Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2020 | May 28, 2020 | |
Document and Entity Information | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2020 | |
Document Fiscal Year Focus | 2020 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Shell Company | false | |
Document Fiscal Period Focus | Q1 | |
Entity Registrant Name | IWEB, Inc. | |
Entity Central Index Key | 0001648365 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Trading Symbol | IWBB | |
Entity Common Stock, Shares Outstanding | 40,306,211 | |
Entity Emerging Growth Company | false | |
Entity Small Business | true |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 338,812 | $ 883,812 |
Amount due from a director | 337,042 | |
Prepayments and deposits | 403,315 | 501,547 |
Other receivables | 14,402 | 14,742 |
Amounts due from shareholders | 1,250 | 1,250 |
Total current assets | 1,094,821 | 1,401,351 |
NON-CURRENT ASSETS | ||
Deposits paid for acquisition of property, plant and equipment | 293,578 | 322,689 |
Property, plant and equipment, net | 35,795 | 27,459 |
Total non-current assets | 329,373 | 350,148 |
TOTAL ASSETS | 1,424,194 | 1,751,499 |
CURRENT LIABILITIES | ||
Accruals | 172,954 | 80,167 |
Short-term loan | 852,405 | 865,625 |
Amount due to directors | 44,872 | 208,191 |
Total current liabilities | 1,070,231 | 1,153,983 |
TOTAL LIABILITIES | 1,070,231 | 1,153,983 |
COMMITMENTS AND CONTINGENCIES | ||
STOCKHOLDERS' EQUITY | ||
Preferred stock: $0.0001 par value, 25,000,000 shares authorized, none issued and outstanding | 0 | 0 |
Common stock, par value $0.0001 per share; 75,000,000 shares authorized, 40,306,211 (December 31, 2019: 40,197,751) shares issued and outstanding as of March 31, 2020 | 7,801 | 7,790 |
Additional paid-in capital | 3,207,635 | 2,990,726 |
Accumulated deficit | (2,822,268) | (2,321,583) |
Accumulated other comprehensive loss | 30,643 | (76,721) |
Total IWEB, Inc. stockholders' equity | 423,811 | 600,212 |
Non-controlling interests | (69,848) | (2,696) |
Total equity | 353,963 | 597,516 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 1,424,194 | $ 1,751,499 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Mar. 31, 2020 | Dec. 31, 2019 |
CONDENSED CONSOLIDATED BALANCE SHEETS | ||
Preferred Stock, Par or Stated Value Per Share | $ 0.0001 | $ 0.0001 |
Preferred Stock, Shares Authorized | 25,000,000 | 25,000,000 |
Preferred Stock, Shares Issued | 0 | 0 |
Preferred Stock, Shares Outstanding | 0 | 0 |
Common Stock, Par or Stated Value Per Share | $ 0.0001 | $ 0.0001 |
Common Stock, Shares Authorized | 75,000,000 | 75,000,000 |
Common Stock, Shares, Issued | 40,306,211 | 40,197,751 |
Common Stock, Shares, Outstanding | 40,306,211 | 40,197,751 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||
Revenue | $ 0 | $ 0 |
General and administrative expenses | (307,110) | (296,173) |
Loss from operations | (307,110) | (296,173) |
Finance cost | (64,913) | |
Other (expense) income | (196,436) | 19,289 |
Loss before income tax | (568,459) | (276,884) |
Income tax | 0 | 0 |
Net loss | (568,459) | (276,884) |
Net loss attributable to noncontrolling interests | 67,774 | 7,952 |
Net loss attributable to ordinary stockholders of IWEB, Inc. | (500,685) | (268,932) |
Net loss | (568,459) | (276,884) |
Other comprehensive loss | ||
Foreign currency translation adjustment | 107,986 | (11,317) |
Total comprehensive loss | (460,473) | (288,201) |
Total comprehensive loss attributable to non-controlling interests | 67,152 | 7,952 |
Total comprehensive loss attributable to ordinary stockholders of IWEB, Inc. | $ (393,321) | $ (280,249) |
Loss per share - Basic and diluted | $ (0.01) | $ (0.01) |
Weighted average number of common shares outstanding Basic and diluted | 40,220,396 | 40,197,751 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Cash flows from operating activities | ||
Net loss | $ (568,459) | $ (276,884) |
Adjustments to reconcile net loss to cash used in operating activities: | ||
Depreciation and amortization | 1,656 | 728 |
Gain on disposal of property, plant and equipment | (46) | 0 |
Prepayments and deposits | 233,246 | 39,176 |
Other receivables | (1,035) | (1,963) |
Amounts due from shareholders | 0 | 20,000 |
Accruals | 99,954 | (20,971) |
Net cash used in operating activities | (234,684) | (239,914) |
Cash flows from investing activities | ||
Proceeds from disposal of property, plant and equipment | 112 | 0 |
Purchase of property, plant and equipment | (13,027) | 0 |
Advance to a director | (425,094) | 0 |
Net cash used in investing activities | (438,009) | 0 |
Cash flows from financing activities | ||
Repayment of advance to a director | (49,733) | 0 |
Advance from a director | 0 | 49,510 |
Proceed from issue of shares | 216,920 | 0 |
Net cash provided by financing activities | 167,187 | 49,510 |
Effect of exchange rates on cash | (39,494) | 31 |
Net decrease in cash and cash equivalents | (545,000) | (190,373) |
Cash and cash equivalents at beginning of period | 883,812 | 883,812 |
Cash and cash equivalents at end of period | 338,812 | 540,866 |
Supplemental of cash flow information | ||
Interest | 0 | 0 |
Income taxes | $ 0 | $ 0 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY - USD ($) | Common Stock [Member] | Additional Paid-In Capital [Member] | Accumulated Deficit [Member] | Accumulated Other Comprehensive Loss [Member] | Non-controlling Interests [Member] | Total |
Beginning Balances at Dec. 31, 2018 | $ 7,790 | $ 2,756,687 | $ (1,337,628) | $ (8,984) | $ (4,781) | $ 1,413,084 |
Beginning Balances (in shares) at Dec. 31, 2018 | 40,197,751 | |||||
Net loss | $ 0 | 0 | (268,932) | 0 | (7,952) | (276,884) |
Foreign currency translation adjustment | 0 | 0 | 0 | (11,317) | 0 | (11,317) |
Ending Balances at Mar. 31, 2019 | $ 7,790 | 2,756,687 | (1,606,560) | (20,301) | (12,733) | 1,124,883 |
Ending Balances (in shares) at Mar. 31, 2019 | 40,197,751 | |||||
Beginning Balances at Dec. 31, 2019 | $ 7,790 | 2,990,726 | (2,321,583) | (76,721) | (2,696) | 597,516 |
Beginning Balances (in shares) at Dec. 31, 2019 | 40,197,751 | |||||
Shares issued | $ 11 | 216,909 | 0 | 0 | 0 | 216,920 |
Shares issued (in shares) | 108,460 | |||||
Net loss | $ 0 | 0 | (500,685) | 0 | (67,774) | (568,459) |
Foreign currency translation adjustment | 0 | 0 | 0 | 107,364 | 622 | 107,986 |
Ending Balances at Mar. 31, 2020 | $ 7,801 | $ 3,207,635 | $ (2,822,268) | $ 30,643 | $ (69,848) | $ 353,963 |
Ending Balances (in shares) at Mar. 31, 2020 | 40,306,211 |
ORGANIZATION AND BUSINESS
ORGANIZATION AND BUSINESS | 3 Months Ended |
Mar. 31, 2020 | |
ORGANIZATION AND BUSINESS | |
ORGANIZATION AND BUSINESS | NOTE 1 – ORGANIZATION AND BUSINESS IWEB, Inc. (the “Company”) was incorporated under the laws of the State of Nevada on February 17, 2015. The Company’s original business plan was to actively engage in providing high impact internet marketing strategies to internet based businesses and people seeking to create websites, but this business was not successful. On December 12, 2016, 24,997,500 shares of the common stock of the Company, representing 97.08% of the Company’s issued and outstanding shares of common stock at that time, were sold by Dmitriy Kolyvayko in a private transaction to Mr. Wai Hok Fung (the “Transaction”) for an aggregate purchase price of $380,000. In connection with the Transaction, Mr. Kolyvayko released the Company from certain liabilities and obligations arising out of his service as a director and officer of the Company. On May 15, 2017, the Company entered into a share exchange agreement (the “Share Exchange Agreement”) with Enigma Technology International Corporation (“Enigma BVI”), and all the shareholders of Enigma BVI, namely, Mr. Ratanaphon Wongnapachant, Ms. Chanikarn Lertchawalitanon and S-Mark Co. Ltd. (collectively the “Shareholders”), to acquire all the issued and outstanding capital stock of Enigma BVI in exchange for the issuance to the Shareholders of an aggregate of 31,500,000 restricted shares of IWEB, Inc.’s common stock (the “Reverse Merger”). The Reverse Merger closed on May 15, 2017. As a result of the Reverse Merger, Enigma BVI is a wholly-owned subsidiary of the Company. Enigma BVI was incorporated on February 22, 2017 in the British Virgin Islands. Digiwork (Thailand) Co., Ltd. (“Digiwork”) was established and incorporated in Thailand on November 24, 2016. The authorized capital of Digiwork is THB5,000,000 (approximately $163,452), divided into 500,000 common shares with a par value of THB10 per share, which has been fully paid up as of December 31, 2016. On May 15, 2017, Enigma BVI, Digiwork and the shareholders of Digiwork entered into the following commercial arrangements, or collectively, “VIE Agreements,” pursuant to which Enigma BVI has contractual rights to control and operate the businesses of Digiwork. Pursuant to an Exclusive Technology Consulting and Service Agreement, Enigma BVI agreed to act as the exclusive consultant of Digiwork and provide technology consulting and services to Digiwork. In exchange, Digiwork agreed to pay Enigma BVI a technology consulting and service fee, the amount of which is decided by Enigma BVI on the basis of the work performed and commercial value of the services and the fee amount to be equivalent to the amount of net profit before tax of Digiwork on a quarterly basis; provided that the minimum amount of which is no less than THB30,000 (approximately $978) per quarter. Without the prior written consent of Enigma BVI, Digiwork may not accept the same or similar technology consulting and services provided by any third party during the term of the agreement. All the benefits and interests generated from the agreement, including but not limited to intellectual property rights, know-how and trade secrets, will be Enigma BVI’s sole and exclusive property. The term of this agreement will expire on May 15, 2027 and may be extended unilaterally by Enigma BVI with Enigma BVI’s written confirmation prior to the expiration date. Digiwork cannot terminate the agreement early unless Enigma BVI commits fraud, gross negligence or illegal acts, or becomes bankrupt or winds up. Pursuant to an Exclusive Purchase Option Agreement, the shareholders of Digiwork granted to Enigma BVI and any party designated by Enigma BVI the exclusive right to purchase at any time during the term of this agreement all or part of the equity interests in Digiwork, or the “Equity Interests,” at a purchase price equal to the registered capital paid by the shareholders of Digiwork for the Equity Interests, or, in the event that applicable law requires an appraisal of the Equity Interests, the lowest price permitted under applicable law; Pursuant to powers of attorney executed by each of the shareholders of Digiwork, such shareholders irrevocably authorized any person appointed by Enigma BVI to exercise all shareholder rights, including but not limited to voting on their behalf on all matters requiring approval of Digiwork’s shareholders, disposing of all or part of the shareholder’s equity interest in Digiwork, and electing, appointing or removing directors and executive officers. The person designated by Enigma BVI is entitled to dispose of dividends and profits on the equity interest without reliance of any oral or written instructions of the shareholder. Each power of attorney will remain in force for so long as the shareholder remains a shareholder of Digiwork. Each shareholder has waived all the rights which have been authorized to Enigma BVI’s designated person under each power of attorney. Pursuant to equity pledge agreements, each of the shareholders of Digiwork pledged all of the Equity Interests to Enigma BVI to secure the full and complete performance of the obligations and liabilities on the part of Digiwork and each of its shareholders under this and the above contractual arrangements. If Digiwork or the shareholders of Digiwork breach their contractual obligations under these agreements, then Enigma BVI, as pledgee, will have the right to dispose of the pledged equity interests. The shareholders of Digiwork agree that, during the term of the equity pledge agreements, they will not dispose of the pledged equity interests or create or allow any encumbrance on the pledged equity interests, and they also agree that Enigma BVI’s rights relating to the equity pledge should not be prejudiced by the legal actions of the shareholders, their successors or their designees. During the term of the equity pledge, Enigma BVI has the right to receive all of the dividends and profits distributed on the pledged equity. The equity pledge agreements will terminate on the second anniversary of the date when Digiwork and the shareholders of Digiwork have completed all their obligations under the contractual agreements described above. As a result of the above contractual arrangements, Enigma BVI has substantial control over Digiwork’s daily operations and financial affairs, election of its senior executives and all matters requiring shareholder approval. Furthermore, as the primary beneficiary of Digiwork, the Company, via Enigma BVI, is entitled to consolidate the financial results of Digiwork in its own consolidated financial statements under Financial Accounting Standards Board Accounting Standard Codification (ASC) Topic 810 and related subtopics related to the consolidation of variable interest entities, or ASC Topic 810. Digiwork was set up pursuant to a joint business agreement among its shareholders on August 4, 2016 and as amended and restated on March 31, 2017 (“JBA”). Pursuant to the JBA, Digiwork is obligated to pay