Item 1. Financial Statements.
CHINAWE.COM INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS
OF COMPREHENSIVE LOSS
|
|
|
Six months ended June 30,
|
|
|
|
|
2016
|
|
|
2015
|
|
|
|
|
U.S.$
|
|
|
U.S.$
|
|
|
|
|
|
|
|
|
|
|
Administrative and general expenses
|
|
|
(10,282
|
)
|
|
|
(7,000
|
)
|
|
|
|
|
|
|
|
|
|
|
|
LOSS BEFORE INCOME TAXES
|
|
|
(10,282
|
)
|
|
|
(7,000
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
NET LOSS
|
|
|
(10,282
|
)
|
|
|
(7,000
|
)
|
|
|
|
|
|
|
|
|
|
|
|
OTHER COMPREHENSIVE INCOME
|
|
|
|
|
|
|
|
|
|
Foreign currency translation
|
|
|
-
|
|
|
|
-
|
|
|
TOTAL COMPREHENSIVE LOSS
|
|
|
(10,282
|
)
|
|
|
(7,000
|
)
|
|
Basic and diluted loss per share of common stock
|
|
|
|
|
|
|
|
|
|
|
|
|
(0.000
|
)
|
|
|
(0.000
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of shares of common stock outstanding
|
|
|
43,800,000
|
|
|
|
43,800,000
|
|
The unaudited condensed consolidated financial
statements should be read in conjunction with the accompanying notes.
CHINAWE.COM INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED BALANCE
SHEETS
|
|
|
|
|
As of
|
|
|
As of
|
|
|
|
|
Note
|
|
June
30, 2016
|
|
|
December
31, 2015
|
|
|
|
|
|
|
U.S.$
|
|
|
U.S.$
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
Total current assets
|
|
|
|
|
—
|
|
|
|
—
|
|
|
Total assets
|
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' DEFICIT
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
Accrued expenses and other current liabilities
|
|
|
|
|
6,598
|
|
|
|
3,800
|
|
|
Due to related parties
|
|
3
|
|
|
321,159
|
|
|
|
313,675
|
|
|
Total current liabilities
|
|
|
|
|
327,757
|
|
|
|
317,475
|
|
|
Stockholders' deficit:
|
|
|
|
|
|
|
|
|
|
|
Preferred stock, par value U.S.$0.001 per share,
authorized 20,000,000 shares,
none issued; common stock, par value U.S.$0.001 per share, authorized 100,000,000
shares, issued and outstanding 43,800,000 shares
|
|
|
|
|
43,800
|
|
|
|
43,800
|
|
|
Additional paid in capital
|
|
|
|
|
191,825
|
|
|
|
191,825
|
|
|
Accumulated losses
|
|
|
|
|
(563,382
|
)
|
|
|
(553,100
|
)
|
|
Accumulated other comprehensive
loss
|
|
|
|
|
—
|
|
|
|
—
|
|
|
Total stockholders’ deficit
|
|
|
|
|
(327,757
|
)
|
|
|
(317,475
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL LIABILITIES AND STOCKHOLDERS’
DEFICIT
|
|
|
|
|
—
|
|
|
|
—
|
|
The unaudited condensed consolidated financial
statements should be read in conjunction with the accompanying notes.
CHINAWE.COM INC.
AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS
OF CHANGES IN STOCKHOLDERS’ DEFICIT
|
|
|
Number
of shares
|
|
|
Amount
|
|
|
Additional
paid-in
capital
|
|
|
Accumulated
losses
|
|
|
Total
Stockholders’
Deficit
|
|
|
|
|
|
|
|
U.S.$
|
|
|
U.S.$
|
|
|
U.S.$
|
|
|
U.S.$
|
|
|
Balance as of January 1, 2015
|
|
|
43,800,000
|
|
|
|
43,800
|
|
|
|
84,560
|
|
|
|
(535,015
|
)
|
|
|
(406,655
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss for the period
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(7,000
|
)
|
|
|
(7,000
|
)
|
|
Balance as of June 30, 2015
|
|
|
43,800,000
|
|
|
|
43,800
|
|
|
|
84,560
|
|
|
|
(542,015
|
)
|
|
|
(413,655
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of January 1, 2016
|
|
|
43,800,000
|
|
|
|
43,800
|
|
|
|
191,825
|
|
|
|
(553,100
|
)
|
|
|
(317,475
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss for the period
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(10,282
|
)
|
|
|
(10,282
|
)
|
|
Balance as of June 30, 2016
|
|
|
43,800,000
|
|
|
|
43,800
|
|
|
|
191,825
|
|
|
|
(563,382
|
)
|
|
|
(327,757
|
)
|
The unaudited condensed consolidated financial
statements should be read in conjunction with the accompanying notes.
CHINAWE.COM INC.
AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS
OF CASH FLOWS
|
|
|
Six months
ended June 30,
|
|
|
|
|
2016
|
|
|
2015
|
|
|
|
|
U.S.$
|
|
|
U.S.$
|
|
|
CASH FLOWS FROM OPERATING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
|
(10,282
|
)
|
|
|
(7,000
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments to reconcile net loss to net cash used in operating activities:
|
|
|
|
|
|
|
|
|
|
Accrued expenses and other current liabilities
|
|
|
2,798
|
|
|
|
(3,700
|
)
|
|
|
|
|
|
|
|
|
|
|
|
NET CASH USED IN OPERATING ACTIVITIES
|
|
|
(7,484
|
)
|
|
|
(10,700
|
)
|
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Advance from related parties
|
|
|
7,484
|
|
|
|
10,700
|
|
|
|
|
|
|
|
|
|
|
|
|
NET CASH PROVIDED BY FINANCING ACTIVITIES
|
|
|
7,484
|
|
|
|
10,700
|
|
|
|
|
|
|
|
|
|
|
|
|
NET CHANGE IN CASH AND CASH EQUIVALENTS
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents, beginning of period
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect of exchange rate changes
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH AND CASH EQUIVALENTS, END OF PERIOD
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL DISCLOSURE
|
|
|
|
|
|
|
|
|
|
Interest paid
|
|
|
—
|
|
|
|
—
|
|
|
Taxes paid
|
|
|
—
|
|
|
|
—
|
|
The unaudited condensed consolidated financial
statements should be read in conjunction with the accompanying notes.
CHINAWE.COM INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
The accompanying financial statements present
the financial position of Chinawe.com Inc. (the “Company” or “Chinawe”) as of June 30, 2016 and December 31,
2015, and the results of operations for the Company and its subsidiary (up to date of disposal) for the six months ended June 30,
2016 and 2015. All inter-company accounts and transactions have been eliminated on consolidation.
The accompanying unaudited condensed consolidated
financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information
and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion
of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been
included. Operating results for the six months ended June 30, 2016 are not necessarily indicative of the results that may be expected
for the year ending December 31, 2016.
The balance sheet at December 31,
2015 has been derived from the audited financial statements at that date but does not include all of the information and footnotes
required by generally accepted accounting principles for complete financial statements. These unaudited condensed consolidated
financial statements should be read in conjunction with the consolidated financial statements included in the Company’s Annual
Report on Form 10-K for the year ended December 31, 2015.
Chinawe was incorporated under the laws
of the State of California. Chinawe’s principal business activity was providing professional management services relating
to non-performing loans in the People’s Republic of China, as well as other consulting services. During the first quarter
of 2009, the Company’s sole customer, Huizhou One Limited, issued a notice of termination to terminate the services contracts
with effect from March 26 and March 27, 2009. Effective March 27, 2009, the Company became a non-operating company.
