Company Quick10K Filing
Umatrin Holding
Price-0.00 EPS0
Shares182 P/E-0
MCap-0 P/FCF-0
Net Debt0 EBIT0
TEV0 TEV/EBIT2
TTM 2019-09-30, in MM, except price, ratios
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UMHL 10K Annual Report

Part I
Item 1. Business.
Item 1A. Risk Factors.
Item 1B. Unresolved Staff Comments.
Item 2. Properties.
Item 3. Legal Proceedings
Item 4. Mine Safety Disclosures.
Part II
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
Item 6. Selected Financial Data.
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk.
Item 8. Financial Statements and Supplementary Data.
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
Item 9A. Controls and Procedures.
Item 9B. Other Information.
Part III
Item 10. Directors, Executive Officers and Corporate Governance.
Item 11. Executive Compensation
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
Item 13. Certain Relationships and Related Transactions, and Director Independence.
Item 14. Principal Accounting Fees and Services.
Part IV
Item 15. Exhibits, Financial Statement Schedules.
EX-31.1 umhl_ex311.htm
EX-32.1 umhl_ex321.htm

Umatrin Holding Earnings 2019-12-31

Balance SheetIncome StatementCash Flow
1.91.40.90.5-0.0-0.52012201420172020
Assets, Equity
0.70.50.30.0-0.2-0.42012201420172020
Rev, G Profit, Net Income
0.30.20.1-0.1-0.2-0.32012201420172020
Ops, Inv, Fin

10-K 1 umhl_10k.htm FORM 10-K umhl_10k.htm

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-K

 

(Mark One)

 

x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the fiscal year ended December 31, 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: 333-211289

 

UMATRIN HOLDING LIMITED

(Exact name of registrant as specified in its charter)

 

Delaware

 

87-0814235

(State or other jurisdiction of

incorporation or organization)

 

(I.R.S. Employer

Identification No.)

  

32, JALAN RADIN BAGUS 3,

BANDAR BARU SRI PETALING,

KUALA LUMPUR

 

57000

(Address of principal executive offices)

 

(Zip Code)

 

Registrant's telephone number, including area code: (603) 1700-81-8988

 

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

 

Title of each class:

 

Name of each exchange on which registered:

None

 

None

 

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

 

Common Stock, par value $0.00001

(Title of class)

 

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ¨ No x

 

Indicate by check mark if the registrant is not required to file reports pursuant Section 13 or 15(d) of the Exchange Act. Yes ¨ No x

 

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 website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) 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 if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ¨

 

Indicate by check mark whether the registrant is a large accelerated filer, and accelerated filer, a non-accelerated filer, or a small reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

¨

Accelerated filer

¨

Non-accelerated filer

¨

Smaller reporting company

x

(Do not check if a 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 Act). Yes ¨ No x

 

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, as of the last business day of the registrant’s most recently completed second fiscal quarter: $844,827.06 based on 42,241,353 non-affiliates shares of common stock of $0.02 per share as of June 30, 2019.

 

As of May 29, 2020, the number of shares of common stock of the registrant outstanding is 182,444,266, par value $0.00001 per share.

 

 

 

 

RELIANCE ON SECURITIES AND EXCHANGE COMMISSION ORDER

  

Umatrin Holding Limited (the “Company”) is filing this Annual Report on Form 10-K (the “Annual Report”) for fiscal year ended December 31, 2019 pursuant to the Securities and Exchange Commission (the “SEC”) Order dated March 4, 2020 (Release No. 34-88318), as modified on March 25, 2020 (Release No. 34-88465) (the “Order”) to delay the filing of the Annual Report due to circumstances related to the coronavirus pandemic (“COVID-19”). On March 30, 2020, the Company filed a Current Report on Form 8-K stating that it is relying on the Order to delay the filing of the Report by up to 45 days due to circumstances related to the COVID-19 pandemic. The local Malaysia government issued a movement control order starting March 18, 2020 till March 31, 2020, which was subsequently extended to April 14, 2020 thereafter extended to April 28, 2020 and to May 12, 2020. During the above period, all businesses are closed and cannot operate as usual. The Company has been following the recommendations of local health authorities to minimize exposure risk for its team members in March, April and May including the temporary closures of its offices and having team members work remotely. Such restrictive measures caused a delay in the preparation of the financial statements and consequently a delay in the completion of the Company’s financial statements for the Annual Report. As a result, the Company was unable to timely file the Annual Report without the extension provided for by the Order.

 

 
2

Table of Contents

 

TABLE OF CONTENTS

 

Item Number and Caption

 

Page

 

PART I

 

Item 1.

Business

5

 

Item 1A.

Risk Factors

11

 

Item 1B.

Unresolved Staff Comments

11

 

Item 2.

Properties

11

 

Item 3.

Legal Proceedings

11

 

Item 4.

Mine Safety Disclosures

11

 

PART II

 

Item 5.

Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

12

 

Item 6.

Selected Financial Data

12

Item 7.

Management's Discussion and Analysis of Financial Condition and Results of Operations

13

 

Item 7A.

Quantitative and Qualitative Disclosures About Market Risk

15

 

Item 8.

Financial Statements and Supplementary Data

F-1

 

Item 9.

Changes in and Disagreements With Accountants on Accounting and Financial Disclosure

16

 

Item 9A.

Controls and Procedures

16

 

Item 9B.

Other Information

17

 

PART III

 

Item 10.

Directors, Executive Officers and Corporate Governance

18

 

Item 11.

Executive Compensation

19

 

Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

20

 

Item 13.

Certain Relationships and Related Transactions, and Director Independence

21

 

Item 14.

Principal Accountant Fees and Services

22

 

PART IV

 

Item 15.

Exhibits, Financial Statement Schedules

23

 

SIGNATURES

24

 

 
3

 

 

CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS

 

This Annual Report on Form 10-K contains “forward-looking statements”. Forward-looking statements discuss matters that are not historical facts. Because they discuss future events or conditions, forward-looking statements may include words such as “anticipate,” “believe,” “estimate,” “intend,” “could,” “should,” “would,” “may,” “seek,” “plan,” “might,” “will,” “expect,” “anticipate,” “predict,” “project,” “forecast,” “potential,” “continue” negatives thereof or similar expressions. Forward-looking statements speak only as of the date they are made, are based on various underlying assumptions and current expectations about the future and are not guarantees. Such statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, level of activity, performance or achievement to be materially different from the results of operations or plans expressed or implied by such forward-looking statements.

 

We cannot predict all of the risks and uncertainties. Accordingly, such information should not be regarded as representations that the results or conditions described in such statements or that our objectives and plans will be achieved and we do not assume any responsibility for the accuracy or completeness of any of these forward-looking statements. These forward-looking statements are found at various places throughout this Annual Report on Form 10-K and include information concerning possible or assumed future results of our operations, including statements about potential acquisition or merger targets; business strategies; future cash flows; financing plans; plans and objectives of management; any other statements regarding future acquisitions, future cash needs, future operations, business plans and future financial results, and any other statements that are not historical facts.

 

These forward-looking statements represent our intentions, plans, expectations, assumptions and beliefs about future events and are subject to risks, uncertainties and other factors. Many of those factors are outside of our control and could cause actual results to differ materially from the results expressed or implied by those forward-looking statements. In light of these risks, uncertainties and assumptions, the events described in the forward-looking statements might not occur or might occur to a different extent or at a different time than we have described. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of the Annual Report on Form 10-K. All subsequent written and oral forward-looking statements concerning other matters addressed in this Annual Report on Form 10-K and attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this Annual Report on Form 10-K.

 

Except to the extent required by law, we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, a change in events, conditions, circumstances or assumptions underlying such statements, or otherwise.

 

 
4

Table of Contents

 

PART I

 

Item 1. Business.

 

Overview

 

Umatrin Holding Limited (formerly known as Golden Opportunities Corporation) (the “Company”) was incorporated in the State of Delaware on February 2, 2005. The Company 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, the Company 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. Immediately following the Share Exchange, the business of Umatrin became the business of UMHL. The UMHL operation office remained in Malaysia and the business market will remain focus in Asia.

 

Background of Umatrin Holding Limited

 

UMATRIN HOLDING LIMITED, formerly known as Golden Opportunities Corporation, was incorporated in the state of Delaware on February 2, 2005 (“UMHL”, or the “Company”). The Company 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 March 27, 2015, a total of 19,555,000 shares were acquired by Umatrin Group Ltd (“UGL”, a company incorporated in Seychelles, through its principal and director, Dato’ Sri Eu Hin Chai (“Dato’ Sri”). At that time, UGL also acquired promissory notes that covert into common shares of the UMHL. In April 2015, the promissory notes were converted into 24,749,100 shares of UMHL common stock. Upon conversion, UGL held 44,304,100 shares of UMHL common stock out of a total issued and outstanding of 58,319,100 shares. As a result of UGL’s acquisition, UGL currently hold 75% of the outstanding shares in UMHL and is the majority shareholder of UMHL.

 

On March 31, 2015, symbol of the Company’s common stock was changed to “UMHL”.

 

On March 31, 2015, Dato’ Sri was appointed to the board of directors. In addition, Michael Zahorik was appointed as the Vice President to provide management continuity and to provide his insight and expertise with the Company’s development. Dato Sri’ was appointed as President and CEO to serve until the next shareholder meeting, and continuing thereafter until removal or resignation.

 

Michael Zahorik has since resigned from his position at the Company and Dato’ Sri remains as an officer of the Company.

 

Background of U Matrin Worldwide SDN BHD

 

U Matrin Worldwide SDN BHD, formerly known as OLC Worldwide SDN BHD, was incorporated in Malaysia on July 22, 1993 (“Umatrin”).

 

Since its incorporation until September 2014, Umatrin remained dormant. On April 26, 2013, Umatrin was awarded with a direct selling license (number AJL932015) by the Ministry of Domestic Trade and Consumer Affairs in Malaysia. However, since April 26, 2013 and until September 2014, Umatrin maintained no operation.

