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, 2019
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 333-230479
SEATECH VENTURES CORP
(Exact name of registrant issuer as specified in its charter)
| Nevada | 61-1882326 | |
|
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
Suite 2708-09, 27/F, The Metropolis Tower,
10 Metropolis Drive, Hung Hom, Hong Kong
(Address of principal executive offices, including zip code)
Registrant’s phone number, including area code +852 83311767
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 [ ] NO [X]
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” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
Large Accelerated Filer [ ] Accelerated Filer [ ] Non-accelerated Filer [ ] Smaller reporting company [X]
Emerging growth company [X]
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes [ ] No [X]
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has fled all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.
Yes [ ] No [X]
APPLICABLE ONLY TO CORPORATE ISSUERS:
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 July 31, 2019 | |
| Common Stock, $.0001 par value | 92,176,667 |
TABLE OF CONTENTS
| 2 |
ITEM 1. UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS:
SEATECH VENTURES CORP
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
| F- 1 |
CONDENSED CONSOLIDATED BALANCE SHEETS
AS OF JUNE 30, 2019 AND DECEMBER 31, 2018
(Currency expressed in United States Dollars (“US$”), except for number of shares)
See accompanying notes to condensed consolidated financial statements.
| F- 2 |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSSES
FOR THE SIX MONTHS ENDED JUNE 30, 2019
(Currency expressed in United States Dollars (“US$”), except for number of shares)
(Unaudited)
|
Six Months Ended
June 30, 2019 |
||||
| REVENUE | $ | 23,507 | ||
| COST OF REVENUE | (14,220 | ) | ||
| GROSS PROFIT | $ | 9,287 | ||
| OTHER INCOME | 1 | |||
| MARKETING AND SELLING EXPENSES | (8,550 | ) | ||
| GENERAL AND ADMINISTRATIVE | (153,282 | ) | ||
| LOSS BEFORE INCOME TAX | $ | (152,544 | ) | |
| TAXES PROVISION | - | |||
| NET LOSS | $ | (152,544 | ) | |
| Other comprehensive income: | ||||
| - Foreign currency translation adjustment | - | |||
| TOTAL COMPREHENSIVE LOSS | $ | (152,544 | ) | |
| Net loss per share- Basic and diluted | (0.00 | ) | ||
| Weighted average number of common shares outstanding - Basic and diluted | 73,383,699 | |||
See accompanying notes to condensed consolidated financial statements.
| F- 3 |
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
FOR THE SIX MONTHS ENDED JUNE 30, 2019
(Currency expressed in United States Dollars (“US$”), except for number of shares)
(Unaudited)
|
Number of
shares |
Amount |
PAID-IN
CAPITAL |
ADJUSTMENT |
ACCUMULATED
LOSSES |
TOTAL
EQUITY |
|||||||||||||||||||
| Balance as of April 2, 2018 (inception) | 100,000 | $ | 10 | $ | - | $ | - | $ | - | $ | 10 | |||||||||||||
| Issuance of share capital - founder’s shares | 90,000,000 | 9,000 | - | - | 9,000 | |||||||||||||||||||
|
Share issued in private placement completed
on September 07, 2018 at $0.10 per share |
750,000 | 75 | 74,925 | - | - | 75,000 | ||||||||||||||||||
| Shares issued in private placement completed on September 12, 2018 at $0.15 per share | 466,667 | 47 | 69,953 | - | - | 70,000 | ||||||||||||||||||
| Shares issued in private placement completed on November 29, 2018 at $0.20 per share | 860,000 | 86 | 171,914 | - | - | 172,000 | ||||||||||||||||||
| Foreign currency translation loss | (122 | ) | (122 | ) | ||||||||||||||||||||
| Net loss | - | - | - | - | (71,807 | ) | (71,807 | ) | ||||||||||||||||
| Balance as of December 31, 2018 | 92,176,667 | $ | 9,218 | $ | 316,792 | $ | (122 | ) | $ | (71,807 | ) | $ | 254,081 | |||||||||||
| Net loss for the year | - | - | - | (152,544 | ) | (152,544 | ) | |||||||||||||||||
| Balance as of June 30, 2019 | 92,176,667 | 9,218 | 316,792 | (122 | ) | (224,351 | ) | 101,537 | ||||||||||||||||
| F- 4 |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2019
(Currency expressed in United States Dollars (“US$”), except for number of shares)
(Unaudited)
See accompanying notes to condensed consolidated financial statements.
| F- 5 |
NOTES TO CONDENSED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2019
(Currency expressed in United States Dollars (“US$”), except for number of shares)
(UNAUDITED)
1. DESCRIPTION OF BUSINESS AND ORGANIZATION
SEATech Ventures Corp is organized as a Nevada limited liability company, incorporated on April 2, 2018. For purposes of consolidated financial statement presentation, SEATech Venture Corp and its subsidiary are herein referred to as “the Company” or “we”.
