Company Quick10K Filing
Quick10K
Umatrin Holding
10-Q 2019-06-30 Quarter: 2019-06-30
10-Q 2019-03-31 Quarter: 2019-03-31
10-K 2018-12-31 Annual: 2018-12-31
10-Q 2018-09-30 Quarter: 2018-09-30
10-Q 2018-06-30 Quarter: 2018-06-30
10-Q 2018-03-31 Quarter: 2018-03-31
10-K 2017-12-31 Annual: 2017-12-31
10-Q 2017-09-30 Quarter: 2017-09-30
10-Q 2017-06-30 Quarter: 2017-06-30
10-Q 2017-03-31 Quarter: 2017-03-31
10-K 2016-12-31 Annual: 2016-12-31
10-Q 2016-09-30 Quarter: 2016-09-30
10-Q 2016-06-30 Quarter: 2016-06-30
10-Q 2016-03-31 Quarter: 2016-03-31
10-K 2015-12-31 Annual: 2015-12-31
10-Q 2015-10-31 Quarter: 2015-10-31
10-Q 2015-07-31 Quarter: 2015-07-31
10-Q 2015-04-30 Quarter: 2015-04-30
10-K 2015-01-31 Annual: 2015-01-31
10-Q 2014-10-31 Quarter: 2014-10-31
10-Q 2014-07-31 Quarter: 2014-07-31
10-Q 2014-04-30 Quarter: 2014-04-30
10-K 2014-01-31 Annual: 2014-01-31
BEGI Blackstar Enterprise Group 104
PRKR Parkervision 22
WDLF Social Life Network 15
NIMU Non Invasive Monitoring Systems 12
FUTU Future Healthcare of America 7
PWVI Powerverde 3
TAQR Traqer 0
GPFF Grant Park Futures Fund Limited Partnership 0
KRDO Kreido Biofuels 0
LKM Link Motion 0
UMHL 2019-06-30
Part I-Financial Information
Item 1. Financial Statements
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
Item 4. Controls and Procedures.
Part Ii- Other Information
Item 1. Legal Proceedings.
Item 1A. Risk Factors.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
Item 3. Defaults Upon Senior Securities.
Item 4. Mine Safety Disclosures.
Item 5. Other Information.
Item 6. Exhibits.
EX-31.1 umhl_ex311.htm
EX-32.1 umhl_ex321.htm

Umatrin Holding Earnings 2019-06-30

UMHL 10Q Quarterly Report

Balance SheetIncome StatementCash Flow

10-Q 1 umhl_10q.htm FORM 10-Q umhl_10q.htm

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES AND EXCHANGE ACT OF 1934

 

For the quarterly period ended June 30, 2019

 

¨ 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: 00051190

 

UMATRIN HOLDING LIMITED

 (Exact name of registrant as specified in its charter)

 

 Delaware

 

870814235

(State or other jurisdiction

of incorporation or organization)

 

(I.R.S. Employer

Identification No.)

  

 

 

315 Madison Ave, 3rd Floor PMB #3050

New York, NY

 

10017 

(Address of principal executive offices) 

 

(Zip Code)

 

(866) 8744888

Registrant’s telephone number, including area code

 

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 ST during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ¨

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a nonaccelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b2 of the Exchange Act.

 

Large accelerated filer

¨

Accelerated filer

¨

Non-accelerated filer

¨

Smaller reporting company

x

(Do not check if 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 12b2 of the Exchange Act). Yes ¨ No x

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of Each Class

 

Trading Symbol(s)

 

Name of Each Exchange on Which Registered

N/A

 

 

 

 

 

As of August 13, 2019, the registrant had 182,444,266 shares of common stock, $0.00001 par value per share, issued and outstanding.

 

 
 
 
 

 

UMATRIN HOLDING LIMITED

FORM 10-Q

FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2019

 

TABLE OF CONTENTS

 

PART I FINANCIAL INFORMATION

 

Item 1.

Financial Statements.

 

 

 3

 

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations.

 

 

19

 

Item 3.

Quantitative and Qualitative Disclosures About Market Risk.

 

 

20

 

Item 4.

Controls and Procedures.

 

 

21

 

 

 

 

 

 

 

PART II OTHER INFORMATION

 

Item 1.

Legal Proceedings.

 

 

22

 

Item 1A.

Risk Factors.

 

 

22

 

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds.

 

 

22

 

Item 3.

Defaults Upon Senior Securities.

 

 

22

 

Item 4.

Mine Safety Disclosures.

 

 

22

 

Item 5.

Other Information.

 

 

22

 

Item 6.

Exhibits.

 

 

23

 

SIGNATURES

 

 

24

 

 

 
2
 
Table of Contents

 

PART I—FINANCIAL INFORMATION

 

Item 1. Financial Statements

 

UMATRIN HOLDING LIMITED

CONSOLIDATED BALANCE SHEETS

 

 

 

June 30,

 

 

December 31,

 

 

 

2019

 

 

2018

 

 

 

(Unaudited)

 

 

(Audited)

 

Assets

 

 

 

 

 

 

Current Assets

 

 

 

 

 

 

Cash and cash equivalents

 

$151,544

 

 

$36,431

 

Inventory

 

 

82,538

 

 

 

17,971

 

Prepaid tax

 

 

48,441

 

 

 

105,214

 

Deferred tax assets

 

 

10,317

 

 

 

10,280

 

Due from related parties

 

 

280,528

 

 

 

359,407

 

Total Current Assets

 

 

573,368

 

 

 

529,303

 

Land, property and equipment, net

 

 

837,693

 

 

 

867,302

 

Deposits

 

 

21,574

 

 

 

29,402

 

Total Assets

 

 

1,432,635

 

 

 

1,426,007

 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

Current Liabilities

 

 

 

 

 

 

 

 

Term loan payable-current portion

 

 

21,666

 

 

 

21,090

 

Accounts payable and accrued expenses

 

 

167,265

 

 

 

155,572

 

Other payables

 

 

196,435

 

 

 

195,719

 

Due to related parties

 

 

952,055

 

 

 

1,079,112

 

Total Current Liabilities

 

 

1,337,421

 

 

 

1,451,493

 

Term loan payable-long term

 

 

464,207

 

 

 

472,411

 

Total Liabilities

 

 

1,801,628

 

 

 

1,923,904

 

 

 

 

 

 

 

 

 

 

Equity

 

 

 

 

 

 

 

 

Umatrin Holding Limited Stockholders' Equity

 

 

 

 

 

 

 

 

Preferred stock: 10,000,000 authorized; $0.00001 par value 0 and 0 shares issued and outstanding