 

On July 3, 2014 and August 12, 2014, Umatrin appointed both Dato’ Liew Kok Hong (“Dato’ Liew”) and Dato’ Sri as the company’s directors. Together, Dato’ Liew and Dato’ Sri with Dato’ Ho Phooi Keow (“Dato’ Ho”), the co-founder of Umatrin, decided to start the business and expand it throughout Asia as a leading Online to Offline (O2O) company that provides technology, products and services to enable consumers, merchants, and other participants to conduct E-commerce on its I-Cloud ecosystem. As of the date of this Annual Report, both Dato’ Liew and Dato’ Ho have resigned from their positions at the Company due to respective personal reasons.

 

As an early-stage company, Umatrin focuses on health and beauty care products. Umatrin had cooperated with several corporations and is appointed as their sole distributor for their health and beauty care products in Asia. Umatrin introduces its products via online platform and offline platform which is our retail shop. At our retail store, Umatrin also provides training and product introductory speeches to public.

 

At the early stage of our business, our marketing teams focus on selling our products to the end-user and also introduced an Independent Dealer Program to our customer. To be qualified, the customer only needs to host a product demo and then will receive a discount on product purchases and earn additional credit for each product sold during the demo. Consequently, our customer will become our Independent Dealer.

 

 
5

Table of Contents

  

Main Business Activities

 

Umatrin aims to provide healthy and youthfulness to the consumer through our extensive research and development conducted by our certified dermatologist and pharmacist partners.  

 

Our Products

 

We have curated non-toxic beauty, personal care to health and wellness products. The principal markets for Umatrin’s products are in Malaysia as well as Asia countries. We market out products through three primary methods: direct contact, online distribution and/or by our dealer program. Our marketing and sales teams work closely together to maintain a high standard of service to our customers. Each and every new product launched will be communicated to our existing customers and to the public. Since September 2014, our best seller products include:

 

(a) AkeroAfatelo

 

Akero Afatelo is a nutrient product which contains telomerase and spirulina as the main ingredients. This product is produce by nanotechnology. Akero Afatelo contains agrobacterium, a kind of edible rare blue-green algae that lives in fresh water. Therefore, this product is organic and non-toxic, with higher nutrient value compare to spirulina chorella. It contains strong vitality and can be quickly absorbed by human body without excessive decomposition. It was recognized by the United Nations Food Conference as “the most ideal food for human being” and the World Health Organization referred it as “the best health care product for human in the 21st century”.

 

(b) Akero Karela

 

Bitter gourd is not the popular vegetable to eat on its own. However, bitter gourd is important especially for the liver. It can detoxify and lower blood fat. Akero Karela made with bitter gourd peptides provide human body with the desired nutrient balance, activate cells and strengthen the body organs. It also help to improve your health, prevents constipation and prevents toxins from accumulating in your body. 

  

(c) UNIBERSIH

 

Unibersih is a natural and unpolluted herbal essence. This unique essence which consist of a total of eleven kinds of organic natural herbs is an all-rounded detoxification element which can excrete waste and toxins thoroughly. It is applicable to those problems brought to our body in modern living, such as constipation, pigmentation, overweight, bad breath, unsound sleep, lack of physical strength, indigestion, abdominal swelling, dry and pale skin, poor immune system etc. It can also strengthen the function of detoxification.

 

 
6

Table of Contents

  

(d) SOPHIELICIOUS

 

Sophielicous is an anti-aging supplement formulated by using a novel processing technology and the ingredients consists of 3 types of plant stem cells and collagen tri-peptide to enhance the longevity of skin cells. Apple stem cell obtained from the rare and endangered Swiss apple which found rich in epigenetic factors and metabolites to activate sleeping cell, repairs and regenerates new cell; Grape stem cell ensures the vitality and generation capacity of the skin, to protect and prevent the UV damage and pigmentation thus even the skin tone; Argon stem cell derived from very resistant and rare argon tree is for a deep-seated rejuvenation of the skin, restoration of the skin’s firmness and wrinkle reduction. It also contains the wonder from deep sea: marine collagen used is in the very short chain of amino acids known tri-peptide. Collagen tri-peptide with the small molecule size can be absorbed fast to the body compare to others collagen, works as cushion and support the epidermis, making it firm and preventing our skin from sagging; lastly the green tea extracts work as powerful antioxidant for the cell protection. Combining all benefits, Sophielicious provides significant anti-aging effect and restores skin.

 

(e) AKERO SECRET ANTI-AGING SKIN CARE GOLD SERIES

 

Umatrin introduces our own anti-aging skin care series known as “AKERO SECRET”. The product was developed with 100% natural botanical active ingredients and adopted a unique nanotechnology for skin hydration and anti-aging. This technology gives user a luminous, firm and flawless skin. It improves skin tone in just 7 days and skin will look more plump in just 14 days. After 28 days, skin will look more translucent. Continuous use will improve skin elasticity, lightens pigmentation, for a brighter looking skin. AKERO SECRET includes moisturizing cleansing foam, facial toner, brightening serum, soothing emulsion, ageless cream and protective sunscreen.

 

(f) AKERO Beauty Serum

 

This exclusive Akero Beauty Serum contained the latest Swiss Apple Stem Cell active ingredients which help to neutralizes and repairs the effects of emotional and environmental stress on the skin. It helps to restore the skin complexion, firm up and reduce fine wrinkle lines, makes the skin look fuller, whiter, younger and more beautiful. As we age, the reduced turnover of our cells means we can lose control over how our skin ages, and Epidermal stem cells needed to create healthy new skin are significantly reduced and function less efficiently. Scientists have found that a novel extract derived from the stem cells of a rare apple tree cultivated for its extraordinary longevity shows tremendous ability to rejuvenate aging skin. By stimulating aging skin stem cells, this plant extract has been shown to lessen the appearance of unsightly wrinkles. Clinical trials show that this unique formulation increases the longevity of skin cells, resulting in skin that has a more youthful and radiant appearance.

 

(g) AKERO Fruit Juice - Resveratrol Natural Antioxidants

 

Resveratrol is a natural antioxidant, can reduce blood viscosity, inhibiting platelet aggregation and vasodilation, maintain blood flow, can prevent the occurrence and development of various cardiovascular problems. Resveratrol through a variety of different ways to play a variety of effects has anti-allergic, antipyretic and analgesic activity. Resveratrol can inhibit cell inflammation; cell inflammation can lead to arthritis and other diseases.

 

(h) AKERO Gold Mask

 

Akero Gold Mask helps to renew skin, improve blood circulation and is high in antioxidants and minerals. The effects of this product are seen almost immediately with visible improvement to the skin firmness and reduction of the appearance of fine lines and wrinkles. It provides instant skin clarity and toning leaving your skin looking radiant, youthful and revitalize.

 

 (i) AKERO Warming Lipstick

 

Akero Warming Lipstick contains 100% natural ingredients and does not contain any sort of toxins, irritants or paraffin which may bring harm to the lips. This lipstick has fullerene which helps to enhance the vitality and give nourishment for the lips. Moreover, it contains bitter ginseng root extract for lips protection and sodium hyaluronic acid to lock the moisture in the lips. Akero Warming Lipstick also contains Vitamin E which improves the lips texture. The most important feature of Akero Warming Lipstick is, it is manufactured using temperature technology and lip temperature discoloration technology. This lipstick does not fade and the color will last long on the lips unlike other lipsticks. This lipstick is guaranteed that it does not leave any stain or traces. Akero Warming Lipstick creates exclusive color which will be the secret of your confidence to show your best look always.

 

 (j) AKERO Feminine Wash

 

Akero Feminine Wash a specially designed sulfate-free intimate wash for a woman’s special cleansing needs. Apple extracts will stay fresh and free of any discomfort throughout the day. Female’s body parts are so much sensitive and need to be treated like one. We cannot simply use the same cleanser for all of female’s body part. Feminine or vaginal wash is a product specially designed to take care of female’s private body part from unwanted odor, infections and to provide extra safe cleansing.

 

 
7

Table of Contents

  

Raw Materials and supplies

 

We do not depend on principal suppliers for any of our single product. Most of the raw materials were supplied by various suppliers and some are repackaged in Malaysia. Akero Secret, our anti-aging skin care product, was manufactured in Taiwan.

  

Intellectual Property

 

On December 31, 2015, our trademark “AKERO SECRET” was successfully registered with the Trademark Registry of Malaysia.

 

Licenses and agreements

 

We possessed 4 licenses for our products from Ministry of Health Malaysia, as listed below:

 

No.

 

Name of Cosmetic

 

Validity Period

 

Notification Number

1.

 

Gold Toner

 

Sept. 14, 2017 – Sept. 14, 2019

 

NOT170903447K

2.

 

Gold Cleanser

 

Sept. 14, 2017 – Sept. 14, 2019

 

NOT170903448K

3.

 

Gold Magical Cream

 

Sept. 14, 2017 – Sept. 14, 2019

 

NOT170903450K

4.

 

Gold Moisturizer

 

Sept. 14, 2017 – Sept. 14, 2019

 

NOT170903449K

 

Our manufactures, CK Harvest (M) Sdn Bhd and APB Standard Sdn Bhd, possessed three licenses for our products from Ministry of Health Malaysia, as listed below:

 

No.

 

Name of Product

 

Validity Period

 

MAL/Notification Number

 

License Holder

1.

 

AKERO BEAUTY SERUM

 

January 5, 2016- January 5, 2018 (1)

 

NOT160100852K

 

AKERO BEAUTY SERUM

2.

 

Jian-Mei-Nin (Unibersih)

 

July 30, 2015 – July 30, 2020

 

MAL20001394T

 

Jian-Mei-Nin(Unibersih)

___________

(1)

We are in the process of renewing this license.

 

Customers

 

We do not depend on any major customers. Our customers’ basis consists of retail-based end-users and dealers.

 

Government Regulation

 

All of our health and beauty products are approved by our Ministry of Health in Malaysia.