a total of $10,000,000 to S-Mark Co. Ltd., a shareholder of Digiwork or Digiwork Co., Ltd. (“Digiwork Korea”), a wholly owned subsidiary of S-Mark. As consideration for such payments, Digiwork Korea agreed to provide research and development services to Digiwork for a period of five years commencing on March 31, 2017. On December 31, 2016, an initial payment of $100,000 was paid to Digiwork Korea. On July 10, 2017, the parties to the JBA entered into an amendment to the Amended and Restated Joint Business Agreement which amended the total payment from $10,000,000 to $1,100,000. In May 2018, the final payment of $1,000,000 was paid to Digiwork Korea. Towards the end of 2019, management started discussions with Digiwork Korea to review the scope of the research and development with respect of the coding technology. On March 5, 2020, the parties entered into Amendment No. 2 to the Amended and Restated Joint Business Agreement, pursuant to which Digiwork Korea agreed to provide research and development services to Digiwork until December 31, 2020. Upon expiration of its services, Digiwork Korea shall repay $150,000 to Digiwork. Prepaid R&D payments to Digiwork Korea were $301,099 and $391,274 as of March 31, 2020 and December 31, 2019, respectively. Digiwork Korea also agreed to grant Digiwork full and exclusive licenses to any new launches, developments, improvements and any other intellectual property rights of coding technology developed by Digiwork Korea until December 31, 2020. The territories for such licenses are in Thailand, Vietnam, Myanmar, Laos, Cambodia, United Arab Emirates and Qatar. Digiwork was authorized by Digiwork Korea to be an official licensee and distributor of its technology exclusively in Thailand, Vietnam, Myanmar, Laos, Cambodia, United Arab Emirates and Qatar, and the authorization covers all four categories of Digiwork Korea’s coding technology: image, audio, web and security coding. This technology enables governments and enterprises around the world to give digital identities to media and objects that computers can sense and recognize, and to which they can react. Digiwork is a technology development and services provider specializing in coding services in various industries and markets. On March 7, 2018, the Company filed a Certificate of Change with the State of Nevada (the “Certificate”) to effect a 1-for-2 reverse stock split of the Company’s authorized shares of common stock, par value $0.0001 (the “Common Stock”), accompanied by a corresponding decrease in the Company’s issued and outstanding shares of Common Stock (the “Reverse Stock Split”) such that, following the consummation of the Reverse Stock Split, the number of authorized shares of Common Stock was reduced from 150,000,000 to 75,000,000. The Reverse Stock Split became effective on March 13, 2018. During 2019, One Belt One Network Holdings Limited, a British Virgin Island company (the “OBON BVI”) and 70% owned subsidiary of IWEB, Inc., OBON Corporation Company Limited, a Thailand Company (the “OBON Thailand”) and the shareholders of OBON Thailand (namely, Mr. Ratanaphon Wongnapachant, Mr. Wanee Watcharakangka and Ms. Chanikarn Lertchawalitanon, the “OBON Thailand Shareholders”) entered into the following agreements, or collectively, the “Variable Interest Entity or VIE Agreements,” pursuant to which OBON BVI has contractual rights to control and operate the business of OBON Thailand (the “VIE”). OBON Thailand was established as our VIE for our business expansion and development in Thailand, which imposes certain restrictions on foreign invested companies. The VIE Agreements are as follows: 1. Exclusive Technology Consulting and Service Agreement by and between OBON BVI and OBON Thailand. Pursuant to the Exclusive Technology Consulting and Service Agreement, OBON BVI agreed to act as the exclusive consultant of OBON Thailand and provide technology consulting and services to OBON Thailand. In exchange, OBON Thailand agreed to pay OBON BVI a technology consulting and service fee, the amount of which is decided by OBON BVI on the basis of the work performed and commercial value of the services, and the fee amount is to be equivalent to the amount of net profit before tax of OBON Thailand on a quarterly basis; provided that the minimum amount of which shall be no less than THB30,000 (approximately $978) per quarter. Without the prior written consent of OBON BVI, OBON Thailand may not accept the same or similar technology consulting and services provided by any third party during the term of the agreement. All the benefits and interests generated from the agreement, including but not limited to intellectual property rights, know-how and trade secrets, will be OBON BVI’s sole and exclusive property. The term of this agreement will expire on June 3, 2029 and may be extended unilaterally by OBON BVI with OBON BVI's written confirmation prior to the expiration date. OBON Thailand cannot terminate the agreement early unless OBON BVI commits fraud, gross negligence or illegal acts, or becomes bankrupt or winds up. 2. Exclusive Purchase Option Agreements by and among OBON BVI, OBON Thailand and each of OBON Thailand Shareholders. Pursuant to the Exclusive Purchase Option Agreements, each of OBON Thailand Shareholders granted to OBON BVI and any party designated by OBON BVI the exclusive right to purchase at any time during the term of this agreement all or part of the equity interests in OBON Thailand, or the “Equity Interests,” at a purchase price equal to the registered capital paid by each of OBON Thailand Shareholders for the Equity Interests, or, in the event that applicable law requires an appraisal of the Equity Interests, the lowest price permitted under applicable law. Pursuant to a power of attorney executed by each of OBON Thailand Shareholders, each of them irrevocably authorized any person appointed by OBON BVI to exercise all shareholder rights, including but not limited to voting on his/her behalf on all matters requiring approval of OBON Thailand’s shareholder, disposing of all or part of the shareholder's equity interest in OBON Thailand, and electing, appointing or removing directors and executive officers. The person designated by OBON BVI is entitled to dispose of dividends and profits on the equity interest without reliance on any oral or written instructions of OBON Thailand Shareholders. The power of attorney will remain in force for so long as each of OBON Thailand Shareholders remains the shareholder of OBON Thailand. Each of OBON Thailand Shareholders has waived all the rights which have been authorized to OBON BVI’s designated person under power of attorney. 3. Equity Pledge Agreements by and among OBON BVI, OBON Thailand and each of OBON Thailand Shareholders. Pursuant to the Equity Pledge Agreements, each of OBON Thailand Shareholders pledged all of the Equity Interests to OBON BVI to secure the full and complete performance of the obligations and liabilities on the part of OBON Thailand and him/her under this and the above contractual arrangements. If OBON Thailand or OBON Thailand Shareholders breaches their contractual obligations under these agreements, then OBON BVI, as pledgee, will have the right to dispose of the pledged equity interests. Each OBON Thailand Shareholders agrees that, during the term of the Equity Pledge Agreement, he/she will not dispose of the pledged equity interests or create or allow any encumbrance on the pledged equity interests, and he/she also agrees that OBON BVI’s rights relating to the equity pledge should not be prejudiced by the legal actions of the shareholder of OBON Thailand, his successors or designees. During the term of the equity pledge, OBON BVI has the right to receive all of the dividends and profits distributed on the pledged equity. The Equity Pledge Agreement will terminate on the second anniversary of the date when OBON Thailand and OBON Thailand Shareholders have completed all their obligations under the contractual agreements described above. As a result of the above contractual arrangements, OBON BVI has substantial control over OBON Thailand’s daily operations and financial affairs, election of its senior executives and all matters requiring shareholder approval. Furthermore, as the primary beneficiary of OBON Thailand, the Company, via OBON BVI, is entitled to consolidate the financial results of OBON Thailand in its own consolidated financial statements under ASC Topic 810. On September 6, 2019, OBON Thailand, a Variable Interest Entity or VIE of OBON BVI, which is a 70% owned subsidiary of IWEB, Inc. entered into a Networking and WiFi Devices Installation Agreement (the “Agreement”) with CatBuzz TV Company Limited, a Thailand Company (“CatBuzz TV”). Pursuant to the Agreement, OBON Thailand will lease and install network systems, WiFi devices and related accessories for CatBuzz TV and provides maintenance services. CatBuzz TV agrees to pay OBON Thailand compensation for the network systems, WiFi devices and the accessories and maintenance services with a monthly fee based upon the location and type of device, which fees range from 600 Bath (approximately $20) to 2,500 Baht (approximately $83) per device per month. This Agreement has a term of 5 (five) years from the execution date of the Agreement. Upon the end of the term, if not agreed otherwise, both parties agree to extend the term of the Agreement for additional 2 (two) year terms, under the same terms or according to mutually agreeable terms determined by both parties in the future. As of March 31, 2020, OBON Thailand has not yet derived any revenue pursuant to this Agreement. Organization and Reorganization Enigma BVI was incorporated on February 22, 2017 in the British Virgin Islands with limited liability as an investment holding company. Upon incorporation, Enigma BVI issued 50,000 shares at $1 each. Prior to the reorganization, Enigma BVI was owned 57.5% by Mr. Ratanaphon Wongnapachant, 2.5% by Ms. Chanikarn Lertchawalitanon, and 40% by S-Mark Co. Ltd., a KOSDAQ-listed corporation and 100% shareholder of Digiwork Korea. Digiwork (Thailand) Co. Ltd was incorporated in Thailand with limited liability on November 24, 2016. Digiwork was also owned 57.5% by Mr. Ratanaphon Wongnapachant, 2.5% by Ms. Chanikarn Lertchawalitanon, and 40% by S-Mark Co. Ltd. On May 15, 2017, Enigma BVI, Digiwork and the shareholders of Digiwork entered into the abovementioned VIE Agreements, pursuant to which Enigma BVI has contractual rights to control and operate the businesses of Digiwork. The change in control of and the acquisition of Digiwork by Enigma BVI have been accounted for as common control transactions in a manner similar to a pooling of interests, and there was no recognition of any goodwill or excess of the acquirers’ interest in the net fair value of the acquirees’ identifiable assets, liabilities and contingent liabilities over cost at the time of the common control combinations. Therefore, this transaction was recorded at historical cost with a reclassification of equity from retained profits to additional paid in capital to reflect the deemed value of consideration given in the local jurisdiction and the capital structure of Enigma BVI. On May 15, 2017, the Company entered into a share exchange agreement (the “Share Exchange Agreement”) with Enigma Technology International Corporation (“Enigma BVI”), and all the shareholders of Enigma BVI, namely, Mr. Ratanaphon Wongnapachant, Ms. Chanikarn Lertchawalitanon, and S-Mark Co. Ltd. (collectively the “Shareholders”), to acquire all the issued and outstanding capital stock of Enigma BVI in exchange for the issuance to the Shareholders of an aggregate of 31,500,000 restricted shares of IWEB, Inc.’s common stock (the “Reverse Merger”). The Reverse Merger closed on May 15, 2017. As a result of the Reverse Merger, Enigma BVI is a wholly-owned subsidiary of the Company. On May 15, 2017, the Company filed a Current Report on Form 8‑K with the Securities and Exchange Commission (“SEC”) announcing the completion of the business combination between the Company and Enigma BVI in accordance with the terms of the Share Exchange Agreement. As a result of the transaction, Enigma BVI is a wholly owned subsidiary of the Company, and the former shareholders of Enigma BVI became the holders of approximately 84% of the Company’s issued and outstanding capital stock on a fully-diluted basis immediately after the transaction. The acquisition was accounted for as a recapitalization effected by a share exchange, wherein Enigma BVI is considered the acquirer for accounting and financial reporting purposes. The assets and liabilities of the acquired entity have been brought forward at their book value and no goodwill has been recognized. In September 2018, the Company incorporated Marvelous ERA Limited in the British Virgin Islands as a wholly-owned subsidiary (“Marvelous ERA”). Marvelous ERA is the 70% majority owner of One Belt One Network Holdings Limited, a British Virgin Islands company (“OBON BVI”), which was incorporated in October 2018. OBON BVI is the sole parent of One Belt One Network (HK) Limited, a company organized under the laws of Hong Kong SAR in October 2018. In June 2019, OBON BVI, OBON Thailand and the shareholders of OBON Thailand entered into the abovementioned VIE agreements, pursuant to which OBON BVI has contractual rights to control and operate the business of OBON Thailand. In December 2019, a novel strain of coronavirus, causing a disease referred to as COVID-19, was reported to have surfaced in Wuhan, China, which