Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2020 | Aug. 13, 2020 | |
Document And Entity Information | ||
Entity Registrant Name | HotApp Blockchain Inc. | |
Entity Central Index Key | 0001600347 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2020 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Is Entity's Reporting Status Current? | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Emerging Growth Company | false | |
Entity Small Business | true | |
Entity Shell Company | false | |
Entity Interactive Data Current | Yes | |
Entity Incorporation State Country Code | DE | |
Entity File Number | 333-194748 | |
Entity Common Stock, Shares Outstanding | 506,898,576 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2020 |
CONDENSED BALANCE SHEETS (Unaud
CONDENSED BALANCE SHEETS (Unaudited) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 |
CURRENT ASSETS: | ||
Cash | $ 47,974 | $ 55,752 |
Promissory note-related parties | 100,000 | 100,000 |
TOTAL CURRENT ASSETS | 147,974 | 155,752 |
Other non-current assets | 102 | 102 |
TOTAL ASSETS | 148,076 | 155,854 |
CURRENT LIABILITIES: | ||
Accounts payable and accrued expenses | 12,808 | 18,561 |
Accrued taxes | 7,742 | 7,742 |
Amount due to related parties | 1,389,925 | 1,401,871 |
TOTAL CURRENT LIABILITIES | 1,410,475 | 1,428,174 |
TOTAL LIABILITIES | 1,410,475 | 1,428,174 |
STOCKHOLDERS' (DEFICIT): | ||
Preferred stock, $0.0001 par value, 15,000,000 shares authorized, 0 issued and outstanding as of June 30, 2020 and December 31, 2019 | 0 | 0 |
Common stock, $0.0001 par value, 1,000,000,000 shares authorized, 506,898,576 shares issued and outstanding, as of June 30, 2020 and December 31, 2019 | 50,690 | 50,690 |
Accumulated other comprehensive loss | (205,114) | (310,293) |
Additional paid-in capital | 4,604,191 | 4,604,191 |
Accumulated deficit | (5,712,166) | (5,616,908) |
TOTAL STOCKHOLDERS' DEFICIT | (1,262,399) | (1,272,320) |
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | $ 148,076 | $ 155,854 |
CONDENSED BALANCE SHEETS (Paren
CONDENSED BALANCE SHEETS (Parenthetical) - $ / shares | Jun. 30, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, authorized | 15,000,000 | 15,000,000 |
Preferred stock, issued | 0 | 0 |
Preferred stock, outstanding | 0 | 0 |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, authorized | 1,000,000,000 | 1,000,000,000 |
Common stock, issued | 506,898,576 | 506,898,576 |
Common stock, outstanding | 506,898,576 | 506,898,576 |
CONDENSED STATEMENTS OF OPERATI
CONDENSED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Income Statement [Abstract] | ||||
Revenues | $ 0 | $ 0 | $ 0 | $ 0 |
Cost of revenues | 0 | 0 | 0 | 0 |
Gross profit | 0 | 0 | 0 | 0 |
Operating Expenses: | ||||
General and administrative | 20,555 | 47,257 | 38,605 | 198,462 |
Total operating expenses | 20,555 | 47,257 | 38,605 | 198,462 |
(Loss) from operations | (20,555) | (47,257) | (38,605) | (198,462) |
Other Income (Loss): | ||||
Interest income | 1 | 23 | 3 | 32 |
Foreign exchange gain /(loss) | 36,002 | 10,767 | (56,656) | 18,941 |
Gain on disposal of subsidiary | 0 | 0 | 0 | 299,255 |
Total other income/(expenses) | 36,003 | 10,790 | (56,653) | 318,228 |
Income (loss) before taxes from continuing operations | 15,448 | (36,467) | (95,258) | 119,766 |
Income tax provision | 0 | 0 | 0 | 0 |
Net income (loss) from continuing operations | 15,448 | (36,467) | (95,258) | 119,766 |
Loss from discontinued operations, net of tax | 0 | 0 | 0 | (3,712) |
Net income (loss) applicable to common shareholders | $ 15,448 | $ (36,467) | $ (95,258) | $ 116,054 |
Net income (loss) from continuing operations per share - basic and diluted | $ 0 | $ 0 | $ 0 | $ 0 |
Net loss from discontinued operations per share - basic and diluted | $ 0 | $ 0 | $ 0 | $ 0 |
Weighted number of shares outstanding - basic and diluted | 506,898,576 | 506,898,576 | 506,898,576 | 506,898,576 |
Comprehensive Income (Loss): | ||||
Net income (loss) | $ 15,448 | $ (36,467) | $ (95,258) | $ 116,054 |
Foreign currency translation (loss) gain | (64,361) | (13,206) | 105,179 | (60,598) |
Total comprehensive (loss) income | $ (48,913) | $ (49,673) | $ 9,921 | $ 55,456 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' (DEFICIT) - USD ($) | Common Stock | Paid-In Capital | Accumulated Other Comprehensive Income (Loss) | Accumulated Deficit | Total |
Beginning balances, shares at Dec. 31, 2018 | 506,898,576 | ||||
Beginning balance, amount at Dec. 31, 2018 | $ 50,690 | $ 4,604,191 | $ (225,119) | $ (5,623,034) | $ (1,193,272) |
Net income/(loss) for period | 152,521 | 152,521 | |||
Foreign currency translation adjustment | (47,392) | (47,392) | |||
Ending balance, shares at Mar. 31, 2019 | 506,898,576 | ||||
Ending balance, amount at Mar. 31, 2019 | $ 50,690 | 4,604,191 | (272,511) | (5,470,513) | (1,088,143) |
Beginning balances, shares at Dec. 31, 2018 | 506,898,576 | ||||
Beginning balance, amount at Dec. 31, 2018 | $ 50,690 | 4,604,191 | (225,119) | (5,623,034) | (1,193,272) |
Net income/(loss) for period | 116,054 | ||||
Ending balance, shares at Jun. 30, 2019 | 506,898,576 | ||||
Ending balance, amount at Jun. 30, 2019 | $ 50,690 | 4,604,191 | (285,717) | (5,506,980) | (1,137,816) |
Beginning balances, shares at Mar. 31, 2019 | 506,898,576 | ||||
Beginning balance, amount at Mar. 31, 2019 | $ 50,690 | 4,604,191 | (272,511) | (5,470,513) | (1,088,143) |
Net income/(loss) for period | (36,467) | (36,467) | |||
Foreign currency translation adjustment | (13,206) | (13,206) | |||
Ending balance, shares at Jun. 30, 2019 | 506,898,576 | ||||
Ending balance, amount at Jun. 30, 2019 | $ 50,690 | 4,604,191 | (285,717) | (5,506,980) | (1,137,816) |
Beginning balances, shares at Dec. 31, 2019 | 506,898,576 | ||||
Beginning balance, amount at Dec. 31, 2019 | $ 50,690 | 4,604,191 | (310,293) | (5,616,908) | (1,272,320) |
Net income/(loss) for period | (110,706) | (110,706) | |||
Foreign currency translation adjustment | 169,540 | 169,540 | |||
Ending balance, shares at Mar. 31, 2020 | 506,898,576 | ||||
Ending balance, amount at Mar. 31, 2020 | $ 50,690 | 4,604,191 | (140,753) | (5,727,614) | (1,213,486) |
Beginning balances, shares at Dec. 31, 2019 | 506,898,576 | ||||
