest   519,807   519,807  
Increase goodwill   179,162   179,162  
Decreased in additional paid in capital   340,645   340,645  
Restatement Adjustment [Member] | Greenpro Credit Limited [Member]          
Decrease in accounts receivable   45,423   45,423  
Additional general and administrative expenses   93,566   93,566  
Increase goodwill   93,566   93,566  
Decreased in allowance for uncollectible accounts and bad debts and accounts receivable   $ 82,037   82,037  
Bad debt expense increased       54,799  
Increase in provision expense       $ 30,881  
XML 45 R34.htm IDEA: XBRL DOCUMENT v3.10.0.1
Restatement of Previously Issued Consolidated Financial Statements - Schedule of Restated Statements (Details) - USD ($)
3 Months Ended 6 Months Ended
Jun. 30, 2018
Jun. 30, 2017
Jun. 30, 2018
Jun. 30, 2017
Dec. 31, 2017
Accounts Receivable, net $ 192,299 $ 289,513 $ 192,299 $ 289,513 $ 345,734
Deferred costs related to revenue 141,436 52,139 141,436 52,139 74,990
Real estate held for investment, net 853,285 833,818 853,285 833,818 868,984
Goodwill 1,211,863 2,946,237 1,211,863 2,946,237 1,211,863
Deferred revenue   355,000   355,000  
Additional paid in capital 10,722,356 8,465,294 10,722,356 8,465,294 8,465,294
Accumulated other comprehensive income (loss) (73,486) (87,976) (73,486) (87,976) (40,199)
Accumulated deficit (3,673,880) (185,216) (3,673,880) (185,216) (3,266,313)
Non-controlling interests in consolidated subsidiaries 117,181 869,117 117,181 869,117 $ 83,283
Service revenue   487,482   1,313,649  
Cost of service revenue (202,752) (93,520) (386,315) (290,544)  
General and administrative (845,593) (778,290) (1,639,570) (1,560,444)  
Net income (loss) attribute to common shareholders (398,468) (340,953) (407,567) (493,392)  
Foreign currency translation income (loss) (206,239) 19,828 (119,763) 23,842  
Comprehensive income (loss) $ (604,707) $ (321,125) $ (527,330) $ (469,550)  
Net loss per share, basic and diluted $ (0.01) $ (0.01) $ (0.01) $ (0.01)  
Net (loss) income $ (359,972) $ (355,413) $ (373,669) $ (511,160)  
Provision for bad debts     (43,963) 30,881  
Changes in Accounts Receivable, net     197,383 (40,433)  
Changes in Deferred costs of revenue     (66,446) 23,068  
Changes in Accounts payable and accrued liabilities     (376,578) (177,037)  
Changes in Deferred revenue     $ 465,400 140,000  
Scenario, Previously Reported [Member]          
Accounts Receivable, net   706,973   706,973  
Deferred costs related to revenue      
Real estate held for investment, net   1,007,706   1,007,706  
Goodwill   2,686,650   2,686,650  
Deferred revenue      
Additional paid in capital   8,803,996   8,803,996  
Accumulated other comprehensive income (loss)   87,858   87,858  
Accumulated deficit   (664,349)   (664,349)  
Non-controlling interests in consolidated subsidiaries   178,398   178,398  
Service revenue   997,482   1,743,649  
Cost of service revenue   (122,997)   (267,476)  
General and administrative   (683,467)   (1,394,216)  
Net income (loss) attribute to common shareholders   234,391   125,904  
Foreign currency translation income (loss)   (2,172)   (8,606)  
Comprehensive income (loss)   $ 232,219   $ 117,298  
Net loss per share, basic and diluted   $ (0.00)   $ (0.00)  
Net (loss) income       $ 108,136  
Provision for bad debts        
Changes in Accounts Receivable, net       (372,214)  
Changes in Deferred costs of revenue        
Changes in Accounts payable and accrued liabilities       (270,603)  
Changes in Deferred revenue        
Restatement Adjustment [Member]          
Accounts Receivable, net   $ (417,460)   (417,460)  
Deferred costs related to revenue   52,139   52,139  
Real estate held for investment, net   (173,888)   (173,888)  
Goodwill   259,587   259,587  
Deferred revenue   355,000   355,000  
Additional paid in capital   (338,702)   (338,702)  
Accumulated other comprehensive income (loss)   (175,833)   (175,833)  
Accumulated deficit   (810,795)   (810,795)  
Non-controlling interests in consolidated subsidiaries   690,719   690,719  
Service revenue   (510,000)   (430,000)  
Cost of service revenue   29,477   (23,068)  
General and administrative   (94,823)   (166,228)  
Net income (loss) attribute to common shareholders   (575,345)   (619,296)  
Foreign currency translation income (loss)   22,000   32,448  