has spread rapidly to many parts of the world, including Thailand and the U.S. In March 2020, the World Health Organization declared the COVID-19 a pandemic. The pandemic has resulted in quarantines, travel restrictions, and the temporary closure of office buildings and facilities in Thailand. Substantially all of our revenues are generated in Thailand. The Company’s business and services and results of operations have been adversely affected and could continue to be adversely affected by the COVID-19 pandemic. In response to the evolving dynamics related to the COVID-19 outbreak, the Company is following the guidelines of local authorities as it prioritizes the health and safety of its employees, contractors, suppliers and business partners. Our office in Thailand has been closed and all of the Company’s employees in Thailand have been working from home since March 23, 2020 until May 7, 2020. The quarantines, travel restrictions, and the temporary closure of office buildings have negatively impacted our business including our wifi installation project. Our suppliers have negatively been affected, and could continue to be negatively affected in their ability to supply and ship wifi related devices and parts to us. Our customers that are negatively impacted by the outbreak of COVID-19 may reduce their budgets to purchase our products and services, which may materially adversely impact our revenue. Some of our customers may require additional time to pay us or fail to pay us at all, which could significantly increase the amount of accounts receivable and require us to record additional allowances for doubtful accounts. The outbreak of COVID-19 has disrupted our supply chain and logistics and caused shortage of active installation workers and service providers for our project and might continue impose negative impact to our business operations. Some of our customers, contractors, suppliers and other business partners are small and medium-sized enterprises (SMEs), which may not have strong cash flows or be well capitalized, and may be vulnerable to an epidemic outbreak and slowing macroeconomic conditions. If the SMEs that we work with cannot weather the COVID-19 and the resulting economic impact, or cannot resume business as usual after a prolonged outbreak, our revenues and business operations may be materially and adversely impacted. The global economy has also been materially negatively affected by the COVID-19 and there is continued severe uncertainty about the duration and intensity of its impacts. The Thailand and global growth forecast is extremely uncertain, which would seriously affect investment in infrastructures including building wifi network and related installation business. While the potential economic impact brought by, and the duration of, COVID-19 may be difficult to assess or predict, a widespread pandemic could result in significant disruption of global financial markets, reducing our ability to access capital, which could negatively affect our liquidity. In addition, a recession or market correction resulting from the spread of COVID-19 could materially affect our business and the value of our common stock. Further, as we do not have access to a revolving credit facility, there can be no assurance that we would be able to secure commercial debt financing in the future in the event that we require additional capital. We currently believe that our financial resources will be adequate to see us through the outbreak. However, in the event that we do need to raise capital in the future, outbreak-related instability in the securities markets could adversely affect our ability to raise additional capital. Consequently, our results of operations has been adversely, and may be materially, affected, to the extent that the COVID-19 harms the Thailand and global economy. Any potential impact to our results will depend on, to a large extent, future developments and new information that may emerge regarding the duration and severity of the COVID-19 and the actions taken by government authorities and other entities to contain the COVID-19 or treat its impact, almost all of which are beyond our control. Going Concern The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern. The Company has a history of recurring net losses and a significant accumulated deficit. At March 31, 2020, the Company had an accumulated deficit of $2,822,268. These conditions raise substantial doubt about our ability to continue as a going concern. The Company's plan for continuing as a going concern included improving its profitability, and obtaining additional debt financing, loans from existing directors and shareholders and private placements of capital stock for additional funding to meet its operating needs. There can be no assurance that we will be successful in our plans described above or in attracting equity or alternative financing on acceptable terms, or if at all. These consolidated financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2020 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with United States of America generally accepted accounting principles (“U.S. GAAP”). The interim condensed consolidated financial information as of March 31, 2020 and for the three month periods ended March 31, 2020 and 2019 have been prepared without audit, pursuant to the rules and regulations of the SEC. Certain information and footnote disclosures, which are normally included in consolidated financial statements prepared in accordance with U.S. GAAP have not been included. These unaudited condensed consolidated financial statements should be read in conjunction with the financial statements and accompanying footnotes thereto, included in the Company’s Annual Report on Form 10‑K for the fiscal year ended December 31, 2019, previously filed with the SEC on April 9, 2020. In the opinion of management, all adjustments and disclosures necessary for a fair presentation of these condensed consolidated financial statements, which are of a normal and recurring nature, have been included. The results reported in the condensed consolidated financial statements for any interim periods are not necessarily indicative of the results that may be reported for the entire year. Use of Estimates The preparation of these financial statements in conformity with U.S. GAAP requires management of the Company to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues, costs and expenses, and related disclosures. On an ongoing basis, the Company evaluates its estimates based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. Identified below are the accounting policies that reflect the Company’s most significant estimates and judgments, and those that the Company believes are the most critical to fully understanding and evaluating its consolidated financial statements. Basis of Consolidation and Noncontrolling Interests The consolidated financial statements include the financial statements of the Company, its subsidiaries and VIE entities. All significant inter-company balances and transactions within the Company have been eliminated upon consolidation. A subsidiary is an entity in which (i) the Company directly or indirectly controls more than 50% of the voting power; or (ii) the Company has the power to appoint or remove the majority of the members of the board of directors or to cast a majority of votes at the meeting of the board of directors or to govern the financial and operating policies of the investee pursuant to a statute or under an agreement among the shareholders or equity holders. For the Company’s non-wholly owned subsidiaries, a noncontrolling interest is recognized to reflect a portion of equity that is not attributable, directly or indirectly, to the Company. Consolidated net income in the consolidated income statements includes net income (loss) attributable to noncontrolling interests. The cumulative results of operations attributable to noncontrolling interests are also recorded as noncontrolling interests in the Company’s consolidated balance sheets. Cash flows related to transactions with noncontrolling interests are presented under financing activities in the consolidated statements of cash flows. VIE Consolidation Digiwork Digiwork is owned as to 57.5% by Mr. Ratanaphon Wongnapachant, 2.5% by Ms. Chanikarn Lertchawalitanon, and 40% by S-Mark Co. Ltd., a KOSDAQ-listed corporation. For the consolidated VIE, management made evaluations of the relationships between the Company and the VIE and the economic benefit flow of contractual arrangements with the VIE. In connection with such evaluation, management also took into account the fact that, as a result of such contractual arrangements, the Company controls the shareholders’ voting interests in the VIE. As a result of such evaluation, management concluded that Enigma BVI is the primary beneficiary of its consolidated VIE. Owing predominantly to the Thailand legal restrictions on foreign ownership, Enigma BVI currently conducts the coding business in Thailand through Digiwork, which it effectively controls through a series of contractual arrangements. The Company consolidates in its consolidated financial statements of the VIE of which the Company is the primary beneficiary. The following financial information of Digiwork is included in the accompanying consolidated financial statements: March 31, 2020 December 31, 2019 ASSETS Cash at bank and on hand $ 1,025 $ 377 Prepayments and deposits 301,270 391,463 Other receivables 2,358 2,582 Amount due from a fellow subsidiary — 849 Property, plant and equipment, net 4,334 5,409 TOTAL ASSETS $ 308,987 $ 400,680 LIABILITIES Accruals $ 12,144 $ 13,239 Amount due to a director 443,967 487,991 Amount due to Enigma BVI 1,000,000 1,000,000 TOTAL LIABILITIES $ 1,456,111 $ 1,501,230 For the three months ended March 31, 2020 2019 Revenues $ — $ — Net loss $ 152,489 $ 82,072 For the three months ended March 31, 2020 2019 Net cash used in operating activities $ (207) $ (46,046) Net cash provided by investing activities 112 — Net cash provided by financing activities 807 49,510 OBON Thailand OBON Thailand is owned 90.9% by Ms. Chanikarn Lertchawalitanon, 0.1% by Wanee Watcharakangka, and 9.0% by Mr. Ratanaphon Wongnapachant. For the consolidated VIE, management made evaluations of the relationships between the Company and the VIE and the economic benefit flow of contractual arrangements with the VIE. In connection with such evaluation, management also took into account the fact that, as a result of such contractual arrangements, the Company controls the shareholders’ voting interests in the VIE. As a result of such evaluation, management concluded that OBON BVI is the primary beneficiary of its consolidated VIE. OBON Thailand was established as a VIE for the Company’s business expansion and development in Thailand, which imposes certain restrictions on foreign invested companies. The Company consolidates in its consolidated financial statements of the VIE of which the Company is the primary beneficiary. The following financial information of OBON Thailand is included in the accompanying consolidated financial statements: March 31, 2020 December 31, 2019 ASSETS Cash at bank and on hand $ 128,862 $ 687,008 Other receivables 12,044 12,160 Prepayments and deposits 102,045 110,084 Amount due from a director 406,728 124 Deposits paid for acquisition of property, plant and equipment 293,578 322,689 Property, plant and equipment, net 31,461 22,050 TOTAL ASSETS $ 974,718 $ 1,154,115 LIABILITIES Accruals $ 93,603 $ 35,089 Short-term loan 852,405 865,625 Amounts due to fellow subsidiaries 166,666 167,515 TOTAL LIABILITIES $ 1,112,674 $ 1,068,229 For the three months ended March 31, 2020 Revenues $ — Net loss $ 225,914 Net cash used in operating activities $ (79,789) Net cash used in investing activities (438,928) Net cash used in financing activities — OBON Thailand has not earned any revenue since its inception. Property, plant and equipment Property, plant and equipment are recorded at cost less accumulated depreciation and accumulated impairment. Depreciation is computed using the straight-line method over the estimated useful lives of the assets. Estimated useful lives (years) Office and computer equipment 5 Software 5 Expenditure for maintenance and repairs is expensed as incurred. The gain or loss on the disposal of property, plant and equipment is the difference between the net sales proceeds and the lower of the carrying value or fair value less cost to sell the relevant assets and is recognized in general and administrative expenses in the consolidated statements of comprehensive loss. Impairment of Long-lived Assets In accordance with ASC 360‑10‑35, we review the carrying values of long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. Based on the existence of one or more indicators of impairment, the Company measures any impairment of long-lived assets using the projected discounted cash flow method at the asset group level. The estimation of future cash flows requires significant management judgment based on the Company’s historical results and anticipated results and is subject to many factors. The discount rate that is commensurate with the risk inherent in the Company’s business model is determined by its management. An impairment loss would be recorded if the Company determined that the carrying value of long-lived assets may not be recoverable. The impairment to be recognized is measured by the amount by which the carrying values of the assets exceed the fair value of the assets. No