UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
For
the Quarterly Period Ended
or
For the transition period from _________ to _________
Commission
File Number
(Exact name of registrant issuer as specified in its charter)
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
(Address of principal executive offices, including zip code)
Registrant’s
phone number, including area code
Securities registered pursuant to Section 12(b) of the Act:
| Title of Each Class | Trading Symbol(s) | Name of Each Exchange on Which Registered | ||
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.
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).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” or an “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):
| Large Accelerated Filer ☐ | Accelerated Filer ☐ |
| Smaller
reporting company | |
| Emerging
Growth Company |
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 ☐
As of August 11, 2023, there were shares, par value $0.0001 of the registrant’s Common Stock issued and outstanding.
TABLE OF CONTENTS
| 2 |
PART I – FINANCIAL INFORMATION
Item 1. Condensed Consolidated Financial Statements.
GREENPRO CAPITAL CORP.
CONDENSED CONSOLIDATED BALANCE SHEETS
AS OF JUNE 30, 2023 AND DECEMBER 31, 2022
(In U.S. dollars, except share and per share data)
| June 30, 2023 | December 31, 2022 | |||||||
| (Unaudited) | (Audited) | |||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents (including $ | $ | $ | ||||||
| Accounts receivable, net of allowance of $ | ||||||||
| Prepaids and other current assets (including $ | ||||||||
| Due from related parties | ||||||||
| Deferred cost of revenue (including $ | ||||||||
| Total current assets | ||||||||
| Property and equipment, net | ||||||||
| Real estate investments: | ||||||||
| Real estate held for sale | ||||||||
| Real estate held for investment, net | ||||||||
| Intangible assets, net | ||||||||
| Goodwill | ||||||||
| Other investments (including $ | ||||||||
| Operating lease right-of-use assets, net | ||||||||
| Finance lease right-of-use asset, net | ||||||||
| Other non-current assets | ||||||||
| TOTAL ASSETS | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable and accrued liabilities | $ | $ | ||||||
| Due to related parties | ||||||||
| Income tax payable | ||||||||
| Operating lease liabilities, current portion | ||||||||
| Finance lease liabilities, current portion | ||||||||
| Deferred revenue (including $ | ||||||||
| Derivative liabilities | ||||||||
| Total current liabilities | ||||||||
| Operating lease liabilities, non-current portion | ||||||||
| Finance lease liabilities, non-current portion | ||||||||
| Total liabilities | ||||||||
| Commitments and contingencies | ||||||||
| Stockholders’ equity: | ||||||||
| Preferred stock, $ par value; shares authorized; shares issued and outstanding | ||||||||
| Common Stock, $ par value; shares authorized; and shares issued and outstanding at June 30, 2023 and December 31, 2022, respectively | ||||||||
| Additional paid in capital | ||||||||
| Accumulated other comprehensive loss | ( | ) | ( | ) | ||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total Greenpro Capital Corp. stockholders’ equity | ||||||||
| Noncontrolling interests in a consolidated subsidiary | ||||||||
| Total stockholders’ equity | ||||||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | $ | ||||||
See accompanying notes to the condensed consolidated financial statements.
| 3 |
GREENPRO CAPITAL CORP.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE INCOME (LOSS)
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2023 AND 2022
(In U.S. dollars, except share and per share data)
(Unaudited)
| Three months ended June 30 | Six months ended June 30, | |||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
| REVENUES: | ||||||||||||||||
| Service revenue (including $ | $ | $ | $ | $ | ||||||||||||
| Sale of real estate properties | ||||||||||||||||
| Rental revenue | ||||||||||||||||
| Total revenue | ||||||||||||||||
| COST OF REVENUES: | ||||||||||||||||
| Cost of service revenue | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Cost of real estate properties sold | ( | ) | ||||||||||||||
| Cost of rental revenue | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Total cost of revenues | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| GROSS PROFIT | ||||||||||||||||
| OPERATING EXPENSES: | ||||||||||||||||
| General and administrative (including $ | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| LOSS FROM OPERATIONS | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| OTHER INCOME (EXPENSES) | ||||||||||||||||
| Other income (including $ | ||||||||||||||||
| Interest income | ||||||||||||||||
| Fair value gains of derivative liabilities associated with warrants | ||||||||||||||||
| Reversal of impairment (impairment) of other investment (including reversal of impairment of $ | ( | ) | ( | ) | ||||||||||||
| Reversal of write-off notes receivable | ||||||||||||||||
| Interest expense | ( | ) | ( | ) | ||||||||||||
| Total other income (expenses) | ( | ) | ( | ) | ||||||||||||
| INCOME (LOSS) BEFORE INCOME TAX | ( | ) | ( | ) | ||||||||||||
| Income tax expense | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| NET INCOME (LOSS) | ( | ) | ( | ) | ||||||||||||
| Net loss (income) attributable to noncontrolling interest | ( | ) | ||||||||||||||
| NET INCOME (LOSS) ATTRIBUTED TO COMMON SHAREHOLDERS OF GREENPRO CAPITAL CORP. | ( | ) | ( | ) | ||||||||||||
| Other comprehensive loss: | ||||||||||||||||
| - Foreign currency translation loss | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| COMPREHENSIVE INCOME (LOSS) | $ | $ | ( | ) | $ | $ | ( | ) | ||||||||
| NET INCOME (LOSS) PER SHARE, BASIC AND DILUTED (1) | $ | $ | ) | $ | $ | ) | ||||||||||
| WEIGHTED AVERAGE NUMBER OF COMMON STOCK OUTSTANDING, BASIC AND DILUTED (1) | ||||||||||||||||
| (1) |
See accompanying notes to the condensed consolidated financial statements.
