Delaware
|
|
45-4742558
|
(State
or other jurisdiction of incorporation or
organization)
|
|
(I.R.S.
Employer Identification No.)
|
|
|
|
4800 Montgomery Lane, Suite 210 Bethesda MD
|
|
20814
|
(Address
of principal executive offices)
|
|
(Zip
Code)
|
Large accelerated
filer
|
☐
|
Accelerated
filer
|
☐
|
Non-accelerated
filer
|
☐
|
Smaller reporting
company
|
☑
|
(Do not check if a
smaller reporting company)
|
|
Emerging growth
company
|
☑
|
PART
I
FINANCIAL INFORMATION
|
4
|
|
|
|
|
ITEM
1. INTERIM
FINANCIAL STATEMENTS
|
4
|
|
|
|
|
CONDENSED
CONSOLIDATED BALANCE SHEETS AS OF MARCH 31, 2018 (UNAUDITED) AND
DECEMBER 31, 2017
|
5
|
|
|
|
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS FOR
THE THREE MONTHS ENDED MARCH 31, 2018 AND 2017 (UNAUDITED)
|
6
|
|
|
|
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS ENDED
MARCH 31, 2018 AND 2017 (UNAUDITED)
|
7
|
|
|
|
|
NOTES TO INTERIM
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
|
8
|
|
|
|
|
ITEM
2. MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS.
|
14
|
|
|
|
|
ITEM
3. QUANTITATIVE AND
QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
18
|
|
|
|
|
ITEM
4. CONTROLS AND
PROCEDURES
|
18
|
|
|
|
|
PART II
OTHER
INFORMATION
|
19
|
|
|
|
|
ITEM
1. LEGAL
PROCEEDINGS
|
19
|
|
|
|
|
ITEM
1A. RISK
FACTORS
|
19
|
|
|
|
|
ITEM
2. UNREGISTERED
SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
|
19
|
|
|
|
|
ITEM
3. DEFAULTS UPON
SENIOR SECURITIES
|
19
|
|
|
|
|
ITEM
4. MINE SAFETY
DISCLOSURES
|
19
|
|
|
|
|
ITEM
5. OTHER
INFORMATION
|
19
|
|
|
|
|
ITEM
6. EXHIBITS
|
19
|
Condensed
Consolidated Balance Sheets as of March 31, 2018 (unaudited) and
December 31, 2017
|
|
5
|
|
|
|
Condensed
Consolidated Statements of Operations and Comprehensive Loss for
the three months ended March 31, 2018 and 2017
(unaudited)
|
|
6
|
|
|
|
Condensed
Consolidated Statements of Cash Flows for the three months ended
March 31, 2018 and 2017 (unaudited)
|
|
7
|
|
|
|
Notes
to Condensed Consolidated Financial Statements
|
|
8
|
|
March
31,
2018
|
December
31,
2017
|
ASSETS
|
|
|
|
|
|
CURRENT
ASSETS:
|
|
|
Cash
|
$74,720
|
$124,739
|
Accounts
receivable-related parties
|
112,427
|
89,427
|
Accounts
receivable-other
|
-
|
17,914
|
Prepaid
expenses
|
4,958
|
7,532
|
Deposit and other
receivable
|
13,685
|
13,526
|
TOTAL CURRENT
ASSETS
|
205,790
|
253,138
|
|
|
|
Fixed assets,
net
|
16,824
|
22,937
|
TOTAL
ASSETS
|
$222,614
|
$276,075
|
|
|
|
LIABILITIES
AND STOCKHOLDERS' EQUITY (DEFICIT)
|
|
|
|
|
|
CURRENT
LIABILITIES:
|
|
|
Accounts payable
and accrued expenses
|
$198,755
|
$204,707
|
Accrued taxes and
franchise fees
|
7,742
|
7,742
|
Amount due to
related parties
|
907,695
|
825,107
|
TOTAL CURRENT
LIABILITIES
|
1,114,192
|
1,037,556
|
|
|
|
TOTAL
LIABILITIES
|
1,114,192
|
1,037,556
|
|
|
|
STOCKHOLDERS'
EQUITY (DEFICIT):
|
|
|
Preferred stock,
$0.0001 par value, 15,000,000 shares authorized, 0 issued and
outstanding as of March 31, 2018 and December 31, 2017
|
-
|
-
|
Common stock,
$0.0001 par value, 1,000,000,000 shares authorized, 506,898,576
shares issued and outstanding, as of March 31, 2018 and December
31, 2017
|
50,690
|
50,690
|
Accumulated other
comprehensive loss
|
(348,850)
|
(289,398)
|
Additional paid-in
capital
|
4,604,191
|
4,604,191
|
Accumulated
deficit
|
(5,197,609)
|
(5,126,964)
|
TOTAL
STOCKHOLDERS' EQUITY (DEFICIT)
|
(891,578)
|
(761,481)
|
TOTAL
LIABILITIES AND STOCKHOLDERS' EQUITY
|
$222,614
|
$276,075
|
|
Three Months
Ended
March
31,
2018
|
Three Months
Ended
March
31,
2017
|
|
|
|
Revenues:
|
|
|
Project fee-related
parties
|
$23,046
|
$32,272
|
Project
fee-others
|
4,623
|
33,906
|
|
27,669
|
66,178
|
|
|
|
Cost
of revenues
|
14,404
|
14,105
|
|
|
|
Gross
profit
|
$13,265
|
$52,073
|
|
|
|
Operating
expenses:
|
|
|
Research and
product development
|
$-
|
$52,662
|
Deposits written
off
|
-
|
2,663
|
Depreciation
|
8,684
|
8,636
|
General and
administrative
|
114,737
|
187,502
|
Total
operating expenses
|
123,421
|
251,463
|
|
|
|
(Loss)
from operations
|
(110,156)
|
(199,390)
|
|
|
|
Other
income:
|
|
|
Interest
income
|
1
|
-
|
Other sundry
income
|
205
|
-
|
Foreign exchange
gain
|
39,305
|
65,572
|
Total
other income
|
39,511
|
65,572
|
|
|
|
Loss
before taxes
|
(70,645)
|
(133,818)
|
Income tax
provision
|
-
|
-
|
Net
loss applicable to common shareholders
|
$(70,645)
|
$(133,818)
|
|
|
|
Net loss per share
- basic and diluted
|
$(0.00)
|
$(0.02)
|
|
|
|
Weighted number of
shares outstanding -
|
|
|
Basic and
diluted
|
506,898,576
|
5,909,687
|
|
|
|
Comprehensive
Income Loss:
|
|
|
Net