 

Our Marketing Strategies

 

Umatrin markets products via online to offline. Umatrin believes that via online channel, we are able to reach our target audiences around the world. Based on Euromonitor International, internet retailing of health and beauty shows fast growth in Asia Pacific Market. As for our offline channel, we have one retail store in Malaysia, whereby anyone can step in and try our products. Following Umatrin’s Mission: Improve each standard of living. We provide our customer with quality health and beauty products and also allow them to host event to share our products and at the same time earning additional credit for each sale during the event. Consequently, we will appoint them as our dealers if they wish to start-up their own business. Umatrin will provide market support to the dealers, such as advertisements, products introductory speeches and website to introduce the products to public. This strategy allows Umatrin’s products to reach to each and every single person around the Asia Pacific as Umatrin’s believe the best advertising will always be by way of word-of-mouth referrals.

 

Most of our customers and dealers are from Asia. We have 20,000 dealers in Asia. From Umatrin’s sales, we have seen a market trend that consumers are buying more anti-aging products from us.

 

 
8

Table of Contents

  

Industry Trends- Anti-Aging Products Market

 

The global market for Anti-Aging Products is projected to exceed US$260 billion by 2022, driven by the expanding base of aging population, growing prominence of non-invasive cosmetic procedures and steady launch of high-efficacy products. The desire to look young and retain beauty and health is a major consumer psychological factor influencing growth in the market. While older women remain the primary customer base, adoption of preventive skin care regimen among women in the 20s and 30s age group to safeguard against premature aging is bringing younger consumers into the spotlight. Other major factors also influencing growth in the market include growing research in skin biology and new understanding into the regenerative potential of stem cells; emergence of probiotic skincare technology for visibly radiant and younger looking skin; innovation in anti-aging active ingredients such as hydroxypropyl tetrahydropyrantriol, salicyloyl phytosphingosine and anti-tyrosinase; and the rise of the “she-economy” comprising senior women aged over 50 with high net worth. The United States and Europe represent the largest markets worldwide. Asia-Pacific ranks as the fastest growing market with a CAGR of 6.3% over the analysis period led by factors such as aggressive retail marketing, rising health and beauty awareness, rising disposable incomes and increasing per capita spending on appearance maintenance cosmetic products among the growing base of affluent middle-class population (http://www.strategyr.com/MarketResearch/Anti_Aging_Products_Market_Trends.asp).

 

Hence, Umatrin is moving towards developing our own brand and anti-aging products. Recently we have developed a 100% natural anti-aging skin care series products under the brand “AKERO SECRET”. We have received lots of positive feedbacks on this new skin care series. GCI Magazine had reported that “In anti-aging and beauty trends, the desire for more natural ingredients is one of the fastest growing around the world. Zion Market Research has published a new report titled ”Anti-Aging Market (Baby Boomer, Generation X and Generation Y), by product (Botox, Anti-Wrinkle Products, Anti-Stretch Mark Products, and Others), by Services (Anti-Pigmentation Therapy, Anti-Adult Acne Therapy, Breast Augmentation, Liposuction, Chemical Peel, Hair Restoration Treatment, and Others), by Device (Microdermabrasion, Laser Aesthetics, Anti-Cellulite Treatment and Anti-Aging Radio Frequency Devices) : Global Industry Perspective, Comprehensive Analysis, Size, Share, Growth, Segment, Trends and Forecast, 2015 – 2021”. According to the report, the global anti-aging market was valued at USD 140.3 billion in 2015, is expected to reach USD 216.52 billion in 2021 and is anticipated to grow at a CAGR of 7.5% between 2016 and 2021.

 

In view of the above, Umatrin does not stop right here, but aims at developing and manufacturing more anti-aging products to benefit the public enlarged. In order to achieve this, additional capital funds are required for Umatrin to venture into manufacturing industry and expanding further research and development to develop more and more quality products.

 

Competitive Analysis

 

Market Analysis

 

Asia is the Earth’s largest and most populous continent. It comprises 30% of Earth’s land area, and has historically been home to 60% of the planet’s human population (roughly 4.4 billion people reside in Asia). Asia is notable for not only the overall large size, but unusually dense and large settlements as well as vast barely populated regions. Rising individual incomes and changing lifestyles drive the global beauty care products industry.

 

Lucintel, a leading global management consulting and market research firm, has analyzed the global beauty care industry and presents its findings in “Global Beauty Care Products Industry 2012-2017: Trend, Profit, and Forecast Analysis.” The industry encompasses manufacturers’ segment revenue related to beauty care products. As per the study, increased awareness has resulted in higher demand for luxury products, especially cosmetics. Providing quality products at a low cost is a challenge for manufacturers. Skincare, the largest segment, represents the growth in products during the forecast period. Increased demand for multi-feature products such as moisturizing cream with sun protection and anti-aging or anti-wrinkle properties are likely to drive market growth.

 

The cosmetics segment also has growth potential as demand is increasing for premium cosmetics in the expanding middle class in developing countries.

 

Many famous companies sell their cosmetic products online also in countries where they do not have representatives. At present, cosmetics industry is focusing on launching organic cosmetic products because people are now becoming more and more conscious about the chemicals and the harmful effects in the cosmetics. Players are globally exploring the markets to tap the hidden growth potential. Regulatory bodies are also ensuring that consumers have full knowledge about the ingredients of products and hence focusing on labeling.

 

A new global anti-ageing report from Research and Markets, forecasts the global product market will grow at a CAGR of 6.7% over the period 2013-2018, with the rising global ageing population being the main driver. (www.cosmeticsdesign-europe.com)

 

 
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Competitors

 

The beauty and health industry is highly competitive and, at times, subject to rapidly changing consumer preferences and industry trends. Competition generally provides incentives to boost brand strength, assortment and continuity of merchandise selection, reliable order fulfillment and on-time delivery, and a higher level of brand support and customer support. We compete with a large number of multi-national manufacturers of beauty and health products, many of which have significantly greater resources than we do. Many of our competitors also have the ability to develop and market products similar to and competitive with our products. Specifically, we compete with the major skin care companies which market many brands including Avon, Chanel, Clarins, Clinique, Estée Lauder, L’Oréal, Lancôme, Neutrogena and Shiseido, major health supplement companies which market many brands including USANA, CVS, Nature Made and Carlson Labs. Most, if not all of these competitors, have launched anti-aging skin care products. We also compete with several smaller prestige boutique and designer anti-aging products brands.

 

We believe that we compete primarily on the basis of product differentiation, sales and marketing strategy and distribution model. We focus on anti-aging industry by introducing quality natural products to be consumed or applied on skins to naturally reach the ultimate results. In addition, we are moving forward to develop our innovative product formulation and differentiated product concepts. We believe that our expertise within the anti-aging industry, brand authenticity and loyal consumer base, and multi-channel marketing and distribution expertise provide us with competitive advantages in the market for prestige anti-aging beauty and health products.

 

Principal Methods of Competition

 

A core element of our success is our distinctive Online to Offline (O2O) marketing strategy and multi-channel distribution model. We focus on educating consumers about the unique benefits of our products, developing intimate relationships with consumers, capitalizing on our multi-channel distribution strategy to effectively reach and engage those consumers and allowing our consumers to enjoy the benefit to be profitable by sharing the same to other consumers. We believe educational media such as products introductory demo and continuous products roadshows are effective at informing consumers about the innovative product formulation, application technique and resulting benefits of our products. We also believe that our company-owned boutiques enhance the authenticity of our brand and provide a personal environment in which we offer our broadest product assortment and provide one-on-one consumer consultations and product demonstrations. At the same time, our physical presence at the event hosted by our dealers have helped to further strengthen our brand image and provide additional points of contact to educate consumers about our products. Moreover, this model allows us to:

 

 

acquire new consumers and maintain premium brand positioning without large expenditures on print-based advertising and marketing common in our industry;

 

provide consumers the ability to select the most convenient channel to purchase our products;

 

develop intimate consumer relationships that foster brand loyalty and encourage repeat purchases;

 

build a base of recurring revenues as a substantial percentage of our consumers participate in our product continuity programs through which products initially purchased are automatically replenished; and

 

drive traffic across our sales channels.

 

We believe that our company benefits from strong consumer loyalty as well as the emotional connection formed between our consumers and our brand. In turn, we believe that our consumers are strong advocates for our brand and have displayed a desire and willingness to convert others to our brand. Strong consumer loyalty has resulted in the development of a community of consumers who share a passion for our products and our brand. This community has expressed itself through attendance at events we sponsor, as well as events initiated by individual consumers. In addition, these loyal consumers have established multiple online community independent of the Company’s efforts. This loyal community of users provides invaluable feedback that we often incorporate into our product development.

 

As consumers continue to blend their off-line and on-line activities, from “showrooming” and retail apps to sofa shopping and click-and-collect, the lines between internet retailing, e-commerce and physical retailing are increasingly blurred. Big retailers are taking an “omni-channel” approach by merging their offline, on-line and mobile capabilities to create a seamless experience for shoppers. To elaborate, consumer behavior driving internet sales surge. E-commerce and m-commerce have changed the way that consumers’, even those who still visit physical stores, approach on shopping. The main drivers of e-commerce include: the search for value and convenience; increased access to, and usage of, the internet; faster download speeds; improved delivery and online payment methods; and the shift towards mobile devices such as smartphones and tablets. Hence, we will be co-operating with our partners to allow our consumer to purchase our products by just a click at their mobile devices apps.

 

We use third-party contract manufacturers and suppliers to obtain substantially all raw materials, components and packaging products and to manufacture finished some of products relating to our Umatrin and AKERO SECRET brands products. We utilize approximately 20 different product and packaging suppliers from which we source and contract manufacture our products. Suppliers purchase all necessary raw materials, including the natural ingredients used to manufacture our products.

 

With respect to our other third-party manufacturers, we make purchases through purchase orders. We believe that we have good relationships with our manufacturers and that there are alternative sources in the event that one or more of these manufacturers is not available. We continually review our manufacturing needs against the capacity of our contract manufacturers to ensure that we are able to meet our production goals, reduce costs, and operate more efficiently.

 

 
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Research and Development

 

We previously invested approximately $19,500 for a third-party manufacturer to develop AKERO SECRET. We did not incur additional research and development expenses in the fiscal year ended December 31, 2019.