| 4 |
GREENPRO CAPITAL CORP.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2023 AND 2022
(In U.S. dollars, except share data)
(Unaudited)
| Three months ended June 30, 2023 (Unaudited) | ||||||||||||||||||||||||||||
| Common Stock | Additional | Accumulated Other | Non- | Total | ||||||||||||||||||||||||
| Number of Shares | Amount | Paid-in Capital | Comprehensive Loss | Accumulated Deficit | Controlling Interest | Stockholders’ Equity | ||||||||||||||||||||||
| Balance as of March 31, 2023 (Unaudited) | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | ||||||||||||||||||
| Cancellation of shares resulting from termination of investment | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||
| Foreign currency translation | - | ( | ) | ( | ) | |||||||||||||||||||||||
| Net income (loss) | - | ( | ) | |||||||||||||||||||||||||
| Balance as of June 30, 2023 (Unaudited) | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | ||||||||||||||||||
| Six months ended June 30, 2023 (Unaudited) | ||||||||||||||||||||||||||||
| Common Stock | Additional | Accumulated Other | Non- | Total | ||||||||||||||||||||||||
Number of Shares | Amount | Paid-in Capital | Comprehensive Loss | Accumulated Deficit | Controlling Interest | Stockholders’ Equity | ||||||||||||||||||||||
| Balance as of December 31, 2022 | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | | |||||||||||||||||
| Cancellation of shares resulting from termination of investment | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||
| Foreign currency translation | - | ( | ) | ( | ) | |||||||||||||||||||||||
| Net income (loss) | - | ( | ) | |||||||||||||||||||||||||
| Balance as of June 30, 2023 (Unaudited) | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | ||||||||||||||||||
| Three months ended June 30, 2022 (Unaudited) | ||||||||||||||||||||||||||||
| Common Stock (1) | Additional | Accumulated Other | Non- | Total | ||||||||||||||||||||||||
Number of Shares | Amount | Paid-in Capital | Comprehensive Loss | Accumulated Deficit | Controlling Interest | Stockholders’ Equity | ||||||||||||||||||||||
| Balance as of March 31, 2022 (Unaudited) | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | | |||||||||||||||||
| Foreign currency translation | - | ( | ) | ( | ) | |||||||||||||||||||||||
| Net loss | - | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||
| Balance as of June 30, 2022 (Unaudited) | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | ||||||||||||||||||
| Six months ended June 30, 2022 (Unaudited) | ||||||||||||||||||||||||||||
| Common Stock (1) | Additional | Accumulated Other | Non- | Total | ||||||||||||||||||||||||
Number of Shares | Amount | Paid-in Capital | Comprehensive Loss | Accumulated Deficit | Controlling Interest | Stockholders’ Equity | ||||||||||||||||||||||
| Balance as of December 31, 2021 | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | | |||||||||||||||||
| Foreign currency translation | - | ( | ) | ( | ) | |||||||||||||||||||||||
| Net (loss) income | - | ( | ) | ( | ) | |||||||||||||||||||||||
| Balance as of June 30, 2022 (Unaudited) | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | ||||||||||||||||||
| (1) |
See accompanying notes to the condensed consolidated financial statements.
| 5 |
GREENPRO CAPITAL CORP.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2023 AND 2022
(In U.S. dollars)
(Unaudited)
| Six months ended June 30, | ||||||||
| 2023 | 2022 | |||||||
| Cash flows from operating activities: | ||||||||
| Net income (loss) | $ | $ | ( | ) | ||||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation and amortization | ||||||||
| Amortization of operating lease right-of-use assets | ||||||||
| Amortization of finance lease right-of-use asset | ||||||||
| Reversal of write-off notes receivable | ( | ) | ||||||
| (Reversal of impairment) impairment of other investment-related party | ( | ) | ||||||
| Loss on forfeiture of other investment | ||||||||
| Gain on sale of real estate held of sale | ( | ) | ||||||
| Fair value gains of derivative liabilities associated with warrants | ( | ) | ( | ) | ||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable, net | ( | ) | ( | ) | ||||
| Prepaids and other current assets | ( | ) | ||||||
| Deferred costs of revenue | ( | ) | ( | ) | ||||
| Accounts payable and accrued liabilities | ( | ) | ( | ) | ||||
| Operating lease liabilities | ( | ) | ( | ) | ||||
| Income tax payable | ( | ) | ||||||
| Deferred revenue | ( | ) | ||||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| Cash flows from investing activities: | ||||||||
| Purchase of property and equipment | ( | ) | ( | ) | ||||
| Purchase of other investments | ( | ) | ( | ) | ||||
| Initial payment of finance lease right-of-use asset | ( | ) | ||||||
| Proceeds from real estate held for sale | ||||||||
| Net cash (used in) provided by investing activities | ( | ) | ||||||
| Cash flows from financing activities: | ||||||||
| Principal payment of finance lease liabilities | ( | ) | ||||||
| Advances to related parties | ( | ) | ( | ) | ||||
| Collection of notes receivable | ||||||||
| Net cash used in financing activities | ( | ) | ( | ) | ||||
| Effect of exchange rate changes in cash and cash equivalents | ||||||||
| NET CHANGE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH | ( | ) | ( | ) | ||||
| CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, BEGINNING OF PERIOD | ||||||||
| CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, END OF PERIOD | $ | $ | ||||||
| SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||||||||
| Cash paid for income tax | $ | $ | ||||||
| Cash paid for interest | $ | $ | ||||||
| SUPPLEMENTAL NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||||||||
| Balance payment of finance lease right-of-use asset by finance lease liabilities | $ | $ | ||||||
See accompanying notes to the condensed consolidated financial statements.
| 6 |
GREENPRO CAPITAL CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2023 AND 2022
(In U.S. dollars, except share and per share data)
(Unaudited)
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Greenpro Capital Corp. (the “Company” or “GRNQ”) was incorporated on July 19, 2013 in the state of Nevada. The Company currently provides a wide range of business consulting and corporate advisory services, including cross-border listing advisory services, tax planning, advisory and transaction services, record management services, and accounting outsourcing services. Our focus is on companies located in Asia and Southeast Asia, including Hong Kong, Malaysia, China, Thailand, and Singapore. As part of our business consulting and corporate advisory business segment, Greenpro Venture Capital Limited provides a business incubator for start-up companies and focuses on investments in select start-up and high growth potential companies. In addition to our business consulting and corporate advisory business segment, we operate another business segment that focuses on the acquisition and rental of real estate properties held for investment and the acquisition and sale of real estate properties held for sale.
Basis of presentation and principles of consolidation
The accompanying unaudited condensed consolidated financial statements as of and for the six months ended June 30, 2023 and 2022 have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) that permit reduced disclosure for interim periods. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) have been condensed or omitted. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the period ended June 30, 2023 are not necessarily indicative of the results that may be expected for the year ending December 31, 2023. The Condensed Consolidated Balance Sheet information as of December 31, 2022 was derived from the Company’s audited Consolidated Financial Statements as of and for the year ended December 31, 2022 included in the Company’s Annual Report on Form 10-K filed with the SEC on March 31, 2023. These financial statements should be read in conjunction with that report.