loss
|
$(70,645)
|
$(133,818)
|
Foreign currency
translation gain (loss)
|
(59,452)
|
(84,004)
|
Total
comprehensive loss
|
$(130,097)
|
$(217,822)
|
|
Three Months
Ended
March
31,
2018
|
Three Months
Ended
March
31,
2017
|
CASH
FLOWS FROM OPERATING ACTIVITIES:
|
|
|
Net
Loss
|
$(70,645)
|
$(133,818)
|
|
|
|
Adjustments
to reconcile net loss to cash used in operating
activities:
|
|
|
Depreciation
|
8,684
|
8,636
|
Deposit written
off
|
-
|
2,663
|
Foreign exchange
transaction gain
|
(39,305)
|
(65,572)
|
|
|
|
Change
in operating assets and liabilities:
|
|
|
Accounts
receivable
|
(5,086)
|
(66,033)
|
Security deposit
and other receivable
|
(159)
|
(6,796)
|
Prepaid
expenses
|
2,574
|
(13,449)
|
Accounts payable
and accrued expenses
|
(5,853)
|
(18,239)
|
Net
cash used in operating activities
|
$(109,790)
|
$(292,608)
|
|
|
|
CASH
FLOW FROM INVESTING ACTIVITIES:
|
|
|
Acquisition of
fixed asset
|
(2,571)
|
(3,898)
|
Net
cash used in investing activities
|
$(2,571)
|
$(3,898)
|
|
|
|
CASH
FLOW FROM FINANCING ACTIVITIES:
|
|
|
Advance from
related parties
|
82,489
|
310,307
|
Net
cash provided by financing activities
|
$82,489
|
$310,307
|
|
|
|
|
|
|
NET
(DECREASE)/INCREASE IN CASH
|
(29,872)
|
13,801
|
Effects of exchange
rates on cash
|
(20,147)
|
(18,432)
|
|
|
|
CASH
AND CASH EQUIVALENTS at beginning of period
|
124,739
|
102,776
|
CASH
AND CASH EQUIVALENTS at end of period
|
$74,720
|
$98,145
|
Subsidiaries
|
|
Date of
Incorporation
|
|
Place of
Incorporation
|
|
Percentage of
Ownership
|
1st Tier Subsidiary:
|
|
|
|
|
|
|
HotApps
International Pte Ltd (“HIP”)
|
|
May
23, 2014
|
|
Republic of
Singapore
|
|
100%
by Company
|
Crypto Exchange
Inc.
|
|
December 15,
2017
|
|
State of Nevada,
the United States of America
|
|
100%
by Company
|
2nd Tier Subsidiaries:
|
|
|
|
|
|
|
Crypto Exchange
Pte. Ltd., formerly HotApps Call Pte Ltd
|
|
September 15,
2014
|
|
Republic of
Singapore
|
|
100%
owned by HIP
|
HotApps
Information Technology Co Ltd
|
|
November 10,
2014
|
|
People’s
Republic of China
|
|
100%
owned by HIP
|
HotApp
International Limited*
|
|
July
8, 2014
|
|
Hong
Kong (Special Administrative Region)
|
|
100%
owned by HIP
|
Office
equipment
|
3
years
|
Computer
equipment
|
3
years
|
Furniture
and fixtures
|
3
years
|
Motor
vehicles
|
10
years
|
Segments
|
Provision of
Services
|
Software
Development
|
Total
|
Primary
Geographical Markets
|
|
|
|
North
America
|
$23,046
|
$-
|
$23,046
|
Asia
|
-
|
4,623
|
4,623
|
|
$23,046
|
$4,623
|
$27,669
|
|
|
|
|
Timing
of Revenue Recognition
|
|
|
|
Goods transferred
at a point in time
|
$-
|
$4,623
|
$4,623
|
Services
transferred over time
|
23,046
|
-
|
23,046
|
|
$23,046
|
$4,623
|
$27,669
|
|
March
31,
|
December
31,
|
|
2018
|
2017
|
Computer
equipment
|
$78,277
|
$76,662
|
Office
equipment
|
23,637
|
22,843
|
Furniture and
fixtures
|
10,761
|
10,599
|
|
$112,675
|
$110,104
|
Less: accumulated
depreciation
|
(95,851)
|
(87,167)
|
Fixed assets,
net
|
$16,824
|
$22,937
|
|
March
31,
|
December
31,
|
|
2018
|
2017
|
Accrued payroll
& benefits
|
$177,633
|
$170,915
|
Accrued
professional fees
|
17,568
|
20,666
|
Other
|
3,554
|
13,126
|
Total
|
$198,755
|
$204,707
|
2018
|
$6,340
|
2019
|
-
|
Total
|
$6,340
|
|
|
Subsidiaries
|
|
Date of
Incorporation
|
|
Place of
Incorporation
|
|
Percentage of
Ownership
|
1st Tier Subsidiary:
|
|
|
|
|
|
|
HotApps
International Pte Ltd (“HIP”)
|
|
May
23, 2014
|
|
Republic of
Singapore
|
|
100%
by Company
|
Crypto Exchange
Inc.
|
|
December 15,
2017
|
|
State of Nevada,
the United States of America
|
|
100%
by Company
|
2nd Tier Subsidiaries:
|
|
|
|
|
|
|
Crypto Exchange
Pte. Ltd., formerly HotApps Call Pte Ltd
|
|
September 15,
2014
|
|
Republic of
Singapore
|
|
100%
owned by HIP
|
HotApps
Information Technology Co Ltd
|
|
November 10,
2014
|
|
People’s
Republic of China
|
|
100%
owned by HIP
|
HotApp
International Limited*
|
|
July
8, 2014
|
|
Hong
Kong (Special Administrative Region)
|
|
100%
owned by HIP
|
Segments
|
Provision of
Services
|
Software
Development
|
Total
|
Primary
Geographical Markets
|
|
|
|
North
America
|
$23,046
|
$-
|
$23,046
|
Asia
|
-
|
4,623
|
4,623
|
|
$23,046
|
$4,623
|
$27,669
|
|
|
|
|
Timing
of Revenue Recognition
|
|
|
|
Goods transferred
at a point in time
|
$-
|
$4,623
|
$4,623
|
Services
transferred over time
|
23,046
|
-
|
23,046
|
|
$23,046
|
$4,623
|
$27,669
|
Exhibit Number
|
|
Description
|
|
Outsource
Technology Development Agreement, by and between Document Security
Systems, Inc. and HotApp International Ltd., dated as of March 1,
2018.