Beginning balance, amount at Dec. 31, 2019 | $ 50,690 | 4,604,191 | (310,293) | (5,616,908) | (1,272,320) |
Net income/(loss) for period | (95,258) | ||||
Ending balance, shares at Jun. 30, 2020 | 506,898,576 | ||||
Ending balance, amount at Jun. 30, 2020 | $ 50,690 | 4,604,191 | (205,114) | (5,712,166) | (1,262,399) |
Beginning balances, shares at Mar. 31, 2020 | 506,898,576 | ||||
Beginning balance, amount at Mar. 31, 2020 | $ 50,690 | 4,604,191 | (140,753) | (5,727,614) | (1,213,486) |
Net income/(loss) for period | 15,448 | 15,448 | |||
Foreign currency translation adjustment | (64,361) | (64,361) | |||
Ending balance, shares at Jun. 30, 2020 | 506,898,576 | ||||
Ending balance, amount at Jun. 30, 2020 | $ 50,690 | $ 4,604,191 | $ (205,114) | $ (5,712,166) | $ (1,262,399) |
CONDENSED STATEMENTS OF CASH FL
CONDENSED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income (loss) including noncontrolling interests from continuing operations | $ (95,258) | $ 119,766 |
Net (loss) including noncontrolling interests from discontinued operations | 0 | (3,712) |
Net income (loss) including noncontrolling interests, total | (95,258) | 116,054 |
Adjustments to reconcile net loss to cash used in operating activities: | ||
Depreciation | 0 | 48 |
(Gain) on disposal of subsidiary | 0 | (299,255) |
Impairment on accounts receivable | 0 | 49,676 |
Foreign exchange transaction loss (gain) | 56,467 | (18,939) |
Change in operating assets and liabilities: | ||
Security deposit and other receivables | 0 | 463 |
Prepaid expenses | 0 | (49,632) |
Promissory note-related party | 0 | (100,000) |
Accounts payable and accrued expenses | (5,753) | (13,426) |
Net cash used in operating activities | (44,544) | (315,011) |
CASH FLOW FROM INVESTING ACTIVITIES: | ||
Other non-current assets | 0 | (102) |
Net cash inflow on disposal of subsidiary | 0 | 68,940 |
Net cash generated from (used in) investing activities | 0 | 68,838 |
CASH FLOW FROM FINANCING ACTIVITIES: | ||
Advance from related parties | 37,097 | 205,546 |
Net cash generated from financing activities | 37,097 | 205,546 |
NET (DECREASE) IN CASH | (7,447) | (40,627) |
Effects of exchange rates on cash | (331) | (7,372) |
CASH AND CASH EQUIVALENTS at beginning of period | 55,752 | 118,045 |
CASH AND CASH EQUIVALENTS at end of period | $ 47,974 | $ 70,046 |
1. The Company History and Natu
1. The Company History and Nature of the Business | 6 Months Ended |
Jun. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
The Company History and Nature of the Business | HotApp Blockchain Inc., formerly HotApp International, Inc., (the “Company” or “Group”) was incorporated in the State of Delaware on March 7, 2012 and established a fiscal year end of December 31. The Company’s initial business plan was to be a financial acquisition intermediary which would serve buyers and sellers for companies that are in highly fragmented industries. Our Board determined it was in the best interest of the Company to expand our business plan. On October 15, 2014, through a sale and purchase agreement, the Company acquired all the issued and outstanding stock of HotApps International Pte Ltd (“HIP”) from Singapore eDevelopment Limited (“SeD”). SeD is presently our largest stockholder. HIP owned certain intellectual property relating to instant messaging for portable devices (referred to herein as the “HotApp Application”). The HotApp Application is a cross-platform mobile application that incorporates instant messaging and ecommerce. This application can be used on any mobile platform (i.e. IOS Online or Android). The HotApp Application offered messaging and calling services for HotApp Application users (text, photo, audio); however, the messaging and calling services we offered were terminated in 2017. On December 29, 2017, our Board approved a change of the Company’s name from “HotApp International, Inc.” to “HotApp Blockchain Inc.” to reflect the Board’s determination that it was in the best interest of the Company to expand its activities to include the development and commercialization of blockchain-related technologies. One area we are presently exploring is providing technology consulting for security token offerings (“STO”). Such services, which have not yet commenced commercially, would include STO white paper development, technology design and web development. We intend to outsource certain aspects of these projects to potential partners we have identified. We have no plans to launch our own token offering, but rather may develop technologies that could facilitate such offerings by other companies. We believe that the increasing acceptance of distributed ledger technologies by potential customers will benefit us. The growth of network marketing throughout the world would impact our technologies that target that industry. In this rapidly evolving field, however, technology is advancing quickly and it is possible that our competitors could create products that gain market acceptance before our products. In 2018, one of our main developments was a broadening of our scope of planned operations into a digital transformation technology business. As a digital transformation technology business, we are committed to enabling enterprises we work with to engage in a digital transformation by providing consulting, implementation and development services with various technologies, including instant messaging, blockchain, e-commerce, social media and payment solutions. We continue to be involved in mobile application product development and other businesses, providing information technology services to end-users, service providers and other commercial users through multiple platforms. We are focused on serving business-to-business (B2B) needs in e-commerce, collaboration and supply chains. We will help enterprises and community users to transform their business model with digital economy in a more effective manner. With our platform, users can discover and build their own communities and create valuable content. Enterprises can in turn enhance the user experience with premium content, all of which are facilitated by the transactions of every stakeholder via e-commerce. Our technology platform consists of instant messaging systems, social media, e-commerce