impairment has been recorded by the Company as of March 31, 2020 and December 31, 2019. Revenue Recognition Revenue is principally comprised of image coding services revenue, and represents the fair value of the consideration received or receivable for the provision of services in the ordinary course of the Company’s activities and is recorded net of value-added tax ("VAT"). Under the new revenue standards, the Company recognizes revenues when its customer obtains control of promised goods or services, in an amount that reflects the consideration which the Company expects to receive in exchange for those goods or services. The Company recognizes revenues following the five step model prescribed under ASU No. 2014‑09: (i) identify contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenues when (or as) the Company satisfies the performance obligation. Revenues are recognized when the customer obtains control of our product or services, which may occur at a point in time or over time depending on the terms and conditions of the agreement. Neither the Company, its subsidiaries or VIEs earned any revenue for the three months ended March 31, 2020 and 2019. Leases Effective with adoption of Accounting Standards Update No. 2016-02 (ASU 2016-02), Leases (the new lease standard) on January 1, 2019, the Company determines if an arrangement is a lease at inception. Operating lease right-of-use (ROU) assets and liabilities are recognized at commencement date based on the present value of remaining lease payments over the lease term. For this purpose, the Company considers only payments that are fixed and determinable at the time of commencement. As most of the Company's leases do not provide an implicit rate, it uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The Company's incremental borrowing rate is a hypothetical rate based on its understanding of what its credit rating would be. The ROU asset also includes any lease payments made prior to commencement and is recorded net of any lease incentives received. The Company's lease terms may include options to extend or terminate the lease when it is reasonably certain that it will exercise such options. Operating leases are included in operating lease right-of-use assets, operating lease liabilities, current and operating lease liabilities, non-current on the Company's consolidated balance sheets. Foreign Currency and Foreign Currency Translation The functional currency of the Company and its subsidiaries is US$. The Company’s VIEs with operations in Thailand use their respective local currency, Thai Baht (“THB”), as their functional currency. An entity’s functional currency is the currency of the primary economic environment in which it operates, normally that is the currency of the environment in which the entity primarily generates and expends cash. Management’s judgment is essential to determine the functional currency by assessing various indicators, such as cash flows, sales price and market, expenses, financing and inter-company transactions and arrangements. Foreign currency transactions denominated in currencies other than the functional currency are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are re-measured at the applicable rates of exchange in effect at that date. Gains and losses resulting from foreign currency re-measurement are included in the statements of comprehensive loss. The financial statements are presented in U.S. dollars. Assets and liabilities are translated into U.S. dollars at the current exchange rate in effect at the balance sheet date, and revenues and expenses are translated at the average of the exchange rates in effect during the reporting period. Stockholders’ equity accounts are translated using the historical exchange rates at the date the entry to stockholders’ equity was recorded, except for the change in retained earnings during the period, which is translated using the historical exchange rates used to translate each period’s income statement. Differences resulting from translating functional currencies to the reporting currency are recorded in accumulated other comprehensive income in the balance sheets. Translation of amounts from THB into U.S. dollars has been made at the following exchange rates: Balance sheet items, except for equity accounts March 31, 2020 THB32.7000 to $1 December 31, 2019 THB29.7500 to $1 Income statement and cash flows items For the three months ended March 31, 2020 THB31.2785 to $1 For the three months ended March 31, 2019 THB31.6251 to $1 Research and Development Research and development costs are paid to Digiwork Korea, which is providing research and development services to Digiwork commencing from March 31, 2017and ending on December 31, 2020. Research and development costs are recognized in general and administrative expenses and expensed as incurred. Research and development expense was $57,371 and $58,464 for the three months ended March 31, 2020 and 2019, respectively. Income Taxes Income taxes are accounted for using an asset and liability approach which requires the recognition of income taxes payable or refundable for the current year and deferred tax liabilities and assets for the future tax consequences of events that have been recognized in the Company’s financial statements or tax returns. Deferred income taxes are determined based on the differences between the accounting basis and the tax basis of assets and liabilities and are measured using the currently enacted tax rates and laws. Deferred tax assets are reduced by a valuation allowance, if based on available evidence, it is considered that it is more likely than not that some portion of or all of the deferred tax assets will not be realized. In making such determination, the Company considers factors including future reversals of existing taxable temporary differences, future profitability, and tax planning strategies. If events were to occur in the future that would allow the Company to realize more of its deferred tax assets than the presently recorded net amount, an adjustment would be made to the deferred tax assets that would increase income for the period when those events occurred. If events were to occur in the future that would require the Company to realize less of its deferred tax assets than the presently recorded net amount, an adjustment would be made to the valuation allowance against deferred tax assets that would decrease income for the period when those events occurred. Significant management judgment is required in determining income tax expense and deferred tax assets and liabilities. Thailand Withholding Tax on Dividends Dividends payable by a foreign invested enterprise in Thailand to its foreign investors are subject to a 10% withholding tax, unless any foreign investor’s jurisdiction of incorporation has a tax treaty with Thailand that provides for a different withholding arrangement. Uncertain Tax Positions Management reviews regularly the adequacy of the provisions for taxes as they relate to the Company’s income and transactions. In order to assess uncertain tax positions, the Company applies a more likely than not threshold and a two-step approach for tax position measurement and financial statement recognition. For the two-step approach, the first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely to be realized upon settlement. Net loss per share of common stock The Company has adopted ASC Topic 260, “Earnings per Share,” (“EPS”) which requires presentation of basic EPS on the face of the income statement for all entities with complex capital structures and requires a reconciliation of the numerator and denominator of the basic EPS computation. In the accompanying financial statements, basic earnings (loss) per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period. For the three months ended 2020 2019 Net loss attributable to ordinary stockholders of IWEB, Inc. $ (500,685) $ (268,932) Weighted average number of common shares outstanding – basic and diluted 40,220,396 40,197,751 Basic and diluted loss per share $ (0.01) $ (0.01) The calculation of basic net loss per share of common stock is based on the net loss attributable to ordinary stockholders of IWEB, Inc. for the three months ended March 31, 2020 and 2019 and the weighted average number of ordinary shares outstanding. The Company has no potentially dilutive securities, such as options or warrants, currently issued and outstanding. Segments The Company evaluates a reporting unit by first identifying its operating segments, and then evaluates each operating segment to determine if it includes one or more components that constitute a business. If there are components within an operating segment that meets the definition of a business, the Company evaluates those components to determine if they must be aggregated into one or more reporting units. If applicable, when determining if it is appropriate to aggregate different operating segments, the Company determines if the segments are economically similar and, if so, the operating segments are aggregated. Fair Value of Financial Instruments U.S. GAAP establishes a three-tier hierarchy to prioritize the inputs used in the valuation methodologies in measuring the fair value of financial instruments. This hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The three-tier fair value hierarchy is: Level 1 – observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2 – include other inputs that are directly or indirectly observable in the market place. Level 3 – unobservable inputs which are supported by little or no market activity. The carrying value of the Company’s financial instruments, including cash at banks and on hand and balances with related parties approximate their fair value due to their short maturities. Comprehensive Income Comprehensive income is defined as the change in equity of a company during a period from transactions and other events and circumstances excluding transactions resulting from investments from owners and distributions to owners. Accumulated other comprehensive income includes cumulative foreign currency translation adjustment. Recently Issued Accounting Pronouncements In June 2016, the FASB issued ASU No. 2016‑13, Financial Instruments-Credit Losses (Topic 326), which requires entities to measure all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. This replaces the existing incurred loss model and is applicable to the measurement of credit losses on financial assets measured at amortized cost. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The Company adopted the guidance effective January 1, 2020, and the guidance did not have a material impact on the Company’s condensed consolidated financial statements. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement, which modifies the disclosure requirements for Level 1, Level 2 and Level 3 instruments in the fair value hierarchy. The guidance is effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. The Company adopted the guidance effective January 1, 2020, and the guidance did not have a material impact on the Company’s condensed consolidated financial statements. In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes, which simplifies the accounting for income taxes, eliminates certain exceptions within ASC 740, Income Taxes, and clarifies certain aspects of the current guidance to promote consistent application among reporting entities. The guidance is effective for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years, with early adoption permitted. Upon adoption, the Company must apply certain aspects of this standard retrospectively for all periods presented while other aspects are applied on a modified retrospective basis through a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year of adoption. The Company is evaluating the impact this update will have on its financial statements. |
BALANCES WITH RELATED PARTIES
BALANCES WITH RELATED PARTIES | 3 Months Ended |
Mar. 31, 2020 | |
BALANCES WITH RELATED PARTIES | |
BALANCES WITH RELATED PARTIES | NOTE 3 - BALANCES WITH RELATED PARTIES March 31, 2020 December 31, 2019 Due from shareholders $ 1,250 $ 1,250 Due from (to) directors Mr. Ratanaphon Wongnapachant $ 337,042 $ (163,319) Mr. Wai Hok Fung $ (44,872) (44,872) The balances with shareholders and directors detailed above as of March 31, 2020 and December 31, 2019 are unsecured, non-interest bearing, receivable and repayable on demand. Subsequent to March 31, 2020, Mr. Ratanaphon Wongnapachant repaid $337,042 to the Company. |
PROPERTY, PLANT AND EQUIPMENT,
PROPERTY, PLANT AND EQUIPMENT, NET | 3 Months Ended |
Mar. 31, 2020 | |
PROPERTY, PLANT AND EQUIPMENT, NET | |
PROPERTY, PLANT AND EQUIPMENT, NET | NOTE 4 - PROPERTY, PLANT AND EQUIPMENT, NET Property, plant and equipment, net consist of the following: March 31, 2020 December 31, 2019 Office and computer equipment $ 41,006 $ 32,958 Software 2,711 1,566 Less: Accumulated depreciation (7,922) (7,065) $ 35,795 $ 27,459 Depreciation expenses charged to the statements of comprehensive loss for the three months ended March 31, 2020 and 2019 were $1,656 and $728, respectively. |
COMMON STOCK
COMMON STOCK | 3 Months Ended |
Mar. 31, 2020 | |
COMMON STOCK | |
COMMON STOCK | NOTE 5 - COMMON STOCK On March 13, 2020, the Company entered into several Securities Purchase Agreements with certain investors, pursuant to which the Company sold to the such investor in a private placement an aggregate of 108,460 shares of the Company’s common stock, par value $0.0001 per share, at a purchase price of $2.00 per share for an aggregate offering price of $216,920 (the “Private Placement”). The Private Placement was completed pursuant to the exemption from registration provided by Regulation S promulgated under the Securities Act of 1933, as amended. |