The Company business of which planned principal operations are to provide business mentoring, nurturing and incubation services relating to client businesses and corporate development advisory services to entrepreneurs in the broader technology industry, but with a specific focus on the information and communication technology industry.
On May 2, 2018, the Company acquired 100% interest in SEATech Ventures Corp, a private limited liability company incorporated in Labuan, Malaysia.
On December 21, 2018, SEATech Ventures Corp, the Malaysia Company acquired SEATech Ventures (HK) Limited, a private limited company incorporated in Hong Kong.
Details of the Company’s subsidiaries:
| Company name |
Place
and date of
incorporation |
Particulars of issued capital | Principal activities | ||||
| 1. | SEATech Ventures Corp | Labuan / March 12, 2018 | 100 share of ordinary share of US$1 each | Investment holding | |||
| 2. | SEATech Ventures (HK) Limited | Hong Kong / December 13, 2018 |
1 ordinary share of HKD$1 |
Business mentoring, nurturing and incubation, and corporate development advisory services |
| F- 6 |
SEATECH VENTURES CORP
NOTES TO CONDENSED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2019
(Currency expressed in United States Dollars (“US$”), except for number of shares)
(UNAUDITED)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of presentation
The consolidated financial statements for SEATech Ventures Corp. and its subsidiaries for the six months ended June 30, 2019 is prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) and include the accounts of SEATech Ventures Corp. and its wholly owned subsidiaries, SEATech Ventures Corp. and SEATech Ventures (HK) Limited. Intercompany accounts and transactions have been eliminated on consolidation. The Company has adopted December 31 as its fiscal year end.
Basis of consolidation
The condensed consolidated financial statements include the accounts of the Company and its subsidiaries. All inter-company accounts and transactions have been eliminated upon consolidation.
Use of estimates
Management uses estimates and assumptions in preparing these financial statements in accordance with US GAAP. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities in the balance sheets, and the reported revenue and expenses during the periods reported. Actual results may differ from these estimates.
Cash and cash equivalents
Cash and cash equivalents are carried at cost and represent cash on hand, demand deposits placed with banks or other financial institutions and all highly liquid investments with an original maturity of three months or less as of the purchase date of such investments.
| F- 7 |
SEATECH VENTURES CORP
NOTES TO CONDENSED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2019
(Currency expressed in United States Dollars (“US$”), except for number of shares)
(UNAUDITED)
Income taxes
Income taxes are determined in accordance with the provisions of ASC Topic 740, “ Income Taxes ” (“ASC Topic 740”). Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted income tax rates expected to apply to taxable income in the periods in which those temporary differences are expected to be recovered or settled. Any effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.
ASC 740 prescribes a comprehensive model for how companies should recognize, measure, present, and disclose in their financial statements uncertain tax positions taken or expected to be taken on a tax return. Under ASC 740, tax positions must initially be recognized in the financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities. Such tax positions must initially and subsequently be measured as the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the tax authority assuming full knowledge of the position and relevant facts.
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. As reflected in the accompanying financial statements, for the year ended June 30, 2019, the Company incurred a net loss of $152,544 and has generated minimal revenue. These factors raise substantial doubt about the Company’s ability to continue as a going concern within one year of the date that the financial statements are issued. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
The Company’s ability to continue as a going concern is dependent upon improving its profitability and the continuing financial support from its shareholders. Management believes the existing shareholders or external financing will provide the additional cash to meet the Company’s obligations as they become due. No assurance can be given that any future financing, if needed, will be available or, if available, that it will be on terms that are satisfactory to the Company. Even if the Company is able to obtain additional financing, if needed, it may contain undue restrictions on its operations, in the case of debt financing, or cause substantial dilution for its stock holders, in the case of equity financing.
| F- 8 |
SEATECH VENTURES CORP
NOTES TO CONDENSED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2019
(Currency expressed in United States Dollars (“US$”), except for number of shares)
(UNAUDITED)
Net income/(loss) per share
The Company calculates net income/(loss) per share in accordance with ASC Topic 260, “Earnings per Share.” Basic income/(loss) per share is computed by dividing the net income/(loss) by the weighted-average number of common shares outstanding during the period. Diluted income per share is computed similar to basic income/(loss) per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common stock equivalents had been issued and if the additional common shares were dilutive.