 

Employees

 

Umatrin’s core team has served with numerous companies like E-commerce, financial sector companies and variety of internet services. The team has over five years’ experiences in operating and managing E-commerce sites, brand marketing, product development and financial security. The team also has over ten years’ experiences in internet performance and security and was involved in world-class networking enterprises. We currently have 11 full-time employees.

 

Item 1A. Risk Factors.

 

Smaller reporting companies are not required to provide the information required by this item.

 

Item 1B. Unresolved Staff Comments.

 

Smaller reporting companies are not required to provide the information required by this item.

 

Item 2. Properties.

 

We own the following property:

 

Location

 

Area

(square meters)

 

Certificate No.

 

Encumbrance

 

No. 32, Jalan Radin Bagus 3, Bandar Baru Seri Petaling, 57000 Kuala Lumpur

 

178.4

 

Parcel of land held under PM8479

 

Leasehold property with its lease term expiring on May 4, 2110.

  

Item 3. Legal Proceedings

 

To the best of our knowledge, except as set forth below, there are no material pending legal proceedings or threat against us to which we are a party or of which any of our property is the subject. From time to time, we may become involved in various lawsuits and legal proceedings, which arise, in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business.

 

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. No claim has been 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 and intends to fight such claim.

 

Item 4. Mine Safety Disclosures.

 

Not Applicable.

 

 
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PART II

 

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

 

Our common stock is quoted on the OTC Markets, or OTC, under the symbol “UMHL”. As of May 27, 2020, the closing price for our common stock was $0.0046 per share. The bid prices set forth below reflect inter-dealer quotations, do not include retail markups, markdowns or commissions and do not necessarily reflect actual transactions.

 

The following table sets forth, for the periods indicated, the high and low bid prices of our common stock.

 

 

 

High

 

 

Low

 

Fiscal Year Ended December 31, 2020

 

 

 

 

 

 

First Quarter

 

$ 0.0168

 

 

$ 0.0100

 

 

 

 

 

 

 

 

 

 

Fiscal Year Ended December 31, 2019

 

 

 

 

 

 

 

 

First Quarter

 

$ 0.0300

 

 

$ 0.0200

 

Second Quarter

 

$ 0.0200

 

 

$ 0.0200

 

Third Quarter

 

$ 0.0200

 

 

$ 0.0170

 

Fourth Quarter

 

$ 0.1480

 

 

$ 0.0150

 

 

 

 

 

 

 

 

 

 

Fiscal Year Ended December 31, 2018

 

 

 

 

 

 

 

 

First Quarter

 

$ 0.0600

 

 

$ 0.0258

 

Second Quarter

 

$ 0.0300

 

 

$ 0.0258

 

Third Quarter

 

$ 0.0500

 

 

$ 0.0200

 

Fourth Quarter

 

$ 0.0500

 

 

$ 0.0200

 

 

Holders

 

As of May 29, 2020, there are approximately 122 shareholders of record of our common stock.

 

Dividends

 

Since inception we have not paid any dividends on our common stock. We currently do not anticipate paying any cash dividends in the foreseeable future on our common stock, when issued pursuant to this offering. Although we intend to retain our earnings, if any, to finance the exploration and growth of our business, our Board of Directors will have the discretion to declare and pay dividends in the future.

 

Payment of dividends in the future will depend upon our earnings, capital requirements, and other factors, which our Board of Directors may deem relevant.

 

Recent Sale of Unregistered Securities

 

There were no unregistered sales of the Company’s equity securities during the fiscal year ended December 31, 2019, that were not otherwise disclosed in a Quarterly Report on Form 10-Q or Current Report on Form 8-K.

 

Equity Compensation Plan Information

 

None.

 

Item 6. Selected Financial Data.

 

Smaller reporting companies are not required to provide the information required by this item.

 

 
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Item 7. 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 "forward-looking statements”. Forward-looking statements are statements other than historical information or statements of current condition. Some forward-looking statements may be identified by use of terms such as "believes", "anticipates", "intends" or "expects". These forward-looking 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 forward-looking 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 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. 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 non-toxic 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 year ended December 31, 2019 and 2018

  

Sales

 

For the year ended December 31, 2019, the Company generated $1,204,553 in revenues, which has an increase of $793,730, or 193% compared to the year ended December 31, 2018. This is due to increase in sales volume for Akero product series as the economy improved, which drove up the demand of our products..

 

Gross profit and gross margin

 

The Company was able to generate a gross profit of $973,383 for the year ended December 31, 2019, which was an increase of $590,323 or 154% compared to the year ended December 31, 2018. This is due to increase in sales volume for new Akero product series which has a higher profit margin and improvement in the overall market condition.

 

Selling, general and administrative costs

 

Major operating costs include salaries and wages, advertising and promotional costs for the year ended December 31, 2019 and 2018. Selling, general and administrative costs increased $42,398 or 5% from $811,814 for the year ended December 31, 2018 to $854,212 for the year ended December 31, 2019. The increase is due to increases in operating costs such as increase in commission expenses, printing and stationeries.

 

Net income

 

For the year ended December 31, 2019, the Company had $95,138 in net profit as compared to $428,754 in net loss for the year ended December 31, 2018, which was an increase in net profit of $548,258 or 121%. 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 $171,678 and $36,431 as of December 31, 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.

 

 
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The following table sets forth information about our net cash flow for the years ended December 31, 2019 and 2018:

 

 

 

For the years ended

 

 

 

December 31,

 

 

December 31,

 

 

 

2019

 

 

2018

 

Net cash provided by (used in) operating activities

 

 

344,732

 

 

 

(452,235 )

Net cash provided by (used in) investing activities

 

 

(82,872 )

 

 

-

 

Net cash provided by (used in) financing activities

 

 

(128,932 )

 

 

190,854

 

  

Operating Activities

 

For the year ended December 31, 2019 we generated $344,732 in operating activities as compared to using $452,235 in operating activities during the year ended December 31, 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 year ended December 31, 2019 we used $82,872 in investing activities as compared to using $nil in investing activities during the year ended December 31, 2018. The movement in net cash used in investing activity resulted from purchase of equipment and motor vehicle.

 

Financing Activities

 

During the year ended December 31, 2019, we used $128,932 in financing activities as compared to generating $190,854 in financing activities during the year ended December 31, 2018.

 

During the year ended December 31, 2019, the net cash provided by financing activities resulted from net advances and repayment to related party of $147,797 and net repayment for borrowings of $18,865.

 

During the year ended December 31, 2018, the net cash provided by financing activities resulted from net proceeds received from related party of $210,583 and net repayment to term loan of $19,729.

 

Capital Lease

 

The Company acquired a motor vehicle under a hire purchase agreement under capital lease. The lease arrangements require monthly payments of $910 for a period of 84 months.

 

Interest expenses were $851 and $nil for the years ended December 31, 2019 and 2018, respectively.

 

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 December 31, 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 $26,212 and $24,366 for the years ended December 31, 2019 and 2018, respectively.

 

 
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We have no known demands or commitments and we are not aware of any events or uncertainties as of December 31, 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 years ended December 31, 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 $3,369,169 as of December 31, 2019 which include a profit of $95,138 for the year ended December 31, 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.

   

Critical Accounting Policies and Estimates

 

Please refer to Note 2 of our Consolidated Financial Statements included in the financial statements for the year ended December 31, 2019 for details of our critical accounting policies.

 

Off Balance Sheet Arrangements

 

We do not have any off balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, sales or expenses, results of operations, liquidity or capital expenditures, or capital resources that are material to an investment in our securities.

 

Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

 

Smaller reporting companies are not required to provide the information required by this item.

 

 
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Item 8. Financial Statements and Supplementary Data.

 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

 

To:

The Board of Directors and Stockholders of

Umatrin Holding Limited

 

Opinion on the Financial Statements

 

We have audited the accompanying consolidated balance sheets of Umatrin Holding Limited and subsidiaries (collectively, the “Company”) as of December 31, 2019, and the related consolidated statements of operations, stockholders’ equity, and cash flows for the year ended December 31, 2019, and the related notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2019, and the results of its operations and its cash flows for the year ended December 31, 2019, in conformity with accounting principles generally accepted in the United States of America.

 

Explanatory Paragraph Regarding Going Concern

 

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3 to the financial statements, the Company had incurred substantial losses with working capital deficits , which raises substantial doubt about its ability to continue as a going concern. Management’s plan in regards to these matters are described in Note 3. These financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

Basis for Opinion

 

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

 

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

 

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

 

/s/ JLKZ CPA LLP

 

JLKZ CPA LLP

Flushing, New York

May 29, 2020

 

We have served as the Company’s auditor since November 2019.

 

 

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

 

To:

The Board of Directors and Stockholders of

 

Umatrin Holding Limited

 

Opinion on the Financial Statements

 

We have audited the accompanying consolidated balance sheets of Umatrin Holding Limited (the Company) as of December 31, 2018, and the related consolidated statements of income, comprehensive income, stockholders’ equity, and cash flows for the year ended December 31, 2018, and the related notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2018, and the results of its operations and its cash flows for each of the two years ended December 31, 2018, in conformity with accounting principles generally accepted in the United States of America.

 

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3 to the financial statements, as of December 31, 2018, the Company had working capital deficits, and during those years the ended, it had incurred substantial losses. These facts raised substantial doubt on the Company’s ability to continue as going concern as of December 31, 2017, and that doubt remained during the year ended December 31, 2018. During the year, the Company maintained solvency through raising capital through the issuances of new shares and related parties' advances. Management’s plan to address to this matter is described in Note 3. These financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

Basis for Opinion

 

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

 

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

 

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

 

/s/ WWC, P.C.

WWC, P.C.

Certified Public Accountants

 

San Mateo, CA

April 16, 2019

 

We have served as the Company’s auditor since December 31, 2016.