SHORT-TERM LOAN
SHORT-TERM LOAN | 3 Months Ended |
Mar. 31, 2020 | |
SHORT-TERM LOAN | |
SHORT-TERM LOAN | NOTE 6 –SHORT-TERM LOAN As of March 31, 2020 and December 31, 2019, short-term loan represents a loan of $852,405 and $865,625 advanced from an unrelated party to the Company. The loan is unsecured, bearing 30% interest per annum and repayable by November 2020. Interest of $88,977 and $25,613 was accrued (included in accruals) as of March 31, 2020 and December 31, 2019, respectively. |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Mar. 31, 2020 | |
INCOME TAXES | |
INCOME TAXES | NOTE 7 - INCOME TAXES (a) The local (United States) and foreign components of loss before income taxes were comprised of the following: For three months ended 31, 2020 2019 Tax jurisdictions from: - Local $ (119,511) $ (116,664) - Foreign, representing: BVI (70,545) (51,640) HK — (26,508) Thailand (378,403) (82,072) Loss before income taxes $ (568,459) $ (276,884) United States of America The Company is incorporated in the State of Nevada and is subject to the U.S. federal tax and state tax. The Tax Cuts and Jobs Act of (“TCJ Act”) was signed into law in December 2017, and among its many provisions, it imposed a mandatory one-time transition tax on undistributed international earnings and reduced the U.S. corporate income tax rate to 21%, effective January 1, 2018. No provision for income taxes in the United States has been made as the Company had no taxable income for the three months ended March 31, 2020 and 2019. British Virgin Islands Under the current laws of the British Virgin Islands, entities incorporated in British Virgin Islands are not subject to tax on their income or capital gains. Thailand The statutory corporate income tax rate in Thailand (“CIT”) is 20%. Digiwork, assuming a paid-in capital not exceeding 5 million Thai baht (THB) ($152,905) at the end of any accounting period and income from the sale of goods and/or the provision of services not exceeding THB 30 million ($917,431) in any accounting period, is subject to CIT in Thailand at the following reduced rates: Net profit Nil – THB300,000 ($9,174) 0 % THB300,000 – THB3,000,000 ($91,743) 15 % Over THB3,000,000 ($91,743) 20 % A reconciliation of loss before income taxes to the effective tax rate as follows: For three months ended 31, 2020 2019 Loss before income taxes $ (568,459) $ (276,884) Statutory income tax rate 21 % 21 % Income tax credit computed at statutory income tax rate (119,376) (58,146) Reconciling items: Non-deductible expenses 29,713 11,125 Tax effect of tax exempt entity 14,815 10,844 Rate differential in different tax jurisdictions 3,784 2,014 Valuation allowance on deferred tax assets 71,064 34,163 Total tax expenses $ — $ — (b) The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities as of March 31, 2020 and December 31, 2019 are presented below March 31, 2020 December 31, 2019 Deferred tax assets: Net operating loss carryforwards: - United States of America $ 180,572 $ 155,475 - Thailand 186,136 156,264 366,708 311,739 Less: Valuation allowance (366,708) (311,739) $ — $ — The Company has accumulated net operating loss carryovers of approximately $859,869 and $740,358 as of March 31, 2020 and December 31, 2019, respectively, which are available to reduce future taxable income. Due to the change in ownership provisions of the Tax Reform Act of 1986, net operating loss carry forwards of $145,660 for federal income tax reporting purposes may be subject to annual limitations. A change in ownership may limit the utilization of the net operating loss carry forwards in future years. The tax losses will begin to expire in 2035. As of March 31, 2020, and December 31, 2019, the entities in Thailand had net operating loss carry forwards of $930,678 and $781,318, respectively, which will expire in various years through 2024. Management believes that it is more likely than not that the Company will not realize these potential tax benefits as these operations will not generate any operating profits in the foreseeable future. As a result, a valuation allowance was provided against the full amount of the potential tax benefits. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 3 Months Ended |
Mar. 31, 2020 | |
SEGMENT INFORMATION | |
SEGMENT INFORMATION | NOTE 8 - SEGMENT INFORMATION The Company’s segments are business units that offer different products and services and are reviewed separately by the chief operating decision maker (the “CODM”), or the decision-making group, in deciding how to allocate resources and in assessing performance. The Company’s CODM is the Company’s Chief Executive Officer. The Company used to have one reportable segment, being technology development and provision of coding services in various industries and markets. Starting from the last quarter of fiscal 2019, there is one additional segment, consisting of the leasing and installation of network systems, WiFi devices and related accessories. Technology development and services provider specializing in coding services in Lease and install various network systems, Corporate industries and WiFi devices and unallocated For the three months ended March 31, 2020 markets related accessories (note) Consolidated Revenues $ — $ — $ — $ — Gross profit — — — — General and administrative expenses (128,720) (58,879) (119,511) (307,110) Loss from operations (128,720) (58,879) (119,511) (307,110) Finance expenses — (64,913) — (64,913) Other expense (94,314) (102,122) (196,436) Loss before income tax (223,034) (225,914) (119,511) (568,459) Income tax expense — — — — Net loss (223,034) (225,914) (119,511) (568,459) Total assets As of March 31, 2020 $ 449,055 $ 974,718 $ 421 $ 1,424,194 As of December 31, 2019 $ 597,087 $ 1,153,991 $ 421 $ 1,751,499 Note: The Company does not allocate its assets located and expenses incurred outside Hong Kong and Thailand to its reportable segments because these assets and activities are managed at a corporate level. The Company primarily operates in Thailand. Substantially all the Company's long-lived assets are located in Thailand. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2020 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | NOTE 9 - COMMITMENTS AND CONTINGENCIES Lease Commitments Rental expense of the Company was $33,009 and $33,545 for the three months ended March 31, 2020 and 2019, respectively. On October 1, 2019, the Company entered into a lease for office space in Hong Kong for the period of one year, at HKD55,000 (approximately $7,051) per month. The Company has entered into a lease for office space located in Din Daeng Sub-district, din Daeng District, Bangkok, Thailand for the period from February 21, 2017 to February 20, 2020, at THB127,120 ($3,887) per month. The Company early terminated the lease effective in July 2019. On August 1, 2019 and OBON Thailand entered into a rental agreement with Mr. Thanawat Wongnapachant, brother of the Company’s CEO, to lease an office space from Mr Thanawat Wongnapachant for a period of twelve months at THB50,000 ($1,529) per month. On November 1, 2019, OBON Thailand entered into an additional rental agreement with Mr. Thanawat Wongnapachant, brother of the Company’s CEO, to lease an office space property from Mr Thanawat Wongnapachant for a period of twelve months at THB70,000 ($2,141) per month. For the three months ended March 31, 2020, the Company paid rental amounts of $11,509 to Mr. Thanawat Wongnapachant that are included in General and administrative expenses. As of March 31, 2020, all the outstanding leases are short-term leases. The total minimum future lease payments are $63,409 payable in the twelve months ending March 31, 2021. Capital Commitments As of March 31 2020, the Company had the following contracted capital commitments: March 31, 2020 For purchases of equipment, payable in the twelve months ending March 31, 2021 $ 1,006,301 Employment Agreement On October 1, 2019, Enigma BVI entered into a three-year employment agreement with Hok Fung Wai, the president of the Company to serve as Enigma BVI’s general manager from October 1, 2019 to October 1, 2022. Enigma BVI may, in its absolute discretion, terminate the employment agreement with one month notice or for cause. The agreement provides Mr. Wai a monthly salary of HK$45,000 (approximately $5,769). During the three months ended March 31, 2020, salaries paid to Mr. Wai totaled $23,654. |
THAILAND AND HONG KONG CONTRIBU
THAILAND AND HONG KONG CONTRIBUTION PLANS | 3 Months Ended |
Mar. 31, 2020 | |
THAILAND AND HONG KONG CONTRIBUTION PLANS | |
THAILAND AND HONG KONG CONTRIBUTION PLANS | NOTE 10 - THAILAND AND HONG KONG CONTRIBUTION PLANS In accordance with the rules and regulations of Thailand, the employees of the VIEs established in Thailand are required to participate in a defined contribution retirement plan organized by local government. Contributions to this plan are expensed as incurred and other than these monthly contributions, the VIE has no further obligation for the payment of retirement benefits to its employees. For the three months ended March 31, 2020 and 2019, the VIEs contributed a total of $437 and $199, respectively , to this plan. The Company also makes payments to a defined contribution plan for the benefit of employees employed in Hong Kong. Amounts contributed during the three months ended March 31, 2020 and 2019 were $577 and $1,290, respectively. |
CERTAIN RISKS AND CONCENTRATION
CERTAIN RISKS AND CONCENTRATIONS | 3 Months Ended |
Mar. 31, 2020 | |
CERTAIN RISKS AND CONCENTRATIONS | |
CERTAIN RISKS AND CONCENTRATIONS | NOTE 11 - CERTAIN RISKS AND CONCENTRATIONS Credit risk At March 31, 2020 and December 31, 2019, the Company’s cash and cash equivalents included bank deposits in accounts maintained in Thailand. The Company does not experience any losses in such accounts and believes it is not exposed to any significant risks on its cash in bank accounts. Foreign currency risk As a result of the operations in Thailand, the Company is exposed to foreign exchange risk arising from the currency exposures primarily with respect to THB. The Company’s VIEs with operations in Thailand use their respective local currency, THB, as their functional currency. Although a majority of their total revenues, their payroll and other operating expenses are incurred and paid in Thai baht, the payment of R&D services provided by Digiwork Korea is required to be made in the U.S. dollar. As of March 31, 2020 and December 31, 2019, the Company owed Enigma BVI and Digiwork Korea $1,000,000 for such R&D services, respectively. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Mar. 31, 2020 | |
SUBSEQUENT EVENTS | |
SUBSEQUENT EVENTS | NOTE 12 - SUBSEQUENT EVENTS The Company evaluated all events and transactions that occurred after March 31, 2020 up through the date the Company issued these financial statements on May 29, 2020. Coronavirus (COVID-19) In December 2019, a novel strain of coronavirus (COVID-19) surfaced. Subsequent, COVID-19 has spread rapidly to many parts of the world, including Thailand. The epidemic has resulted in quarantines and travel restrictions in Thailand, and elsewhere around the world. Substantially all of our revenues are concentrated in Thailand. Consequently, the COVID-19 outbreak may materially adversely affect our business operations, financial condition and operating results for 2020, including but not limited to material negative impact to our total revenues, slower collection of accounts receivables and additional allowance for doubtful accounts. Because of the significant uncertainties surrounding the COVID-19 outbreak, the extent of the business disruption and the related financial impact cannot be reasonably estimated at this time. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Basis of Presentation | Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with United States of America generally accepted accounting principles (“U.S. GAAP”). The interim condensed consolidated financial information as of March 31, 2020 and for the three month periods ended March 31, 2020 and 2019 have been prepared without audit, pursuant to the rules and regulations of the SEC. Certain information and footnote disclosures, which are normally included in consolidated financial statements prepared in accordance with U.S. GAAP have not been included. These unaudited condensed consolidated financial statements should be read in conjunction with the financial statements and accompanying footnotes thereto, included in the Company’s Annual Report on Form 10‑K for the fiscal year ended December 31, 2019, previously filed with the SEC on April 9, 2020. In the opinion of management, all adjustments and disclosures necessary for a fair presentation of these condensed consolidated financial statements, which are of a normal and recurring nature, have been included. The results reported in the condensed consolidated financial statements for any interim periods are not necessarily indicative of the results that may be reported for the entire year. |