Foreign currencies translation
Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transaction. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency using the applicable exchange rates at the balance sheet dates. The resulting exchange differences are recorded in the Condensed Consolidated Statements of Operations and Comprehensive Income.
The reporting currency of the Company is United States Dollars (“US$”). The Company’s subsidiary in Labuan and Hong Kong maintains its books and record in United States Dollars (“US$”) respectively, and Ringgits Malaysia (“RM”) is functional currency as being the primary currency of the economic environment in which the entity operates.
In general, for consolidation purposes, assets and liabilities of its subsidiary whose functional currency is not US$ are translated into US$, in accordance with ASC Topic 830-30, “ Translation of Financial Statement ”, 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 foreign subsidiary are recorded as a separate component of accumulated other comprehensive income within the statements of shareholders’ equity.
Translation of amounts from RM into US$1 and HK$ into US$1 has been made at the following exchange rates for the respective periods:
|
As of and for the period ended June 30, 2019 |
As of and for the period ended December 31, 2018 | |||||||
| Period-end RM : US$1 exchange rate | 4.13 | 4.14 | ||||||
| Period-average RM : US$1 exchange rate | 4.12 | 4.08 | ||||||
| Period-end HK$: US$1 exchange rate | 7.82 | 7.83 | ||||||
| Period-average HK$ : US$1 exchange rate | 7.84 | 7.84 | ||||||
Related parties
Parties, which can be a corporation or individual, are considered to be related if the Company has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Companies are also considered to be related if they are subject to common control or common significant influence.
| F- 9 |
SEATECH VENTURES CORP
NOTES TO CONDENSED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2019
(Currency expressed in United States Dollars (“US$”), except for number of shares)
(UNAUDITED)
Fair value of financial instruments:
The carrying value of the Company’s financial instruments: cash and cash equivalents, account receivables, amount due to a director, and accounts payable and approximate at their fair values because of the short-term nature of these financial instruments.
The Company also follows the guidance of the ASC Topic 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.
Recent accounting pronouncements
FASB issues various Accounting Standards Updates relating to the treatment and recording of certain accounting transactions. On June 10, 2014, the Financial Accounting Standards Board issued Accounting Standards Update (ASU) No. 2014-10, Development Stage Entities (Topic 915) Elimination of Certain Financial Reporting Requirements, including an Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation , which eliminates the concept of a development stage entity (DSE) entirely from current accounting guidance. The Company has elected adoption of this standard, which eliminates the designation of DSEs and the requirement to disclose results of operations and cash flows since inception.
The Company has reviewed all recently issued, but not yet effective, accounting pronouncements and do not believe the future adoption of any such pronouncements may be expected to cause a material impact on its financial condition or the results of its operations.
| F- 10 |
SEATECH VENTURES CORP
NOTES TO CONDENSED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2019
(Currency expressed in United States Dollars (“US$”), except for number of shares)
(UNAUDITED)
3. COMMON STOCK
On April 2, 2018, the founder of the Company, Mr. Chin Chee Seong purchased 100,000 shares of restricted common stock of the Company at a par value of $0.0001 per share. The monies from this transaction, which totaled $10, went to the Company to be used as initial working capital.
On May 14, 2018, the Company issued 20,000,000 shares of restricted common stock to Chin Chee Seong and Seah Kok Wah respectively, with a par value of $0.0001 per share, for total additional working capital of $4,000.
On August 7, 2018, the Company issued 10,000,000 shares of restricted common stock to Greenpro Venture Capital Limited with a par value of $0.0001 per share, for total additional working capital of $1,000.
On August 8, 2018, the Company issued 30,000,000 shares of restricted common stock to Greenpro Asia Strategic Fund SPC, a company incorporated in Cayman Islands with a par value of $0.0001 per share, for additional working capital of $3,000.
On August 27, 2018, the Company issued 10,000,000 shares of restricted common stock to STVC Talent Sdn. Bhd, a company incorporated in Malaysia with a par value of $0.0001 per share, for additional working capital of $1,000.