 

 

-

 

 

 

-

 

Common stock: 500,000,000 authorized; $0.00001 par value 182,444,266 shares issued and outstanding

 

 

1,825

 

 

 

1,825

 

Additional paid in capital

 

 

3,136,561

 

 

 

3,136,561

 

Accumulated deficits

 

 

(3,323,886)

 

 

(3,422,205)

Accumulated other comprehensive loss

 

 

(128,561)

 

 

(125,991)

Total Umatrin Holding Limited Stockholders' Equity

 

 

(314,061)

 

 

(409,810)

Non-controlling interest

 

 

(54,933)

 

 

(88,087)

Total Equity

 

 

(368,994)

 

 

(497,897)

Total Liabilities and Stockholders Equity

 

$1,432,634

 

 

$1,426,007

 

 

See accompanying notes to financial statements

 

 
3
 
Table of Contents

 

UMATRIN HOLDING LIMITED

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(UNAUDITED)

 

 

 

For the Three Months ended

 

 

For the Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

June 30,

 

 

June 30,

 

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

Sales

 

$439,167

 

 

$71,955

 

 

$593,966

 

 

$145,213

 

Cost of sales

 

 

68,417

 

 

 

8,988

 

 

 

94,391

 

 

 

18,365

 

Gross profit

 

 

370,750

 

 

 

62,967

 

 

 

499,575

 

 

 

126,848

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general & administrative expenses

 

 

252,309

 

 

 

130,742

 

 

 

355,322

 

 

 

265,767

 

Total operating expenses

 

 

252,309

 

 

 

130,742

 

 

 

355,322

 

 

 

265,767

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Profit/(Loss) from operations

 

 

118,441

 

 

 

(67,775)

 

 

144,253

 

 

 

(138,919)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income (expenses)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

(6,027)

 

 

(6,333)

 

 

(12,138)

 

 

(12,703)

Total other income (expenses)

 

 

(6,027)

 

 

(6,333)

 

 

(12,138)

 

 

(12,703)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net profit/(loss) before income taxes

 

 

112,414

 

 

 

(74,108)

 

 

132,115

 

 

 

(151,622)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Provision for income taxes

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net profit/(loss)

 

 

112,414

 

 

 

(74,108)

 

$132,115

 

 

$(151,622)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Less: Net profit/(loss) attributable to non-controlling interest

 

 

26,113

 

 

 

(12,891)

 

$33,796

 

 

$(28,293)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net profit/(loss) attributable to Umatrin Holding Limited

 

$86,301

 

 

$(61,216)

 

$98,319

 

 

$(123,328)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other comprehensive loss, net of tax

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustment

 

 

(6,972)

 

 

(9,858)

 

 

3,212

 

 

 

(2,869)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Comprehensive loss

 

 

105,442

 

 

 

(83,966)

 

 

135,327

 

 

 

(154,491)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Comprehensive profit/(loss) attributable to the non-controlling interest

 

 

53,620

 

 

 

(42,009)

 

 

66,950

 

 

 

(56,013)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Comprehensive loss attributable to Umatrin Holding Limited

 

$51,822

 

 

$(41,957)

 

$68,377

 

 

$(98,478)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss per common share - basic and diluted

 

$0.00

 

 

$(0.00)

 

$0.00

 

 

$(0.00)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of shares outstanding - basic and diluted

 

 

182,444,266

 

 

 

182,444,266

 

 

 

182,444,266

 

 

 

182,444,266

 

 

See accompanying notes to financial statements

 

 
4
 
Table of Contents

 

UMATRIN HOLDING LIMITED

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

 

 

 

For the Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2019

 

 

2018

 

Cash flows from operating activities

 

 

 

 

 

 

Net profit/(loss) including noncontrolling interest

 

$132,115

 

 

$(151,622)

Adjustment to reconcile net profit/(loss) from operations:

 

 

 

 

 

 

 

 

Depreciation expense

 

 

35,949

 

 

 

37,621

 

Changes in Operating Assets and Liabilities

 

 

 

 

 

 

 

 

Inventory

 

 

(65,117)

 

 

(5,287)

Prepaid tax

 

 

57,704

 

 

 

(30,487)

Other receivables and deposits

 

 

8,011

 

 

 

1,905

 

Accounts payable and accrued expenses

 

 

8,151

 

 

 

(8,707)

Other payables

 

 

3,500

 

 

 

(41,101)

Net cash used in operating activities

 

 

180,313

 

 

 

(197,677)

 

 

 

 

 

 

 

 

 

Cash flows from investing activity

 

 

 

 

 

 

 

 

Purchase of property and equipment

 

 

(2,851)

 

 

-

 

Net cash provided by (used in) investing activity

 

 

(2,851)

 

 

-

 

 

 

 

 

 

 

 

 

 

Cash flows from financing activities

 

 

 

 

 

 

 

 

Proceeds/(Repayment) to related party, net

 

 

(51,859)

 

 

168,562

 

Proceeds/(Repayments) from term loan, net

 

 

(9,526)

 

 

(9,822)

Net cash provided by financing activities

 

 

(61,385)

 

 

158,740

 

 

 

 

 

 

 

 

 

 

Effect of exchange rate changes

 

 

(964)

 

 

8,613

 

 

 

 

 

 

 

 

 

 

Net increase (decrease) in cash and cash equivalents

 

 

115,113

 

 

 

(30,324)

Cash and cash equivalents at beginning of period

 

 

36,431

 

 

 

73,093

 

Cash and cash equivalents at end of period

 

$151,544

 

 

$42,769

 

 

 

 

 

 

Supplemental disclosures of cash flow information

 

 

 

 

 

 

 

 

Interest paid

 

$12,138

 

 

$12,703

 

Income taxes (refund)/paid

 

$(57,704)

 

$30,487

 

 

See accompanying notes to financial statements

 
 
5
 
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UMATRIN HOLDING LIMITED

STATEMENTS OF OWNERS' EQUITY

 

 

 

Umatrin Holding Limited Shareholders'

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

Common Stock, $0.00001

 

 

Additional

Paid-In

 

 

Retained

Earnings

 

 

Other

Comprehensive

 

 

Noncontrolling

 

 

Total

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

(Deficit)

 

 

Loss

 

 

Interest

 

 

Equity

 

Balance, December 31, 2017

 

 

182,444,266

 

 

$1,825

 

 

$3,136,561

 

 

$(3,038,346)

 

$(137,666)

 

$(21,745)

 

$(59,371)

Net income (loss)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(383,859)

 

 

 

 

 

 

(69,261)

 

 

(453,120)

Cumulative translation adjustment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