|
|
|
Certification
of Chief Executive Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
|
|
|
Certification
of Chief Financial Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
|
|
|
Section
1350 Certification of Chief Executive Officer and Chief Financial
Officer
|
|
101.INS
|
|
XBRL
Instance Document
|
101.SCH
|
|
XBXRL
Taxonomy Extension Schema.
|
101.CAL
|
|
XBRL
Taxonomy Extension Calculation Linkbase.
|
101.DEF
|
|
XBRL
Taxonomy Extenstion Definition Linkbase.
|
101.LAB
|
|
XBRL
Taxonomy Extension Label Linkbase
|
|
HOTAPP BLOCKCHAIN INC.
|
|
|
|
|
|
|
|
|
|
|
Date:
May 15, 2018
|
By:
|
/s/ Lee
Wang Kei
|
|
|
|
Lee
Wang Kei
|
|
|
|
Chief
Executive Officer
|
|
|
|
|
|
Date:
May 15, 2018
|
By:
|
/s/ Lui
Wai Leung, Alan
|
|
|
|
Lui Wai
Leung, Alan
|
|
|
|
Chief
Financial Officer
|
|
|
|
|
|
|
If to DSS:
Document Security Systems, Inc.
200
Canal View Blvd., Suite 300
Rochester,
New York 14623
USA
Attn: Chief Executive Officer
|
|
With e-mail PDF copy to:
Document Security Systems, Inc.
200 Canal View Blvd., Suite 300
Rochester, New York 14614
USA
Attn:
General Counsel (jdangelo@dsssecure.com)
|
|
|
|
|
|
If
to Developer:
HotApp
International Ltd.
17B,
Greatmany Centre
109-111
Queen’s Road East
Hong
Kong
Attn: Chief Executive Officer
|
|
With
a copy to:
|
DOCUMENT SECURITY SYSTEMS, INC.
|
|
HOTAPP
INTERNATIONAL LTD.
|
|
|
|
|
|
|
|
/s/Jeffrey
Ronaldi
|
|
|
/s/
Nathan Lee
|
|
Name:
Jeffrey Ronaldi
|
|
|
Name:
Nathan Lee
|
|
Title:
Chief Executive Office
|
|
|
Title:
Chief Executive Officer
|
|
|
|
|
|
Date:
May 15, 2018
|
By:
|
/s/ Lee
Wang Kei
|
|
|
|
Lee
Wang Kei
|
|
|
|
Chief
Executive Officer
|
|
|
|
|
|
|
|
|
|
Date:
May 15, 2018
|
By:
|
/s/ Lui
Wai Leung, Alan
|
|
|
|
Lui Wai
Leung, Alan
|
|
|
|
Chief
Financial Officer
|
|
|
|
|
|
Date:
May 15, 2018
|
By:
|
/s/ Lee
Wang Kei
|
|
|
|
Lee
Wang Kei
|
|
|
|
Chief
Executive Officer
|
|
|
|
|
|
Date:
May 15, 2018
|
By:
|
/s/ Lui
Wai Leung, Alan
|
|
|
|
Lui Wai
Leung, Alan
|
|
|
|
Chief
Financial Officer
|
|
|
|
|
|
Document and Entity Information - shares |
3 Months Ended | |
---|---|---|
Mar. 31, 2018 |
May 15, 2018 |
|
Document And Entity Information | ||
Entity Registrant Name | HotApp Blockchain Inc. | |
Entity Central Index Key | 0001600347 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2018 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Is Entity a Well-known Seasoned Issuer? | No | |
Is Entity a Voluntary Filer? | No | |
Is Entity's Reporting Status Current? | Yes | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 506,898,576 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2018 |
CONDENSED BALANCE SHEETS (Parenthetical) - $ / shares |
Mar. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Preferred stock, Par Value | $ 0.0001 | $ 0.0001 |
Preferred stock, Share Authorized | 15,000,000 | 15,000,000 |
Preferred stock, Issued | 0 | 0 |
Preferred stock, Outstanding | 0 | 0 |
Common stock, Par Value | $ 0.0001 | $ 0.0001 |
Common stock, Shares Authorized | 1,000,000,000 | 1,000,000,000 |
Common stock, Issued | 506,898,576 | 506,898,576 |
Common stock, Outstanding | 506,898,576 | 506,898,576 |
1. The Company History and Nature of the Business |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
The Company History and Nature of the Business | HotApp Blockchain Inc., formerly HotApp International, Inc., (the “Company” or “Group”) was incorporated in the State of Delaware on March 7, 2012 and established a fiscal year end of December 31. The Company’s initial business plan was to be a financial acquisition intermediary which would serve buyers and sellers for companies that are in highly fragmented industries. The Company determined it was in the best interest of the shareholders to expand its business plan. On October 15, 2014, through a sale and purchase agreement (the “Purchase Agreement”) the Company acquired all the issued and outstanding stock of HotApps International Pte Ltd (“HIP”) from Singapore eDevelopment Limited (“SeD”). HIP owned certain intellectual property relating to instant messaging for portable devices (“HotApp”). HotApp is a cross-platform mobile application that incorporates instant messaging and ecommerce. It provides a messaging and calling services for HotApp users (text, photo, audio). Started from a cross platform mobile application that incorporate messaging and eCommerce, HotApp has evolved as a platform Service provider with application framework serving vertical industry such as multilevel Marketing. The messaging and calling services has been terminated in 2017. HotApp can be used on any mobile platform (i.e. IOS Online or Android). On January 1, 2018, the Company’s new subsidiary, Crypto Exchange Inc., issued 1,000 shares of its common stock to the Company.