 

 

 

 
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UMATRIN HOLDING LIMITED

 

 

 

 

 

 

CONSOLIDATED BALANCE SHEETS

 

 

 

 

 

 

(AUDITED)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31,

 

 

December 31,

 

 

 

2019

 

 

2018

 

 

 

 

 

 

 

 

Assets

 

 

 

 

 

 

Current Assets

 

 

 

 

 

 

Cash and cash equivalents

 

$ 171,678

 

 

$ 36,431

 

Inventory

 

 

27,611

 

 

 

17,971

 

Prepaid tax

 

 

13,348

 

 

 

105,214

 

Deferred tax assets

 

 

10,484

 

 

 

10,280

 

Due from related parties

 

 

398,580

 

 

 

359,407

 

Total Current Assets

 

 

621,701

 

 

 

529,303

 

Land, property and equipment, net

 

 

889,285

 

 

 

867,302

 

Deposits

 

 

19,874

 

 

 

29,402

 

Total Assets

 

 

1,530,860

 

 

 

1,426,007

 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

Current Liabilities

 

 

 

 

 

 

 

 

Term loan payable-current portion

 

 

22,533

 

 

 

21,090

 

Capital lease-current portion

 

 

10,917

 

 

 

-

 

Accounts payable and accrued expenses

 

 

231,812

 

 

 

155,572

 

Other payables

 

 

202,400

 

 

 

195,719

 

Due to related parties

 

 

983,210

 

 

 

1,079,112

 

Total Current Liabilities

 

 

1,450,872

 

 

 

1,451,493

 

 

 

 

 

 

 

 

 

 

Term loan payable-long term

 

 

435,924

 

 

 

472,411

 

Capital lease payable-long term

 

 

53,013

 

 

 

-

 

Total Long Term Liabilities

 

 

488,937

 

 

 

472,411

 

 

 

 

 

 

 

 

 

 

Total Liabilities

 

 

1,939,809

 

 

 

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

 

 

(3,369,169 )

 

 

(3,422,205 )

Accumulated other comprehensive loss

 

 

(130,943 )

 

 

(125,991 )

Total Umatrin Holding Limited Stockholders' Equity

 

 

(361,726 )

 

 

(409,810 )

Non-controlling interest

 

 

(47,223 )

 

 

(88,087 )

Total Equity

 

 

(408,949 )

 

 

(497,897 )

Total Liabilities and Stockholders’ Equity

 

$ 1,530,860

 

 

$ 1,426,007

 

 

 

 

 

 

 

 

 

 

See accompanying notes to financial statements

  

 
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Table of Contents

  

UMATRIN HOLDING LIMITED

 

 

 

 

 

 

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(AUDITED)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Years Ended

 

 

 

December 31,

 

 

December 31,

 

 

 

2019

 

 

2018

 

Sales

 

$ 1,204,553

 

 

$ 410,823

 

Cost of sales

 

 

231,170

 

 

 

27,763

 

Gross profit

 

 

973,383

 

 

 

383,060

 

 

 

 

 

 

 

 

 

 

Operating expenses

 

 

 

 

 

 

 

 

Selling, general & administrative expenses

 

 

854,212

 

 

 

811,814

 

Total operating expenses

 

 

854,212

 

 

 

811,814

 

 

 

 

 

 

 

 

 

 

Profit/(Loss) from operations

 

 

119,171

 

 

 

(428,754 )

 

 

 

 

 

 

 

 

 

Other income (expenses)

 

 

 

 

 

 

 

 

Interest expense

 

 

(24,033 )

 

 

(24,366 )

Total other income (expenses)

 

 

(24,033 )

 

 

(24,366 )

 

 

 

 

 

 

 

 

 

Net profit/(loss) before income taxes

 

 

95,138

 

 

 

(453,120 )

 

 

 

 

 

 

 

 

 

Provision for income taxes

 

 

-

 

 

 

-

 

 

 

 

 

 

 

 

 

 

Net profit/(loss)

 

$ 95,138

 

 

$ (453,120 )

 

 

 

 

 

 

 

 

 

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

 

$ 42,102

 

 

$ (69,261 )

 

 

 

 

 

 

 

 

 

Net profit/(loss) attributable to Umatrin Holding Limited

 

$ 53,036

 

 

$ (383,859 )

 

 

 

 

 

 

 

 

 

Other comprehensive profit/(loss), net of tax

 

 

 

 

 

 

 

 

Foreign currency translation adjustment

 

 

6,192

 

 

 

(14,593 )

 

 

 

 

 

 

 

 

 

Comprehensive profit/(loss)

 

 

88,947

 

 

 

(467,713 )

 

 

 

 

 

 

 

 

 

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

 

 

40,864

 

 

 

(135,603 )

 

 

 

 

 

 

 

 

 

Comprehensive profit/(loss) attributable to Umatrin Holding Limited

 

$ 48,083

 

 

$ (332,110 )

 

 

 

 

 

 

 

 

 

Profit (Loss) per common share - basic and diluted

 

$ 0.00

 

 

$ (0.00 )

 

 

 

 

 

 

 

 

 

Weighted average number of shares outstanding - basic and diluted

 

 

182,444,266

 

 

 

182,444,266

 

 

 

 

 

 

 

 

 

 

See accompanying notes to financial statements

  

 
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UMATRIN HOLDING LIMITED

CONSOLIDATED STATEMENTS OF CASH FLOWS

(AUDITED)

 

 

 

For the Years Ended

 

 

 

December 31,

 

 

December 31,

 

 

 

2019

 

 

2018

 

Cash flows from operating activities

 

 

 

 

 

 

Net profit/(loss) including noncontrolling interest

 

$ 95,138

 

 

$ (453,120 )

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

 

 

 

 

 

 

 

 

Depreciation expense

 

 

78,170

 

 

 

73,409

 

Changes in Operating Assets and Liabilities

 

 

 

 

 

 

 

 

Inventory

 

 

(9,172 )

 

 

2,760

 

Prepaid tax

 

 

92,828

 

 

 

(29,744 )

Other receivables and deposits

 

 

9,990

 

 

 

(7,882 )

Accounts payable and accrued expenses

 

 

48,014

 

 

 

(3,979 )

Other payables

 

 

29,764

 

 

 

(33,679 )

Net cash used in operating activities

 

 

344,732

 

 

 

(452,235 )

 

 

 

 

 

 

 

 

 

Cash flows from investing activity

 

 

 

 

 

 

 

 

Purchase of property and equipment

 

 

(82,872 )

 

 

-

 

Net cash provided by (used in) investing activity

 

 

(82,872 )

 

 

-

 

 

 

 

 

 

 

 

 

 

Cash flows from financing activities

 

 

 

 

 

 

 

 

Proceeds/(Repayment) to related party, net

 

 

(147,797 )

 

 

210,583

 

Proceeds/(Repayments) of loan and capital lease, net

 

 

18,865

 

 

 

(19,729 )

Net cash provided by financing activities

 

 

(128,932 )

 

 

190,854

 

 

 

 

 

 

 

 

 

 

Effect of exchange rate changes

 

 

2,318

 

 

 

224,719

 

 

 

 

 

 

 

 

 

 

Net increase (decrease) in cash and cash equivalents

 

 

135,247

 

 

 

(36,662 )

Cash and cash equivalents at beginning of period

 

 

36,431

 

 

 

73,093

 

Cash and cash equivalents at end of period

 

$ 171,678

 

 

$ 36,431

 

 

 

 

 

 

 

 

 

 

Supplemental disclosures of cash flow information

 

 

 

 

 

 

 

 

Interest paid

 

$ 24,033

 

 

$ 24,366

 

Income taxes (refund)/paid

 

$ (92,828 )

 

$ 30,086

 

 

 

 

 

 

 

 

 

 

See accompanying notes to financial statements

  

 
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Table of Contents

  

UMATRIN HOLDING LIMITED

STATEMENTS OF OWNERS' EQUITY

 

For the Years Ended December 31, 2019 and 2018

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

182,444,266

 

 

$ 1,825

 

 

$ 3,136,561

 

 

$ (3,422,205 )

 

$ (125,991 )

 

$ (88,087 )

 

$ (497,897 )

Net income (loss)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

53,036

 

 

 

 

 

 

 

42,102

 

 

 

95,138

 

Cumulative translation adjustment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(4,952 )

 

 

(1,238 )

 

 

(6,190 )

Balance, December 31, 2019

 

 

182,444,266

 

 

$ 1,825

 

 

$ 3,136,561

 

 

$ (3,369,169 )

 

$ (130,943 )

 

$ (47,223 )

 

$ (408,949 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

See accompanying notes to financial statements

   

 
F-6

Table of Contents

 

UMATRIN HOLDINGS LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2019

(AUDITED)

 

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.

 

 
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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.

 

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 consolidated statements of cash flows for the year ended December 31, 2018 have been reclassified to conform to the current period presentation. These reclassifications had no effect on reported net decrease in cash and cash equivalents during the year ended December 31, 2018.

 

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

 

December 31, 2019

 

 

4.0925

 

 

 

4.1421

 

December 31, 2018

 

 

4.1737

 

 

 

4.0344

 

 

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.

 

 
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Table of Contents

  

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 December 31, 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 December 31, 2019 and December 31, 2018 were $171,678 and $36,431 respectively.

 

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 years ended December 31, 2019 and 2018, respectively.

 

At December 31, 2019 and 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.

 

 
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Table of Contents

  

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

Motor vehicle

5 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 years ended December 31, 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.

 

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

 

The Company sales revenues are generated from retail product sales and revenues are recognized at a point in time when products sold are paid and picked up by the customer or when handed to shipping courier.

 

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.

 

 
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Table of Contents

  

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 years ended December 31, 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.

 

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.

 

 
F-11

Table of Contents

  

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. .