11,675

 

 

 

2,919

 

 

 

14,594

 

Balance, December 31, 2018 (Audited)

 

 

182,444,266

 

 

$1,825

 

 

$3,136,561

 

 

$(3,422,205)

 

$(125,991)

 

$(88,087)

 

$(497,897)

Net income (loss)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

98,319

 

 

 

 

 

 

 

33,796

 

 

 

132,115

 

Cumulative translation adjustment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(2,570)

 

 

(642)

 

 

(3,212)

Balance, June 30, 2019 (Unaudited)

 

 

182,444,266

 

 

$1,825

 

 

$3,136,561

 

 

$(3,323,886)

 

$(128,561)

 

$(54,933)

 

$(368,994)

 

See accompanying notes to financial statements

 

 
6
 
Table of Contents

 

UMATRIN HOLDINGS LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2019

(UNAUDITED)

 

1. ORGANIZATION

 

Umatrin Holding Limited (formerly known as Golden Opportunities Corporation) (“ UMHL” ) was incorporated in the state of Delaware on February 2, 2005. UMHL was originally incorporated in order to locate and negotiate with a targeted business entity for the combination of that target company with the Company.

 

On January 6, 2016, UMHL acquired 80% of the equity interests of U Matrin Worldwide SDN. BHD. (“ Umatrin” ) in exchange for the issuance of a total of 100,000,000 shares of its common stock to the two holders of Umatrin, Dato’ Sri Eu Hin Chai and Dato’ Liew Kok Hong. Immediately following the Share Exchange, the business of Umatrin became the business of UMHL.

 

U Matrin Worldwide SDN BHD, formerly known as OLC Worldwide SDN. BHD., was incorporated in Malaysia on July 22, 1993. The principal activities of Umatrin is direct selling and trading on beauty and personal care products, and investment holding.

 

UMHL entered into a share exchange agreement with Umatrin whereas the acquisition was accounted under US GAAP as a business combination under common control with UMHL being the acquirer as both entities were owned by the same controlling shareholders. Prior to the business combination, Dato’ Sri Eu Hin Chai, through Umatrin Group Ltd., held 76% of the outstanding shares of common stock of the Company. Dato’ Sri Eu Hin Chai and Dato’ Liew Kok Hong beneficially owned 61.25% and 38.75% of Umatrin immediately prior to the closing. Accordingly, historical cost will be the basis for transfer of assets and liabilities in the business combination in accordance with ASC 805-50-30-5.

 

Umatrin Holding Limited and its subsidiary U Matrin Worldwide SDN. BHD. shall be referred as the “ Company” .

 

The organization structure as follows:

 

Umatrin Holding Ltd.

(USA)

80%

U Matrin Worldwide

SDN BHD

(Malaysia)

 

2. SIGNIFICANT ACCOUNTING POLICIES

 

Basis of presentation

 

The accompanying consolidated financial statements and related notes have been prepared in accordance with generally accepted accounting principles in the United States (“ US GAAP” ).

 

The accompanying consolidated financial statements include the accounts of the Company and its subsidiary. Significant inter-company transactions have been eliminated in consolidation.

 

 
7
 
Table of Contents

 

In accordance with ASC 805-50-45-5, for transactions between entities under common control, financial statements and financial information presented for prior periods have been be retroactively adjusted to furnish comparative information. The accompanying consolidated financial statements are presented retrospectively as though the share exchange agreement between the UMHL and Umatrin occurred at the beginning of the first period presented.

 

Interim Financial Statements

 

The accompanying unaudited financial statements have been prepared in accordance with generally accepted accounting principles (GAAP) applicable to interim financial information and the requirements of Form 10-Q and Rule 8-03 of Regulation S-X of the Securities and Exchange Commission. Accordingly, they do not include all of the information and disclosure required by accounting principles generally accepted in the United States of America for complete financial statements. Interim results are not necessarily indicative of results for a full year. In the opinion of management, all adjustments considered necessary for a fair presentation of the financial position and the results of operations and cash flows for the interim periods have been included. These interim financial statements should be read in conjunction with the audited financial statements for the year ended December 31, 2018, as not all disclosures required by generally accepted accounting principles for annual financial statements are presented. The interim financial statements follow the same accounting policies and methods of computations as the audited financial statements for the year ended December 31, 2018.

 

Use of estimates

 

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates.

 

Reclassification

 

Certain amounts in the prior period financial statements have been reclassified to conform to the current period presentation. These reclassifications had no effect on reported net income or losses.

 

Functional and presentation currency

 

The functional currency of Umatrin is the currency of the primary economic environment in which the Company operates which is Malaysia Ringgit (“ MYR” ).

 

Transactions in currencies other than the entity’s functional currency are recorded at the rates of exchange prevailing on the date of the transaction. At the end of each reporting period, monetary items denominated in foreign currencies are translated at the rates prevailing at the end of the reporting periods. Exchange differences arising on the settlement of monetary items and on translation of monetary items at period-end are included in income statement of the period.

 

For the purpose of presenting these financial statements, the Company’s assets and liabilities are expressed in US$ at the exchange rate on the balance sheet date, stockholder’s equity accounts are translated at historical rates, and income and expense items are translated at the weighted average exchange rate during the period. The resulting translation adjustments are reported under accumulated other comprehensive income in the stockholder’s equity section of the balance sheets.

 

Exchange rate used for the translation as follows:

 

 

 

Period End

 

 

Average

 

US$ to MYR

 

Rate

 

 

Rate

 

June 30, 2019

 

 

4.1585

 

 

 

4.1191

 

December 31, 2018

 

 

4.1737

 

 

 

4.0344

 

June 30, 2018

 

 

4.0350

 

 

 

3.9361

 

 

 
8
 
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Fair value of financial instruments

 

The Company’s balance sheet includes financial instruments, including cash, term loan, accounts payable, accrued expenses, amounts due to related party and convertible notes payable to a related party. The carrying amounts of current assets and current liabilities approximate their fair value because of the relatively short period of time between the origination of these instruments and their expected realization.

 

Accounting Standards Codification (“ ASC” ) 820, Fair Value Measurements and Disclosures, defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below:

 

Level 1

Quoted market prices available in active markets for identical assets or liabilities as of the reporting date.

 

Level 2

Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date.

 

Level 3

Pricing inputs that are generally observable inputs and not corroborated by market data.

 

Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of June 30, 2019. The respective carrying value of certain amounts on the balance sheet financial instruments approximated their fair values due to the short-term nature of these instruments.

 

Related parties

 

The Company adopted ASC 850, Related Party Disclosures, for the identification of related parties and disclosure of related party transactions.