As of March 31, 2018, details of the Company’s subsidiaries are as follows:
* On March 25, 2015, HotApps International Pte Ltd acquired 100% of issued share capital in HotApp International Limited.
These financial statements have been prepared using accounting principles generally accepted in the United States of America applicable for a going concern, which assumes that the Company will realize its assets and discharge its liabilities in the ordinary course of business. Since inception, the Company has incurred net losses of $5,197,609 and has net working capital deficit of $908,402 at March 31, 2018. Management has concluded that due to the conditions described above, there is substantial doubt about the entities ability to continue as a going concern through May 15, 2019. We have evaluated the significance of the conditions in relation to our ability to meet our obligations and believe that our current cash balance along with our current operations will not provide sufficient capital to continue operation through 2018. Our ability to continue as a going concern is dependent upon achieving sales growth, the management of operating expenses and the ability of the Company to obtain the necessary financing to meet its obligations and pay its liabilities arising from normal business operations when they come due, and upon profitable operations.
Our majority shareholder has advised us not to depend solely on it for financing. We have increased our efforts to raise additional capital through equity or debt financings from other sources. However, we cannot be certain that such capital (from our shareholders or third parties) will be available to us or whether such capital will be available on terms that are acceptable to us. Any such financing likely would be dilutive to existing stockholders and could result in significant financial operating covenants that would negatively impact our business. If we are unable to raise sufficient additional capital on acceptable terms, we will have insufficient funds to operate our business or pursue our planned growth.
These financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or amounts and classification of liabilities that might result from this uncertainty.
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2. Summary of Significant Accounting Policies |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Significant Accounting Policies | Basis of presentation
The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). These condensed consolidated financial statements should be read in conjunction with the financial statements and additional information as contained in our Annual Report on Form 10-K for the year ended December 31, 2017. Results of operations for the three month periods ended March 31, 2018 are not necessarily indicative of the operating results that may be expected for the year ending December 31, 2018. The other information in these condensed consolidated financial statements is unaudited but, in the opinion of management, reflects all adjustments necessary for a fair presentation of the results for the periods covered. All such adjustments are of a normal recurring nature unless disclosed otherwise.
Basis of consolidation
The consolidated financial statements of the Group include the financial statements of HotApp Blockchain Inc. and its subsidiaries. All inter-company transactions and balances have been eliminated upon consolidation.
Use of estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and revenues, cost and expenses in the financial statements and accompanying notes. Significant accounting estimates reflected in the Group’s consolidated financial statements include revenue recognition, the useful lives and impairment of property and equipment, valuation allowance for deferred tax assets and share-based compensation.
Cash and cash equivalents
The Company considers all highly liquid investments with a maturity of three months or less at the date of acquisition to be cash equivalents. There were no cash equivalents as of March 31, 2018 and December 31, 2017.
Foreign currency risk
Because of its foreign operations, the Company holds cash in non-US dollars. As of March 31, 2018, cash and cash equivalents of the Group includes, on an as converted basis to US dollars $53,694, $7,047 and $12,738 in Hong Kong Dollars (“HK$”), Reminbi (“RMB”) and Singapore Dollars (“S$”), respectively.
The Renminbi (“RMB”) is not a freely convertible currency. The State Administration for Foreign Exchange, under the authority of the People’s Bank of China, controls the conversion of RMB into foreign currencies. The value of the RMB is subject to changes in central government policies and to international economic and political developments affecting supply and demand in the China Foreign Exchange Trading System market.
Concentration of credit risk
Financial instruments that potentially expose the Group to concentration of credit risk consist primarily of cash. Although the cash at each particular bank in the United States is insured up to $250,000 by Federal Deposit Insurance Corporation (FDIC), the Group exposes to credit risk due to its concentration of cash in foreign countries. The Group places their cash with financial institutions with high-credit ratings and quality. The Group also exposes to credit risk due to its concentration for customers with revenue in excess of 10%.
Fixed assets, net
Property and equipment are stated at cost less accumulated depreciation. Depreciation is calculated on a straight-line basis over the following estimated useful lives:
Fair value
The carrying value of cash and cash equivalents, accounts payable and accrued liabilities, and borrowings, as reflected in the balance sheets, approximate fair value because of the short-term maturity of these instruments. All other significant financial assets, financial liabilities and equity instruments of the Company are either recognized or disclosed in the financial statements together with other information relevant for making a reasonable assessment of future cash flows, interest rate risk and credit risk. Where practicable the fair values of financial assets and financial liabilities have been determined and disclosed; otherwise only available information pertinent to fair value has been disclosed.
Revenue recognition
Accounting Standards Codification ("ASC") 606, Revenue from Contracts with Customers ("ASC 606"), establishes principles for reporting information about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity's contracts to provide goods or services to customers. Under the new standard, revenue is recognized when a customer obtains control of promised goods or services in an amount that reflects the consideration the entity expects to receive in exchange for those goods or services. The Company adopted this new standard on January 1, 2018 under the modified retrospective method to all contracts not completed as of January 1, 2018 and the adoption did not have a material effect on our financial statements but we expanded our disclosures related to contracts with customers below.
Revenue is recognized when (or as) the Company transfers promised goods or services to its customers in amounts that reflect the consideration to which the Company expects to be entitled to in exchange for those goods or services, which occurs when (or as) the Company satisfies its contractual obligations and transfers over control of the promised goods or services to its customers. Costs to obtain or fulfill a contract are expensed as incurred.
Disaggregation of Revenue
We generate revenue from the project involving provision of services and software development to customers. In respect to the provision of services, the agreement span over the length of one year with cancellable clause and are typically billed on a monthly basis. The following table depicts the disaggregation of revenue according to revenue type and is consistent with how we evaluate our financial performance:
Contract assets and contract liabilities
Based on our contracts, we normally invoice customers once our performance obligations have been satisfied, at which point payment is unconditional. Accordingly, our contracts do not give rise to contract assets or liabilities under ASC 606. Accounts receivable are recorded when the right to consideration becomes unconditional.