Comprehensive income (loss)   $ (553,345)   $ (586,848)  
Net loss per share, basic and diluted   $ (0.01)   $ (0.01)  
Net (loss) income       $ (619,296)  
Provision for bad debts       30,881  
Changes in Accounts Receivable, net       331,781  
Changes in Deferred costs of revenue       23,068  
Changes in Accounts payable and accrued liabilities       93,566  
Changes in Deferred revenue       $ 140,000  
XML 46 R35.htm IDEA: XBRL DOCUMENT v3.10.0.1
Note Receivable, Related Party (Details Narrative) - Leader Financial Asset Management Ltd. [Member] - Loan Agreement [Member]
Jun. 16, 2018
USD ($)
Due from related party $ 300,000
Debt instrument, interest rate 6.00%
Debt instrument, maturity date Jun. 15, 2020
XML 47 R36.htm IDEA: XBRL DOCUMENT v3.10.0.1
Other Investments - Schedule of Other Investments (Details) - USD ($)
Jun. 30, 2018
Dec. 31, 2017
Cash surrender value of life insurance, net of policy loan $ 92,662 $ 56,058
Total 396,029 130,457
Investment in Related Party [Member]    
Investments 301,617 51,613
Unconsolidated Entities [Member]    
Investments $ 1,750 $ 3,500
XML 48 R37.htm IDEA: XBRL DOCUMENT v3.10.0.1
Other Investments - Schedule of Other Investments (Details) (Parenthetical) - USD ($)
Jun. 30, 2018
Dec. 31, 2017
Greenpro Trust Limited Related Party [Member]    
Investments $ 51,613 $ 51,613
Equity ownership interest 11.76% 11.76%
Acorn Group Holdings Limited [Member]    
Investments $ 250,000  
Equity ownership interest 2.00%  
Unconsolidated Entities [Member]    
Investments $ 1,750 $ 3,500
Unconsolidated Entities [Member] | Maximum [Member]    
Equity ownership interest 5.00%  
Two Unconsolidated Entities [Member]    
Investments   $ 3,500
XML 49 R38.htm IDEA: XBRL DOCUMENT v3.10.0.1
Derivative Liabilities (Details Narrative)
Jun. 12, 2018
shares
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Number of warrants exercisable into common stock 53,556
XML 50 R39.htm IDEA: XBRL DOCUMENT v3.10.0.1
Derivative Liabilities - Schedule of Derivative Liabilities at Fair Value (Details) - USD ($)
1 Months Ended 6 Months Ended
Jun. 12, 2018
Jun. 30, 2018
Jun. 30, 2018
Fair Value of warrants $ 508,589   $ 523,585
Risk Free Interest Rate [Member]      
Fair value assumptions, measurement input, percentages 2.90% 3.00% 3.00%
Expected Volatility [Member]      
Fair value assumptions, measurement input, percentages 165.00% 196.00% 196.00%
Expected Life [Member]      
Fair value assumptions, measurement input, term 5 years 5 years  
Expected Dividend Yield [Member]      
Fair value assumptions, measurement input, percentages 0.00% 0.00% 0.00%
XML 51 R40.htm IDEA: XBRL DOCUMENT v3.10.0.1
Due to Related Parties (Details Narrative) - USD ($)
Jun. 30, 2018
Dec. 31, 2017
Due to Related Parties [Abstract]    
Amount due to non-controlling interest $ 1,235,097 $ 1,441,548
Amount due to another non-controlling interest $ 97,176 $ 175,693
XML 52 R41.htm IDEA: XBRL DOCUMENT v3.10.0.1
Due to Related Parties - Schedule of Amounts Due to Related Parties (Details) - USD ($)
Jun. 30, 2018
Dec. 31, 2017
Due to Related Parties [Abstract]    
Due to non-controlling interest $ 1,332,273 $ 1,617,241
Due to shareholders 101,113 3,993
Due to directors 3,745 85,212
Due to related companies 110,927 107,484
Total $ 1,548,058 $ 1,813,930
XML 53 R42.htm IDEA: XBRL DOCUMENT v3.10.0.1
Stockholders' Equity (Details Narrative) - USD ($)
1 Months Ended 6 Months Ended
Jun. 12, 2018
Jun. 30, 2018
Jun. 30, 2018
Number of common stock sold during period     $ 2,257,116
Public Offering [Member]      
Number of common stock sold during period $ 535,559 $ 535,559  
Stock issued price per share $ 6.00 $ 6.00 $ 6.00
Proceeds from issuance public offering $ 2,700,000 $ 2,765,705  
Underwriting commissions and offering expenses   447,649  
Fair value of warrants issued   $ 508,589  
XML 54 R43.htm IDEA: XBRL DOCUMENT v3.10.0.1
Related Party Transactions - Schedule of Related Parties Transactions (Details) - USD ($)
3 Months Ended 6 Months Ended
Jun. 30, 2018
Jun. 30, 2017
Jun. 30, 2018
Jun. 30, 2017
Service Revenue [Member]        
Revenue from related parties $ 35,745 $ 12,664 $ 260,816 $ 253,451
Cost of service, related parties 66,000   66,000  
Rental Revenue [Member]        
Revenue from related parties $ 24,973 $ 29,489 24,973 29,489