 

Risks and Uncertainties

 

The Company’s operations are subject to significant risks and uncertainties including financial, operational and regulatory risks, including the potential risk of business failure.

 

Commitments and contingencies

 

The Company adopted ASC 450-20, Loss Contingencies, to report accounting for contingencies. Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated.

 

Cash and cash equivalents

 

The Company considers all highly liquid investments with maturities of three months or less at the time of purchase to be cash equivalents.

 

The cash and cash equivalents for the period ended June 30, 2019 and December 31, 2018 were $151,544 and $36,431 respectively.

 

 
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Trade Receivables

 

Trade receivables are carried at anticipated realizable value. Bad debts are written off in the period in which they are identified. An estimate is made for doubtful debts based on a review of all outstanding amounts at the balance sheet date.

 

Bad debt expenses were $nil and $nil for the six months ended June 30, 2019 and 2018, respectively.

 

At June 30, 2019 and December 31, 2018, the Company did not have any outstanding trade receivables.

 

Inventories

 

Inventories, which are primarily comprised of finished goods for sale, are stated at the lower of cost or net realizable value, using the first-in first-out (FIFO) method. The Company evaluates the need for reserves associated with obsolete, slow-moving and non-salable inventory by reviewing net realizable values on a periodic basis. Only defects products could be return to our suppliers.

 

Property and Equipment

 

Property and equipment are stated at cost less accumulated depreciation and impairment losses, if any.

 

Depreciation is calculated under the straight-line method to write off the cost of the assets over their estimated useful lives.

 

Computer and software

5 years

Furniture and fittings

10 years

Office equipment

10 years

Renovation and improvements

10 years

Building

40 years

Land

95 years

 

An item of equipment is derecognized upon disposal or when no future economic benefits are expected from its use. Any gain or loss arising from de-recognition of asset is recognized in profit or loss.

 

Expenditures for repairs and maintenance, which do not improve or extend the expected useful lives of the assets, are expensed as incurred while major replacements and improvements are capitalized.

 

Impairment of Long-lived Assets

 

In accordance with ASC Topic 360, the Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable, or at least annually. The Company recognizes an impairment loss when the sum of expected undiscounted future cash flows is less than the carrying amount of the asset. The amount of impairment is measured as the difference between the asset’s estimated fair value and its book value. The Company recorded no impairment charge for the six months ended June 30, 2019 and 2018.

 

Revenue Recognition

 

The Company adopted ASU 201409, Topic 606 on January 1, 2018, using the modified retrospective method. ASC 606 requires the use of a new five-step model to recognize revenue from customer contracts. The five-step model requires that the Company (i) identify the contract with the customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, including variable consideration to the extent that it is probable that a significant future reversal will not occur, (iv) allocate the transaction price to the respective performance obligations in the contract, and (v) recognize revenue when (or as) the Company satisfies the performance obligation.

 

 
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The adoption of Topic 606 has no impact on revenue amounts recorded on the Company’s interim financial statements.

 

The Company generally recognizes product sales revenue when the performance obligation have been satisfied pursuant to Malaysia law, including such factors as contract existed with the customer, delivery and acceptance of products by customer has occurred, the sales price is fixed or determinable and allocated to the products sold, sales and value-added tax laws have been complied with, and collectability is reasonably assured. The Company estimates potential returns and records such estimates against its gross revenue to arrive at its reported net sales revenue.

 

Commission

 

The Company expenses commission costs as incurred and includes it in selling expenses. The Company expenses commission costs as incurred and includes it in selling expenses. The Company grants commission to dealers and promoters to promote and sell the products. Amount of commission is based upon agreed value between the Company and the dealers and promoters as there is no fix basis for such amount.

 

Advertising

 

The Company expenses advertising costs as incurred and includes it in selling expenses. The Company recorded $nil and $nil for advertising and promotions expenses during the six months ended June 30, 2019 and 2018, respectively.

 

Income taxes and valuation allowance

 

The Company follows ASC 740, Income Taxes. The Company records deferred tax assets and liabilities for future income tax consequences that are attributable to differences between financial statement carrying amounts of assets and liabilities and their income tax bases. The measurement of deferred tax assets and liabilities is based on enacted tax rates that are expected to apply to taxable income in the year when settlement or recovery of those temporary differences is expected to occur. The Company recognizes the effect on deferred tax assets and liabilities of any change in income tax rates in the period that includes the enactment date. The Company record a valuation allowance to reduce deferred tax assets if it is more likely than not that some portion or all of the deferred tax assets will not be realized.

 

A tax benefit from an uncertain tax position may be recognized only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities. The determination is based on the technical merits of the position and presumes that the relevant taxing authority that has full knowledge of all relevant information will examine each uncertain tax position. Although the Company believes the estimates are reasonable, no assurance can be given that the final outcome of these matters will not be different than what is reflected in the historical income tax provisions and accruals.

 

Comprehensive Income (Loss)

 

The Company follows the provisions of the Financial Accounting Standards Board (the “ FASB” ) ASC 220 Reporting Comprehensive Income, and establishes standards for the reporting and display of comprehensive income, its components and accumulated balances in a full set of general purpose financial statements. The Company’s comprehensive income (loss) consists of net income (loss) and foreign currency translation adjustments.

 

Segment Information

 

The Company adopted ASC-280, Disclosures about Segments of an Enterprise and Related Information, which requires certain financial and supplementary information to be disclosed on an annual and interim basis for each reportable segment of an enterprise. The Company believes that it operates in one business segment (marketing and sales) and in one geographical segment Malaysia, because all of the Company’s current operations are conducted in Malaysia.

 

 
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Recent Accounting Pronouncements

 

In January 2016, the FASB issued ASU No. 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities, which revises the accounting related to (1) the classification and measurement of investments in equity securities and (2) the presentation of certain fair value changes for financial liabilities measured at fair value. The ASU also amends certain disclosure requirements associated with the fair value of financial instruments. The new guidance requires the fair value measurement of investments in equity securities and other ownership interests in an entity, including investments in partnerships, unincorporated joint ventures and limited liability companies (collectively, equity securities) that do not result in consolidation and are not accounted for under the equity method. Entities will need to measure these investments and recognize changes in fair value in net income. Entities will no longer be able to recognize unrealized holding gains and losses on equity securities they classify under current guidance as available for sale in other comprehensive income (OCI). They also will no longer be able to use the cost method of accounting for equity securities that do not have readily determinable fair values. Instead, for these types of equity investments that do not otherwise qualify for the net asset value practical expedient, entities will be permitted to elect a practicability exception and measure the investment at cost less impairment plus or minus observable price changes (in orderly transactions). The ASU also establishes an incremental recognition and disclosure requirement related to the presentation of fair value changes of financial liabilities for which the fair value option (FVO) has been elected. Under this guidance, an entity would be required to separately present in OCI the portion of the total fair value change attributable to instrument-specific credit risk as opposed to reflecting the entire amount in earnings. For derivative liabilities for which the FVO has been elected, however, any changes in fair value attributable to instrument-specific credit risk would continue to be presented in net income, which is consistent with current guidance. The standard is effective beginning January 1, 2018 via a cumulative-effect adjustment to beginning retained earnings, except for guidance relative to equity securities without readily determinable fair values which is applied prospectively. ’’ The adoption of this ASU did not have any impact on the Company’s consolidated results of operations and financial condition.