Remaining performance obligations
As of March 31, 2018, the aggregate amount of the transaction price allocated to the remaining performance obligation is $3,092, and the Group will recognize this revenue as the software development is completed, which is expected to occur over the next 3 months.
Research and development expenses
Research and development expenses primarily consist of (i) salaries and benefits for research and development personnel, and (ii) office rental, general expenses and depreciation expenses associated with the research and development activities. The Company’s research and development activities primarily consist of the research and development of new features for its mobile platform and its self-developed mobile games. Expenditures incurred during the research phase are expensed as incurred.
Income taxes
Current income taxes are provided for in accordance with the laws of the relevant tax authorities. Deferred income taxes are recognized when temporary differences exist between the tax bases of assets and liabilities and their reported amounts in the consolidated financial statements. Net operating loss carry forwards and credits are applied using enacted statutory tax rates applicable to future years. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more-likely-than-not that a portion of or all of the deferred tax assets will not be realized. The components of the deferred tax assets and liabilities are individually classified as non-current based on their characteristics.
The impact of an uncertain income tax position on the income tax return is recognized at the largest amount that is more-likely-than-not to be sustained upon audit by the relevant tax authority. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. Interest and penalties on income taxes will be classified as a component of the provisions for income taxes. The Group did not recognize any income tax due to uncertain tax position or incur any interest and penalties related to potential underpaid income tax expenses for the years ended December 31, 2017 or 2016, respectively.
Uncertainties exist with respect to the application of the New EIT Law to our operations, specifically with respect to our tax residency. The New EIT Law specifies that legal entities organized outside of the PRC will be considered residents for PRC income tax purposes if their “de facto management bodies” as “establishments that carry on substantial and overall management and control over the operations, personnel, accounting, properties, etc. of the Company.” Because of the uncertainties that have resulted from limited PRC guidance on the issue, it is uncertain whether our legal entities outside the PRC constitute residents under the New EIT Law. If one or more of our legal entities organized outside the PRC were characterized as PRC residents, the impact would adversely affect our results of operations.
Foreign currency translation
The functional and reporting currency of the Company is the United States dollar (“U.S. dollar”). The financial records of the Company’s subsidiaries located in Singapore, Hong Kong and the PRC are maintained in their local currencies, the Singapore Dollar (S$), Hong Kong Dollar (HK$) and Renminbi ("RMB"), which are also the functional currencies of these entities.
Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency at the rates of exchange ruling at the balance sheet date. Transactions in currencies other than the functional currency during the year are converted into functional currency at the applicable rates of exchange prevailing when the transactions occurred. Transaction gains and losses are recognized in the statement of operations.
The Company’s entities with functional currency of Renminbi, Hong Kong Dollar and Singapore Dollar, translate their operating results and financial positions into the U.S. dollar, the Company’s reporting currency. Assets and liabilities are translated using the exchange rates in effect on the balance sheet date. Revenues, expenses, gains and losses are translated using the average rate for the year. Translation adjustments are reported as cumulative translation adjustments and are shown as a separate component of comprehensive income (loss).
For the three months ended March 31, 2018, the Company recorded other comprehensive loss from translation loss of $59,452 in the consolidated financial statements.
Operating leases
Leases where the rewards and risks of ownership of assets primarily remain with the lessor are accounted for as operating leases. Payments made under operating leases are charged to the consolidated statements of operations on a straight-line basis over the lease periods.
Comprehensive income (loss)
Comprehensive income (loss) includes gains (losses) from foreign currency translation adjustments. Comprehensive income (loss) is reported in the consolidated statements of operations and comprehensive loss.
Loss per share
Basic loss per share is computed by dividing net loss attributable to shareholders by the weighted average number of shares outstanding during the period.
The Company's convertible preferred shares are not participating securities and have no voting rights until converted to common stock. As of March 31, 2018, no shares of preferred stock are eligible for conversion into voting common stock.
Recent accounting pronouncements not yet adopted
In November 2015, the FASB issued Accounting Standards Update No. 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes (ASU 2015-17), which simplifies the presentation of deferred income taxes by requiring deferred tax assets and liabilities be classified as noncurrent on the balance sheet. The updated standard is effective for us beginning on January 1, 2017. The adoption of this standard did not have a significant effect on our consolidated financial statements.
On Feb. 25, 2016, the Financial Accounting Standards Board (FASB) released Accounting Standards Update No. 2016-02, Leases (Topic 842) (the Update). The new leasing standard presents dramatic changes to the balance sheets of lessees. Lessor accounting is updated to align with certain changes in the lessee model and the new revenue recognition standard. The Company does not expect the adoption of ASU No. 2016-02 to have a material impact on its financial statements.
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3. Fixed Assets, Net |
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Fixed assets, net | Fixed assets, net consisted of the following:
Depreciation expenses charged to the consolidated statements of operations for the three months ended March 31, 2018 and 2017 were $8,684 and $8,636, respectively.
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4. Accounts Payable and Accrued Expense |
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Accounts Payable and Accrued Expenses | Accrued expenses and other current liabilities consisted of the following:
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5. Share Capitalization |
3 Months Ended |
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Mar. 31, 2018 | |
Share Capitalization | |
Share Capitalization | The Company is authorized to issue 1 billion shares of common stock and 15 million shares of preferred stock. The authorized share capital of the Company’s common stock was increased from 500 million to 1 billion on May 5, 2017. Both share types have a $0.0001 par value. As of March 31, 2018 and December 31, 2017, the Company had issued and outstanding, 506,898,576 of common stock, and 0 shares of preferred stock.
Common Shares:
On July 13, 2015, SED acquired 777,687 shares of the Company common stock by converting outstanding loans made to the Company into common stock of the Company at a rate of $5.00 per share (rounded to the nearest full share). After such transactions SED owned 98.17% of the Company.
On March 27, 2017, the Company entered into a Loan Conversion Agreement with SeD, pursuant to which SeD agreed to convert $450,890 of debt owed by Company to SeD into 500,988,889 common shares at a conversion price of $0.0009. The captioned shares were issued on June 9, 2017, and SeD owned 99.979% of the Company after such transactions.