The unaudited condensed consolidated financial
statements for the six months ended June 30, 2016 include the accounts of Chinawe and the following subsidiary (sometimes collectively
referred to hereinafter as the “Company”): Officeway Technology Limited, a company incorporated
in the British Virgin Islands in December 1999, and sold to an independent third party on December 31, 2015. The unaudited condensed
consolidated financial statements for the six months ended June 30, 2016 include the accounts of Chinawe only.
|
|
3.
|
Going concern consideration
|
The Company’s unaudited condensed
consolidated 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. As of June 30, 2016, the Company had negative
working capital and stockholders’ deficit of U.S.$327,757 and U.S.$327,757, respectively, which raise substantial doubt about
its ability to continue as a going concern.
The Company has relied on private financing
by cash inflows from the principal stockholders of the Company, who have agreed not to demand repayment of amounts due to them
as long as the Company has negative working capital. These stockholders have indicated their intention to finance the Company for
a reasonable period of time to enable the Company to continue as a going concern, assuming that in such a period of time the Company
would not be able to raise additional capital to support its continuation. However, it is uncertain for how long or to what extent
such a period of time would be “reasonable” and there can be no assurance that the financing from these stockholders
will be continued. The accompanying unaudited condensed consolidated financial statements do not include or reflect any adjustments
that might result from the outcome of these uncertainties.
|
|
4.
|
Due to related parties
|
The balances with related parties are as follows:
|
|
|
As of
|
|
|
As of
|
|
|
|
|
June 30, 2016
|
|
|
December 31, 2015
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
U.S.$
|
|
|
U.S.$
|
|
|
Advances from stockholders
|
|
|
321,159
|
|
|
|
313,675
|
|
|
|
|
The amounts due are unsecured, non-interest bearing and repayable on demand.
|
The Company is currently suspended in the
State of California due to failure to file income tax returns with the Franchise Tax Board for numerous years. The Company is also
delinquent in filing its U.S. Federal tax returns and information forms for numerous years. Although for most of such years the
Company incurred losses and would not owe taxes except for minimum fees to California, the failure to file could result in interest
and penalties imposed upon the Company which would have a material adverse effect upon the Company’s financial condition.
The Company has decided not to pursue reinstatement in California or prepare and file past due U.S. Federal tax returns and information
forms until it has formulated a plan for once again becoming an operating company. Management is unable to estimate the possible
losses with a reasonable degree of uncertainty.
The Company’s income tax returns
for the years ended December 31, 2015 and 2014 are subject to examination by the Internal Revenue Service and State tax authorities,
generally for three years after they are filed.
Item 2. Management’s Discussion
and Analysis of Financial Condition and Results of Operations.
The following discussion should be read
in conjunction with the unaudited condensed consolidated financial statements and notes thereto appearing elsewhere in this Form
10-Q. The following discussion contains forward-looking statements. Our actual results may differ significantly from those projected
in the forward-looking statements. Factors that might cause future results to differ materially from those projected in the forward-looking
statements include, but are not limited to, those discussed elsewhere in this report.
Overview — Results of Operations
Effective March 27, 2009, the Company
ceased providing professional management services relating to non-performing loans in the People’s Republic of China. The
Company has terminated its employees and closed down its offices. The Company has not identified a specific line of business or
territory for any new business. There can be no assurance that the Company will be successful in identifying a new line of business
that it can enter into or that if such new line of business is identified, that the Company will have adequate funding to commence
operations of a new line of business. The principal stockholders of the Company have indicated their intention to finance the Company
for a reasonable period of time to enable the Company to continue as a going concern, assuming that in such a period of time the
Company would not be able to raise additional capital to support its continuation. However, it is uncertain for how long or to
what extent such a period of time would be “reasonable” and there can be no assurance that financing from these stockholders
will be continued.
|
|
|
Six months ended June 30,
|
|
|
|
|
2016
|
|
|
2015
|
|
|
|
|
U.S.$
|
|
|
U.S.$
|
|
|
|
|
|
|
|
|
|
|
Administrative and general expenses
|
|
|
(10,282
|
)
|
|
|
(7,000
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Loss before income taxes
|
|
|
(10,282
|
)
|
|
|
(7,000
|
)
|
|
Income tax expense
|
|
|
—
|
|
|
|
—
|
|
|
Net loss
|
|
|
(10,282
|
)
|
|
|
(7,000
|
)
|
SIX MONTHS ENDED JUNE 30, 2016 (UNAUDITED)
COMPARED TO THE SIX MONTHS ENDED JUNE 30, 2015 (UNAUDITED)
LOSS FROM OPERATIONS
The Company’s operating expenses totaled
U.S.$10,282 for the six months ended June 30, 2016, compared to U.S. $7,000 for the six months ended June 30, 2015.