On September 7, 2018, the Company sold shares to 2 shareholders, of whom reside in Malaysia. A total of 750,000 shares of restricted common stock were sold at a price of $0.10 per share. The total proceeds to the Company amounted to a total of $75,000.
On September 12, 2018, the Company sold shares to a shareholder, of whom reside in Malaysia. A total of 466,667 shares of restricted common stock were sold at a price of $0.15 per share. The total proceeds to the Company amounted to a total of $70,000.
In between September 21, 2018 and November 29, 2018, the Company sold shares to 44 shareholders, of whom reside in Malaysia. A total of 860,000 shares of restricted common stock were sold at a price of $0.20 per share. The total proceeds to the Company amounted to a total of $172,000.
As of June 30, 2019, SEATech Ventures Corp has an issued and outstanding common share of 92,176,667.
4. CASH AND CASH EQUIVALENTS
As at June 30, 2019, the Company recorded $205,381 of cash and cash equivalents which primarily consists of cash in bank.
5. OTHER PAYABLES AND ACCRUED LIABILITIES
Other payables and accrued liabilities consisted of the following at June 30, 2019 and December 31, 2018:
|
As of
June 30, 2019 |
As of
December 31, 2018 |
|||||||
| Accrued audit fees | $ | 12,500 | $ | 10,000 | ||||
| Total payables and accrued liabilities | $ | 12,500 | $ | 10,000 | ||||
| F- 11 |
SEATECH VENTURES CORP
NOTES TO CONDENSED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2019
(Currency expressed in United States Dollars (“US$”), except for number of shares)
(UNAUDITED)
6. AMOUNT DUE TO A DIRECTOR
As of June 30, 2019, a director of the Company advanced $4,831, respectively to the Company, which is unsecured, interest-free with no fixed repayment term, for working capital purpose. Imputed interest is considered insignificant.
|
As of June 30, 2019 (Unaudited) |
As of
December 31, 2018 (Audited) |
|||||||
| Amount due to director | 4,831 | 4,831 | ||||||
| Total amount due to director | $ | 4,831 | $ | 4,831 | ||||
7. AMOUNT DUE TO RELATED PARTY
|
As of
(Unaudited) |
As of
(Audited) |
|||||||
| Related party A 1 | $ | 94,220 | $ | - | ||||
| $ | 94,220 | $ | - | |||||
As of June 30, 2019, the balance $94,220 represented an outstanding payable to 1 related party.
1 The related party A, through its wholly owned subsidiaries is a 43.4% shareholder of the Company. Related party A provides consultancy service to the Company.
The amounts due to related parties are unsecured, interest-free with no fixed repayment term, for working capital purpose.
8. INCOME TAXES
For the six months ended June 30, 2019, the local (United States) and foreign components of income/ (loss) before income taxes were comprised of the following:
|
Six months ended June 30, 2019 (Unaudited) |
For the period ended December 31, 2018 (Audited) |
|||||||
| Tax jurisdictions from: | ||||||||
| Local | $ | (142,500 | ) | $ | (73,957 | ) | ||
| Foreign, representing | ||||||||
| - Seychelles | (2,580 | ) | (4,319 | ) | ||||
| - Hong Kong | $ | (7,464 | ) | $ | 6,469 | |||
| Loss before income tax | $ | (152,544 | ) | $ | (71,807 | ) | ||
The provision for income taxes consisted of the following:
| For the period ended June 30, 2019 |
For the year ended December 31, 2018 |
|||||||
| Current: | ||||||||
| - Local | - | - | ||||||
| - Foreign | - | - | ||||||
| Deferred: | ||||||||
| - Local | - | - | ||||||
| - Foreign | - | - | ||||||
| Income tax expense | $ | - | $ | - | ||||
The effective tax rate in the periods presented is the result of the mix of income earned in various tax jurisdictions that apply a broad range of income tax rates. The Company has subsidiaries that operate in various countries: United States Labuan and Hong Kong that are subject to taxes in the jurisdictions in which they operate, as follows:
United States of America
The Company is registered in the State of Nevada and is subject to the tax laws of the United States of America. As of June 30, 2019, the operations in the United States of America incurred $142,500 of cumulative net operating losses which can be carried forward to offset future taxable income. The net operating loss carryforwards begin to expire in 2038, if unutilized. The Company has provided for a full valuation allowance of $29,925 against the deferred tax assets on the expected future tax benefits from the net operating loss carryforwards as the management believes it is more likely than not that these assets will not be realized in the future
Labuan
Under the current laws of the Labuan, SEATech Ventures Corp is governed under the Labuan Business Activity Act, 1990. The tax charge for such company is based on 3% of net audited profit.