Use of Estimates | Use of Estimates The preparation of these financial statements in conformity with U.S. GAAP requires management of the Company to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues, costs and expenses, and related disclosures. On an ongoing basis, the Company evaluates its estimates based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. Identified below are the accounting policies that reflect the Company’s most significant estimates and judgments, and those that the Company believes are the most critical to fully understanding and evaluating its consolidated financial statements. |
Basis of Consolidation and Noncontrolling Interests | Basis of Consolidation and Noncontrolling Interests The consolidated financial statements include the financial statements of the Company, its subsidiaries and VIE entities. All significant inter-company balances and transactions within the Company have been eliminated upon consolidation. A subsidiary is an entity in which (i) the Company directly or indirectly controls more than 50% of the voting power; or (ii) the Company has the power to appoint or remove the majority of the members of the board of directors or to cast a majority of votes at the meeting of the board of directors or to govern the financial and operating policies of the investee pursuant to a statute or under an agreement among the shareholders or equity holders. For the Company’s non-wholly owned subsidiaries, a noncontrolling interest is recognized to reflect a portion of equity that is not attributable, directly or indirectly, to the Company. Consolidated net income in the consolidated income statements includes net income (loss) attributable to noncontrolling interests. The cumulative results of operations attributable to noncontrolling interests are also recorded as noncontrolling interests in the Company’s consolidated balance sheets. Cash flows related to transactions with noncontrolling interests are presented under financing activities in the consolidated statements of cash flows. VIE Consolidation Digiwork Digiwork is owned as to 57.5% by Mr. Ratanaphon Wongnapachant, 2.5% by Ms. Chanikarn Lertchawalitanon, and 40% by S-Mark Co. Ltd., a KOSDAQ-listed corporation. For the consolidated VIE, management made evaluations of the relationships between the Company and the VIE and the economic benefit flow of contractual arrangements with the VIE. In connection with such evaluation, management also took into account the fact that, as a result of such contractual arrangements, the Company controls the shareholders’ voting interests in the VIE. As a result of such evaluation, management concluded that Enigma BVI is the primary beneficiary of its consolidated VIE. Owing predominantly to the Thailand legal restrictions on foreign ownership, Enigma BVI currently conducts the coding business in Thailand through Digiwork, which it effectively controls through a series of contractual arrangements. The Company consolidates in its consolidated financial statements of the VIE of which the Company is the primary beneficiary. The following financial information of Digiwork is included in the accompanying consolidated financial statements: March 31, 2020 December 31, 2019 ASSETS Cash at bank and on hand $ 1,025 $ 377 Prepayments and deposits 301,270 391,463 Other receivables 2,358 2,582 Amount due from a fellow subsidiary — 849 Property, plant and equipment, net 4,334 5,409 TOTAL ASSETS $ 308,987 $ 400,680 LIABILITIES Accruals $ 12,144 $ 13,239 Amount due to a director 443,967 487,991 Amount due to Enigma BVI 1,000,000 1,000,000 TOTAL LIABILITIES $ 1,456,111 $ 1,501,230 For the three months ended March 31, 2020 2019 Revenues $ — $ — Net loss $ 152,489 $ 82,072 For the three months ended March 31, 2020 2019 Net cash used in operating activities $ (207) $ (46,046) Net cash provided by investing activities 112 — Net cash provided by financing activities 807 49,510 OBON Thailand OBON Thailand is owned 90.9% by Ms. Chanikarn Lertchawalitanon, 0.1% by Wanee Watcharakangka, and 9.0% by Mr. Ratanaphon Wongnapachant. For the consolidated VIE, management made evaluations of the relationships between the Company and the VIE and the economic benefit flow of contractual arrangements with the VIE. In connection with such evaluation, management also took into account the fact that, as a result of such contractual arrangements, the Company controls the shareholders’ voting interests in the VIE. As a result of such evaluation, management concluded that OBON BVI is the primary beneficiary of its consolidated VIE. OBON Thailand was established as a VIE for the Company’s business expansion and development in Thailand, which imposes certain restrictions on foreign invested companies. The Company consolidates in its consolidated financial statements of the VIE of which the Company is the primary beneficiary. The following financial information of OBON Thailand is included in the accompanying consolidated financial statements: March 31, 2020 December 31, 2019 ASSETS Cash at bank and on hand $ 128,862 $ 687,008 Other receivables 12,044 12,160 Prepayments and deposits 102,045 110,084 Amount due from a director 406,728 124 Deposits paid for acquisition of property, plant and equipment 293,578 322,689 Property, plant and equipment, net 31,461 22,050 TOTAL ASSETS $ 974,718 $ 1,154,115 LIABILITIES Accruals $ 93,603 $ 35,089 Short-term loan 852,405 865,625 Amounts due to fellow subsidiaries 166,666 167,515 TOTAL LIABILITIES $ 1,112,674 $ 1,068,229 For the three months ended March 31, 2020 Revenues $ — Net loss $ 225,914 Net cash used in operating activities $ (79,789) Net cash used in investing activities (438,928) Net cash used in financing activities — OBON Thailand has not earned any revenue since its inception. |
Property, plant and equipment | Property, plant and equipment Property, plant and equipment are recorded at cost less accumulated depreciation and accumulated impairment. Depreciation is computed using the straight-line method over the estimated useful lives of the assets. Estimated useful lives (years) Office and computer equipment 5 Software 5 Expenditure for maintenance and repairs is expensed as incurred. The gain or loss on the disposal of property, plant and equipment is the difference between the net sales proceeds and the lower of the carrying value or fair value less cost to sell the relevant assets and is recognized in general and administrative expenses in the consolidated statements of comprehensive loss. |
Impairment of Long-lived Assets | Impairment of Long-lived Assets In accordance with ASC 360‑10‑35, we review the carrying values of long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. Based on the existence of one or more indicators of impairment, the Company measures any impairment of long-lived assets using the projected discounted cash flow method at the asset group level. The estimation of future cash flows requires significant management judgment based on the Company’s historical results and anticipated results and is subject to many factors. The discount rate that is commensurate with the risk inherent in the Company’s business model is determined by its management. An impairment loss would be recorded if the Company determined that the carrying value of long-lived assets may not be recoverable. The impairment to be recognized is measured by the amount by which the carrying values of the assets exceed the fair value of the assets. No impairment has been recorded by the Company as of March 31, 2020 and December 31, 2019. |
Revenue Recognition | Revenue Recognition Revenue is principally comprised of image coding services revenue, and represents the fair value of the consideration received or receivable for the provision of services in the ordinary course of the Company’s activities and is recorded net of value-added tax ("VAT"). Under the new revenue standards, the Company recognizes revenues when its customer obtains control of promised goods or services, in an amount that reflects the consideration which the Company expects to receive in exchange for those goods or services. The Company recognizes revenues following the five step model prescribed under ASU No. 2014‑09: (i) identify contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenues when (or as) the Company satisfies the performance obligation. Revenues are recognized when the customer obtains control of our product or services, which may occur at a point in time or over time depending on the terms and conditions of the agreement. Neither the Company, its subsidiaries or VIEs earned any revenue for the three months ended March 31, 2020 and 2019. |
Leases | Leases Effective with adoption of Accounting Standards Update No. 2016-02 (ASU 2016-02), Leases (the new lease standard) on January 1, 2019, the Company determines if an arrangement is a lease at inception. Operating lease right-of-use (ROU) assets and liabilities are recognized at commencement date based on the present value of remaining lease payments over the lease term. For this purpose, the Company considers only payments that are fixed and determinable at the time of commencement. As most of the Company's leases do not provide an implicit rate, it uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The Company's incremental borrowing rate is a hypothetical rate based on its understanding of what its credit rating would be. The ROU asset also includes any lease payments made prior to commencement and is recorded net of any lease incentives received. The Company's lease terms may include options to extend or terminate the lease when it is reasonably certain that it will exercise such options. Operating leases are included in operating lease right-of-use assets, operating lease liabilities, current and operating lease liabilities, non-current on the Company's consolidated balance sheets. |
Foreign Currency and Foreign Currency Translation | Foreign Currency and Foreign Currency Translation The functional currency of the Company and its subsidiaries is US$. The Company’s VIEs with operations in Thailand use their respective local currency, Thai Baht (“THB”), as their functional currency. An entity’s functional currency is the currency of the primary economic environment in which it operates, normally that is the currency of the environment in which the entity primarily generates and expends cash. Management’s judgment is essential to determine the functional currency by assessing various indicators, such as cash flows, sales price and market, expenses, financing and inter-company transactions and arrangements. Foreign currency transactions denominated in currencies other than the functional currency are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are re-measured at the applicable rates of exchange in effect at that date. Gains and losses resulting from foreign currency re-measurement are included in the statements of comprehensive loss. The financial statements are presented in U.S. dollars. Assets and liabilities are translated into U.S. dollars at the current exchange rate in effect at the balance sheet date, and revenues and expenses are translated at the average of the exchange rates in effect during the reporting period. Stockholders’ equity accounts are translated using the historical exchange rates at the date the entry to stockholders’ equity was recorded, except for the change in retained earnings during the period, which is translated using the historical exchange rates used to translate each period’s income statement. Differences resulting from translating functional currencies to the reporting currency are recorded in accumulated other comprehensive income in the balance sheets. Translation of amounts from THB into U.S. dollars has been made at the following exchange rates: Balance sheet items, except for equity accounts March 31, 2020 THB32.7000 to $1 December 31, 2019 THB29.7500 to $1 Income statement and cash flows items For the three months ended March 31, 2020 THB31.2785 to $1 For the three months ended March 31, 2019 THB31.6251 to $1 |
Research and Development | Research and Development Research and development costs are paid to Digiwork Korea, which is providing research and development services to Digiwork commencing from March 31, 2017and ending on December 31, 2020. Research and development costs are recognized in general and administrative expenses and expensed as incurred. Research and development expense was $57,371 and $58,464 for the three months ended March 31, 2020 and 2019, respectively. |
Income Taxes | Income Taxes Income taxes are accounted for using an asset and liability approach which requires the recognition of income taxes payable or refundable for the current year and deferred tax liabilities and assets for the future tax consequences of events that have been recognized in the Company’s financial statements or tax returns. Deferred income taxes are determined based on the differences between the accounting basis and the tax basis of assets and liabilities and are measured using the currently enacted tax rates and laws. Deferred tax assets are reduced by a valuation allowance, if based on available evidence, it is considered that it is more likely than not that some portion of or all of the deferred tax assets will not be realized. In making such determination, the Company considers factors including future reversals of existing taxable temporary differences, future profitability, and tax planning strategies. If events were to occur in the future that would allow the Company to realize more of its deferred tax assets than the presently recorded net amount, an adjustment would be made to the deferred tax assets that would increase income for the period when those events occurred. If events were to occur in the future that would require the Company to realize less of its deferred tax assets than the presently recorded net amount, an adjustment would be made to the valuation allowance against deferred tax assets that would decrease income for the period when those events occurred. Significant management judgment is required in determining income tax expense and deferred tax assets and liabilities. Thailand Withholding Tax on Dividends Dividends payable by a foreign invested enterprise in Thailand to its foreign investors are subject to a 10% withholding tax, unless any foreign investor’s jurisdiction of incorporation has a tax treaty with Thailand that provides for a different withholding arrangement. Uncertain Tax Positions Management reviews regularly the adequacy of the provisions for taxes as they relate to the Company’s income and transactions. In order to assess uncertain tax positions, the Company applies a more likely than not threshold and a two-step approach for tax position measurement and financial statement recognition. For the two-step approach, the first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely to be realized upon settlement. |