Preferred Shares:
Pursuant to the Purchase Agreement, dated October 15, 2014, the Company issued 1,000,000 shares of common stock to SED. Such amount represented 19% ownership in the Company. Pursuant to the Purchase Agreement, dated October 15, 2014, the Company issued 13,800,000 shares of a class of preferred stock called Perpetual Preferred Stock (“Preferred Stock”) to SED. The Preferred Stock has no dividend or voting rights. The Preferred Stock is convertible to common stock of the Company dependent upon the number of commercial users of the Software. For each 1,000,000 commercial users of the Software (without duplication), SED shall have the right to convert 1,464,000 shares of Perpetual Preferred Stock into 7,320,000 shares of Common Stock, so that there must be a minimum of 9,426,230 commercial users in order for all of the shares of the Perpetual Preferred Stock to be converted into common stock of the Company (13,800,000 shares of Preferred Stock convertible into 69,000,000 shares of common stock).
On March 27, 2017, SeD and the Company entered into a Preferred Stock Cancellation Agreement, by which SeD agreed to cancel its 13,800,000 shares Perpetual Preferred Stock issued by the Company. On June 8, 2017, a Certificate of Retirement for 13,800,000 shares of the Perpetual Preferred Stock has been filed to the office of Secretary of State of the State of Delaware.
Other than the conversion rights described above, the Preferred Stock has no voting, dividend, redemption or other rights.
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6. Commitments and Contingencies |
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Commitments And Contingencies | |||||||||||||||||||||
Commitments and Contingencies | On May 9, 2016, the Company entered into a lease agreement for 1,231 square feet of office space in Guangzhou, China. The lease commenced on May 9, 2016 and runs through May 8, 2018 with monthly payments of $2,451. The Company was required to put up a security deposit of $4,918. For the three months ended March 31, 2018, the Company recorded rent expense of $7,353 for the Guangzhou office.
On April 10, 2015, the Company entered into a lease agreement for 347 square feet of office space in Kowloon, Hong Kong. This lease commenced on April 20, 2015 and runs through April 19, 2017 with monthly payments of $2,574. The Company was required to put up a security deposit of $5,147. On March 16, 2017, the Company entered into a lease agreement for 1,504 square feet of office space in Kowloon, Hong Kong. This lease commenced on March 16, 2017 and runs through March 31, 2019 with monthly payments of $3,256. The Company was required to put up a security deposit of $6,499. For the three months ended March 31, 2018, the Company recorded rent expense of $9,768 for the office.
The following is a schedule by years of future minimum lease payments under non-cancellable operating leases:
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7. Related Party Balances and Transactions |
3 Months Ended |
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Mar. 31, 2018 | |
Related Party Transactions [Abstract] | |
Related Party Balances and Transactions | On March 1, 2018, the Company’s subsidiary HotApp International Ltd. entered into an Outsource Technology Development Agreement (the “Agreement”) with a related party, which may be terminated by either party on 30-days’ notice. Under this agreement, the related party agreed to pay a monthly fee for access to HotApp International Ltd.’s software programmers.
As of March 31, 2018, the Company has amount due to SeD for $902,216, plus an amount due to a director of $5,479 and has an amount due from an affiliate for $2,285. The Company has made full impairment provision for the amount due from the affiliate.
The account receivable as of March 31, 2018 included a trade receivable from an affiliate by common ownership amounting to $89,427 resulting from the revenue earned from that affiliate during the year 2017, and a trade receivable of $23,000 from a related party resulting from the revenue earned in 2018. |
8. Subsequent Event |
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Mar. 31, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | The Company has evaluated subsequent events through the date that the financials were issued. |
2. Summary of Significant Accounting Policies (Policies) |
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Summary Of Significant Accounting Policies Policies | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basis of Presentation | The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). These condensed consolidated financial statements should be read in conjunction with the financial statements and additional information as contained in our Annual Report on Form 10-K for the year ended December 31, 2017. Results of operations for the three month periods ended March 31, 2018 are not necessarily indicative of the operating results that may be expected for the year ending December 31, 2018. The other information in these condensed consolidated financial statements is unaudited but, in the opinion of management, reflects all adjustments necessary for a fair presentation of the results for the periods covered. All such adjustments are of a normal recurring nature unless disclosed otherwise. |
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Basis of consolidation | The consolidated financial statements of the Group include the financial statements of HotApp Blockchain Inc. and its subsidiaries. All inter-company transactions and balances have been eliminated upon consolidation. |
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Use of estimates | The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and revenues, cost and expenses in the financial statements and accompanying notes. Significant accounting estimates reflected in the Group’s consolidated financial statements include revenue recognition, the useful lives and impairment of property and equipment, valuation allowance for deferred tax assets and share-based compensation. |
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Cash and Cash Equivalents | The Company considers all highly liquid investments with a maturity of three months or less at the date of acquisition to be cash equivalents. There were no cash equivalents as of March 31, 2018 and December 31, 2017. |
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Foreign currency risk | Because of its foreign operations, the Company holds cash in non-US dollars. As of March 31, 2018, cash and cash equivalents of the Group includes, on an as converted basis to US dollars $53,694, $7,047 and $12,738 in Hong Kong Dollars (“HK$”), Reminbi (“RMB”) and Singapore Dollars (“S$”), respectively.
The Renminbi (“RMB”) is not a freely convertible currency. The State Administration for Foreign Exchange, under the authority of the People’s Bank of China, controls the conversion of RMB into foreign currencies. The value of the RMB is subject to changes in central government policies and to international economic and political developments affecting supply and demand in the China Foreign Exchange Trading System market.