The
accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries
and majority-owned subsidiaries which the Company controls and entities for which the Company is the primary beneficiary. For those consolidated
subsidiaries where the Company’s ownership is less than
Going concern
The
accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement
of liabilities and commitments in the normal course of business. During the six months ended June 30, 2023, the Company recorded net
cash used in operations of $
| 7 |
The Company’s ability to continue as a going concern is dependent upon profitable future operations, positive cash flows and additional financing. Despite the amount of funds that we have raised in the past, no assurance can be given that any future financing, if needed, will be available or, if available, that it will be on terms that are satisfactory to the Company. Even if the Company is able to obtain additional financing, if needed, it may contain undue restrictions on its operations, in the case of debt financing, or cause substantial dilution for its stockholders, in the case of equity financing.
Certain effects of reverse stock split
On
July 19, 2022, the Company filed a Certificate of Change with the Secretary of State of the State of Nevada (the “Certificate of
Change”) to effect a reverse split of the Company’s Common Stock at a ratio of
No fractional shares are issued in connection with the Reverse Stock Split. Stockholders who otherwise would be entitled to receive fractional shares because they hold a number of pre-reverse stock split shares of the Company’s Common Stock not evenly divisible by 10, in lieu of a fractional share, are entitled the number of shares rounded up to the nearest whole share. The Company will issue one whole share of the post-Reverse Stock Split Common Stock to any stockholder who otherwise would have received a fractional share as a result of the Reverse Stock Split.
The Reverse Stock Split affected all holders of Common Stock uniformly and did not affect any stockholder’s percentage of ownership interest. The par value of the Company’s Common Stock remained unchanged at $ per share and the number of authorized shares of Common Stock remained the same after the Reverse Stock Split.
As the par value per share of the Company’s Common Stock remained unchanged at $ per share, the change in the Common Stock recorded at par value has been reclassified to additional paid-in-capital on a retroactive basis. All references to shares of Common Stock and per share data for all periods presented in the accompanying condensed consolidated financial statements and notes thereto have been adjusted to reflect the Reverse Stock Split on a retroactive basis.
| 8 |
COVID-19 pandemic
While the COVID-19 pandemic has significantly subsided, it continues to pose risks to our business, results of operations and financial condition, and the future nature and extent of COVID-19 is highly uncertain and unpredictable.
While the COVID-19 pandemic is considered to be largely over, new strains of the virus continue to periodically emerge, and certain countries have implemented restrictions on their citizens which impacts business activities. We continue to experience adverse impacts on our businesses as our clients or prospective clients are less willing to try our newly promoted services or pay for advanced services other than basic services which we can offer to them, due to significant capital constraints as a result of the COVID-19 pandemic and the macro-economic environment.
Additionally, the COVID-19 pandemic caused significant volatility and uncertainty in U.S. and international markets which may result in a prolonged economic downturn. A disruption of financial markets may reduce our ability to access capital and increase the cost of doing so. There are no assurances that the credit markets or the capital markets will be available to us in the future or that financing will be available.
We cannot reasonably estimate the length or severity of the COVID-19 pandemic or the related response, or the extent to which the disruption may continue to impact our business, financial position, results of operations and cash flows. Ultimately, the COVID-19 pandemic could have a material adverse impact on our business, financial position, results of operations and cash flows.
Use of estimates
The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions relating to the reporting of assets and liabilities and the disclosure of contingent liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Significant accounting estimates include certain assumptions related to, among others, the allowance for doubtful accounts receivable, impairment analysis of real estate assets and other long-term assets including goodwill, valuation allowance on deferred income taxes, the assumptions used in the valuation of the derivative liabilities, and the accrual of potential liabilities. Actual results may differ from these estimates.
| 9 |
Cash, cash equivalents, and restricted cash
Cash consists of funds on hand and held in bank accounts. Cash equivalents includes demand deposits placed with banks or other financial institutions and all highly liquid investments with original maturities of three months or less, including money market funds. Restricted cash represents cash restricted for the loan collateral requirements as defined in a loan agreement and the minimum paid-up share capital requirement for insurance brokers specified under the Insurance Ordinance of Hong Kong.
At
June 30, 2023 and December 31, 2022, cash included funds held by employees of $
As of June 30, 2023 | As of December 31, 2022 | |||||||
| (Unaudited) | (Audited) | |||||||
| Cash, cash equivalents, and restricted cash | ||||||||
| Denominated in United States Dollar | $ | $ | ||||||
| Denominated in Hong Kong Dollar | ||||||||
| Denominated in Chinese Renminbi | ||||||||
| Denominated in Malaysian Ringgit | ||||||||
| Denominated in Euro | ||||||||
| Denominated in Singapore Dollar | ||||||||
| Denominated in Great British Pound | ||||||||
| Cash, cash equivalents, and restricted cash | $ | $ | ||||||
Revenue recognition
The Company follows the guidance of Accounting Standards Codification (ASC) 606, Revenue from Contracts. ASC 606 creates a five-step model that requires entities to exercise judgment when considering the terms of contracts, which includes (1) identifying the contracts or agreements with a customer, (2) identifying our performance obligations in the contract or agreement, (3) determining the transaction price, (4) allocating the transaction price to the separate performance obligations, and (5) recognizing revenue as each performance obligation is satisfied. The Company only applies the five-step model to contracts when it is probable that the Company will collect the consideration it is entitled to in exchange for the services it transfers to its clients (see Note 2).
| 10 |
Investments
Investments in equity securities
The
Company accounts for its investments that represent less than
On May 18, 2023, the
Company decided to terminate its investment in the Fund due to significant impairments suffered since subscription and to cancel the shares
issued to the Fund due to the Fund’s failure to provide consideration for the shares. As a result, shares of the Company’s
restricted Common Stock were cancelled, the value of Common Stock of $ and the value of additional paid-in capital of $, in
aggregate of $, were reversed accordingly. The Company recorded a reversal of impairment of other investment of $
On
June 30, 2023, the Company had total twenty-seven (27) investments in equity securities without readily determinable fair values, all
were related party investments with aggregate value of $
On
December 31, 2022, the Company had total twenty-seven (27) investments in equity securities without readily determinable fair values,
all were related party investments with aggregate value of $
Leases
The Company determines if a contract is or contains a lease at inception of the contract or modification of the contract. A contract is or contains a lease if the contract conveys the right to control the use of an identified asset for a period in exchange for consideration. Control over the use of the identified asset means the lessee has both (a) the right to obtain substantially all of the economic benefits from the use of the asset and (b) the right to direct the use of the asset.