 

3. GOING CONCERN

 

As reflected in the accompanying financial statements, the Company had accumulated deficit of $3,369,169 as of December 31, 2019 which include a profit of $95,138 for the year ended December 31, 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:

 

 

 

December 31,

 

 

December 31,

 

 

 

2019

 

 

2018

 

Computer and software

 

$ 21,795

 

 

$ 21,166

 

Furniture and fittings

 

 

29,808

 

 

 

29,228

 

Office equipment

 

 

43,498

 

 

 

42,652

 

Renovations and improvements

 

 

350,937

 

 

 

341,486

 

Motor vehicle

 

 

81,007

 

 

 

-

 

Building

 

 

910,848

 

 

 

893,127

 

Land

 

 

223,483

 

 

 

219,135

 

Total

 

 

1,661,376

 

 

 

1,546,794

 

Less: accumulated depreciation

 

 

(772,091 )

 

 

(679,492 )

Net

 

$ 889,285

 

 

$ 867,302

 

  

The depreciation expense charged to general and administrative expenses were $78,170 and $73,409 for the years ended December 31, 2019 and 2018, respectively.

  

 
F-12

Table of Contents

  

5. RELATED PARTIES TRANSACTIONS

 

Due from related parties consists of the following:

 

 

 

December 31,

 

 

December 31,

 

 

 

 

 

 

2019

 

 

2018

 

 

Purpose

 

Global Bizrewards Sdn. Bhd.

 

$ 274,413

 

 

$ 301,963

 

 

Advance

 

M1 Tech Sdn. Bhd.

 

 

-

 

 

 

24,747

 

 

Advance

 

Sportlight Academy Sdn. Bhd.

 

 

-

 

 

 

12,557

 

 

Advance

 

M1Elite Sdn. Bhd.

 

 

-

 

 

 

15,827

 

 

Advance

 

Koperasi Usahawan

 

 

105,382

 

 

 

-

 

 

Advance

 

Global Patronage Sdn Bhd

 

 

14,121

 

 

 

-

 

 

Advance

 

Yaya Media Sdn Bhd

 

 

266

 

 

 

-

 

 

Advance

 

Hipland Realty Sdn. Bhd.

 

 

4,398

 

 

 

4,313

 

 

Advance

 

Total Due from

 

 

398,580

 

 

 

359,407

 

 

 

 

 

Due to related parties consists of the following:

 

 

 

December 31,

 

 

December 31,

 

 

 

 

 

 

2019

 

 

2018

 

 

Purpose

 

Dato Sri Warren Eu Hin Chai

 

$ 896,867

 

 

$ 885,562

 

 

Capital Advance

 

Michael A. Zahorik

 

 

30,307

 

 

 

30,307

 

 

Capital Advance

 

SKH Media Sdn. Bhd.

 

 

55,284

 

 

 

163,243

 

 

Capital Advance

 

Total Due to

 

 

983,210

 

 

 

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

Koperasi Usahawan

 

Related by common director, Dato' Sri Eu Hin Chai

Global Patronage Sdn Bhd

 

Related by common director, Dato' Sri Eu Hin Chai

Yaya Media Sdn Bhd

 

Related by common director, Dato' Sri Eu Hin Chai

Hipland Realty Sdn. Bhd.

 

Related by common director, Dato' Sri Eu Hin Chai

 

The amounts due from or due to related parties’ above 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 $14,872 for the years ended December 31, 2019 and 2018, respectively.

 

The Company generated sales revenues from related parties Global Bizrewards Sdn. Bhd of $172,313 for the year ended December 31, 2019.

 

 
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6. STOCKHOLDERS’ EQUITY

 

Equity –Common Stock

 

The Company has 182,444,266 shares of common stock issued and outstanding as of December 31, 2019.

 

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 $14,872 for the years ended December 31, 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 suppliers 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.

 

The Company has concentration of suppliers whose purchase amount individually represented 10% or more of the Company’s total purchase. For the years ended December 31, 2018, one supplier accounted for 14%, and one supplier accounted for 17% of total purchase, respectively.

 

The Company has concentration of customers whose revenue amount individually represented 10% or more of the Company’s total revenue. For the years ended December 31, 2019, one customer who is a related party accounted for 14%, and one customer accounted for 17% of total revenue, respectively. 

 

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 December 31, 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 $458,457, of which $22,533 is due within one year and classified as short term, and $435,924 is due after one year, and has classified as long term.

 

 
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Table of Contents

  

Interest expenses were $23,023 and $24,366 for the years ended December 31, 2019 and 2018, respectively.

 

 

 

December 31,

 

 

December 31,

 

 

 

2019

 

 

2018

 

Payable within 1 year.

 

$ 22,533

 

 

$ 21,090

 

Payable within 2 year

 

 

23,287

 

 

 

22,094

 

Payable within 3 year

 

 

24,385

 

 

 

23,145

 

Payable within 4 year

 

 

25,508

 

 

 

24,236

 

Payable within 5 year

 

 

26,680

 

 

 

25,352

 

Thereafter

 

 

336,064

 

 

 

377,584

 

Total

 

 

458,457

 

 

 

493,501

 

  

9. LEASE

 

The Company acquired a motor vehicle under a hire purchase agreement under capital lease. The lease arrangements require monthly payments of $910 for a period of 84 months.

 

The Company has included the asset as motor vehicle as follows:

 

Motor vehicle

 

 

89,502

 

 

 

-

 

Less: accumulated depreciation

 

 

(6,750 )

 

 

-

 

Net

 

$ 82,752

 

 

$ -

 

 

Interest expenses were $851 and $nil for the years ended December 31, 2019 and 2018, respectively.

 

The future minimum payments under the capitalized lease, together with the present value of net minimum lease payments at year ended December 31, 2019 as follows:

 

 

 

December 31,

 

 

 

2019

 

Payable within 1 year.

 

$ 10,917

 

Payable within 2 year

 

 

10,917

 

Payable within 3 year

 

 

10,917

 

Payable within 4 year

 

 

10,917

 

Payable within 5 year

 

 

10,917

 

Thereafter

 

 

9,345

 

Total

 

 

63,930

 

Less amounts representing interest

 

 

8,851

 

Present value of lease payments

 

$ 55,079

 

 

10. 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 December 31, 2019, UMHL has accumulated net operating losses of $539,952 which carryovers as a deferred tax asset that begins to expire in 2025.

 

 
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Table of Contents

  

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

 

 

 

For the years ended

 

 

 

December 31,

 

 

December 31,

 

 

 

2019

 

 

2018

 

Net loss before income taxes

 

 

(115,373 )

 

 

(106,816 )

 

 

 

 

 

 

 

 

 

Tax expenses (benefit) at the statutory tax rate

 

 

(24,228 )

 

 

(35,250 )

Tax effect of:

 

 

 

 

 

 

 

 

Valuation allowance

 

 

24,228

 

 

 

35,250

 

Income tax benefit

 

 

-

 

 

 

-

 

  

The components of deferred tax assets and liabilities as follows:

 

 

 

December 31,

 

 

December 31,

 

 

 

2019

 

 

2018

 

Deferred tax asset

 

 

 

 

 

 

Net operating losses carry forwards

 

 

501,377

 

 

 

477,149

 

 

 

 

 

 

 

 

 

 

Valuation allowance

 

 

(501,377 )

 

 

(477,149 )

Deferred tax assets, net

 

 

-

 

 

 

-

 

 

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 years ended

 

 

 

December 31,

 

 

December 31,

 

 

 

2019

 

 

2018

 

Net profit/(loss) before income taxes

 

 

210,511

 

 

 

(346,304 )

 

 

 

 

 

 

 

 

 

Tax expenses (benefit) at the statutory tax rate

 

 

50,523

 

 

 

(62,335 )

 

 

 

 

 

 

 

 

 

Tax effects of:

 

 

 

 

 

 

 

 

Utilization of deferred tax assets previously not recognized

 

 

(50,523 )

 

 

-

 

Expenses not currently deductible

 

 

-

 

 

 

62,335

 

Income tax expense (benefit)

 

 

-

 

 

 

-

 

 

The components of deferred tax assets and liabilities as follows:

 

 

 

December 31,

 

 

December 31,

 

 

 

2019

 

 

2018

 

Deferred tax asset

 

 

 

 

 

 

Expenses not currently deductible

 

 

10,484

 

 

 

10,280

 

Valuation allowance

 

 

-

 

 

 

-

 

Deferred tax assets, net

 

 

10,484

 

 

 

10,280

 

 

The Company has prepaid income tax of $13,348 and $105,214 as of December 31, 2019 and 2018, respectively.

 

11. 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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Table of Contents

  

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

 

(1)

Previous Independent Registered Public Accounting Firm

 

On February 28, 2017, the Board of Directors of the Company appointed WWC, P.C. (“WWC”) as its new independent registered public accounting firm to audit and review the Company’s financial statements. During the two most recent fiscal years ended December 31, 2015 and December 31, 2014 and any subsequent interim periods through the date hereof prior to the engagement of WWC, neither the Company, nor someone on its behalf, has consulted WWC regarding:

 

(i)

either: the application of accounting principles to a specified transaction, either completed or proposed; or the type of audit opinion that might be rendered on the Company’s consolidated financial statements, and either a written report was provided to the Company or oral advice was provided that the new independent registered public accounting firm concluded was an important factor considered by the Company in reaching a decision as to the accounting, auditing or financial reporting issue; or

 

(ii)

any matter that was either the subject of a disagreement as defined in paragraph 304(a)(1)(iv) of Regulation S-K or a reportable event as described in paragraph 304(a)(1)(v) of Regulation S-K.

 

(2)

New Independent Registered Public Accounting Firm

 

On November 5, 2019, the Board of Directors of the Company appointed JLKZ CPA LLP ("JLKZ") as its new independent registered public accounting firm to audit and review the Company’s financial statements for the period ended September 30, 2019. During the two most recent fiscal years ended December 31, 2018 and December 31, 2017 and any subsequent interim periods through the date hereof prior to the engagement of JLKZ, neither the Company, nor someone on its behalf, has consulted JLKZ regarding:

 

 

(I)

either: the application of accounting principles to a specified transaction, either completed or proposed; or the type of audit opinion that might be rendered on the Company’s consolidated financial statements, and either a written report was provided to the Company or oral advice was provided that the new independent registered public accounting firm concluded was an important factor considered by the Company in reaching a decision as to the accounting, auditing or financial reporting issue; or 

 

 

(ii)

 any matter that was either the subject of a disagreement as defined in paragraph 304(a)(1)(iv) of Regulation S-K or a reportable event as described in paragraph 304(a)(1)(v) of Regulation S-K.