 

In February 2016, the FASB issued ASU No. 2016-02, Leases, replacing existing lease accounting guidance. The new standard introduces a lessee model that would require entities to recognize assets and liabilities for most leases, but recognize expenses on their income statements in a manner similar to current accounting. The ASU does not make fundamental changes to existing lessor accounting. However, it modifies what qualifies as a sales-type and direct financing lease and related accounting and aligns a number of the underlying principles with those of the new revenue standard, ASU No. 2014-09, such as evaluating how collectability should be considered and determining when profit can be recognized. The guidance eliminates existing real estate-specific provisions and requires expanded qualitative and quantitative disclosures. The standard requires modified retrospective transition by which it is applied at the beginning of the earliest comparative period presented in the year of adoption. The ASU is effective January 1, 2019. The Company adopted the new standard on January 1, 2019 using the modified retrospective method of adoption. The transition method expedient which allows entities to initially apply the requirements by recognizing a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. As a result of electing this transition method, prior periods have not been restated. The adoption of this ASU did not have any impact on the Company’s consolidated results of operations and financial condition as the Company did not have any leases at the time of adoption.

 

 
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3. GOING CONCERN

 

As reflected in the accompanying financial statements, the Company had accumulated deficit of $3,323,886 as of June 30, 2019 which include a profit of $132,115 for the six months period ended June 30, 2019.

 

The Company ability to generate profit in the next 12 months is uncertain given that the market in which it operates is facing an economic slowdown. Management’s plans include the raising of capital through the equity markets to fund future operations, seeking additional acquisitions, and generating profits through its business operations; however, there can be no assurances the Company will be successful in its efforts to secure additional equity financing and obtaining sufficient profit. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

 

4. LAND, PROPERTY & EQUIPMENT

 

Land, property & equipment consist of the following:

 

 

 

June 30,

 

 

December 31,

 

 

 

2019

 

 

2018

 

Computer and software

 

$21,434

 

 

$21,166

 

Furniture and fittings

 

 

29,335

 

 

 

29,228

 

Office equipment

 

 

42,808

 

 

 

42,652

 

Renovations and improvements

 

 

345,370

 

 

 

341,486

 

Building

 

 

896,398

 

 

 

893,127

 

Land

 

 

219,938

 

 

 

219,135

 

Total

 

 

1,555,283

 

 

 

1,546,794

 

Less: accumulated depreciation

 

 

(717,590)

 

 

(679,492)

Net

 

$837,693

 

 

$867,302

 

 

The depreciation expense charged to general and administrative expenses were $35,949 and $37,621 for the six months ended June 30, 2019 and 2018, respectively.

 

 
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5. RELATED PARTIES TRANSACTIONS

 

Due from related parties consists of the following:

 

 

 

June 30,

 

 

December 31,

 

 

 

 

 

 

2019

 

 

2018

 

 

Purpose

 

Global Bizrewards Sdn. Bhd.

 

$276,200

 

 

$301,963

 

 

Advance

 

M1 Tech Sdn. Bhd.

 

 

-

 

 

 

24,747

 

 

Advance

 

Sportlight Academy Sdn. Bhd.

 

 

-

 

 

 

12,557

 

 

Advance

 

M1Elite Sdn. Bhd.

 

 

-

 

 

 

15,827

 

 

Advance

 

Hipland Realty Sdn. Bhd.

 

 

4,328

 

 

 

4,313

 

 

Advance

 

Total Due from

 

 

280,528

 

 

 

359,407

 

 

 

 

 

Due to related parties consists of the following:

 

 

 

June 30,

 

 

December 31,

 

 

 

 

 

 

2019

 

 

2018

 

 

Purpose

 

Dato Sri Warren Eu Hin Chai

 

$892,470

 

 

$885,562

 

 

Capital Advance

 

Michael A. Zahorik

 

 

30,307

 

 

 

30,307

 

 

Capital Advance

 

SKH Media Sdn. Bhd.

 

 

29,278

 

 

 

163,243

 

 

Capital Advance

 

Total Due to

 

 

952,055

 

 

 

1,079,112

 

 

 

 

 

The related parties’ relationship to the Company as follows:

 

Name

Relationship

Michael A. Zahorik

Former director

Global Bizrewards Sdn. Bhd.

Related by common director, Dato’ Sri Eu Hin Chai

M1 Tech Sdn. Bhd.

Related by common director, Dato’ Sri Eu Hin Chai

Sportlight Academy Sdn. Bhd.

Related by common director, Dato’ Sri Eu Hin Chai

M1Elite Sdn. Bhd.

Related by common director, Dato’ Sri Eu Hin Chai

SKH Media Sdn. Bhd.

Related by common director, Dato’ Sri Eu Hin Chai

Dato Sri Warren Eu Hin Chai

Director & Shareholder of the Company

Hipland Realty Sdn. Bhd.

Related by common director, Dato’ Sri Eu Hin Chai

 

The amounts due from or due to related parties’ were unsecured, non-interest bearing, and due on demand.

 

The Company leased an office space from SKH Media Sdn. Bhd. The rent expenses were $nil and $15,243 for the six months ended June 30, 2019 and 2018, respectively.

 

6. STOCKHOLDERS’ EQUITY

 

Equity – Common Stock

 

The Company has 182,444,266 shares of common stock issued and outstanding as of June 30, 2019.

 

 
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7. COMMITMENTS, CONTINGENCIES, RISKS AND UNCERTAINTIES

 

Operating Lease Commitments

 

The Company entered into a property lease agreement for office space which started on December 1, 2014 and expired on October 31, 2015 for monthly payment of MYR10,000 (approximately $2,250). The lease was not renewed and the Company continues to rent the property on a month to month basis until June 30, 2018.

 

The rent expenses were $nil and $15,243 for the six months ended June 30, 2019 and 2018, respectively.