Net loss per share of common stock | Net loss per share of common stock The Company has adopted ASC Topic 260, “Earnings per Share,” (“EPS”) which requires presentation of basic EPS on the face of the income statement for all entities with complex capital structures and requires a reconciliation of the numerator and denominator of the basic EPS computation. In the accompanying financial statements, basic earnings (loss) per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period. For the three months ended 2020 2019 Net loss attributable to ordinary stockholders of IWEB, Inc. $ (500,685) $ (268,932) Weighted average number of common shares outstanding – basic and diluted 40,220,396 40,197,751 Basic and diluted loss per share $ (0.01) $ (0.01) The calculation of basic net loss per share of common stock is based on the net loss attributable to ordinary stockholders of IWEB, Inc. for the three months ended March 31, 2020 and 2019 and the weighted average number of ordinary shares outstanding. The Company has no potentially dilutive securities, such as options or warrants, currently issued and outstanding. |
Segments | Segments The Company evaluates a reporting unit by first identifying its operating segments, and then evaluates each operating segment to determine if it includes one or more components that constitute a business. If there are components within an operating segment that meets the definition of a business, the Company evaluates those components to determine if they must be aggregated into one or more reporting units. If applicable, when determining if it is appropriate to aggregate different operating segments, the Company determines if the segments are economically similar and, if so, the operating segments are aggregated. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments U.S. GAAP establishes a three-tier hierarchy to prioritize the inputs used in the valuation methodologies in measuring the fair value of financial instruments. This hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The three-tier fair value hierarchy is: Level 1 – observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2 – include other inputs that are directly or indirectly observable in the market place. Level 3 – unobservable inputs which are supported by little or no market activity. The carrying value of the Company’s financial instruments, including cash at banks and on hand and balances with related parties approximate their fair value due to their short maturities. |
Comprehensive Income | Comprehensive Income Comprehensive income is defined as the change in equity of a company during a period from transactions and other events and circumstances excluding transactions resulting from investments from owners and distributions to owners. Accumulated other comprehensive income includes cumulative foreign currency translation adjustment. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In June 2016, the FASB issued ASU No. 2016‑13, Financial Instruments-Credit Losses (Topic 326), which requires entities to measure all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. This replaces the existing incurred loss model and is applicable to the measurement of credit losses on financial assets measured at amortized cost. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The Company adopted the guidance effective January 1, 2020, and the guidance did not have a material impact on the Company’s condensed consolidated financial statements. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement, which modifies the disclosure requirements for Level 1, Level 2 and Level 3 instruments in the fair value hierarchy. The guidance is effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. The Company adopted the guidance effective January 1, 2020, and the guidance did not have a material impact on the Company’s condensed consolidated financial statements. In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes, which simplifies the accounting for income taxes, eliminates certain exceptions within ASC 740, Income Taxes, and clarifies certain aspects of the current guidance to promote consistent application among reporting entities. The guidance is effective for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years, with early adoption permitted. Upon adoption, the Company must apply certain aspects of this standard retrospectively for all periods presented while other aspects are applied on a modified retrospective basis through a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year of adoption. The Company is evaluating the impact this update will have on its financial statements. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Schedule of property plant and equipment useful life | Depreciation is computed using the straight-line method over the estimated useful lives of the assets. Estimated useful lives (years) Office and computer equipment 5 Software 5 |
Schedule of differences between reported amount and reporting currency denominated amount | Translation of amounts from THB into U.S. dollars has been made at the following exchange rates: Balance sheet items, except for equity accounts March 31, 2020 THB32.7000 to $1 December 31, 2019 THB29.7500 to $1 Income statement and cash flows items For the three months ended March 31, 2020 THB31.2785 to $1 For the three months ended March 31, 2019 THB31.6251 to $1 |
Schedule of earnings per share, basic and diluted | For the three months ended 2020 2019 Net loss attributable to ordinary stockholders of IWEB, Inc. $ (500,685) $ (268,932) Weighted average number of common shares outstanding – basic and diluted 40,220,396 40,197,751 Basic and diluted loss per share $ (0.01) $ (0.01) |
Digiwork Thailand Co Ltd | |
Schedule of condensed balance sheet | The following financial information of Digiwork is included in the accompanying consolidated financial statements: March 31, 2020 December 31, 2019 ASSETS Cash at bank and on hand $ 1,025 $ 377 Prepayments and deposits 301,270 391,463 Other receivables 2,358 2,582 Amount due from a fellow subsidiary — 849 Property, plant and equipment, net 4,334 5,409 TOTAL ASSETS $ 308,987 $ 400,680 LIABILITIES Accruals $ 12,144 $ 13,239 Amount due to a director 443,967 487,991 Amount due to Enigma BVI 1,000,000 1,000,000 TOTAL LIABILITIES $ 1,456,111 $ 1,501,230 |
Schedule of condensed income statement | For the three months ended March 31, 2020 2019 Revenues $ — $ — Net loss $ 152,489 $ 82,072 |
Schedule of condensed cash flow statement | For the three months ended March 31, 2020 2019 Net cash used in operating activities $ (207) $ (46,046) Net cash provided by investing activities 112 — Net cash provided by financing activities 807 49,510 |
OBON Thailand | |
Schedule of condensed balance sheet | The following financial information of OBON Thailand is included in the accompanying consolidated financial statements: March 31, 2020 December 31, 2019 ASSETS Cash at bank and on hand $ 128,862 $ 687,008 Other receivables 12,044 12,160 Prepayments and deposits 102,045 110,084 Amount due from a director 406,728 124 Deposits paid for acquisition of property, plant and equipment 293,578 322,689 Property, plant and equipment, net 31,461 22,050 TOTAL ASSETS $ 974,718 $ 1,154,115 LIABILITIES Accruals $ 93,603 $ 35,089 Short-term loan 852,405 865,625 Amounts due to fellow subsidiaries 166,666 167,515 TOTAL LIABILITIES $ 1,112,674 $ 1,068,229 |
Schedule of income and cashflow statement | For the three months ended March 31, 2020 Revenues $ — Net loss $ 225,914 Net cash used in operating activities $ (79,789) Net cash used in investing activities (438,928) Net cash used in financing activities — |
BALANCES WITH RELATED PARTIES (
BALANCES WITH RELATED PARTIES (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
BALANCES WITH RELATED PARTIES | |
Schedule of Balances with related parties | March 31, 2020 December 31, 2019 Due from shareholders $ 1,250 $ 1,250 Due from (to) directors Mr. Ratanaphon Wongnapachant $ 337,042 $ (163,319) Mr. Wai Hok Fung $ (44,872) (44,872) |
PROPERTY, PLANT AND EQUIPMENT_2
PROPERTY, PLANT AND EQUIPMENT, NET (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
PROPERTY, PLANT AND EQUIPMENT, NET | |
Schedule of Property, plant and equipment, net | Property, plant and equipment, net consist of the following: March 31, 2020 December 31, 2019 Office and computer equipment $ 41,006 $ 32,958 Software 2,711 1,566 Less: Accumulated depreciation (7,922) (7,065) $ 35,795 $ 27,459 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
INCOME TAXES | |
Schedule of components of loss before income taxes | (a) The local (United States) and foreign components of loss before income taxes were comprised of the following: For three months ended 31, 2020 2019 Tax jurisdictions from: - Local $ (119,511) $ (116,664) - Foreign, representing: BVI (70,545) (51,640) HK — (26,508) Thailand (378,403) (82,072) Loss before income taxes $ (568,459) $ (276,884) |
Schedule of corporate income tax rate | Net profit Nil – THB300,000 ($9,174) 0 % THB300,000 – THB3,000,000 ($91,743) 15 % Over THB3,000,000 ($91,743) 20 % |
Schedule of reconciliation of loss before income taxes | A reconciliation of loss before income taxes to the effective tax rate as follows: For three months ended 31, 2020 2019 Loss before income taxes $ (568,459) $ (276,884) Statutory income tax rate 21 % 21 % Income tax credit computed at statutory income tax rate (119,376) (58,146) Reconciling items: Non-deductible expenses 29,713 11,125 Tax effect of tax exempt entity 14,815 10,844 Rate differential in different tax jurisdictions 3,784 2,014 Valuation allowance on deferred tax assets 71,064 34,163 Total tax expenses $ — $ — |
Schedule of deferred tax assets and liabilities | (b) The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities as of March 31, 2020 and December 31, 2019 are presented below March 31, 2020 December 31, 2019 Deferred tax assets: Net operating loss carryforwards: - United States of America $ 180,572 $ 155,475 - Thailand 186,136 156,264 366,708 311,739 Less: Valuation allowance (366,708) (311,739) $ — $ — |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
SEGMENT INFORMATION | |
Schedule of segment reporting information | Technology development and services provider specializing in coding services in Lease and install various network systems, Corporate industries and WiFi devices and unallocated For the three months ended March 31, 2020 markets related accessories (note) Consolidated Revenues $ — $ — $ — $ — Gross profit — — — — General and administrative expenses (128,720) (58,879) (119,511) (307,110) Loss from operations (128,720) (58,879) (119,511) (307,110) Finance expenses — (64,913) — (64,913) Other expense (94,314) (102,122) (196,436) Loss before income tax (223,034) (225,914) (119,511) (568,459) Income tax expense — — — — Net loss (223,034) (225,914) (119,511) (568,459) Total assets As of March 31, 2020 $ 449,055 $ 974,718 $ 421 $ 1,424,194 As of December 31, 2019 $ 597,087 $ 1,153,991 $ 421 $ 1,751,499 Note: The Company does not allocate its assets located and expenses incurred outside Hong Kong and Thailand to its reportable segments because these assets and activities are managed at a corporate level. |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
COMMITMENTS AND CONTINGENCIES | |
Schedule of capital commitments | March 31, 2020 For purchases of equipment, payable in the twelve months ending March 31, 2021 $ 1,006,301 |
ORGANIZATION AND BUSINESS (Deta
ORGANIZATION AND BUSINESS (Details) | Mar. 13, 2020USD ($)$ / sharesshares | Sep. 06, 2019THB (฿) | Sep. 06, 2019USD ($) | Mar. 07, 2018shares | May 15, 2017THB (฿)shares | May 15, 2017USD ($)shares | Dec. 12, 2016USD ($)shares | May 31, 2018USD ($) | Dec. 31, 2016USD ($) | Mar. 31, 2020THB (฿) | Mar. 31, 2020USD ($)$ / sharesshares | Mar. 31, 2019USD ($) | Dec. 31, 2019USD ($)$ / sharesshares | Dec. 31, 2018$ / shares | Oct. 31, 2018 | Mar. 13, 2018shares | Jul. 10, 2017USD ($) | Mar. 31, 2017USD ($) | Feb. 22, 2017$ / sharesshares | Dec. 31, 2016THB (฿)฿ / sharesshares | Dec. 31, 2016USD ($)shares | Nov. 24, 2016 |
Stock Issued During Period, Shares, New Issues | shares | 108,460 | |||||||||||||||||||||
Stock Issued During Period, Value, New Issues | $ 216,920 | $ 216,920 | ||||||||||||||||||||
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares | shares | 31,500,000 | 31,500,000 | ||||||||||||||||||||