and payment systems, network marketing platforms and e-real estate. We are focused on business-to-business solutions such as enterprise messaging and workflow. We have successfully implemented several strategic platform developments for clients, including a mobile front-end solution for network marketing, a hotel e-commerce platform for Asia and a real estate agent management platform in China. We have also enhanced our technological capability from mobile application development to include blockchain architectural design, allowing mobile-friendly front-end solutions to integrate with software platforms. Our main digital assets at the present time are our applications. Our emphasis will be on developing solutions and providing services. As of June 30, 2020, details of the Company’s subsidiaries are as follows: Subsidiaries Date of Incorporation Place of Incorporation Percentage of Ownership 1st Tier Subsidiary: HotApps International Pte Ltd (“HIP”) May 23, 2014 Republic of Singapore 100% by Company Crypto Exchange Inc. December 15, 2017 State of Nevada, the United States of America 100% by Company HWH World Inc. August 28, 2018 State of Delaware, the United States of America 100% by Company 2nd Tier Subsidiaries: HWH World Pte. Ltd. September 15, 2014 Republic of Singapore 100% owned by HIP HotApp International Limited* July 8, 2014 Hong Kong (Special Administrative Region) 100% owned by HIP * On March 25, 2015, HotApps International Pte Ltd acquired 100% of the issued and outstanding shares of HotApp International Limited. Going Concern These financial statements have been prepared using accounting principles generally accepted in the United States of America applicable for a going concern, which assumes that the Company will realize its assets and discharge its liabilities in the ordinary course of business. Since inception, the Company has incurred net losses of $5,712,166 and has net working capital deficit of $1,262,501 at June 30, 2020. Management has concluded that due to the conditions described above, there is substantial doubt about the entities ability to continue as a going concern through August 13, 2021. We have evaluated the significance of the conditions in relation to our ability to meet our obligations and believe that our current cash balance along with our current operations will not provide sufficient capital to continue operation through 2020. Our ability to continue as a going concern is dependent upon achieving sales growth, management of operating expenses and ability of the Company to obtain the necessary financing to meet its obligations and pay its liabilities arising from normal business operations when they come due, and upon profitable operations. Our majority shareholder has advised us not to depend solely on them for financing. We have increased our efforts to raise additional capital through equity or debt financings from other sources. However, we cannot be certain that such capital (from our shareholders or third parties) will be available to us or whether such capital will be available on terms that are acceptable to us. Any such financing likely would be dilutive to existing stockholders and could result in significant financial operating covenants that would negatively impact our business. If we are unable to raise sufficient additional capital on acceptable terms, we will have insufficient funds to operate our business or pursue our planned growth. These financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or amounts and classification of liabilities that might result from this uncertainty. |
2. Summary of Significant Accou
2. Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Basis of presentation The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). These condensed consolidated financial statements should be read in conjunction with the financial statements and additional information as contained in our Annual Report on Form 10-K for the year ended December 31, 2019. Results of operations for the three and six months ended June 30, 2020 are not necessarily indicative of the operating results that may be expected for the year ending December 31, 2020. The other information in these condensed consolidated financial statements is unaudited but, in the opinion of management, reflects all adjustments necessary for a fair presentation of the results for the periods covered. All such adjustments are of a normal recurring nature unless disclosed otherwise. Basis of consolidation The condensed consolidated financial statements of the Group include the financial statements of HotApp Blockchain Inc. and its subsidiaries. All inter-company transactions and balances have been eliminated upon consolidation. Use of estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and revenues, cost and expenses in the financial statements and accompanying notes. Cash and cash equivalents The Company considers all highly liquid investments with a maturity of three months or less at the date of acquisition to be cash equivalents. There were no cash equivalents as of June 30, 2020 and December 31, 2019. Foreign currency risk Because of its foreign operations, the Company holds cash in non-US dollars. As of June 30, 2020, cash and cash equivalents of the Group includes, on an as converted basis to US dollars, $25,265 and $22,611 in Hong Kong Dollars (“HK$”) and Singapore Dollars (“S$”), respectively. As of December 31, 2019, cash and cash equivalents of the Group include, on an as converted basis to US dollars, $32,283, and $23,131, in Hong Kong Dollars (“HK$”), and Singapore Dollars (“S$”), respectively. Concentrations Financial instruments that potentially expose the Group to concentration of credit risk consist primarily of cash. Although the cash at each particular bank in the United States is insured up to $250,000 by Federal Deposit Insurance Corporation (FDIC), the Group exposes to risk due to its concentration of cash in foreign countries. The Group places its cash with financial institutions with high-credit ratings and quality. Fair value Fair Value of Financial Instruments The carrying value of cash and cash equivalents, accounts payable and accrued liabilities, and short-term borrowings, as