Finance and operating lease right-of-use (“ROU”) assets and liabilities are recognized based on the present value of future minimum lease payments over the expected lease term at commencement date. As the implicit rate is not determinable in most of the Company’s leases, management uses the Company’s incremental borrowing rate based on the information available at commencement date in determining the present value of future payments. The expected lease term includes options to extend or terminate the lease when it is reasonably certain the Company will exercise such option. Lease expense for minimum lease payments is recognized on a straight-line basis over the expected lease term.
The Company’s lease arrangements have lease and non-lease components. Leases with an expected term of 12 months or less are not accounted for on the balance sheet and the related lease expense is recognized on a straight-line basis over the expected lease term.
The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.
See Note 4 for more information regarding leases.
Derivative financial instruments
Derivative financial instruments consist of financial instruments that contain a notional amount and one or more underlying variables such as interest rate, security price, variable conversion rate or other variables, require no initial net investment and permit net settlement. The derivative financial instruments may be free-standing or embedded in other financial instruments. The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. The Company follows the provision of ASC 815, Derivatives and Hedging for derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the statements of operations. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether net-cash settlement of the derivative instrument could be required within 12 months of the balance sheet date. At each reporting date, the Company reviews its convertible securities to determine that their classification is appropriate.
Basic income (loss) per share is computed by dividing the net income (loss) available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted net income (loss) per share is calculated by dividing the net income (loss) by the weighted average number of common shares outstanding during the period plus any potentially dilutive shares related to the issuance of shares from stock warrants. For the six months ended June 30, 2023 and 2022, the only outstanding Common Stock equivalents were warrants for potentially dilutive shares outstanding. These warrants have been excluded from the calculation of weighted average shares as the effect would have been anti-dilutive and therefore, basic and diluted net income (loss) per share were the same.
| 11 |
Foreign currency translation
The consolidated financial statements are presented in United States Dollar (“US$”), which is the functional and reporting currency of the Company. In addition, the Company’s operating subsidiaries maintain their books and records in their respective functional currency, which consists of the Malaysian Ringgit (“MYR”), Chinese Renminbi (“RMB”) and Hong Kong Dollar (“HK$”).
In general, for consolidation purposes, assets and liabilities of the Company’s subsidiaries whose functional currency is not the US$, are translated into US$ using the exchange rate on the balance sheet date. Revenues and expenses are translated at average rates prevailing during the period. The gains and losses resulting from translation of financial statements of a foreign subsidiary are recorded as a separate component of accumulated other comprehensive income or loss within stockholders’ equity.
Translation of amounts from the local currencies of the Company into US$ has been made at the following exchange rates for the respective periods:
As of and for the six months ended June 30, | ||||||||
| 2023 | 2022 | |||||||
| Period-end MYR : US$1 exchange rate | ||||||||
| Period-average MYR : US$1 exchange rate | ||||||||
| Period-end RMB : US$1 exchange rate | ||||||||
| Period-average RMB : US$1 exchange rate | ||||||||
| Period-end HK$ : US$1 exchange rate | ||||||||
| Period-average HK$ : US$1 exchange rate | ||||||||
Fair value of financial instruments
The Company follows the guidance of ASC 820-10, “Fair Value Measurements and Disclosures” (“ASC 820-10”), with respect to financial assets and liabilities that are measured at fair value. ASC 820-10 establishes a three-tier fair value hierarchy that prioritizes the inputs used in measuring fair value as follows:
| ● | Level 1 : Observable inputs such as quoted prices in active markets; |
| ● | Level 2 : Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and |
| ● | Level 3 : Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions |
The Company believes the carrying amount reported in the balance sheet for cash and cash equivalents, accounts receivable, prepaids and other current assets, accounts payable and accrued liabilities, income tax payable, deferred cost of revenue, deferred revenue, and due from or due to related parties, approximate their fair values because of the short-term nature of these financial instruments.
As
of June 30, 2023 and December 31, 2022, the Company’s balance sheet includes Level 3 liabilities comprised of the fair value of
derivative liabilities of $
Derivative liability | ||||
| Fair value as of December 31, 2022 (Audited) | $ | |||
| Fair value gain of derivative liability associated with warrants | ( | ) | ||
| Fair value as of June 30, 2023 (Unaudited) | $ | |||
| 12 |
Concentrations of risks
For
the three months ended June 30, 2023 and 2022, two customers accounted for
Three
customers accounted for
For
the three and six months ended June 30, 2023 and 2022, no vendor accounted for
Two
vendors accounted for
Economic and political risks
Substantially all the Company’s services are conducted in the Asian region, primarily in Hong Kong, Malaysia, and the People’s Republic of China (“PRC”). Among other risks, the Company’s operations in Malaysia are subject to the risks of restrictions on transfer of funds; export duties, quotas, and embargoes; domestic and international customs and tariffs; changing taxation policies; foreign exchange restrictions; and political conditions and governmental regulations in Malaysia.
The Company’s operations in the PRC are subject to special considerations and significant risks not typically associated with companies in North America and Western Europe. These include risks associated with, among others, the political, economic, and legal environment and foreign currency exchange. The Company’s results may be adversely affected by changes in the political conditions in the PRC, and by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion, remittances abroad, and rates and methods of taxation.
Recent accounting pronouncements
In August 2020, the FASB issued ASU 2020-06, Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40). This ASU reduces the number of accounting models for convertible debt instruments and convertible preferred stock and amends the guidance for the derivatives scope exception for contracts in an entity’s own equity to reduce form-over-substance-based accounting conclusions. In addition, this ASU improves and amends the related earnings per share guidance. This standard became effective for the Company beginning on January 1, 2023. Adoption is either a modified retrospective method or a fully retrospective method of transition. The Company adopted this guidance effective January 1, 2023, and the adoption of this standard did not have a material impact on its consolidated financial statements.
In November 2019, the FASB issued ASU No. 2019-10, which to update the effective date of ASU No. 2016-13 for private companies, not-for-profit organizations and certain smaller reporting companies applying for credit losses, leases, and hedging standard. The new effective date for these preparers is for fiscal years beginning after December 15, 2022. ASU 2019-05 is effective for the Company for annual and interim reporting periods beginning January 1, 2023, as the Company is qualified as a smaller reporting company. The Company has accordingly adopted ASUs 2016-13 and 2019-05 in the preparation of its unaudited condensed consolidated financial statements. The adoption of the accounting standards has no material impact on the unaudited condensed consolidated financial statements for the six months ended and as at June 30, 2023.
Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company’s present or future financial statements.
| 13 |
NOTE 2 - REVENUE FROM CONTRACTS WITH CUSTOMERS
The Company’s revenue consists of revenue from providing business consulting and corporate advisory services (“service revenue”), revenue from the sale of real estate properties, and revenue from the rental of real estate properties.
Revenue from services
For certain service contracts, we assist or provide advisory to clients in capital market listings (“Listing services”), our services provided to clients are considered as our performance obligations. Revenue and expenses are deferred until the performance obligation is complete and collectability of the consideration is probable. For service contracts where the performance obligation is not completed, deferred cost of revenue is recorded as incurred and deferred revenue is recorded for any payments received on such yet to be completed performance obligations. On an ongoing basis, management monitors these contracts for profitability and when needed may record a liability if a determination is made that costs will exceed revenue.
For other services such as company secretarial, accounting, financial analysis and related services (“Non-listing services”), the Company’s performance obligations are satisfied, and the related revenue is recognized, as services are rendered. For contracts in which we act as an agent, the Company reports revenue net of expenses paid.
The Company offers no discounts, rebates, rights of return, or other allowances to clients which would result in the establishment of reserves against service revenue. Additionally, to date, the Company has not incurred incremental costs in obtaining a client contract.
Revenue from the sale of real estate properties
The Company follows the guidance of ASC 610-20, Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets (“ASC 610-20”) in accounting for the sale of real estate properties. The Company records the sale based on completed performance obligations, which typically occurs upon the transfer of ownership of a real estate asset to the buyer. During the three months ended June 30, 2023, and 2022, no real estate property was sold. For the six months ended June 30, 2023, no real estate property was sold, as compared to the six months ended June 30, 2022, the Company recorded revenue from the sale of one unit of real estate property.
Revenue from the rental of real estate properties
Rental revenue represents the lease income from the Company’s tenants. The tenants pay monthly in accordance with lease agreements and the Company recognizes the income ratably over the lease term as this is the most representative of the pattern in which the benefit is expected to be derived from the underlying asset.
Cost of revenues
Cost of service revenue primarily consists of employee compensation and related payroll benefits, company formation costs, and other professional fees directly attributable to the services rendered.
Cost of real estate properties sold primarily consists of the purchase price of property, legal fees, improvement costs to the building structure, and other acquisition costs. Selling and advertising costs are expensed as incurred.
Cost of rental revenue primarily includes costs associated with repairs and maintenance, property management fees and insurance, depreciation, and other related administrative costs. Utility expenses are borne and paid directly by individual tenants.
| 14 |
The following table provides information about disaggregated revenue based on revenue by service lines and revenue by geographic area:
| Three Months Ended June 30, | ||||||||
| 2023 | 2022 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| Revenue by service lines: | ||||||||
| Corporate advisory – Non-listing services | $ | $ | ||||||
| Corporate advisory – Listing services | ||||||||
| Rental of real estate properties | ||||||||
| Total revenue | $ | $ | ||||||
| Three Months Ended June 30, | ||||||||
| 2023 | 2022 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| Revenue by geographic area: | ||||||||
| Hong Kong | $ | $ | ||||||
| Malaysia | ||||||||
| China | ||||||||
| Total revenue | $ | $ | ||||||
| Six Months Ended June 30, | ||||||||
| 2023 | 2022 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| Revenue by service lines: | ||||||||
| Corporate advisory – Non-listing services | $ | $ | ||||||
| Corporate advisory – Listing services | ||||||||
| Rental of real estate properties | ||||||||
| Sale of real estate properties | ||||||||
| Total revenue | $ | $ | ||||||
| Six Months Ended June 30, | ||||||||
| 2023 | 2022 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| Revenue by geographic area: | ||||||||
| Hong Kong | $ | $ | ||||||
| Malaysia | ||||||||
| China | ||||||||
| Total revenue | $ | $ | ||||||
Our contract balances include deferred costs of revenue and deferred revenue.
Deferred Cost of Revenue
Deferred cost of revenue mainly consists of the direct costs associated with the services provided. For the service contracts where the Company’s performance obligation is not completed, deferred cost of revenue is recorded when the costs incurred.
Deferred Revenue
Deferred revenue primarily consists of deferred service revenue. For the service contracts where the Company’s performance obligation is not completed, deferred revenue is recorded for any payments received in advance by the Company before the completion of its performance obligation. Changes in deferred revenue were as follows:
Six Months Ended June 30, 2023 | ||||
| (Unaudited) | ||||
| Deferred revenue, January 1, 2023 | $ | |||
| New contract liabilities | ||||
| Performance obligations satisfied | ( | ) | ||
| Deferred revenue, June 30, 2023 | $ | |||
Deferred cost of revenue and deferred revenue at June 30, 2023 and December 31, 2022 are classified as current assets or current liabilities and totaled:
As of June 30, 2023 | As of December 31, 2022 | |||||||
| (Unaudited) | (Audited) | |||||||
| Deferred cost of revenue | $ | $ | ||||||
| Deferred revenue | $ | $ | ||||||
| 15 |
NOTE 3 - OTHER INVESTMENTS
| As of | As of | |||||||
| June 30, 2023 | December 31, 2022 | |||||||
| (Unaudited) | (Audited) | |||||||
| Investments in equity securities without readily determinable fair values of affiliates: | ||||||||
| (1) Greenpro Trust Limited (a related party) | $ | $ | ||||||
| (2) Other related parties | ||||||||
| Total | $ | $ | ||||||
Investments in equity securities without readily determinable fair values of affiliates (related parties):
Equity securities without readily determinable fair values are investments without readily determinable market values. The Company adopted the guidance of ASC 321, Investments - Equity Securities, which allows an entity to measure investments in equity securities without a readily determinable fair value using a measurement alternative that measures these securities at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for identical or similar investment of same issuer (the “Measurement Alternative”). The fair value of equity securities without readily determinable fair values that have been remeasured due to impairment are classified within Level 3. Management assesses each of these investments on an individual basis. Additionally, on a quarterly basis, management is required to make a qualitative assessment of whether the investment is impaired.