 

Concentration and Credit risk

 

Cash deposits with banks are held in financial institutions in Malaysia, which are federally insured with deposit protection up to MYR250,000 (approximately $59,899). Accordingly, the Company has a concentration of credit risk related to the uninsured part of bank deposits. The Company has not experienced any losses in such accounts and believes it is not exposed to significant credit risk.

 

The Company had no concentration in demand for its products.

 

The Company depends on few supplier for its products. Accordingly, the Company has a concentration risk related to these suppliers. Failure to maintain existing relationships with the suppliers or to establish new relationships in the future could negatively affect the Company’s ability to obtain products sold to customers in a timely manner. If the Company is unable to obtain ample supply of products from existing suppliers or alternative sources of supply, the Company may be unable to satisfy the orders from its customers, which could materially and adversely affect revenues.

 

Contingent Liability

 

A former Director of the Company represents that the Company owes back compensation for services he believes he rendered to the Company and expenses he paid on behalf of the Company. The Company believes all balances owed to him have been settled in prior periods. The Company asserts that a claim has not be filed against the Company for potential damages; accordingly, the Company is unable to reasonably estimate a potential loss or liability in this matter including related legal costs. In the event that a claim is filed against the Company, the Company will provide further disclosure.

 

8. TERM LOAN

 

On December 23, 2014, MYR2,300,000 (approximately $657,507) term loan was granted to the Company for the purchase of a four-story office with a repayment period of 240 months.

 

The term loan was secured by the title deed for the said property and guaranteed by directors of the Company. The term loan is subject to an interest charges at 2.10% per annum below the Bank’s Base Lending Rate (“ BLR” ) with daily rests. The BLR is currently at 6.85% for June 30, 2019.

 

On July 27, 2015, the Company made a drawdown of MYR2,300,000 (approx. $609,554) on the term loan. The repayment started effectively on September 1, 2015 with a fixed installment of MYR14,863.14 (approx. $3,561) for 240 installments.

 

The outstanding balance of the term loan is $485,873, of which $21,666 is due within one year and classified as short term, and $464,207 is due after one year, and has classified as long term.

 

 
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Interest expenses were $12,138 and $12,703 for the six months ended June 30, 2019 and 2018, respectively.

 

 

 

June 30,

 

 

December 31,

 

 

 

2019

 

 

2018

 

Repayable within 1 year.

 

$21,666

 

 

$21,090

 

Repayable within 2 year

 

 

22,696

 

 

 

22,094

 

Repayable within 3 year

 

 

23,774

 

 

 

23,145

 

Repayable within 4 year

 

 

24,880

 

 

 

24,236

 

Repayable within 5 year

 

 

26,023

 

 

 

25,352

 

Repayable after 5 year

 

 

366,834

 

 

 

377,584

 

Total Due from

 

 

485,873

 

 

 

493,501

 

 

9. PROVISION FOR TAXES

 

United States

 

Umatrin Holding Ltd (“ UMHL” ) is established in the State of Delaware in United States and is subject to Delaware State and US Federal tax laws. UMHL has not recognized an income tax benefit for its operating losses based on uncertainties concerning its ability to generate taxable income in future periods. The tax benefit for the periods presented is offset by a valuation allowance established against deferred tax assets arising from the net operating losses and other temporary differences, the realization of which could not be considered more likely than not. Further, the benefit from utilization of NOL carry forwards could be subject to limitations due to material ownership changes that could occur in the Company as it continues to raise additional capital. Based on such limitations, the Company has significant NOLs for which realization of tax benefits is uncertain. In future periods, tax benefits and related deferred tax assets will be recognized when management considers realization of such amounts to be more likely than not.

 

As of June 30, 2019, UMHL has accumulated net operating losses of $3,323,886 which carryovers as a deferred tax asset that begins to expire in 2025.

 

The net losses before income taxes and its provision for income taxes as follows:

 

 

 

For the six months ended

 

 

 

June 30,

 

 

December 31,

 

 

 

2019

 

 

2018

 

Net loss before income taxes

 

 

(18,716)

 

 

(106,816)

 

 

 

 

 

 

 

 

 

Tax expenses (benefit) at the statutory tax rate

 

 

(6,176)

 

 

(35,250)

Tax effect of:

 

 

 

 

 

 

 

 

Valuation allowance

 

 

6,176

 

 

 

35,250

 

Income tax benefit

 

 

-

 

 

 

-

 

 

The components of deferred tax assets and liabilities as follows:

 

 

 

June 30,

 

 

December 31,

 

 

 

2019

 

 

2018

 

Deferred tax asset

 

 

 

 

 

 

Net operating losses carry forwards

 

 

483,325

 

 

 

477,149

 

 

 

 

 

 

 

 

 

 

Valuation allowance

 

 

(483,325)

 

 

(477,149)

Deferred tax assets, net

 

 

-

 

 

 

-

 

 

 
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Malaysia

 

The Company’s subsidiary, U Matrin Worldwide SDN BHD, is established in Malaysia and its income is subject to Malaysia tax laws. The income tax rate is 17% (2018 : 18%) for the first MYR500,000 ($123,934) taxable income and 24% (2018 : 24%) thereafter.

 

The net income (losses) before income taxes and its provision for income taxes as follows:

 

 

 

For the six months ended

 

 

 

June 30,

 

 

December 31,

 

 

 

2019

 

 

2018

 

Net profit/(loss) before income taxes

 

 

168,980

 

 

 

(346,304)

 

 

 

 

 

 

 

 

 

Tax expenses (benefit) at the statutory tax rate

 

 

30,416

 

 

 

(62,335)

 

 

 

 

 

 

 

 

 

Tax effects of:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Utilization of deferred tax assets previously not recognized

 

 

(30,416)

 

 

-

 

Expenses not currently deductible

 

 

-

 

 

 

62,335

 

Income tax expense (benefit)

 

 

-

 

 

 

-

 

 

The components of deferred tax assets and liabilities as follows:

 

 

 

June 30,

 

 

December 31,

 

 

 

2019

 

 

2018

 

Deferred tax asset

 

 

 

 

 

 

Expenses not currently deductible

 

 

10,317

 

 

 

10,280

 

Valuation allowance

 

 

-

 

 

 

-

 

Deferred tax assets, net

 

 

10,317

 

 

 

10,280

 

 

The Company has prepaid income tax of $48,441 and $105,214 as of June 30, 2019 and December 31, 2018, respectively.

 

10. SUBSEQUENT EVENTS

 

Management has evaluated subsequent events through the date the financial statements were issued. Based on our evaluation, no events have occurred which require adjustment or disclosure.