 

Item 9A. 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 13a-15(e) and 15d-15(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.

 

Limitations on Systems of Controls

 

Our management, including our principal executive officer and principal financial officer, does not expect that our disclosure controls and procedures or our internal controls will prevent all error or fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs. Due to the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. To address the material weaknesses identified in our evaluation, we performed additional analysis and other post-closing procedures in an effort to ensure our financial statements included in this annual report have been prepared in accordance with generally accepted accounting principles. Accordingly, management believes that the financial statements included in this report fairly present in all material respects our financial condition, results of operations and cash flows for the periods presented.

 

 
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Table of Contents

  

Management’s Report on Internal Control Over Financial Reporting

 

Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Securities Exchange Act of 1934 as a process designed by, or under the supervision of, the company’s principal executive and principal financial officers and effected by the company’s board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America and includes those policies and procedures that:

 

 

·

Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the company;

 

·

Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and,

 

·

Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company’s assets that could have a material effect on the financial statements.

 

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Because of the inherent limitations of internal control, there is a risk that material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting. However, these inherent limitations are known features of the financial reporting process. Therefore, it is possible to design into the process safeguards to reduce, but not eliminate, this risk.

 

As of December 31, 2019, management assessed the effectiveness of our internal control over financial reporting based on the criteria for effective internal control over financial reporting established in Internal Control--Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO-2013 framework”) and SEC guidance on conducting such assessments. Based on that evaluation, they concluded that, during the period covered by this report, such 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.

 

Management’s Remediation Initiatives

 

In an effort to remediate the identified material weaknesses and other deficiencies and enhance our internal controls, we have initiated, or plan to initiate, the following series of measures:

 

We will create a position to segregate duties consistent with control objectives and will increase our personnel resources and technical accounting expertise within the accounting function when funds are available to us. And, we plan to appoint one or more outside directors to our board of directors who shall be appointed to an audit committee resulting in a fully functioning audit committee who will undertake the oversight in the establishment and monitoring of required internal controls and procedures such as reviewing and approving estimates and assumptions made by management when funds are available to us.

 

Management believes that the appointment of one or more outside directors, who shall be appointed to a fully functioning audit committee, will remedy the lack of a functioning audit committee and a lack of a majority of outside directors on our Board.

 

We will work as quickly as possible to implement these initiatives; however, the lack of adequate working capital and positive cash flow from operations will likely slow this implementation.

 

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.

 

Item 9B. Other Information.

 

None.

 

 
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Table of Contents

 

PART III

 

Item 10. Directors, Executive Officers and Corporate Governance.

 

Directors and Executive Officers

 

The following sets forth information about our directors and executive officers as of the date of this report:

 

Name

 

Age

 

Title

 

Dato’ Sri Warren Eu Hin Chai

 

41

 

President, CEO, CFO, Director

Dato’ Zakaria Bin Abdul Rahman

 

56

 

Vice President, Director

Choy Chee Hong

 

45

 

Director

Teoh Bi Shan

 

33

 

Director

Teng Ling Ching

 

38

 

Director

 

All of our directors hold offices until the next annual meeting of the shareholders of the Company, and until their successors have been qualified after being elected or appointed. Officers serve at the discretion of the board of directors.

 

The following sets forth biographical information regarding the above Officers and Directors.

 

Dato’ Sri Warren Eu Hin Chai, Chairman of the Board, Chief Executive Officer, Chief Financial Officer, President and Director

 

During the past five years and to date, Dato’ Sri Warren Eu is the director for SKH Media, Global Bizrewards, Hipland Realty and UMatrin Worldwide, as well as Vice President and Director of Umatrin Holding Limited. He has led SKH Media into a company specialized in marketing communications. He had used his insights, experience, expertise, creativity, environment knowledge and business sense to helped SKH Media’s clients to compete successfully in marketing strategy, advertising every form of marketing communication and in monitoring progress to increase their profits in a sustainable way. He has introduced loyalty programme marketing via Global Bizrewards to boost the participated merchant brand and at the same time benefited the consumers. He has also ventured himself into property and hotel industry via Hipland Realty. In view of his extensive knowledge in various industries, he is the best candidate to be appointed as the President, Chairman of the Board, Director, CEO, and CFO to lead the Company to success.

 

Dato’ Zakaria Bin Abdul Rahman, Vice President and Director

 

Dato’ Zakaria Bin Abdul Rahman, age 56, is currently serve as the Vice President of myPPP Malaysia and Vice President of Putrajaya Football Club. He has been awarded the royal awards of Pingat Jasa Negara (PJN), Johan Setia Mahkota (JSM) and Anugerah Setia Negara (ASN). His experience including working as the Chairman of Cempaka Helicopter Corporation Sdn Bhd, the Executive Chairman of KN Furniture Manufacture (M)Sdn Bhd, the Chairman of Oxford United Sdn Bhd, the Chairman of SNZ Heritage Sdn Bhd, the Chairman of Tiara Astana Sdn Bhd and the Chairman of Tiara Cattle Sdn Bhd.

 

Choy Chee Hong, Director

 

Choy Chee Hong, age 45, has extensive experience in marketing and promoting Health and Beauty Products. His personal sales achievements reached USD5,000,000 per annum and group sales achievements reached USD50,000,000 per annum. He had been working as the Diamond Speaker of Al-Ihsan Sdn Bhd from 2011 to June, 2019.

 

Teoh Bi Shan, Director

 

Ms. Teoh joined Umatrin since April 2015 and has served as our legal advisor. She had successfully resolved the company legal dispute and had reorganized the management of the company towards ISO standards. She is a law graduate from University of Northumbria, United Kingdom. After she obtained her Certificate in Legal Practice (CLP), she joined Jeff Leong Poon & Wong and has advised public listed companies in fund raising and other corporate exercises on Bursa Malaysia including initial public offerings, trust deed, warrant, rights issues, bond issues, share split and restructuring. Thereafter, she shifted from a corporate lawyer to a litigator and joined Vin & Isaac Lee. She has several years of complex litigation experience in directorship dispute, partnership dissolution, business contract dispute and intellectual property dispute.

 

 
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Table of Contents

  

Teng Ling Ching, Director

 

Mr. Teng was an accomplished systems administrator with more than 14 years of experience managing server infrastructures and data-center operations across multiple platforms such as Unix, Linux, Windows. He had effectively plan, install, configure and optimize the IT infrastructure to consistently achieve high ability and performance. He had proven his ability to create and deliver solutions for fast business growth, organizational development and systems/network optimization. Throughout his history of employment with MVM Home Entertainment and MNC Group Indonesia, he is well known as skilled troubleshooter and a great team leader in a range of IT environments.

 

Term of Office

 

Our directors hold office until the next annual general meeting of our stockholders and until their successors have been duly elected and qualified or until removed from office in accordance with our bylaws. Our officers are elected by and serve at the discretion of the board of directors.

 

Family Relationships

 

There are no family relationships between any of our directors or executive officers.

 

Certain Legal Proceedings

 

To our knowledge, no director, nominee for director, or executive officer of the Company has been a party in any legal proceeding material to an evaluation of his ability or integrity during the past ten years.

 

Potential Conflicts of Interest

 

We are not aware of any current or potential conflicts of interest with our director or executive officer.

 

Board Committees

 

We have not formed an Audit Committee, Compensation Committee or Nominating and Corporate Governance Committee as of the filing of this Annual Report. Our Board of Directors performs the principal functions of an Audit Committee. We currently do not have an audit committee financial expert on our Board of Directors.

 

Compliance with Section 16(A) Of the Exchange Act.

 

Section 16(a) of the Exchange Act requires the Company’s officers and directors, and persons who beneficially own more than 10% of a registered class of the Company’s equity securities, to file reports of ownership and changes in ownership with the Securities and Exchange Commission and are required to furnish copies to the Company. Based solely on our review of the reports filed with the SEC, no person failed to timely file reports required by Section 16(a) in the past two fiscal years.

 

Code of Ethics

 

We have not adopted a Code of Ethics applicable to our Principal Executive Officer and Principal Financial Officer.

 

ITEM 11. EXECUTIVE COMPENSATION

 

The following is a summary of the compensation we paid to our current executive officer, for the years ended December 31, 2018 and 2019.

 

(a)

 

(b)

 

(c)

 

 

(d)

 

 

(e)

 

 

(f)

 

 

(g)

 

 

(h)

 

 

(i)

 

 

(j)

 

Name and Principal Position

 

Year

 

Salary ($)

 

 

Bonus ($)

 

 

Stock Awards ($)

 

 

Option Awards

($)

 

 

Non-equity Incentive

Plan Compen-

sation

($)

 

 

Non-qualified Deferred Compen-

sation

Earnings ($)

 

 

All Other Compen-

sation

($)

 

 

Total Compen-

sation ($)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dato’ Sri Warren Eu Hin Chai,

 

2019

 

$ -

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

CEO, CFO & Director

 

2018

 

$ -

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dato’ Zakaria Bin Abdul Rahman

 

2019

 

$ -

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Former Vice President & Director (1)

 

2018

 

$ -

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

________________

(1)

On January 1, 2019, the Board of Directors (the “Board”) of the Company appointed Dato’ Zakaria Bin Abdul Rahman to fill the vacancy left by Dato’ Dr. William Lee Wun Loong’s passing and serve as the Vice President of the Company.

 

 
19

Table of Contents

  

Compensation Discussion and Analysis

 

We strive to provide our named executive officers (as defined in Item 402 of Regulation S-K) with a competitive base salary that is in line with their roles and responsibilities when compared to peer companies of comparable size in similar locations.

 

We plan to implement a more comprehensive compensation program, which takes into account other elements of compensation, including, without limitation, short and long term compensation, cash and non-cash, and other equity-based compensation such as stock options. We expect that this compensation program will be comparable to the programs of our peer companies and aimed to retain and attract talented individuals.