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Concentration of credit risk | Financial instruments that potentially expose the Group to concentration of credit risk consist primarily of cash. Although the cash at each particular bank in the United States is insured up to $250,000 by Federal Deposit Insurance Corporation (FDIC), the Group exposes to credit risk due to its concentration of cash in foreign countries. The Group places their cash with financial institutions with high-credit ratings and quality. The Group also exposes to credit risk due to its concentration for customers with revenue in excess of 10%. |
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Fixed assets, net | Property and equipment are stated at cost less accumulated depreciation. Depreciation is calculated on a straight-line basis over the following estimated useful lives:
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Fair Value | The carrying value of cash and cash equivalents, accounts payable and accrued liabilities, and borrowings, as reflected in the balance sheets, approximate fair value because of the short-term maturity of these instruments. All other significant financial assets, financial liabilities and equity instruments of the Company are either recognized or disclosed in the financial statements together with other information relevant for making a reasonable assessment of future cash flows, interest rate risk and credit risk. Where practicable the fair values of financial assets and financial liabilities have been determined and disclosed; otherwise only available information pertinent to fair value has been disclosed. |
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Revenue Recognition | Accounting Standards Codification ("ASC") 606, Revenue from Contracts with Customers ("ASC 606"), establishes principles for reporting information about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity's contracts to provide goods or services to customers. Under the new standard, revenue is recognized when a customer obtains control of promised goods or services in an amount that reflects the consideration the entity expects to receive in exchange for those goods or services. The Company adopted this new standard on January 1, 2018 under the modified retrospective method to all contracts not completed as of January 1, 2018 and the adoption did not have a material effect on our financial statements but we expanded our disclosures related to contracts with customers below.
Revenue is recognized when (or as) the Company transfers promised goods or services to its customers in amounts that reflect the consideration to which the Company expects to be entitled to in exchange for those goods or services, which occurs when (or as) the Company satisfies its contractual obligations and transfers over control of the promised goods or services to its customers. Costs to obtain or fulfill a contract are expensed as incurred. |
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Disaggregation of Revenue | We generate revenue from the project involving provision of services and software development to customers. In respect to the provision of services, the agreement span over the length of one year with cancellable clause and are typically billed on a monthly basis. The following table depicts the disaggregation of revenue according to revenue type and is consistent with how we evaluate our financial performance:
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Contract assets and contract liabilities | Based on our contracts, we normally invoice customers once our performance obligations have been satisfied, at which point payment is unconditional. Accordingly, our contracts do not give rise to contract assets or liabilities under ASC 606. Accounts receivable are recorded when the right to consideration becomes unconditional. |
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Remaining performance obligations | As of March 31, 2018, the aggregate amount of the transaction price allocated to the remaining performance obligation is $3,092, and the Group will recognize this revenue as the software development is completed, which is expected to occur over the next 3 months. |
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Research and development expenses | Research and development expenses primarily consist of (i) salaries and benefits for research and development personnel, and (ii) office rental, general expenses and depreciation expenses associated with the research and development activities. The Company’s research and development activities primarily consist of the research and development of new features for its mobile platform and its self-developed mobile games. Expenditures incurred during the research phase are expensed as incurred. |
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Income Taxes | Current income taxes are provided for in accordance with the laws of the relevant tax authorities. Deferred income taxes are recognized when temporary differences exist between the tax bases of assets and liabilities and their reported amounts in the consolidated financial statements. Net operating loss carry forwards and credits are applied using enacted statutory tax rates applicable to future years. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more-likely-than-not that a portion of or all of the deferred tax assets will not be realized. The components of the deferred tax assets and liabilities are individually classified as non-current based on their characteristics.
The impact of an uncertain income tax position on the income tax return is recognized at the largest amount that is more-likely-than-not to be sustained upon audit by the relevant tax authority. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. Interest and penalties on income taxes will be classified as a component of the provisions for income taxes. The Group did not recognize any income tax due to uncertain tax position or incur any interest and penalties related to potential underpaid income tax expenses for the years ended December 31, 2017 or 2016, respectively.
Uncertainties exist with respect to the application of the New EIT Law to our operations, specifically with respect to our tax residency. The New EIT Law specifies that legal entities organized outside of the PRC will be considered residents for PRC income tax purposes if their “de facto management bodies” as “establishments that carry on substantial and overall management and control over the operations, personnel, accounting, properties, etc. of the Company.” Because of the uncertainties that have resulted from limited PRC guidance on the issue, it is uncertain whether our legal entities outside the PRC constitute residents under the New EIT Law. If one or more of our legal entities organized outside the PRC were characterized as PRC residents, the impact would adversely affect our results of operations. |
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Foreign currency translation | The functional and reporting currency of the Company is the United States dollar (“U.S. dollar”). The financial records of the Company’s subsidiaries located in Singapore, Hong Kong and the PRC are maintained in their local currencies, the Singapore Dollar (S$), Hong Kong Dollar (HK$) and Renminbi ("RMB"), which are also the functional currencies of these entities.
Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency at the rates of exchange ruling at the balance sheet date. Transactions in currencies other than the functional currency during the year are converted into functional currency at the applicable rates of exchange prevailing when the transactions occurred. Transaction gains and losses are recognized in the statement of operations.
The Company’s entities with functional currency of Renminbi, Hong Kong Dollar and Singapore Dollar, translate their operating results and financial positions into the U.S. dollar, the Company’s reporting currency. Assets and liabilities are translated using the exchange rates in effect on the balance sheet date. Revenues, expenses, gains and losses are translated using the average rate for the year. Translation adjustments are reported as cumulative translation adjustments and are shown as a separate component of comprehensive income (loss).
For the three months ended March 31, 2018, the Company recorded other comprehensive loss from translation loss of $59,452 in the consolidated financial statements. |
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Operating leases | Leases where the rewards and risks of ownership of assets primarily remain with the lessor are accounted for as operating leases. Payments made under operating leases are charged to the consolidated statements of operations on a straight-line basis over the lease periods. |
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Comprehensive income (loss) | Comprehensive income (loss) includes gains (losses) from foreign currency translation adjustments. Comprehensive income (loss) is reported in the consolidated statements of operations and comprehensive loss. |
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Loss per share | Basic loss per share is computed by dividing net loss attributable to shareholders by the weighted average number of shares outstanding during the period.
The Company's convertible preferred shares are not participating securities and have no voting rights until converted to common stock. As of March 31, 2018, no shares of preferred stock are eligible for conversion into voting common stock. |
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Recent Accounting Pronouncements Not Yet Adopted | In November 2015, the FASB issued Accounting Standards Update No. 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes (ASU 2015-17), which simplifies the presentation of deferred income taxes by requiring deferred tax assets and liabilities be classified as noncurrent on the balance sheet. The updated standard is effective for us beginning on January 1, 2017. The adoption of this standard did not have a significant effect on our consolidated financial statements.