reflected in the balance sheets, approximate fair value because of the short-term maturity of these instruments. All other significant financial assets, financial liabilities and equity instruments of the Company are either recognized or disclosed in the financial statements together with other information relevant for making a reasonable assessment of future cash flows, interest rate risk and credit risk. Where practicable the fair values of financial assets and financial liabilities have been determined and disclosed; otherwise only available information pertinent to fair value has been disclosed. The Company classifies and discloses assets and liabilities carried at fair value in one of the following three categories: ● Level 1 - quoted prices in active markets for identical assets and liabilities; ● Level 2 - observable market based inputs or unobservable inputs that are corroborated by market data; and ● Level 3 - significant unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions. Revenue recognition Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers (“ASC 606”), establishes principles for reporting information about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity's contracts to provide goods or services to customers. Under the new standard, revenue is recognized when a customer obtains control of promised goods or services in an amount that reflects the consideration the entity expects to receive in exchange for those goods or services. The Company adopted this new standard on January 1, 2018 under the modified retrospective method to all contracts not completed as of January 1, 2018 and the adoption did not have a material effect on our financial statements but we expanded our disclosures related to contracts with customers below. Revenue is recognized when (or as) the Company transfers promised goods or services to its customers in amounts that reflect the consideration to which the Company expects to be entitled to in exchange for those goods or services, which occurs when (or as) the Company satisfies its contractual obligations and transfers over control of the promised goods or services to its customers. Costs to obtain or fulfill a contract are expensed as incurred when the amortization period is less than one year. Contract assets and contract liabilities Based on our contracts, we normally invoice customers once our performance obligations have been satisfied, at which point payment is unconditional. Accordingly, our contracts do not give rise to contract assets or liabilities under ASC 606. Accounts receivable are recorded when the right to consideration becomes unconditional. Income taxes Current income taxes are provided for in accordance with the laws of the relevant tax authorities. Deferred income taxes are recognized when temporary differences exist between the tax bases of assets and liabilities and their reported amounts in the condensed consolidated financial statements. Net operating loss carry forwards and credits are applied using enacted statutory tax rates applicable to future years. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more-likely-than-not that a portion of or all of the deferred tax assets will not be realized. The components of the deferred tax assets and liabilities are individually classified as non-current based on their characteristics. The impact of an uncertain income tax position on the income tax return is recognized at the largest amount that is more-likely-than-not to be sustained upon audit by the relevant tax authority. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. Interest and penalties on income taxes will be classified as a component of the provisions for income taxes. The Group did not recognize any income tax due to uncertain tax position or incur any interest and penalties related to potential underpaid income tax expenses for the period ended June 30, 2020 or 2019, respectively. Foreign currency translation Items included in the financial statements of each entity in the group are measured using the currency of the primary economic environment in which the entity operates (“functional currency”). The functional and reporting currency of the Company is the United States dollar (“U.S. dollar”). The financial records of the Company’s subsidiaries located in Singapore and Hong Kong are maintained in their local currencies, the Singapore Dollar (S$) and Hong Kong Dollar (HK$), which are also the functional currencies of these entities. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency at the rates of exchange ruling at the balance sheet date. Transactions in currencies other than the functional currency during the year are converted into functional currency at the applicable rates of exchange prevailing when the transactions occurred. Transaction gains and losses are recognized in the statement of operations. The Company’s entities with functional currency of Hong Kong Dollar and Singapore Dollar, translate their operating results and financial positions into the U.S. dollar, the Company’s reporting currency. Assets and liabilities are translated using the exchange rates in effect on the balance sheet date. Revenues, expenses, gains and losses are translated using the average rate for the year. Translation adjustments are reported as cumulative translation adjustments and are shown as a separate component of comprehensive income (loss). For the three and six months ended June 30, 2020, the Company recorded other comprehensive income from translation (loss) gain of $(64,361) and $105,179 in the condensed consolidated financial statements, respectively. For the three and six months ended June 30, 2019, the Company recorded other comprehensive income from translation (loss) of $(13,206) and $(60,598) in the condensed consolidated financial statements, respectively. Comprehensive income (loss) Comprehensive income (loss) includes gains (losses) from foreign currency translation adjustments. Comprehensive income (loss) is reported in the condensed consolidated statements of operations and comprehensive loss. Loss per share Basic loss per share is computed by dividing net loss attributable to shareholders by the weighted average number of shares outstanding during the period. As of June 30, 2020, there are no potentially dilutive securities that were excluded from the computation of diluted EPS. |