Hong Kong
SEATECH VENTURES CORP is subject to Hong Kong Profits Tax, which is charged at the statutory income tax rate of 16.5% on its assessable income.
| F- 12 |
SEATECH VENTURES CORP
NOTES TO CONDENSED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2019
(Currency expressed in United States Dollars (“US$”), except for number of shares)
(UNAUDITED)
9. COMMITMENTS AND CONTINGENCIES
As of June 30, 2019, the Company has no commitments or contingencies involved.
10. RELATED PARTY TRANSACTIONS
For the period ended June 30, 2019 the Company has the following transactions with related party:
| For the period ended June 30, 2019 (Unaudited) | For the period ended December 31, 2018 (Audited) | |||||||
| Cost of Revenue : | ||||||||
| - Related party A | $ | 14,220 | $ | - | ||||
| Company Secretary Fees : | ||||||||
| - Related party A | $ | 5,080 | $ | 4,732 | ||||
| Professional Fees: | ||||||||
| - Related party A | $ | 140,000 | $ | 60,000 | ||||
The related party A, through its wholly owned subsidiaries is a 43.4% shareholder of the Company.
11. SUBSEQUENT EVENTS
The Company has evaluated subsequent events that occurred after June 30, 2019 up through the date to July 31, 2019, the Company issued audited consolidated financial statements in accordance with ASC Topic 855, “Subsequent Events”, which establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued. During this period, there was no subsequent event that required recognition or disclosure.
| F- 13 |
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The information contained in this quarter report on Form 10-Q is intended to update the information contained in our Form S-1 Amendment No.3, dated May 30, 2019, for the period ended March 31, 2019 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 S-1. The following discussion and analysis also should be read together with our consolidated financial statements and the notes to the consolidated 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 S-1 Amendment No.3, dated May 30, 2019, 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 transition report on Form 10-Q. The following should also be read in conjunction with the unaudited Condensed Consolidated Financial Statements and notes thereto that appear elsewhere in this report.
Company Overview
SEATech Ventures Corp, the US Company, operates through its wholly owned subsidiary, SEATech Ventures Corp, a Labuan Company; which operates through its wholly owned subsidiary, SEATech Ventures (HK) Limited, a Hong Kong Company; The US, Labuan act solely for holding purposes whereas all current and future operations in Hong Kong are planned to be carried out via SEATech Ventures (HK) Limited, the Hong Kong Company. The purpose of the Hong Kong Company is to function as the current regional hub, carrying out the majority of operations of the Company.
All of the previous entities share the same exact business plan with the goal of providing business mentoring services, nurturing and incubation services relating to client businesses and corporate development advisory services to entrepreneurs in the broader technology industry, but with a specific focus on the information and communication technology industry .We will, at least initially, primarily focus our efforts on nurturing ICT entrepreneurs in Asia. Our advisory services will center on our “ICT Start-Up Mentorship Program”, which is designed to assist tech-based entrepreneurs in solving ICT industry pain points caused by technical insufficiencies, inappropriate financial modelling and weak strategic positioning within a competitive environment.
| 3 |
Results of Operation
For the six months ended June 30, 2019
Revenues
For six months ended June 30, 2019, the Company has generated revenue of $23,507. The revenue generated was the result of corporate development advisory service rendered by the Company and also services rendered to client for organizing seminar. The Company hosted the event on behalf of client so that entrepreneurs could link up and create relationships with other entrepreneurs.
Cost of Revenue and Gross Margin
For the six months ended June 30, 2019, cost incurred arise in providing corporate development advisory services is $14,220 and generate a gross profits of $9,287 the for the six months ended June 30, 2019.
Selling and marketing expenses
For the six months ended June 30, 2019, we had selling and distribution expenses in the amount of $8,550, which was primarily comprised of marketing expenses and expenses incurred for selling of services.
General and administrative expenses
For the six months ended June 30, 2019, we had general and administrative expenses in the amount of $153,282, which was primarily comprised of company renewal fee, employee salary, and employee reimbursement.