 

 
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

 

The information set forth in this Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) contains certain “forwardlooking statements”. Forwardlooking statements are statements other than historical information or statements of current condition. Some forwardlooking statements may be identified by use of terms such as “believes”, “anticipates”, “intends” or “expects”. These forwardlooking statements relate to our plans, liquidity, ability to complete financing and purchase capital expenditures, growth of our business including entering into future agreements with companies, and plans to successfully develop and obtain approval to market our product. We have based these forwardlooking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs.

 

You should read the following discussion and analysis in conjunction with the Financial Statements and Notes attached hereto, and the other financial data appearing elsewhere in this report.

 

US Dollars are denoted herein by “USD”, “$” and “dollars”.

 

Overview

 

Umatrin Holding Limited (formerly known as Golden Opportunities Corporation) (“UMHL”) was incorporated in the state of Delaware on February 2, 2005. UMHL was originally incorporated in order to locate and negotiate with a targeted business entity for the combination of that target company with the Company.

 

On January 6, 2016, UMHL acquired 80% of the equity interests of UMatrin Worldwide SDN. BHD. (“Umatrin”) in exchange for the issuance of a total of 100,000,000 shares of its common stock to the two holders of Umatrin, Dato’ Sri Eu Hin Chai and Dato’ Liew Kok Hong. Immediately following the Share Exchange, the business of Umatrin became the business of UMHL. The Company’s operation office remained in Malaysia and the business market will remain focus in Asia.

 

Umatrin, formerly known as OLC Worldwide SDN. BHD., was incorporated in Malaysia on July 22, 1993. Umatrin has curated nontoxic beauty, personal care to health and wellness products. We market our products through three primary methods: direct contact, online distribution and/or by our dealer program. We apply leading O2O (Online to Offline) marketing strategy to both retail and wholesale trade. We provide technology and services to enable consumers, merchants and other participants to conduct business in our cloud based trading system. We use advanced network technology and rigorous management system to create unlimited business brand space. Without allocating large sums of operating cost, it continuously introduces new products, combined with O2O internet business model and career opportunities.

 

Results of Operations

 

Comparison for the three months ended June 30, 2019 and 2018

 

Sales

 

For the three months ended June 30, 2019, the Company generated $439,167 in revenues, which has an increase of $367,212, or 510% compared to the three months ended June 30, 2018. This is due to increase in sales volume for Akero product series. The Company has been implementing new marketing strategies to improve sales. Hence, we have been repackaging the products

 

Gross profit and gross margin

 

The Company was able to generate a gross profit margin of $370,750 for the three months ended June 30, 2019, which has an increase of $307,783 or 488% compared to the three months ended June 30, 2018. This is due to increase in sales volume for new Akero product series which has higher profit margin.

 

Selling, general and administrative costs

 

Major operating costs include salaries and wages, advertising and promotional costs for the three months ended June 30, 2019 and 2018. Selling, general and administrative costs increased from $130,742 for the three months ended June 30, 2018 to $252,309 for the three months ended June 30, 2019. The increase is due to increase in operating cost such as increase in commission expenses, printing and stationeries. We have been repackaging the products and providing commissions to sales people.

 

 
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Net income

 

For the three months ended June 30, 2019, the Company had $112,414 in net profit as compared to $74,108 in net loss for the three months ended June 30, 2018, which was an increase in net profit of $186,522. The Company will continue to implement new marketing strategies to improve its financial position.

 

Comparison for the six months ended June 30, 2019 and 2018

 

Sales

 

For the six months ended June 30, 2019, the Company generated $593,966 in revenues, which has an increase of $448,753, or 309% compared to the six months ended June 30, 2018. This is due to increase in sales volume for Akero product series.

 

Gross profit and gross margin

 

The Company was able to generate a gross profit margin of $499,575 for the six months ended June 30, 2019, which has an increase of $372,727 or 293% compared to the six months ended June 30, 2018. This is due to increase in sales volume for new Akero product series which has higher profit margin.

 

Selling, general and administrative costs

 

Major operating costs include salaries and wages, advertising and promotional costs for the six months ended June 30, 2019 and 2018. Selling, general and administrative costs increased from $265,767 for the six months ended June 30, 2018 to $355,322 for the six months ended June 30, 2019. The increase is due to increase in operating cost such as increase in commission expenses, printing and stationeries. We have been repackaging the products and providing commissions to sales people.

 

Net income

 

For the six months ended June 30, 2019, the Company had $132,115 in net profit as compared to $151,622 in net loss for the six months ended June 30, 2018, which was an increase in net profit of $283,737. The Company will continue to implement new marketing strategies to improve its financial position.

 

Liquidity and Capital Resources

 

We had cash and cash equivalent of $151,544 and $36,431 as of June 30, 2019 and December 31, 2018, respectively.

 

Our company's operations have been funded through an equity financing and a series of debt transactions, primarily with shareholders, directors, and officers of our company and affiliated entities. These related party debt transactions such as advances have operated as informal lines of credit since the inception of our company, and related parties have extended credit as needed which our company has repaid at its convenience. We anticipate that we will incur operating losses in the foreseeable future and we believe we will need additional cash to support our daily operations while we are attempting to execute our business plan and produce revenues. If our related parties are unable or unwilling to provide additional capital, we would likely require financing from third parties. There can be no assurance that any additional financing will be available to us, on terms we believe to be favorable or at all. The inability to obtain additional capital would have a material adverse effect on our operations and financial condition and could force us to curtail or discontinue operations entirely and/or file for protection under bankruptcy laws.

 

The following table sets forth information about our net cash flow for the six months ended June 30, 2019 and 2018:

 

 

 

For the six months ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2019

 

 

2018

 

Net cash provided by (used in) operating activities

 

 

180,313

 

 

 

(197,677)

Net cash provided by (used in) investing activities

 

 

(2,851)

 

 

-

 

Net cash provided by (used in) financing activities

 

 

(61,385)

 

 

158,740

 

  

Operating Activities

 

For the six months ended June 30, 2019 we generated $180,313 in operating activities as compared to using $197,677 in operating activities during the six months ended June 30, 2018. The movement in net cash used in operating activities resulted from the movement in inventory, prepaid tax, other receivables and deposits, accounts payable and accrued expenses and other payables.

 

Investing Activities

 

During the six months ended June 30, 2019 we used $2,851 in investing activities as compared to using $nil in investing activities during the six months ended June 30, 2018. The movement in net cash used in investing activity resulted from purchase of equipment.

   

 
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Financing Activities

 

During the six months ended June 30, 2019, we used $61,385 in financing activities as compared to generating $158,740 in financing activities during the six months ended June 30, 2018.