3. Accounts Payable and Accrued
3. Accounts Payable and Accrued Expenses | 6 Months Ended |
Jun. 30, 2020 | |
Accounts Payable and Accrued Liabilities [Abstract] | |
Accounts Payable and Accrued Expenses | Accrued expenses and other current liabilities consisted of the following: June 30, December 31, 2020 2019 Accrued professional fees $ 11,866 $ 16,712 Other 942 1,849 Total $ 12,808 $ 18,561 |
4. Share Capitalization
4. Share Capitalization | 6 Months Ended |
Jun. 30, 2020 | |
Share Capitalization | |
Share Capitalization | The Company is authorized to issue 1 billion shares of common stock and 15 million shares of preferred stock. The authorized share capital of the Company’s common stock was increased from 500 million to 1 billion on May 5, 2017. Both share types have a $0.0001 par value. As of June 30, 2020 and December 31, 2019, the Company had issued and outstanding, 506,898,576 of common stock, and 0 shares of preferred stock. Common Shares: Pursuant to the Purchase Agreement, dated October 15, 2014, the Company issued 1,000,000 shares of common stock to SeD. Such amount represented 19% ownership in the Company. On July 13, 2015, Singapore eDevelopment Limited (“SeD”) acquired 777,687 shares of the Company common stock by converting outstanding loans made to the Company into common stock of the Company at a rate of $5.00 per share (rounded to the nearest full share). After such transactions, SeD owned 98.17% of the Company. On March 27, 2017, the Company entered into a Loan Conversion Agreement with SeD, pursuant to which SeD agreed to convert $450,890 of debt owed by Company to SeD into 500,988,889 common shares at a conversion price of $0.0009. The captioned shares were issued on June 9, 2017, and SeD owned 99.979% of the Company after such transactions. On December 20, 2018, the Board of Directors of SeD announced its intention to sell up to 3,200,000 shares of the Company to independent third parties at US$0.50 per share for an aggregate cash consideration of up to US$1,600,000. The purpose of this proposed sale was to raise funds to continue to support the general corporate and working capital of the Company, including but not limited to the operating costs of the Company. As of June 30, 2020, SeD has sold 669,200 shares of the Company to independent third parties, and SeD owned 99.847% of the Company after such transactions. Preferred Shares: No Preferred Stock were issued as of June 30, 2020 and December 31, 2019. |
5. Equity Incentive Plan
5. Equity Incentive Plan | 6 Months Ended |
Jun. 30, 2020 | |
Equity [Abstract] | |
Equity Incentive Plan | On July 30, 2018, the Company adopted the Equity Incentive Plan (the “Plan”). The Plan is intended to encourage ownership of shares by employees, directors and certain consultants to the Company in order to attract and retain such people, to induce them to work for the benefit of the Company. The Plan provides for the grant of options and/or other stock-based or stock-denominated awards. Subject to adjustment in accordance with the terms of the Plan, 50,000,000 shares of Common Stock of the Company have been reserved for issuance pursuant to awards under the Plan. The Plan will be administered by the Company’s Board of Directors. The Plan shall terminate ten (10) years from the date of its adoption by the Board of Directors. There have been no awards issued under the Plan as of June 30, 2020. |
6. Discontinued Operations
6. Discontinued Operations | 6 Months Ended |
Jun. 30, 2020 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations | On October 25, 2018, HotApps International Pte. Ltd. (“HIP”) entered into an Equity Purchase Agreement with DSS Asia Limited (“DSS Asia”), a Hong Kong subsidiary of DSS International Inc. (“DSS International”), pursuant to which HIP agreed to sell to DSS Asia all of the issued and outstanding shares of HotApps Information Technology Co. Ltd., also known as Guangzhou HotApps Technology Ltd. (“Guangzhou HotApps”). Guangzhou HotApps was a wholly owned subsidiary of HIP, which was primarily engaged in engineering work for software development, mainly voice over internet protocol. Guangzhou HotApps was also involved in a number of outsourcing projects, including projects related to real estate and lighting. The parties to the Equity Purchase Agreement agreed that the purchase price for this transaction would be $100,000, which would be paid in the form of a two-year, interest free, unsecured, demand promissory note in the principal amount of $100,000, and that such note would be due and payable in full in two years. The closing of the Equity Purchase Agreement was subject to certain conditions; these conditions were met and the transaction closed on January 14, 2019. The composition of assets and liabilities included in discontinued operations was as follows: June 30, 2020 December 31, 2019 ASSETS CURRENT ASSETS: Cash $ - $ 31,060 Deposit and other receivable - 5,136 TOTAL CURRENT ASSETS - 36,196 Fixed assets, net - 1,717 TOTAL ASSETS $ - $ 37,913 LIABILITIES AND STOCKHOLDERS' DEFICIT CURRENT LIABILITIES: Accounts payable and accrued expenses $ - $ 202,848 TOTAL CURRENT LIABILITIES - 202,848 TOTAL LIABILITIES $ - $ 202,848 The aggregate financial results of discontinued operations were as follows: Three Months Ended June 30, 2020 Three Months Ended June 30, 2019 Six Months Ended June 30, 2020 Six Months Ended June 30, 2019 Revenues: Project fee-others $ - $ - $ - $ - - - - - Cost of revenues - - - - Gross profit $ - $ - $ - $ - Operating expenses: Depreciation - - - 48 General and administrative - - - 3,662 Total operating expenses - - - 3,710 (Loss) from operations - - - (3,710 ) Other income (expenses): Other sundry income - - - - Foreign exchange (loss) - - - (2 ) Total other (expenses) income - - - (2 ) Loss from discontinued operations $ - $ - $ - $ (3,712 ) |
7. Related Party Balances and T
7. Related Party Balances and Transactions | 6 Months Ended |
Jun. 30, 2020 | |
Related Party Transactions [Abstract] | |