For
the three and six months ended June 30, 2023, the Company recognized the reversal of impairment of $
For
the three and six months ended June 30, 2022, the Company recognized an impairment loss of $
During
the year ended December 31, 2022, the Company recognized impairment of $
In
addition, the Company recorded its equity securities without readily determinable fair values at cost. For these cost method investments,
we recorded as other investments in our condensed consolidated balance sheets. We reviewed all our cost method investments quarterly
to determine if impairment indicators were present; however, we were not required to determine fair value of these investments unless
impairment indicators exist. When impairment indicators exist, we generally adopt the valuation methods allowed under ASC820 Fair Value
Measurement to evaluate the fair values of our cost method investments approximated or exceeded their carrying values as of June 30,
2023. Our cost method investments had a carrying value of $
| 16 |
(a) Celmonze Wellness Corporation:
On
February 8, 2023, our wholly owned subsidiary, Greenpro Venture Capital Limited (“GVCL”) entered into a subscription agreement
with Celmonze Wellness Corporation, a Nevada corporation, which provides beauty and wellness solutions to clients (“Celmonze”).
Pursuant to the agreement, GVCL acquired shares of common stock of Celmonze at a price of $
(b) Innovest Energy Fund:
On
February 11, 2021, Greenpro Resources Limited, a subsidiary of the Company (“GRL”) entered into a subscription agreement
with Innovest Energy Fund, a global multi-asset fund incorporated in the Cayman Islands and principally engaged in developing a multi-faceted
suite of products and services for the cryptocurrency industry and economy (the “Fund”). Pursuant to the agreement, GRL agreed
to subscribe for $
On
May 18, 2023, the Company decided to terminate its investment in the Fund due to significant impairments suffered since subscription
and to cancel the shares issued to the Fund due to the Fund’s failure to provide consideration for the shares. As a result,
shares of the Company’s restricted Common Stock were cancelled, the value of Common Stock of $ and the value of additional paid-in
capital of $, in aggregate of $, were reversed accordingly. The Company recorded a reversal of impairment of other
investment of $
The
Company had cost method investments without readily determinable fair values with a carrying value of $
On June 30, 2023 and December 31, 2022, the carrying values of equity securities without readily determinable fair values are as follows:
| As of June 30, 2023 | As of December 31, 2022 | |||||||
| (Unaudited) | (Audited) | |||||||
| Original cost | $ | $ | ||||||
| Unrealized gains (losses) | ||||||||
| Accumulated impairment or decline in value | ( | ) | ( | ) | ||||
| Forfeiture, disposal, or write-off | ( | ) | ( | ) | ||||
| Equity securities without readily determinable fair values, net | $ | $ | ||||||
Accumulated impairment of other investments
For
the three and six months ended June 30, 2023, the Company recognized a reversal of impairment of $
| 17 |
NOTE 4 - LEASES
Currently, the Company has an operating lease agreement for one office space in Hong Kong with a term of two years and has a finance lease for a motor vehicle in Malaysia with a term of 5 years, respectively. Other than these leases, the Company does not have other leases. Leases with an initial term of 12 months or less are not recorded on the balance sheet. The Company accounts for the lease and non-lease components of its leases as a single lease component. Lease expense is recognized on a straight-line basis over the lease term.
Finance and operating lease right-of-use (“ROU”) assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Generally, the implicit rate of interest in arrangements is not readily determinable and the Company utilizes its incremental borrowing rate in determining the present value of lease payments. The Company’s incremental borrowing rate is a hypothetical rate based on its understanding of what its credit rating would be. The ROU asset includes any lease payments made and excludes lease incentives.
The components of lease expense and supplemental cash flow information related to leases for the periods are as follows:
| Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| Lease Costs | ||||||||
| Operating lease costs: | ||||||||
| Operating lease cost | $ | | $ | | ||||
| Short-term lease cost (1) | ||||||||
| Finance lease costs: | ||||||||
| Interest on lease liabilities | ||||||||
| Amortization of right-of-use asset | ||||||||
| Other Information | ||||||||
| Cash paid for amounts included in the measurement of lease liabilities: | ||||||||
| Operating cash flows for operating leases | $ | $ | ||||||
| Operating cash flows for finance leases | $ | $ | ||||||
| Financing cash flows for finance leases | $ | $ | ||||||
| Non-cash activity: | ||||||||
| Balance payment of ROU asset by finance lease liabilities | $ | $ | ||||||
| Weighted average remaining lease term (in years): | ||||||||
| Operating leases | ||||||||
| Finance leases | ||||||||
| Weighted average discount rate: | ||||||||
| Operating leases | % | % | ||||||
| Finance leases | % | - | ||||||
| (1) |
The supplemental balance sheet information related to leases for the periods is as follows:
| As of June 30, 2023 | As of December 31, 2022 | |||||||
| (Unaudited) | (Audited) | |||||||
| Assets | ||||||||
| Long-term operating lease ROU assets, net (1) | $ | $ | ||||||
| Long-term finance lease ROU asset, net (2) | ||||||||
| Total ROU assets | $ | | $ | | ||||
| Liabilities | ||||||||
| Current portion of operating lease liabilities | $ | $ | ||||||
| Current portion of finance lease liabilities | ||||||||
| Total current lease liabilities | ||||||||
| Long-term operating lease liabilities | ||||||||
| Long-term finance lease liabilities | ||||||||
| Total long-term lease liabilities | ||||||||
| Total lease liabilities | $ | $ | ||||||
| (1) | |
| (2) |
Maturities of the Company’s lease liabilities are as follows:
| Operating leases | Finance leases | |||||||
| (Unaudited) | (Unaudited) | |||||||
| Year ending December 31, | ||||||||
| 2023 (remaining 6 months) | $ | $ | ||||||
| 2024 | ||||||||
| 2025 | ||||||||
| 2026 | ||||||||
| 2027 | ||||||||
| 2028 | ||||||||
| Total future minimum lease payments | ||||||||
| Less: Imputed interest/present value discount | ( | ) | ( |
) | ||||
| Present value of lease liabilities | $ | $ | ||||||
| Lease obligations | ||||||||
| Current lease obligations | $ | $ | ||||||
| Long-term lease obligations | ||||||||
| Total lease obligations | $ | $ | ||||||
Lease
expenses were $
| 18 |
NOTE 5 - DERIVATIVE LIABILITIES
On
June 12, 2018, warrants exercisable into
The contractual life of the warrants is based on the expiration date of the warrants, that is the five-year anniversary of the effective date of the public offering on June 13, 2018, and hence the expected expiration of the warrants is June 12, 2023 (the “Expiration”). The derivative liability is re-measured at the end of every reporting period with the change in value reported in the statement of operations.