On Feb. 25, 2016, the Financial Accounting Standards Board (FASB) released Accounting Standards Update No. 2016-02, Leases (Topic 842) (the Update). The new leasing standard presents dramatic changes to the balance sheets of lessees. Lessor accounting is updated to align with certain changes in the lessee model and the new revenue recognition standard. The Company does not expect the adoption of ASU No. 2016-02 to have a material impact on its financial statements. |
1. The Company History and Nature of the Business (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Company History And Nature Of Business Tables | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of subsidiaries |
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2. Summary of Significant Accounting Policies (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary Of Significant Accounting Policies Tables | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fixed Assets estimated useful life |
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Disaggregation of Revenue |
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3. Fixed Assets, Net (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fixed Assets Net Tables | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fixed Assets, Net |
|
4. Accounts Payable and Accrued Expense (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounts Payable And Accrued Expense Tables | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of accounts payable and accrued expenses |
|
6. Commitments and Contingencies (Tables) |
3 Months Ended | ||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2018 | |||||||||||||||||||||
Commitments And Contingencies Tables | |||||||||||||||||||||
Future minimum lease payments |
|
1. The Company History and Nature of the Business (Details) |
3 Months Ended |
---|---|
Mar. 31, 2018 | |
HotApps International Pte Ltd ("HIP") | |
Date of Incorporation | May 23, 2014 |
Place of Incorporation | Republic of Singapore |
Percentage of Ownership | 100.00% |
Crypto Exchange Inc. | |
Date of Incorporation | Dec. 15, 2017 |
Place of Incorporation | State of Nevada, the United States of America |
Percentage of Ownership | 100.00% |
Crypto Exchange Pte. Ltd. | |
Date of Incorporation | Sep. 15, 2014 |
Place of Incorporation | Republic of Singapore |
Percentage of Ownership | 100.00% |
HotApps Information Technology Co Ltd | |
Date of Incorporation | Nov. 10, 2014 |
Place of Incorporation | Peoples Republic of China |
Percentage of Ownership | 100.00% |
HotApp International Limited | |
Date of Incorporation | Jul. 08, 2014 |
Place of Incorporation | Hong Kong (Special Administrative Region) |
Percentage of Ownership | 100.00% |
1. The Company History and Nature of the Business (Details Narrative) |
3 Months Ended |
---|---|
Mar. 31, 2018
USD ($)
| |
Company History And Nature Of Business Details Narrative | |
Incurred net losses | $ (5,197,609) |
Net working capital deficit | $ (908,402) |
2. Summary of Significant Accounting Policies (Details) |
3 Months Ended |
---|---|
Mar. 31, 2018 | |
Office Equipment | |
Estimated useful life | 3 years |
Computer Equipment | |
Estimated useful life | 3 years |
Furniture and Fixtures | |
Estimated useful life | 3 years |
Motor Vehicles | |
Estimated useful life | 10 years |
2. Summary of Significant Accounting Policies (Details 1) - USD ($) |
3 Months Ended | |
---|---|---|
Mar. 31, 2018 |
Mar. 31, 2017 |
|
Revenues | $ 27,669 | $ 66,178 |
Goods transferred at a point in time | ||
Revenues | 4,623 | |
Services transferred over time | ||
Revenues | 23,046 | |
North America | ||
Revenues | 23,046 | |
Asia | ||
Revenues | 4,623 | |
Provision of Services | ||
Revenues | 23,046 | |
Provision of Services | Goods transferred at a point in time | ||
Revenues | 0 | |
Provision of Services | Services transferred over time | ||
Revenues | 23,046 | |
Provision of Services | North America | ||
Revenues | 23,046 | |
Provision of Services | Asia | ||
Revenues | 0 | |
Software Development | ||
Revenues | 4,623 | |
Software Development | Goods transferred at a point in time | ||
Revenues | 4,623 | |
Software Development | Services transferred over time | ||
Revenues | 0 | |
Software Development | North America | ||
Revenues | 0 | |
Software Development | Asia | ||
Revenues | $ 4,623 |
2. Summary of Significant Accounting Policies (Details Narrative) |
3 Months Ended |
---|---|
Mar. 31, 2018
USD ($)
| |
Summary Of Significant Accounting Policies Details Narrative | |
Foreign currency translation gain (loss) | $ (59,452) |
3. Fixed Assets, Net (Details) - USD ($) |
Mar. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Fixed Assets Net Details | ||
Computer equipment | $ 78,277 | $ 76,662 |
Office equipment | 23,637 | 22,843 |
Furniture and fixtures | 10,761 | 10,599 |
Fixed assets, gross | 112,675 | 110,104 |
Less: accumulated depreciation | (95,851) | (87,167) |
Fixed assets, net | $ 16,824 | $ 22,937 |
3. Fixed Assets, Net (Details Narrative) - USD ($) |
3 Months Ended | |
---|---|---|
Mar. 31, 2018 |
Mar. 31, 2017 |
|
Fixed Assets Net Details Narrative | ||
Depreciation expense | $ 8,684 | $ 8,636 |
4. Accounts Payable and Accrued Expense (Details) - USD ($) |
Mar. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Accounts Payable And Accrued Expense Details | ||
Accrued payroll | $ 177,633 | $ 170,915 |
Accrued professional fees | 17,568 | 20,666 |
Other | 3,554 | 13,126 |
Total | $ 198,755 | $ 204,707 |
5. Share Capitalization (Details Narrative) - shares |
Mar. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Share Capitalization Details Narrative | ||
Common stock, Issued | 506,898,576 | 506,898,576 |
Common stock, Outstanding | 506,898,576 | 506,898,576 |
Preferred stock, Issued | 0 | 0 |
Preferred stock, Outstanding | 0 | 0 |
6. Commitments and Contingencies (Details) |
Mar. 31, 2018
USD ($)
|
---|---|
Commitments And Contingencies Details | |
2018 | $ 6,340 |
2019 | 0 |
Total | $ 6,340 |
6. Commitments and Contingencies (Details Narrative) |
3 Months Ended |
---|---|
Mar. 31, 2018
USD ($)
| |
Guangzhou | |
Rent expense | $ 7,353 |
Security deposit | 4,918 |
Hong Kong | |
Rent expense | 9,768 |
Security deposit | $ 6,499 |
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