Related Party Balances and Transactions | SeD is the Company’s majority stockholder. Chan Heng Fai, the Executive Chairman and Acting Chief Executive Officer of the Company’s Board of Directors, is also the Chief Executive Officer and a member of SeD’s Board of Directors, as well as the majority stockholder of SeD. Lui Wai Leung Alan, the Company’s Chief Financial Officer, is also the Executive Director and Chief Financial Officer of SeD. As of the date of this report, the Company has not entered into any employment arrangement with any director or officer. As of June 30, 2020, the Company has amount due to SeD of $1,384,670, an amount due to a director of $5,156, plus an amount due to an affiliate of $99 and an amount due from an affiliate of $2,151. The Company has made full impairment provision for the amount due from the affiliate. As of December 31, 2019, the Company has amount due to SeD of $1,396,426, an amount due to a director of $5,343, plus an amount due to an affiliate of $102 and an amount due from an affiliate of $2,228. The Company has made full impairment provision for the amount due from the affiliate. The account receivable as of June 30, 2020 includes a trade receivable from an affiliate by common ownership amounting to $39,427 resulting from the revenue earned from that affiliate during the year 2017, and the company has put up a full allowance for the said amount. On October 25, 2018, HotApps International Pte. Ltd. (“HIP”) entered into an Equity Purchase Agreement with DSS Asia Limited (“DSS Asia”), a Hong Kong subsidiary of DSS International Inc. (“DSS International”), pursuant to which HIP agreed to sell to DSS Asia all of the issued and outstanding shares of HotApps Information Technology Co. Ltd., also known as Guangzhou HotApps Technology Ltd. (“Guangzhou HotApps”). Guangzhou HotApps was a wholly owned subsidiary of HIP, which was primarily engaged in engineering work for software development, mainly voice over internet protocol. Guangzhou HotApps was also involved in a number of outsourcing projects, including projects related to real estate and lighting. The parties to the Equity Purchase Agreement agreed that the purchase price for this transaction would be $100,000, which would be paid in the form of a two-year, interest free, unsecured, demand promissory note in the principal amount of $100,000, and that such note would be due and payable in full in two years. The closing of the Equity Purchase Agreement was subject to certain conditions; these conditions were met and the transaction closed on January 14, 2019. Mr. Chan Heng Fai is the Acting Chief Executive Officer and a Member of the Board of Directors of the Company. He is also the Chief Executive Officer, Chairman and controlling stockholder of Singapore eDevelopment Limited, the majority stockholder of the Company. Mr. Chan is also the Chief Executive Officer and Chairman of DSS International and a significant stockholder and a member of the Board of Document Security Systems Inc., which is the sole owner of DSS International. Mr. Chan Heng Fai is also a member of the Board of Directors of Document Security Systems and a stockholder of Document Security Systems. Lum Kan Fai, a member of the Board of Directors of the Company, is also an employee of DSS International. Since the completion of the sale of all of the issued and outstanding shares of HotApps Information Technology Co. Ltd. (also known as Guangzhou HotApps Technology Ltd.) on January 14, 2019, we have not paid any employees, and our largest stockholder, SeD, has provided staff without charge to our Company. We intend to outsource many functions of our business for the immediate future. |
8. Subsequent Events
8. Subsequent Events | 6 Months Ended |
Jun. 30, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | The Company has evaluated subsequent events through the date these financial statements were issued and determined that there are no reportable subsequent events. |
2. Summary of Significant Acc_2
2. Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Basis of presentation | The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). These condensed consolidated financial statements should be read in conjunction with the financial statements and additional information as contained in our Annual Report on Form 10-K for the year ended December 31, 2019. Results of operations for the three and six months ended June 30, 2020 are not necessarily indicative of the operating results that may be expected for the year ending December 31, 2020. The other information in these condensed consolidated financial statements is unaudited but, in the opinion of management, reflects all adjustments necessary for a fair presentation of the results for the periods covered. All such adjustments are of a normal recurring nature unless disclosed otherwise. |
Basis of consolidation | The condensed consolidated financial statements of the Group include the financial statements of HotApp Blockchain Inc. and its subsidiaries. All inter-company transactions and balances have been eliminated upon consolidation. |
Use of estimates | The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and revenues, cost and expenses in the financial statements and accompanying notes. |
Cash and cash equivalents | The Company considers all highly liquid investments with a maturity of three months or less at the date of acquisition to be cash equivalents. There were no cash equivalents as of June 30, 2020 and December 31, 2019. |
Foreign currency risk | Because of its foreign operations, the Company holds cash in non-US dollars. As of June 30, 2020, cash and cash equivalents of the Group includes, on an as converted basis to US dollars, $25,265 and $22,611 in Hong Kong Dollars (“HK$”) and Singapore Dollars (“S$”), respectively. As of December 31, 2019, cash and cash equivalents of the Group include, on an as converted basis to US dollars, $32,283, and $23,131, in Hong Kong Dollars (“HK$”), and Singapore Dollars (“S$”), respectively. |
Concentrations | Financial instruments that potentially expose the Group to concentration of credit risk consist primarily of cash. Although the cash at each particular bank in the United States is insured up to $250,000 by Federal Deposit Insurance Corporation (FDIC), the Group exposes to risk due to its concentration of cash in foreign countries. The Group places its cash with financial institutions with high-credit ratings and quality. |