On
July 19, 2022, the Company filed a Certificate of Change with the Secretary of State of the State of Nevada (the “Certificate of
Change”) to effect a reverse split of the Company’s Common Stock at a ratio of
Warrant activity including the number of shares and the exercise price per share has been adjusted for all periods presented in this Quarterly Report to reflect the Reverse Stock Split effected on July 28, 2022 on a retroactive basis.
At
June 30, 2023, the Company did not have any outstanding warrants exercisable into the Company’s Common Stock as all call warrants
were not exercised on June 12, 2023 (the “Expiration”). At the Expiration, the Company’s Common Stock traded at or
below the exercise price (
During
the six months ended June 30, 2023, the Company recorded a decrease in fair value of derivatives of $
The
balance of the derivative liabilities related to warrants was $
The derivative liabilities related to warrants were valued using the Black-Scholes-Merton valuation model with the following assumptions:
As of June 12, 2023 (expiration) | As of December 31, 2022 | |||||||
| (Unaudited) | (Audited) | |||||||
| Risk-free interest rate | $ | % | $ | % | ||||
| Expected volatility | % | % | ||||||
| Contractual life (in years) | ||||||||
| Expected dividend yield | % | % | ||||||
| Fair value of warrants | $ | $ | ||||||
The risk-free interest rate is based on the yield available on U.S. Treasury securities. The Company estimates volatility based on the historical volatility of its Common Stock. The contractual life of the warrants is based on the expiration date of the warrants, that is the five-year anniversary of the effective date of the public offering on June 13, 2018. The expected expiration of the warrants is June 12, 2023 (the “Expiration”). The expected dividend yield is based on the fact that the Company has not paid dividends to common shareholders in the past and does not expect to pay dividends to common shareholders in the future.
On
June 12, 2023 (the “Expiration), no warrants were exercised as the trading price of the Company’s Common Stock was at or
below the exercise price of $
| 19 |
NOTE 6 - WARRANTS
In
2018, the Company granted to the placement agent and issued warrants exercisable into
On
July 19, 2022, the Company filed a Certificate of Change with the Secretary of State of the State of Nevada (the “Certificate of
Change”) to effect a reverse split of the Company’s Common Stock at a ratio of
Warrant activity including the number of shares and the exercise price per share has been adjusted for all periods presented in this Quarterly Report to reflect the Reverse Stock Split effected on July 28, 2022 on a retroactive basis.
A summary of warrant activity during the six months ended June 30, 2023 is presented below:
| Remaining | ||||||||||||
| Number | Contractual | |||||||||||
| of | Exercise | Life | ||||||||||
| Shares | Price | (in Years) | ||||||||||
| Warrants outstanding at December 31, 2022 | $ | |||||||||||
| Granted | ||||||||||||
| Exercised | ||||||||||||
| Expired | ||||||||||||
| Warrants outstanding at June 30, 2023 (Unaudited) | $ | - | ||||||||||
| Warrants exercisable at June 30, 2023 (Unaudited) | $ | - | ||||||||||
On
June 12, 2023 (the “Expiration), no warrants were exercised as the trading price of the Company’s Common Stock was at or
below the exercise price of $
At June 30, 2023, the value of the warrants was $, and warrants were outstanding and exercisable.
| 20 |
NOTE 7 - RELATED PARTY TRANSACTIONS
| Accounts receivable from related parties: | June 30, 2023 | December 31, 2022 | ||||||
| (Unaudited) | (Audited) | |||||||
| Accounts receivable, net - related parties | ||||||||
| - Related party B (net of allowance of $ | ||||||||
| - Related party E (net of allowance of $ | ||||||||
| - Related party K (net of allowance of $ | ||||||||
| Total | $ | $ | ||||||
| Prepaid to a related party: | June 30, 2023 | December 31, 2022 | ||||||
| (Unaudited) | (Audited) | |||||||
| Prepayment | ||||||||
| - Related party B | $ | $ | ||||||
| Due from related parties: | June 30, 2023 | December 31, 2022 | ||||||
| (Unaudited) | (Audited) | |||||||
| Due from related parties | ||||||||
| - Related party B | $ | $ | ||||||
| - Related party D | ||||||||
| - Related party G | ||||||||
| - Related party H | ||||||||
| - Related party I | ||||||||
| - Related party K | ||||||||
| Total | $ | $ | ||||||
The amounts due from related parties are interest-free, unsecured and repayable on demand.
| Due to related parties: | June 30, 2023 | December 31, 2022 | ||||||
| (Unaudited) | (Audited) | |||||||
| Due to related parties | ||||||||
| - Related party A | $ | $ | ||||||
| - Related party B | ||||||||
| - Related party E | ||||||||
| - Related party J | ||||||||
| - Related party K | ||||||||
| Total | $ | $ | ||||||
| 21 |
The amounts due to related parties are interest-free, unsecured, and repayable on demand.
| For the six months ended June 30, | ||||||||
| Related party revenue and expense transactions: | 2023 | 2022 | ||||||
| (Unaudited) | (Unaudited) | |||||||
| Service revenue from related parties | ||||||||
| - Related party A | $ | $ | ||||||
| - Related party B | ||||||||
| - Related party D | ||||||||
| - Related party E | ||||||||
| - Related party G | ||||||||
| - Related party I | ||||||||
| - Related party K | ||||||||
| Total | $ | $ | ||||||
| General and administrative expenses to related parties | ||||||||
| - Related party A | $ | $ | ||||||
| - Related party B | ||||||||
| - Related party I | ||||||||
| - Related party K | ||||||||
| Total | $ | $ | ||||||
| Other income from a related party: | ||||||||
| - Related party D | $ | $ | ||||||
| Reversal of impairment (impairment) of other investment: | ||||||||
| - Related party B | $ | $ | ( | ) | ||||
Related party A is under common control of Mr. Loke Che Chan Gilbert, the Company’s CFO, and a major shareholder.
Related
party B represents those companies where
Related party C is controlled by a director of a wholly owned subsidiary of the Company.
Related party D represents a company that we have determined that we can significantly influence based on our common business relationships.
Related party E represents companies whose CEO is a consultant to the Company, and who is also a director of Aquarius Protection Fund, a shareholder in the Company.