Cost of Service Revenue [Member]        
Cost of service, related parties     66,000
Related Party B [Member] | Service Revenue [Member]        
Revenue from related parties     52,150 163,400
Related Party C [Member] | Service Revenue [Member]        
Revenue from related parties     90,051
Related Party C [Member] | Rental Revenue [Member]        
Revenue from related parties     26,005
Related Party D [Member] | Service Revenue [Member]        
Revenue from related parties     208,666
Related Party A [Member] | Rental Revenue [Member]        
Revenue from related parties     3,484
Related Party B [Member] | Cost of Service Revenue [Member]        
Cost of service, related parties     $ 66,000
XML 55 R44.htm IDEA: XBRL DOCUMENT v3.10.0.1
Segment Information (Details Narrative)
6 Months Ended
Jun. 30, 2018
OperatingSegments
Segment Reporting [Abstract]  
Number of reportable operating segments 2
XML 56 R45.htm IDEA: XBRL DOCUMENT v3.10.0.1
Segment Information - Schedule of Summarized Financial Information (Details) - USD ($)
3 Months Ended 6 Months Ended
Jun. 30, 2018
Jun. 30, 2017
Jun. 30, 2018
Jun. 30, 2017
Dec. 31, 2017
Revenues $ 808,103 $ 544,143 $ 1,548,675 $ 1,399,466  
Cost of revenues     (521,069) (321,445)  
Depreciation and amortization     135,721 87,894  
Net (loss) income (359,972) (355,413) (373,669) (511,160)  
Total assets 12,945,650 10,678,642 12,945,650 10,678,642 $ 11,014,307
Capital expenditures for long-lived assets     283,753 38,444  
Hong Kong [Member]          
Revenues 577,571 386,400 1,116,518 993,915  
Cost of revenues     (360,170) (209,282)  
Depreciation and amortization     50,250 39,061  
Net (loss) income     (172,789) (423,696)  
Total assets 8,363,763 7,107,405 8,363,763 7,107,405  
Capital expenditures for long-lived assets     249,331 16,690  
Malaysia [Member]          
Revenues 173,551 136,200 325,213 350,862  
Cost of revenues     (153,155) (112,163)  
Depreciation and amortization     17,693 15,557  
Net (loss) income     (34,764) 21,907  
Total assets 1,142,819 1,297,552 1,142,819 1,297,552  
Capital expenditures for long-lived assets     (5) 12,087  
China [Member]          
Revenues 56,981 21,543 106,944 54,689  
Cost of revenues     (7,744)  
Depreciation and amortization     67,778 33,276  
Net (loss) income     (166,116) (109,371)  
Total assets 3,439,068 2,273,685 3,439,068 2,273,685  
Capital expenditures for long-lived assets     34,427 9,667  
Real Estate Properties [Member]          
Revenues     233,904 85,817  
Cost of revenues     (134,754) (30,901)  
Depreciation and amortization     16,873 4,271  
Net (loss) income     79,283 18,153  
Total assets 3,420,938 3,792,530 3,420,938 3,792,530  
Capital expenditures for long-lived assets      
Service Business [Member]          
Revenues     1,314,771 1,313,649  
Cost of revenues     (338,315) (290,544)  
Depreciation and amortization     110,686 83,623  
Net (loss) income     (448,630) (528,686)  
Total assets 6,952,628 6,650,490 6,952,628 6,650,490  
Capital expenditures for long-lived assets     35,503 38,444  
Corporate Business [Member]          
Revenues      
Cost of revenues     (48,000)  
Depreciation and amortization     8,162  
Net (loss) income     (4,322) (627)  
Total assets $ 2,572,084 $ 235,622 2,572,084 235,622  
Capital expenditures for long-lived assets     $ 248,250  
XML 57 R46.htm IDEA: XBRL DOCUMENT v3.10.0.1
Subsequent Events (Details Narrative) - USD ($)
6 Months Ended
Jul. 31, 2018
Jul. 18, 2018
Jul. 03, 2018
Jun. 30, 2018
Number of common stock issued during period, value       $ 2,257,116
Subsequent Event [Member]        
Number of common stock issued during period   906,666    
Shares issued price per share   $ 7.50    
Number of common stock issued during period, value   $ 6,700,000    
Subsequent Event [Member] | Advisors [Member]        
Number of shares issued during period acquisition 578      
Subsequent Event [Member] | KSP Holding Group Company Limited [Member]        
Number of common stock issued during period 288,930      
Shares issued price per share $ 7.50      
Acquisition percentage 39.26%   9.74%  
Cash consideration     $ 75,000  
Equity ownership percentage 49.00%      
Number of shares issued during period acquisition 38,524      
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