 

Compensation of Directors

 

The following is a summary of the compensation we paid to the Directors of UMHL, for the years ended December 31, 2019 and 2018:

 

Name and Principal Position

 

Fiscal

Year

 

Salary

($)

 

 

Bonus

($)

 

 

Stock

Awards

($)

 

 

Option

Awards

($)

 

 

Non-equity Incentive Plan Compensation

($)

 

 

Change in Pension Value and Nonqualified Deferred Compensation Earnings

($)

 

 

All Other Compensation

($)

 

 

Total

($)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dato’ Sri Warren Eu Hin Chai

 

2019

 

 

43,466

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

43,466

 

 

 

2018

 

 

44,616

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

44,616

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dato’ Dr. William Lee Wun Loong

 

2019

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Former Director 

 

2018

 

 

27,918

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

27,918

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dato’ Osmanthus Ang Kui Hwa

 

2019

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Former Director 

 

2018

 

 

3,718

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

3,718

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Teoh Bi Shan

 

2019

 

 

28,977

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

28,799

 

 

 

2018

 

 

29,744

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

29,744

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Teng Ling Ching

 

2019

 

 

31,875

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

31,875

 

 

 

2018

 

 

32,718

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

32,718

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dato’ Zakaria Bin Abdul Rahman

 

2019

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Choy Chee Hong

 

2019

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

As of the date of this report, we have no formal or informal arrangements or agreements to compensate our directors for services they provide as directors.

 

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

 

The following table sets forth certain information as of the date hereof with respect to the beneficial ownership of our ordinary shares, the sole outstanding class of our voting securities, by (i) each stockholder known to be the beneficial owner of 5% or more of the outstanding ordinary shares of the Company, (ii) each executive officer and director, and (iii) all executive officers and directors as a group. Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission and generally includes voting or investment power with respect to securities. ordinary shares subject to options, warrants or convertible securities exercisable or convertible within 60 days as of the date hereof are deemed outstanding for computing the percentage of the person or entity holding such options, warrants or convertible securities but are not deemed outstanding for computing the percentage of any other person.

 

 
20

Table of Contents

 

Name of Beneficial Owner

 

Amount

and Nature

of

Beneficial

Ownership

 

 

Percentage

of Class (1)

 

Dato’ Sri Warren Eu Hin Chai (2)

 

 

112,788,813

 

 

 

61.82 %

 

 

 

 

 

 

 

 

 

Dato’ Dr. William Lee Wun Loong

 

 

27,414,100

 

 

 

15.03 %

 

 

 

 

 

 

 

 

 

All Executives and Directors as a group (1 person)

 

 

140,202,913

 

 

 

76.85 %

 

 

 

 

 

 

 

 

 

Other 5% shareholders:

 

 

 

 

 

 

 

 

None

 

 

 

 

 

 

 

 

________________

(1)

Based on 182,444,266 shares of common stock outstanding as of May 29, 2020.

(2)

Including 106,200,000 shares held directly and 6,588,813 shares held indirectly through Umatrin Group Ltd. Principal office of Umatrin Group Ltd. is located at 24 Lesperance Complex Providence Industrial Estate, Maha T2 0000. Dato’ Sri Warren Eu Hin Chai, our CEO, CFO and director, is the sole stockholder of Umatrin Group Ltd. Through his position as the sole stockholder in Umatrin Group Ltd, Dato’ Sri has the sole voting and dispositive power to in the shares held by Umatrin Group Ltd.

 

Item 13. Certain Relationships and Related Transactions, and Director Independence.

 

Due from related parties consists of the following:

 

 

 

December 31,

 

 

December 31,

 

 

 

 

 

 

2019

 

 

2018

 

 

Purpose

 

Global Bizrewards Sdn. Bhd.

 

$ 274,413

 

 

$ 301,963

 

 

Advance

 

M1 Tech Sdn. Bhd.

 

 

-

 

 

 

24,747

 

 

Advance

 

Sportlight Academy Sdn. Bhd.

 

 

-

 

 

 

12,557

 

 

Advance

 

M1Elite Sdn. Bhd.

 

 

-

 

 

 

15,827

 

 

Advance

 

Koperasi Usahawan

 

 

105,382

 

 

 

-

 

 

Advance

 

Global Patronage Sdn Bhd

 

 

14,121

 

 

 

-

 

 

Advance

 

Yaya Media Sdn Bhd

 

 

266

 

 

 

-

 

 

Advance

 

Hipland Realty Sdn. Bhd.

 

 

4,398

 

 

 

4,313

 

 

Advance

 

Total Due from

 

 

398,580

 

 

 

359,407

 

 

 

 

 

Due to related parties consists of the following:

 

 

 

December 31,

 

 

December 31,

 

 

 

 

 

 

2019

 

 

2018

 

 

Purpose

 

Dato Sri Warren Eu Hin Chai

 

$ 896,867

 

 

$ 885,562

 

 

Capital Advance

 

Michael A. Zahorik

 

 

30,307

 

 

 

30,307

 

 

Capital Advance

 

SKH Media Sdn. Bhd.

 

 

55,284

 

 

 

163,243

 

 

Capital Advance

 

Total Due to

 

 

983,210

 

 

 

1,079,112

 

 

 

 

  

 
21

Table of Contents

 

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

Koperasi Usahawan

 

Related by common director, Dato' Sri Eu Hin Chai

Global Patronage Sdn Bhd

 

Related by common director, Dato' Sri Eu Hin Chai

Yaya Media Sdn Bhd

 

Related by common director, Dato' Sri Eu Hin Chai

Hipland Realty Sdn. Bhd.

 

Related by common director, Dato' Sri Eu Hin Chai

 

The amounts due from or due to related parties’ above 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 $14,872 for the years ended December 31, 2019 and 2018, respectively.

 

The Company generated sales revenues from related parties Global Bizrewards Sdn. Bhd of $172,313 for the year ended December 31, 2019.

 

Item 14. Principal Accounting Fees and Services.

 

The following table sets forth the fees billed by our principal independent accountant for each of our last two fiscal years for the categories of services indicated.

 

 

 

Years Ended
December 31,

 

Category

 

2019

 

 

2018

 

Audit Fees

 

$ 45,000

 

 

$ 30,000

 

Audit Related Fees

 

 

0

 

 

 

0

 

Tax Fees

 

 

3,000

 

 

 

3,000

 

All Other Fees

 

 

0

 

 

 

0

 

 

Audit fees. Consists of fees billed for the audit of our annual financial statements, review of our Form 10-K, review of our quarterly financial statements, review of our Forms 10-Q and services that are normally provided by the accountant in connection with year-end and interim statutory and regulatory filings or engagements.

 

Audit-related fees. Consists of fees billed for the review of registration statements, audit related consulting and services that are normally provided by the accountant in connection with non-year end statutory and regulatory filings or engagements.

 

Tax fees. Consists of professional services rendered by our principal accountant for tax compliance, tax advice, and tax planning.

 

 
22

Table of Contents

 

PART IV

 

Item 15. Exhibits, Financial Statement Schedules.

 

a) Documents filed as part of this Annual Report

 

1.

Consolidated Financial Statements

 

 

2.

Financial Statement Schedules

 

 

3.

Exhibits

 

Exhibits #

 

Title

 

3.1

 

Certificate of Incorporation of the Company (1)

3.2

 

Certificate of Amendment to the Articles of Incorporation of the Company, dated June 3, 2008 (2)

3.3

 

Certificate of Amendment to the Articles of Incorporation of the Company, dated March 16, 2015 (3)

3.4

 

Certificate of Amendment to the Articles of Incorporation of the Company, dated March 28, 2015 (3)

3.5

 

Bylaws (2)

10.1

 

Share Exchange Agreement, dated January 6, 2016, by and among Dato’ Sri Warren Eu Hin Chai, Dato’ Liew Kok Hong, the Company, and UMATRIN WORLDWIDE SDN BHD. (3)

10.2

 

Term Loan Agreement, dated December 23, 2014, by and between RHB Bank Berhad and UMATRIN WORLDWIDE SDN BHD. (3)

10.3

 

Sale and Purchase Agreement, dated November 12, 2014, by and between Mega Panorama Sdn Bhd. and UMATRIN WORLDWIDE SDN BHD. (3)

21.1

 

List of Subsidiaries (3)

31.1

 

Certification of Principal Executive Officer and Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1

 

Certification of Principal Executive Officer and Principal Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley 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 33-8238, deemed being furnished and not filed.

(1)

Incorporated by reference to the Company’s Registration Statement on Form 10-SB, as filed with the Securities and Exchange Commission on March 8, 2005.

(2)

Incorporated by reference to the Company’s Registration Statement on Form S-1, as filed with the Securities and Exchange Commission on August 29, 2008.

(3)

Incorporated by reference to the Company’s Current Report on Form 8-K, as filed with the Securities and Exchange Commission on January 6, 2016.

  

 
23

Table of Contents

 

SIGNATURES

 

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

 

 

UMATRIN HOLDING LIMITED

 

Date: June 1, 2020

By:

/s/ Dato’ Sri Warren Eu Hin Chai

 

Dato’ Sri Warren Eu Hin Chai

 

President, Chief Executive Officer, and Chief Financial Officer (Principal Executive Officer and Principal Financial Officer)

 

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

 

Name

 

Title

 

Date

 

/s/ Dato’ Sri Warren Eu Hin Chai

 

President, Chief Executive Officer, Chief Financial Officer, and Director

 

June 1, 2020

Dato’ Sri Warren Eu Hin Chai

 

(Principal Executive Officer and Principal Financial Officer)

 

/s/ Dato’ Zakaria Bin Abdul Rahman

 

Vice President and Director

 

June 1, 2020

Dato’ Zakaria Bin Abdul Rahman

  

/s/ Choy Chee Hong

 

Director

 

June 1, 2020

Choy Chee Hong

 

 

/s/ Teoh Bi Shan

 

Director

 

June 1, 2020

Teoh Bi Shan

 

 

/s/ Teng Ling Ching

 

Director

 

June 1, 2020

Teng Ling Ching

  

 
24