Fair value | Fair Value of Financial Instruments The carrying value of cash and cash equivalents, accounts payable and accrued liabilities, and short-term borrowings, as reflected in the balance sheets, approximate fair value because of the short-term maturity of these instruments. All other significant financial assets, financial liabilities and equity instruments of the Company are either recognized or disclosed in the financial statements together with other information relevant for making a reasonable assessment of future cash flows, interest rate risk and credit risk. Where practicable the fair values of financial assets and financial liabilities have been determined and disclosed; otherwise only available information pertinent to fair value has been disclosed. The Company classifies and discloses assets and liabilities carried at fair value in one of the following three categories: ● Level 1 - quoted prices in active markets for identical assets and liabilities; ● Level 2 - observable market based inputs or unobservable inputs that are corroborated by market data; and ● Level 3 - significant unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions. |
Revenue recognition | Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers (“ASC 606”), establishes principles for reporting information about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity's contracts to provide goods or services to customers. Under the new standard, revenue is recognized when a customer obtains control of promised goods or services in an amount that reflects the consideration the entity expects to receive in exchange for those goods or services. The Company adopted this new standard on January 1, 2018 under the modified retrospective method to all contracts not completed as of January 1, 2018 and the adoption did not have a material effect on our financial statements but we expanded our disclosures related to contracts with customers below. Revenue is recognized when (or as) the Company transfers promised goods or services to its customers in amounts that reflect the consideration to which the Company expects to be entitled to in exchange for those goods or services, which occurs when (or as) the Company satisfies its contractual obligations and transfers over control of the promised goods or services to its customers. Costs to obtain or fulfill a contract are expensed as incurred when the amortization period is less than one year. |
Contract assets and contract liabilities | Based on our contracts, we normally invoice customers once our performance obligations have been satisfied, at which point payment is unconditional. Accordingly, our contracts do not give rise to contract assets or liabilities under ASC 606. Accounts receivable are recorded when the right to consideration becomes unconditional. |
Income taxes | Current income taxes are provided for in accordance with the laws of the relevant tax authorities. Deferred income taxes are recognized when temporary differences exist between the tax bases of assets and liabilities and their reported amounts in the condensed consolidated financial statements. Net operating loss carry forwards and credits are applied using enacted statutory tax rates applicable to future years. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more-likely-than-not that a portion of or all of the deferred tax assets will not be realized. The components of the deferred tax assets and liabilities are individually classified as non-current based on their characteristics. The impact of an uncertain income tax position on the income tax return is recognized at the largest amount that is more-likely-than-not to be sustained upon audit by the relevant tax authority. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. Interest and penalties on income taxes will be classified as a component of the provisions for income taxes. The Group did not recognize any income tax due to uncertain tax position or incur any interest and penalties related to potential underpaid income tax expenses for the period ended June 30, 2020 or 2019, respectively. |
Foreign currency translation | Items included in the financial statements of each entity in the group are measured using the currency of the primary economic environment in which the entity operates (“functional currency”). The functional and reporting currency of the Company is the United States dollar (“U.S. dollar”). The financial records of the Company’s subsidiaries located in Singapore and Hong Kong are maintained in their local currencies, the Singapore Dollar (S$) and Hong Kong Dollar (HK$), which are also the functional currencies of these entities. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency at the rates of exchange ruling at the balance sheet date. Transactions in currencies other than the functional currency during the year are converted into functional currency at the applicable rates of exchange prevailing when the transactions occurred. Transaction gains and losses are recognized in the statement of operations. The Company’s entities with functional currency of Hong Kong Dollar and Singapore Dollar, translate their operating results and financial positions into the U.S. dollar, the Company’s reporting currency. Assets and liabilities are translated using the exchange rates in effect on the balance sheet date. Revenues, expenses, gains and losses are translated using the average rate for the year. Translation adjustments are reported as cumulative translation adjustments and are shown as a separate component of comprehensive income (loss). For the three and six months ended June 30, 2020, the Company recorded other comprehensive income from translation (loss) gain of $(64,361) and $105,179 in the condensed consolidated financial statements, respectively. For the three and six months ended June 30, 2019, the Company recorded other comprehensive income from translation (loss) of $(13,206) and $(60,598) in the condensed consolidated financial statements, respectively. |