Related party F represents a family member of Mr. Loke Che Chan Gilbert, the Company’s CFO and a major shareholder.
Related party G is under common control of Mr. Lee Chong Kuang, the Company’s CEO and a major shareholder.
Related
party H represents a company in which we currently have an approximate
Related party I is controlled by a family member of Mr. Lee Chong Kuang, the Company’s CEO and a major shareholder.
Related party J represents the noncontrolling interest in the Company’s subsidiary that owns its real estate held for sale. The amounts due to related party J are unsecured, bear no interest, are payable on demand, and related to the initial acquisition of the real estate held for sale.
Related party K represents shareholders and directors of the Company. Due from related party K represents the amounts paid by the Company to third parties on behalf of our shareholders or directors. On the other hand, due to related party K represents the amounts paid by the shareholders or directors to third parties on behalf of the Company. The amounts due from or due to related party K are non-interest bearing, and are due on demand.
| 22 |
NOTE 8 - SEGMENT INFORMATION
ASC
280, “Segment Reporting” establishes standards for reporting information about operating segments on a basis consistent with
the Company’s internal organization structure as well as information about services categories, business segments and major customers
in financial statements. The Company has
| ● | Service business - provision of corporate advisory and business solution services |
| ● | Real estate business - leasing or trading of commercial real estate properties in Hong Kong and Malaysia |
The Company had no inter-segment sales for the periods presented. Summarized financial information concerning the Company’s reportable segments is shown as below:
(a) By Categories
| For the six months ended June 30, 2023 (Unaudited) | ||||||||||||||||
| Real estate business | Service business | Corporate | Total | |||||||||||||
| Revenues | $ | $ | $ | $ | ||||||||||||
| Cost of revenues | ( | ) | ( | ) | ( | ) | ||||||||||
| Reversal of impairment of other investment | ||||||||||||||||
| Reversal of write-off notes receivable | ||||||||||||||||
| Depreciation and amortization expenses | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Net (loss) income | ( | ) | ( | ) | ||||||||||||
| Total assets | ||||||||||||||||
| Capital expenditures for long-lived assets | $ | $ | $ | $ | ||||||||||||
| For the six months ended June 30, 2022 (Unaudited) | ||||||||||||||||
| Real estate business | Service business | Corporate | Total | |||||||||||||
| Revenues | $ | $ | $ | $ | ||||||||||||
| Cost of revenues | ( | ) | ( | ) | ( | ) | ||||||||||
| Depreciation and amortization expenses | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Impairment | ( | ) | ( | ) | ||||||||||||
| Net income (loss) | ( | ) | ( | ) | ( | ) | ||||||||||
| Total assets | ||||||||||||||||
| Capital expenditures for long-lived assets | $ | $ | $ | $ | ||||||||||||
(b) By Geography*
| For the six months ended June 30, 2023 (Unaudited) | ||||||||||||||||
| Hong Kong | Malaysia | China | Total | |||||||||||||
| Revenues | $ | $ | $ | $ | ||||||||||||
| Cost of revenues | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Reversal of impairment of other investment | ||||||||||||||||
| Reversal of write-off notes receivable | ||||||||||||||||
| Depreciation and amortization expenses | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Net income (loss) | ( | ) | ||||||||||||||
| Total assets | ||||||||||||||||
| Capital expenditures for long-lived assets | $ | $ | $ | $ | ||||||||||||
| For the six months ended June 30, 2022 (Unaudited) | ||||||||||||||||
| Hong Kong | Malaysia | China | Total | |||||||||||||
| Revenues | $ | $ | $ | $ | ||||||||||||
| Cost of revenues | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Depreciation and amortization expenses | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Impairment | ( | ) | ( | ) | ||||||||||||
| Net (loss) income | ( | ) | ( | ) | ||||||||||||
| Total assets | ||||||||||||||||
| Capital expenditures for long-lived assets | $ | $ | $ | $ | ||||||||||||
| * |
| 23 |
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
The information contained in this Form 10-Q is intended to update the information contained in our Annual Report on Form 10-K for the year ended December 31, 2022 filed with the Securities and Exchange Commission on March 31, 2023 (the “Form 10-K”) and presumes that readers have access to, and will have read, the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and other information contained in such Form 10-K. The following discussion and analysis also should be read together with our financial statements and the notes to the financial statements included elsewhere in this Form 10-Q.
The following discussion contains certain statements that may be deemed “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements appear in several places in this Report, including, without limitation, “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” These statements are not guaranteed of future performance and involve risks, uncertainties and requirements that are difficult to predict or are beyond our control. Forward-looking statements speak only as of the date of this Quarterly Report. You should not put undue reliance on any forward-looking statements. We strongly encourage investors to carefully read the factors described in our Form 10-K in the section entitled “Risk Factors” for a description of certain risks that could, among other things, cause actual results to differ from these forward-looking statements. We assume no responsibility to update the forward-looking statements contained in this Quarterly Report on Form 10-Q. The following should also be read in conjunction with the unaudited Financial Statements and notes thereto that appear elsewhere in this report.
Company Overview
Greenpro Capital Corp. (the “Company” or “Greenpro”), was incorporated in the State of Nevada on July 19, 2013. We provide cross-border business solutions and accounting outsourcing services to small and medium-size businesses located in Asia, with an initial focus on Hong Kong, Malaysia, and China. Greenpro provides a range of services as a package solution to our clients, which we believe can assist our clients in reducing their business costs and improving their revenues.
In addition to our business solution services, we also operate a venture capital business through our wholly-owned subsidiary, Greenpro Venture Capital Limited (“GVCL”). GVCL, an Anguilla corporation, is primarily focuses on (1) establishing a business incubator for start-up and high growth companies to support such companies during critical growth periods, which will include education and support services, and (2) searching for investment opportunities in selected start-up and high growth companies, which may generate significant returns to the Company. Our venture capital business is mainly focused on the companies located in Asia and Southeast Asia including Hong Kong, Malaysia, China, Thailand, and Singapore. Another one of our venture capital business segments is focused on trading or rental activities of our commercial properties.
Results of Operations
During the three and six months ended June 30, 2023, and 2022, we operated in three regions: Hong Kong, China and Malaysia. We derived revenue from the provision of services and the trading or rental activities of our commercial properties.
Comparison of the three months ended June 30, 2023 and 2022
Total revenue
Total revenue wa