 

During the six months ended June 30, 2019, the net cash provided by financing activities resulted from net repayment to related party of $51,859 and net repayment to term loan of $9,526.

 

During the six months ended June 30, 2018, the net cash provided by financing activities resulted from net proceeds received from related party of $168,562 and net repayment to term loan of $9,822.

 

Loan Commitment

 

On December 23, 2014, MYR 2,300,000 (approximately $657,507) term loan was granted to Umatrin for the purchase of four Story Shop Offices located at No.32, 32-1, 32-2, 32-3, Jalan Radin Bagus 3, Bandar Baru Seri Petaling, 57000, Kuala Lumpur with a repayment period of 240 months. This term loan was secured by (i) title deed for the said property, and (ii) way of guarantee by directors of the Company. This term loan is subject to an interest charges at 2.10% per annum below the Bank's Base Lending Rate ("BLR") with daily rests. The BLR is currently at 6.85% for both June 30, 2019 and December 31, 2018.

 

On July 27, 2015, the drawdown of MYR2,300,000 (approximately $609,554) was made and repayment effectively starts on December 1, 2015 with a fixed installment of MYR14,863.14 (approximately $3,561) for 240 installments.

 

Interest expenses were $12,138 and $12,703 for the six months ended June 30, 2019 and 2018, respectively.

 

We have no known demands or commitments and we are not aware of any events or uncertainties as of June 30, 2019 that will result in or that are reasonably likely to materially increase or decrease our current liquidity.

 

We had no material commitments for capital expenditure for the six months ended June 30, 2019 and 2018 except mentioned above.

 

Going Concern

 

Our financial statements have been prepared on a going concern basis. As reflected in the accompanying financial statements, the Company had accumulated deficit of $3,323,886 as of June 30, 2019 which include a profit of $132,115 for the six months ended June 30, 2019. We expect to finance our operations primarily through our existing cash, our operations and any future financing. However, there exists substantial doubt about our ability to continue as a going concern because we will be required to obtain additional capital in the future to continue our operations and there is no assurance that we will be able to obtain such capital, through equity or debt financing, or any combination thereof, or on satisfactory terms or at all. Additionally, no assurance can be given that any such financing, if obtained, will be adequate to meet our capital needs. If adequate capital cannot be obtained on a timely basis and on satisfactory terms, our operations would be materially negatively impacted. Therefore, our auditor has substantial doubt as to our ability to continue as a going concern. Our ability to complete additional offerings is dependent on the state of the debt and/or equity markets at the time of any proposed offering, and such market's reception of the Company and the offering terms. There is no assurance that capital in any form would be available to us, and if available, on terms and conditions that are acceptable.

 

Item 3. Quantitative and Qualitative Disclosures about Market Risk.

 

Not applicable because we are a smaller reporting company.

 

 
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Item 4. Controls and Procedures.

 

Evaluation of Disclosure Controls and Procedures

 

We carried out an evaluation, under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, of the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a15(e) and 15d15(e)). Based upon that evaluation, our principal executive officer and principal financial officer concluded that, as of the end of the period covered in this report, our disclosure controls and procedures were not effective to ensure that information required to be disclosed in reports filed under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the required time periods and is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

 

Our internal controls and procedures were not effective to detect the inappropriate application of US GAAP rules as more fully described below. This was due to deficiencies that existed in the design or operation of our internal controls over financial reporting that adversely affected our internal controls and that may be considered to be material weaknesses.

 

The matters involving internal controls and procedures that our management considered to be material weaknesses under the standards of the Public Company Accounting Oversight Board were lack of a functioning audit committee due to a lack of a majority of independent members; lack of a majority of outside directors on board of directors, resulting in ineffective oversight in the establishment and monitoring of required internal controls and procedures; inadequate segregation of duties consistent with control objectives and affecting the functions of authorization, recordkeeping, custody of assets, and reconciliation; and, management dominated by a single individual/small group without adequate compensating controls.

 

Management believes that the material weaknesses did not have an effect on our financial results. However, management believes that the lack of a functioning audit committee and the lack of a majority of outside directors on our board of directors results in ineffective oversight in the establishment and monitoring of required internal controls and procedures, which could result in a material misstatement in our financial statements in future periods.

 

Changes in internal controls over financial reporting

 

There was no change in our internal controls over financial reporting that occurred during the period covered by this report, which has materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.

 

 
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PART II— OTHER INFORMATION

 

Item 1. Legal Proceedings.

 

There are no other actions, suits, proceedings, inquiries or investigation before or by any court, public board, government agency, self regulatory organization or body pending or, to the knowledge of the executive officers of our company or any of our subsidiaries, threatened against or affecting our company, our common stock, any of our subsidiaries or of our companies or our subsidiaries’ officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect.

 

Item 1A. Risk Factors.

 

Not applicable because we are a smaller reporting company.

 

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

 

There were no unregistered sales of the Company’s equity securities during the three months ended June 30, 2019, that were not otherwise disclosed in a Current Report on Form 8-K.

 

Item 3. Defaults Upon Senior Securities.

 

There were no defaults upon senior securities during the quarter ended June 30, 2019.

 

Item 4. Mine Safety Disclosures.

 

Not applicable.

 

Item 5. Other Information.

 

There is no other information required to be disclosed under this item which was not previously disclosed.

 

 
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Item 6. Exhibits.

 

Exhibits #

 

Title

31.1

 

Certification of Principal Executive Officer and Principal Financial Officer Pursuant to Section 302 of the SarbanesOxley Act of 2002

32.1+

 

Certification of Principal Executive Officer and Principal Financial Officer Pursuant to Section 906 of the SarbanesOxley Act of 2002

101.INS

 

XBRL Instance Document

101.SCH

 

XBRL Taxonomy Extension Schema Document

101.CAL

 

XBRL Taxonomy Extension Calculation Linkbase Document

101.LAB

 

XBRL Taxonomy Extension Label Linkbase Document

101.PRE

 

XBRL Taxonomy Extension Presentation Linkbase Document

101.DEF

 

XBRL Taxonomy Extension Definition Linkbase Document

________

+ In accordance with the SEC Release 338238, deemed being furnished and not filed.

 

 
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SIGNATURES

 

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

 

 UMATRIN HOLDING LIMITED
      
Dated: August 13, 2019By:/s/ Dato’ Sri Warren Eu Hin Chai

 

 

Dato’ Sri Warren Eu Hin Chai 
  

President, Chief Executive Officer, and Chief Financial Officer

 
  (Duly Authorized Officer, Principal Executive

Officer and Principal Financial Officer)

 

 

 
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