Net Loss
For the six months ended June 30, 2019, the Company has incurred a net loss of $152,544. The loss is mainly derived from the general and administrative expenses.
| 4 |
Liquidity and Capital Resources
As of June 30, 2019, we had cash and cash equivalents of $205,381. We had positive operating cash flows due to minimal operating activity, we expect increased levels of operating activities going forward will result in more significant cash outflows.
We depend substantially on financing activities to provide us with the liquidity and capital resources we need to meet our working capital requirements and to make capital investments in connection with ongoing operations. For the six months ended June 30, 2019, we have met these requirements primarily from previous sales of our common stock.
Cash Used In Operating Activities
For the six months ended June 30, 2019, net cash used in operating activities was $55,531, which were the result of our net loss attributable to selling and distribution costs, and administration expenses, as well as increase in accounts receivable.
Credit Facilities
We do not have any credit facilities or other access to bank credit.
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, 2019.
Recent Accounting Pronouncements
The Company has implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.
| 5 |
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 carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of June 30, 2019. This evaluation was carried out under the supervision and with the participation of our Chief Executive Officer and our Chief Investment Officer. Based upon that evaluation, our Chief Executive Officer and Chief Investment Officer concluded that, as of June 30, 2019, our disclosure controls and procedures were not effective due to the presence of material weaknesses in internal control over financial reporting.
A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis. Management has identified the following material weaknesses which have caused management to conclude that, as of June 30, 2019, our disclosure controls and procedures were not effective: (i) inadequate segregation of duties and effective risk assessment; and (ii) insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of both US GAAP and SEC guidelines.
Changes in Internal Control over Financial Reporting:
There were no changes in our internal control over financial reporting during the quarter ended June 30, 2019, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
| 6 |
We know of no materials, 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
None.
Item 3. Defaults Upon Senior Securities
None
Item 4. Mine Safety Disclosures
Not applicable.
None.
| 7 |
| 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 investment officer* | |
| 32.1 | Section 1350 Certification of principal executive officer * | |
| 32.2 | Section 1350 Certification of principal investment officer * | |
| 101.INS | XBRL Instance Document* | |
| 101.SCH | XBRL Schema Document* | |
| 101.CAL | XBRL Calculation Linkbase Document* | |
| 101.DEF | XBRL Definition Linkbase Document* | |
| 101.LAB | XBRL Label Linkbase Document* | |
| 101.PRE | XBRL Presentation Linkbase Document* |
* Filed herewith.
| 8 |
Pursuant to the requirements 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.
| SEATech Ventures Corp | ||
| (Name of Registrant) | ||
| Date: August 12, 2019 | ||
| By: | /s/ CHIN CHEE SEONG | |
| Title: |
Chief Executive Officer, President, Director, Secretary and Treasurer |
|
| Date: August 12, 2019 | By: | /s/ SEAH KOK WAH |
| Title: | Chief Investment Officer, Director |
| 9 |
EXHIBIT 31.1
CERTIFICATION
I, CHIN CHEE SEONG, certify that:
1. I have reviewed this quarterly report on Form 10-Q of SEATech Ventures Corp (the “Company”) for the quarter ended June 30, 2019;
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; and |
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 12, 2019 | By: | /s/ CHIN CHEE SEONG |
| CHIN CHEE SEONG | ||
|
Chief Executive Officer, President, Director, Secretary, Treasurer |
EXHIBIT 31.2
CERTIFICATION
I, SEAH KOK WAH, certify that:
1. I have reviewed this quarterly report on Form 10-Q of SEATech Ventures Corp (the “Company”) for the quarter ended June 30, 2019;
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; and |
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 12, 2019 | By: | /s/ SEAH KOK WAH |
| SEAH KOK WAH | ||
| Chief Investment Officer, Director |
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 SEATECH VENTURES CORP (the “Company”) on Form 10-Q for the quarter ended June 30, 2019 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 12, 2019 | By: | /s/ CHIN CHEE SEONG |
| CHIN CHEE SEONG | ||
| Chief Executive Officer, | ||
| President, Director, Secretary, Treasurer |
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 will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.
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 SEATECH VENTURES CORP (the “Company”) on Form 10-Q for the quarter ended June 30, 2019 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 12, 2019 | By: | /s/ SEAH KOK WAH |
| SEAH KOK WAH | ||
| Chief Investment Officer, Director |
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 will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.