| Description of business and basis of presentation | Note 1 – Description of business and basis of presentation Organization and nature of business Cloudweb, Inc. (the "Company", or “Cloudweb”) is a Florida corporation incorporated on May 25, 2014 as Formigli Inc. On December 3, 2015, the Company changed its name to Cloudweb, Inc. We were previously engaged in On December 3, 2015 the Company increased its authorized share capital from 100,000,000 shares to 500,000,000 shares, no par value, and completed a 100 for 1 forward split for all issued and outstanding shares. All share and per share values have been retroactively impacted to reflect the forward split. On January 28, 2016, Cloudweb concluded a Share Exchange Agreement entered into with Liao Zhi De, whereby Cloudweb issued 2,500,000 shares of its common stock to Mr. Liao in exchange for 100% of the issued and outstanding equity interests of . Data Cloud owns 100% of the issued and outstanding equity interests of which it purchased from James Holland for US$72,000 (GBP 47,000) on November 25, 2015. WHS has been providing web hosting solutions for approximately ten (10) years and became a UK private limited company in 2012. In connection with the Share Exchange Agreement, Cloudweb elected to enter into the web hosting industry and discontinue its former business operations. As a result of the Share Exchange Agreement, Zhi De Liao became the Company’s sole executive officer and sole member of the Board of Directors. Concurrently, Mr. Liao, through his controlled entity, Letterston Investments Ltd., acquired 250,000,000 shares of common stock from our former sole officer and director Ms. Amy Chaffe. As a result, on the transaction date, Mr. Liao effectively controlled approximately 81% of the Company’s issued and outstanding shares of common stock. On February 1, 2016, our former officer and director Amy Chaffe entered into a Waiver, Release and Indemnity agreement with the Company where under she agreed to forgive certain debt in the amount of $167,000 due and payable at January 31, 2016 in exchange for $39,229 and the return of all assets related to the Formigli bicycles, and the sales operations thereunder. As a result of this divestiture, the Company reflected the operations of Formigli Bicycle as discontinued operations as at the fiscal year ended December 31, 2015. In the current financial statement presentation, operations of the parent company, Cloudweb, have all been allocated to retained earnings and additional paid in capital as at the transaction date. The business combination as a result of the Share Exchange Agreement described above is deemed to be a reverse acquisition pursuant to SEC guidance, ASC 805-40-25-1, which provides that the merger of a private operating company into a public corporation with nominal net assets typically results in the owners and management of the private company having actual or effective operating control of the combined company after the transaction, with shareholders of the former public entity continuing only as passive investors. These transactions are considered to be capital transactions in substance, rather than business combinations. That is, the transaction is equivalent to the issuance of stock by the private company for the net monetary assets of the public corporation, accompanied by a recapitalization. The accounting is identical to that resulting from a reverse
acquisition, except
that no goodwill or other intangible should be recorded. Goodwill reflected on the balance sheets as at June 30, 2016 and December 31, 2015 is goodwill carried on the books of the consolidated subsidiary, Data Cloud Inc. Accordingly, Cloudweb (the legal acquirer) is considered the accounting acquiree and Data Cloud (the legal acquire) is considered the accounting acquirer. The consolidated financial statements of the combined entity are in substance those of Data Cloud, with assets and liabilities, and revenues and expenses, of Cloudweb being included effective from the date of completion of the Share Exchange Transaction, as Cloudweb is deemed to be a continuation of the business of Data Cloud. The outstanding stock of Cloudweb prior to the Share Exchange Transaction has been accounted for at its net book value and no goodwill has been recognized. All outstanding shares of Cloudweb at the transaction date have been restated to reflect the effect of the business combination. As a result of the aforementioned transactions a total of shares of Cloudbweb common stock issued and outstanding at December 31, 2015 are reflected as part of the recapitalization transactions impacted January 28, 2016 in our Statements of Stockholder’s Equity (Deficit). The shares issued as part of the Share Exchange Transaction are the reported opening equity balance. Financial Statements Presented The accompanying unaudited financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions for Form 10-Q and Article 210 8-03 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. All such adjustments are of a normal recurring nature. Operating results for the six months ended June 30, 2016, are not necessarily indicative of the results that may be expected for the fiscal year ending June 30, 2016. For further information, refer to the financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2015 as filed with the Securities and Exchange Commission on April 14, 2016. |