PROVISION FOR INCOME TAXES
No income tax expense for the six months ended
June 30, 2016 and 2015 was incurred because the Company reported a net loss.
LIQUIDITY AND CAPITAL RESOURCES
The Company’s unaudited condensed
consolidated 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. As of June 30, 2016, the Company had negative working
capital and stockholders’ deficit of U.S.$327,757 and U.S.$327,757, respectively.
The Company has relied on private financing
by cash inflows from the principal stockholders of the Company, who have agreed not to demand repayment of amounts due to them
as long as the Company has negative working capital. These stockholders have indicated their intention to finance the Company for
a reasonable period of time to enable the Company to continue as a going concern, assuming that in such a period of time the Company
would not be able to raise additional capital to support its continuation. However, it is uncertain for how long or to what extent
such a period of time would be “reasonable” and there can be no assurance that the financing from these stockholders
will be continued. The accompanying unaudited condensed consolidated financial statements do not include or reflect any adjustments
that might result from the outcome of these uncertainties.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
A company’s financial statements
reflect the selection and application of accounting policies which require management to make significant estimates and assumptions.
Since the Company has no business, we believe there is no critical judgment area in the application of our accounting policies
that currently affects our financial condition and results of operations except for the disclosure set forth above under “LIQUIDITY
AND CAPITAL RESOURCES.”
Off-Balance Sheet Arrangements
The Company has no off-balance sheet arrangements
that have or are reasonably likely to have a current or future effect on the Company’s financial condition, changes in financial
condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material
to the Company.
Future Operations
The Company is seeking investment opportunities
that may provide revenues for the Company. However, the Company has not identified a specific line of business or territory for
any such new business. There can be no assurance that the Company will be successful in identifying a new line of business that
it can enter into or that if such new line of business is identified, that the receipt of revenues is probable.
Item 4. Controls and Procedures
.
|
|
(a)
|
Evaluation of Disclosure Controls and Procedures
|
As of the end of the period covered by
this report, the Company conducted an evaluation, under the supervision and with the participation of its Chief Executive Officer
and Chief Financial Officer, of its disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e)
of the Securities Exchange Act of 1934, as amended (“Exchange Act”)). Based upon this evaluation, the Chief Executive
Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures are effective to ensure
that information required to be disclosed by the Company in the reports that the Company files or submits under the Exchange Act
is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and
Exchange Commission and which also are effective in ensuring that information required to be disclosed by the Company in the reports
that it files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including the
Company’s Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.
The Company’s management is responsible
for establishing and maintaining adequate internal control over financial reporting for the Company as defined in Rules 13a-15(f)
and 15d-15(f) under the Exchange Act. The Company’s internal control over financial reporting is designed to provide reasonable
assurance regarding the (i) effectiveness and efficiency of operations, (ii) reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with generally accepted accounting principles, and (iii) compliance
with applicable laws and regulations. The Company’s internal controls framework is based on the criteria set forth in the
Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission
(COSO).
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’s assessment of the effectiveness
of the Company’s internal control over financial reporting is as of the six months ended June 30, 2016. We believe that our
internal control over financial reporting is effective. We have not identified any current material weaknesses considering the
nature and extent of our current operations and any risks or errors in financial reporting under current operations.
|
|
(b)
|
Changes in Internal Controls
|
There were no changes in the Company’s
internal control over financial reporting for the six months ended June 30, 2016 that have materially affected, or are reasonably
likely to materially affect, the Company’s internal control over financial reporting.