Comprehensive income (loss) | Comprehensive income (loss) includes gains (losses) from foreign currency translation adjustments. Comprehensive income (loss) is reported in the condensed consolidated statements of operations and comprehensive loss. |
Loss per share | Basic loss per share is computed by dividing net loss attributable to shareholders by the weighted average number of shares outstanding during the period. As of June 30, 2020, there are no potentially dilutive securities that were excluded from the computation of diluted EPS. |
1. The Company History and Na_2
1. The Company History and Nature of the Business (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Summary of subsidiaries | Subsidiaries Date of Incorporation Place of Incorporation Percentage of Ownership 1st Tier Subsidiary: HotApps International Pte Ltd (“HIP”) May 23, 2014 Republic of Singapore 100% by Company Crypto Exchange Inc. December 15, 2017 State of Nevada, the United States of America 100% by Company HWH World Inc. August 28, 2018 State of Delaware, the United States of America 100% by Company 2nd Tier Subsidiaries: HWH World Pte. Ltd. September 15, 2014 Republic of Singapore 100% owned by HIP HotApp International Limited* July 8, 2014 Hong Kong (Special Administrative Region) 100% owned by HIP |
3. Accounts Payable and Accru_2
3. Accounts Payable and Accrued Expense (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Accounts Payable and Accrued Liabilities [Abstract] | |
Schedule of accounts payable and accrued expenses | June 30, December 31, 2020 2019 Accrued professional fees $ 11,866 $ 16,712 Other 942 1,849 Total $ 12,808 $ 18,561 |
6. Discontinued Operations (Tab
6. Discontinued Operations (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued operations | June 30, 2020 December 31, 2019 ASSETS CURRENT ASSETS: Cash $ - $ 31,060 Deposit and other receivable - 5,136 TOTAL CURRENT ASSETS - 36,196 Fixed assets, net - 1,717 TOTAL ASSETS $ - $ 37,913 LIABILITIES AND STOCKHOLDERS' DEFICIT CURRENT LIABILITIES: Accounts payable and accrued expenses $ - $ 202,848 TOTAL CURRENT LIABILITIES - 202,848 TOTAL LIABILITIES $ - $ 202,848 Three Months Ended June 30, 2020 Three Months Ended June 30, 2019 Six Months Ended June 30, 2020 Six Months Ended June 30, 2019 Revenues: Project fee-others $ - $ - $ - $ - - - - - Cost of revenues - - - - Gross profit $ - $ - $ - $ - Operating expenses: Depreciation - - - 48 General and administrative - - - 3,662 Total operating expenses - - - 3,710 (Loss) from operations - - - (3,710 ) Other income (expenses): Other sundry income - - - - Foreign exchange (loss) - - - (2 ) Total other (expenses) income - - - (2 ) Loss from discontinued operations $ - $ - $ - $ (3,712 ) |
1. The Company History and Na_3
1. The Company History and Nature of the Business (Details) | 6 Months Ended | |
Jun. 30, 2020 | ||
Place of incorporation | DE | |
HotApps International Pte Ltd ("HIP") | ||
Date of incorporation | May 23, 2014 | |
Place of incorporation | U0 | |
Percentage of ownership | 100.00% | |
Crypto Exchange Inc. | ||
Date of incorporation | Dec. 15, 2017 | |
Place of incorporation | NV | |
Percentage of ownership | 100.00% | |
HWH World Inc. | ||
Date of incorporation | Aug. 28, 2018 | |
Place of incorporation | DE | |
Percentage of ownership | 100.00% | |
HWH World Pte. Ltd | ||
Date of incorporation | Sep. 15, 2014 | |
Place of incorporation | U0 | |
Percentage of ownership | 100.00% | |
HotApp International Limited | ||
Date of incorporation | Jul. 8, 2014 | |
Place of incorporation | K3 | |
Percentage of ownership | 100.00% | [1] |
[1] | On March 25, 2015, HotApps International Pte Ltd acquired 100% of the issued and outstanding shares of HotApp International Limited. |
1. The Company History and Na_4
1. The Company History and Nature of the Business (Details Narrative) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Incurred net losses | $ (5,712,166) | $ (5,616,908) |
Net working capital deficit | $ (1,262,501) |
2. Summary of Significant Acc_3
2. Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Accounting Policies [Abstract] | ||||
Revenue | $ 0 | $ 0 | $ 0 | $ 0 |
Foreign currency translation gain (loss) | $ (64,361) | $ (13,206) | $ 105,179 | $ (60,598) |
Anti-dilutive shares | 0 | 0 |
3. Accounts Payable and Accru_3
3. Accounts Payable and Accrued Expense (Details) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 |
Accounts Payable and Accrued Liabilities [Abstract] | ||
Accrued professional fees | $ 11,866 | $ 16,712 |
Other | 942 | 1,849 |
Total | $ 12,808 | $ 18,561 |
4. Share Capitalization (Detail
4. Share Capitalization (Details Narrative) - $ / shares | Jun. 30, 2020 | Dec. 31, 2019 |
Share Capitalization | ||
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, authorized | 1,000,000,000 | 1,000,000,000 |
Common stock, issued | 506,898,576 | 506,898,576 |
Common stock, outstanding | 506,898,576 | 506,898,576 |
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, authorized | 15,000,000 | 15,000,000 |
Preferred stock, issued | 0 | 0 |
Preferred stock, outstanding | 0 | 0 |
6. Discontinued Operations (Det
6. Discontinued Operations (Details) - USD ($) | Jun. 30, 2020 | Jan. 14, 2019 |
Discontinued Operations and Disposal Groups [Abstract] | ||
Cash | $ 0 | $ 31,060 |
Deposit and other receivable | 0 | 5,136 |
TOTAL CURRENT ASSETS | 0 | 36,196 |
Fixed assets, net | 0 | 1,717 |
TOTAL ASSETS | 0 | 37,913 |
Accounts payable and accrued expenses | 0 | 202,848 |
TOTAL CURRENT LIABILITIES | 0 | 202,848 |
TOTAL LIABILITIES | $ 0 | $ 202,848 |
6. Discontinued Operations (D_2
6. Discontinued Operations (Details 1) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Discontinued Operations and Disposal Groups [Abstract] | ||||
Project fee-others | $ 0 | $ 0 | $ 0 | $ 0 |
Cost of revenues | 0 | 0 | 0 | 0 |
Gross profit | 0 | 0 | 0 | 0 |
Depreciation | 0 | 0 | 0 | 48 |
General and administrative | 0 | 0 | 0 | 3,662 |
Total operating expenses | 0 | 0 | 0 | 3,710 |
(Loss) from operations | 0 | 0 | 0 | (3,710) |
Other sundry income | 0 | 0 | 0 | 0 |
Foreign exchange (loss) | 0 | 0 | 0 | (2) |
Total other (expenses) income | 0 | 0 | 0 | (2) |
Loss from discontinued operations | $ 0 | $ 0 | $ 0 | $ (3,712) |