Common Stock, Shares Authorized | shares | 150,000,000 | 75,000,000 | 75,000,000 | 75,000,000 | ||||||||||||||||||
Common Stock, Par or Stated Value Per Share | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||||||||||||||||
Stockholders' Equity, Reverse Stock Split | 1-for-2 | |||||||||||||||||||||
Common Stock, Shares, Issued | shares | 40,306,211 | 40,197,751 | ||||||||||||||||||||
Equity Method Investment, Ownership Percentage | 84.00% | 84.00% | 50.00% | |||||||||||||||||||
Repayments of Related Party Debt | $ 49,733 | $ 0 | ||||||||||||||||||||
Retained Earnings (Accumulated Deficit) | (2,822,268) | $ (2,321,583) | ||||||||||||||||||||
Agreement | Cat Buzz TV Company Limited [Member] | ||||||||||||||||||||||
Term Of Contract | 5 years | 5 years | ||||||||||||||||||||
Contract Renewal Term | 2 years | 2 years | ||||||||||||||||||||
Maximum [Member] | Agreement | Cat Buzz TV Company Limited [Member] | ||||||||||||||||||||||
Networking Device Location Range | ฿ | ฿ 2,500 | |||||||||||||||||||||
Monthly Compensation for Service Offered | $ 83 | |||||||||||||||||||||
Minimum [Member] | Agreement | Cat Buzz TV Company Limited [Member] | ||||||||||||||||||||||
Networking Device Location Range | ฿ | ฿ 600 | |||||||||||||||||||||
Monthly Compensation for Service Offered | $ 20 | |||||||||||||||||||||
Variable Interest Entity, Primary Beneficiary [Member] | Minimum [Member] | ||||||||||||||||||||||
Technology Consulting and Services To Be Paid On Quarterly Basis | ฿ 30,000 | $ 978 | ฿ 30,000 | 978 | ||||||||||||||||||
Digiwork Thailand Co Ltd | ||||||||||||||||||||||
Common Stock, Shares Authorized | shares | 500,000 | 500,000 | ||||||||||||||||||||
Common Stock Authorized ,Amount | ฿ 5,000,000 | $ 163,452 | ||||||||||||||||||||
Common Stock, Par or Stated Value Per Share | ฿ / shares | ฿ 10 | |||||||||||||||||||||
Digiwork Korea [Member] | ||||||||||||||||||||||
Other Commitment | $ 10,000,000 | |||||||||||||||||||||
Payments for Rendering Services, Related Party | $ 100,000 | |||||||||||||||||||||
Noncontrolling Interest, Ownership Percentage by Parent | 100.00% | |||||||||||||||||||||
Repayments of Related Party Debt | $ 1,000,000 | |||||||||||||||||||||
Obligation to Repay Amount Upon Expiration | 150,000 | |||||||||||||||||||||
Prepaid Research and Development | $ 301,099 | $ 391,274 | ||||||||||||||||||||
Digiwork Korea [Member] | Maximum [Member] | ||||||||||||||||||||||
Other Commitment | $ 1,100,000 | |||||||||||||||||||||
Digiwork Korea [Member] | Minimum [Member] | ||||||||||||||||||||||
Other Commitment | $ 10,000,000 | |||||||||||||||||||||
Enigma BVI [Member] | ||||||||||||||||||||||
Common Stock, Shares, Issued | shares | 50,000 | |||||||||||||||||||||
Shares Issued, Price Per Share | $ / shares | $ 1 | |||||||||||||||||||||
Marvelous ERA [Member] | ||||||||||||||||||||||
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners | 70.00% | |||||||||||||||||||||
IWEB, Inc [Member] | ||||||||||||||||||||||
Noncontrolling Interest, Ownership Percentage by Parent | 70.00% | |||||||||||||||||||||
OBON BVI [Member] | ||||||||||||||||||||||
Noncontrolling Interest, Ownership Percentage by Parent | 70.00% | 70.00% | ||||||||||||||||||||
Mr. Kolyvayko [Member] | ||||||||||||||||||||||
Stock Issued During Period, Shares, New Issues | shares | 24,997,500 | |||||||||||||||||||||
Percentage of Issued and Outstanding Common Stock | 97.08% | |||||||||||||||||||||
Stock Issued During Period, Value, New Issues | $ 380,000 | |||||||||||||||||||||
Ratanaphon Wongnapachant [Member] | Digiwork Thailand Co Ltd | ||||||||||||||||||||||
Equity Method Investment, Ownership Percentage | 57.50% | |||||||||||||||||||||
Ratanaphon Wongnapachant [Member] | Enigma BVI [Member] | ||||||||||||||||||||||
Equity Method Investment, Ownership Percentage | 57.50% | |||||||||||||||||||||
Chanikarn Lertchawalitanon [Member] | Digiwork Thailand Co Ltd | ||||||||||||||||||||||
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners | 2.50% | |||||||||||||||||||||
Chanikarn Lertchawalitanon [Member] | Enigma BVI [Member] | ||||||||||||||||||||||
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners | 2.50% | |||||||||||||||||||||
S-Mark Co. Ltd [Member] | Digiwork Thailand Co Ltd | ||||||||||||||||||||||
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners | 40.00% | |||||||||||||||||||||
S-Mark Co. Ltd [Member] | Enigma BVI [Member] | ||||||||||||||||||||||
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners | 40.00% |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Financial information of Digiwork (Details) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
ASSETS | ||
Prepayments and deposits | $ 403,315 | $ 501,547 |
Other receivables | 14,402 | 14,742 |
Property, plant and equipment, net | 35,795 | 27,459 |
TOTAL ASSETS | 1,424,194 | 1,751,499 |
LIABILITIES | ||
Accruals | 172,954 | 80,167 |
Amount due to directors | 44,872 | 208,191 |
TOTAL LIABILITIES | 1,070,231 | 1,153,983 |
Digiwork Korea [Member] | ||
ASSETS | ||
Cash at bank and on hand | 1,025 | 377 |
Prepayments and deposits | 301,270 | 391,463 |
Other receivables | 2,358 | 2,582 |
Amount due from a fellow subsidiary | 849 | |
Property, plant and equipment, net | 4,334 | 5,409 |
TOTAL ASSETS | 308,987 | 400,680 |
LIABILITIES | ||
Accruals | 12,144 | 13,239 |
Amount due to directors | 443,967 | 487,991 |
Amount due to Enigma BVI | 1,000,000 | 1,000,000 |
TOTAL LIABILITIES | $ 1,456,111 | $ 1,501,230 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Financial information of Digiwork (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Revenues | $ 0 | $ 0 | |
Net loss | (500,685) | (268,932) | $ (268,932) |
Digiwork Korea [Member] | |||
Revenues | 0 | 0 | |
Net loss | $ 152,489 | $ 82,072 |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Financial information of Digiwork (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Net cash used in operating activities | $ (234,684) | $ (239,914) |
Net cash provided by investing activities | (438,009) | 0 |
Net cash provided by financing activities | 167,187 | 49,510 |
Digiwork Korea [Member] | ||
Net cash used in operating activities | (207) | (46,046) |
Net cash provided by investing activities | 112 | 0 |
Net cash provided by financing activities | $ 807 | $ 49,510 |
SUMMARY OF SIGNIFICANT ACCOUN_7
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Property, plant and equipment (Details) - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2020 | Dec. 31, 2019 | |
Impairment of Long-lived Assets | ||
Impairment of Long-Lived Assets Held-for-use | $ 0 | $ 0 |
Office and computer equipment | ||
Property, Plant and Equipment, Useful Life | 5 years | |
Software | ||
Property, Plant and Equipment, Useful Life | 5 years |
SUMMARY OF SIGNIFICANT ACCOUN_8
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Translation of amounts from THB into U.S. dollars (Details) | Mar. 31, 2020 | Dec. 31, 2019 | Mar. 31, 2019 |
Income statement and cash flows items [Member] | |||
Foreign Currency Exchange Rate, Translation | 31.2785 | 31.6251 | |
Balance Sheet Items, Except For Equity Accounts [Member] | |||
Foreign Currency Exchange Rate, Translation | 32.7000 | 29.7500 |
SUMMARY OF SIGNIFICANT ACCOUN_9
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Net loss per share of common stock (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||
Net loss attributable to ordinary stockholders of IWEB, Inc. | $ (500,685) | $ (268,932) | $ (268,932) |
Weighted average number of common shares outstanding - basic and diluted | 40,220,396 | 40,197,751 | 40,197,751 |
Basic and diluted loss per share | $ (0.01) | $ (0.01) | $ (0.01) |
Potentially dilutive securities | 0 |
SUMMARY OF SIGNIFICANT ACCOU_10
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Financial information of OBON Thailand (Details) - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2020 | Dec. 31, 2019 | |
Assets | ||
Other receivables | $ 14,402 | $ 14,742 |
Prepayments and deposits | 403,315 | 501,547 |
Amount due from a director | 337,042 | |
Deposits paid for acquisition of property, plant and equipment | 293,578 | 322,689 |
Property, plant and equipment, net | 35,795 | 27,459 |
TOTAL ASSETS | 1,424,194 | 1,751,499 |
Liabilities | ||
Accruals | 172,954 | 80,167 |
Short-term loan | 852,405 | 865,625 |
TOTAL LIABILITIES | 1,070,231 | 1,153,983 |
OBON Thailand | ||
Assets | ||
Cash at bank and on hand | 128,862 | 687,008 |
Other receivables | 12,044 | 12,160 |
Prepayments and deposits | 102,045 | 110,084 |
Amount due from a director | 406,728 | 124 |
Deposits paid for acquisition of property, plant and equipment | 293,578 | 322,689 |
Property, plant and equipment, net | 31,461 | 22,050 |
TOTAL ASSETS | 974,718 | 1,154,115 |
Liabilities | ||
Accruals | 93,603 | 35,089 |
Short-term loan | 852,405 | 865,625 |
Amounts due to fellow subsidiaries | 166,666 | 167,515 |
TOTAL LIABILITIES | $ 1,112,674 | $ 1,068,229 |
SUMMARY OF SIGNIFICANT ACCOU_11
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Financial information of OBON Thailand (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Revenues | $ 0 | $ 0 | |
Net loss | (500,685) | (268,932) | $ (268,932) |
Net cash used in operating activities | (234,684) | (239,914) | |
Net cash used in investing activities | (438,009) | 0 | |
Net cash used in financing activities | 167,187 | $ 49,510 | |
OBON Thailand | |||
Revenues | 0 | ||
Net loss | 225,914 | ||
Net cash used in operating activities | (79,789) | ||
Net cash used in investing activities | (438,928) | ||
Net cash used in financing activities | $ 0 |
SUMMARY OF SIGNIFICANT ACCOU_12
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Additional Information (Details) | May 15, 2017THB (฿) | May 15, 2017USD ($) | Mar. 31, 2020THB (฿) | Mar. 31, 2020USD ($) | Mar. 31, 2019USD ($) | Dec. 31, 2019USD ($) |
Variable Interest Entity [Line Items] | ||||||
Withholding Tax Rate | 10.00% | 10.00% | ||||
Revenue | $ 0 | $ 0 | ||||
Equity Method Investment, Ownership Percentage | 84.00% | 84.00% | 50.00% | 50.00% | ||
Minimum [Member] | ||||||
Variable Interest Entity [Line Items] | ||||||
Revenue | ฿ | ฿ 30,000,000 | |||||
General and Administrative Expense [Member] | ||||||
Variable Interest Entity [Line Items] | ||||||
Research and Development Expense | $ 57,371 | $ 58,464 | ||||
Variable Interest Entity, Primary Beneficiary [Member] | Minimum [Member] | ||||||
Variable Interest Entity [Line Items] | ||||||
Technology Consulting and Services To Be Paid On Quarterly Basis | ฿ 30,000 | $ 978 | ฿ 30,000 | $ 978 | ||
Digiwork Thailand Co Ltd | Mr. Ratanaphon Wongnapachan | ||||||
Variable Interest Entity [Line Items] | ||||||
Variable Interest Entity, Qualitative or Quantitative Information, Ownership Percentage | 57.50% | 57.50% | ||||
Digiwork Thailand Co Ltd | Ms. Chanikarn Lertchawalitanon [Member] | ||||||
Variable Interest Entity [Line Items] | ||||||
Variable Interest Entity, Qualitative or Quantitative Information, Ownership Percentage | 2.50% | 2.50% | ||||
Digiwork Thailand Co Ltd | S-Mark Co. Ltd [Member] | ||||||
Variable Interest Entity [Line Items] | ||||||
Variable Interest Entity, Qualitative or Quantitative Information, Ownership Percentage | 40.00% | 40.00% | ||||
OBON Thailand | Mr. Ratanaphon Wongnapachan | ||||||
Variable Interest Entity [Line Items] | ||||||
Variable Interest Entity, Qualitative or Quantitative Information, Ownership Percentage | 9.00% | 9.00% | ||||
OBON Thailand | Ms. Chanikarn Lertchawalitanon [Member] | ||||||
Variable Interest Entity [Line Items] | ||||||
Variable Interest Entity, Qualitative or Quantitative Information, Ownership Percentage | 90.90% | 90.90% | ||||
OBON Thailand | Wanee Watcharakangka [Member] | ||||||
Variable Interest Entity [Line Items] | ||||||
Variable Interest Entity, Qualitative or Quantitative Information, Ownership Percentage | 0.10% | 0.10% |
BALANCES WITH RELATED PARTIES_2
BALANCES WITH RELATED PARTIES (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | |
Apr. 30, 2020 | Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Amounts due from shareholders | $ 1,250 | $ 1,250 | ||
Repayments received from director | 0 | $ 49,510 | ||
Subsequent Event [Member] | ||||
Repayments received from director | $ 337,042 | |||
Mr. Ratanaphon Wongnapachan | ||||
Due from (to) directors | 337,042 | (163,319) | ||
Mr. Wai Hok Fung | ||||
Due from (to) directors | $ (44,872) | $ (44,872) |
PROPERTY, PLANT AND EQUIPMENT_3
PROPERTY, PLANT AND EQUIPMENT, NET (Details) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Less: Accumulated depreciation | $ (7,922) | $ (7,065) |
Property, Plant and Equipment, Net | 35,795 | 27,459 |
Office and computer equipment | ||
Property, Plant and Equipment, Gross | 41,006 | 32,958 |
Software | ||
Property, Plant and Equipment, Gross | $ 2,711 | $ 1,566 |
PROPERTY, PLANT AND EQUIPMENT_4
PROPERTY, PLANT AND EQUIPMENT, NET - Additional Information (Details) - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2020 | Dec. 31, 2019 | |
PROPERTY, PLANT AND EQUIPMENT, NET | ||
Depreciation | $ 1,656 | $ 728 |
COMMON STOCK (Details)
COMMON STOCK (Details) - USD ($) | Mar. 13, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
COMMON STOCK | ||||
Common Stock, Par or Stated Value Per Share | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 |
Stock Issued During Period, Value, New Issues | $ 216,920 | $ 216,920 | ||
Stock Issued During Period, Shares, New Issues | 108,460 | |||
Sale of Stock, Price Per Share | $ 2 |
SHORT-TERM LOAN (Details)
SHORT-TERM LOAN (Details) - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2020 | Dec. 31, 2019 | |
SHORT-TERM LOAN | ||
Debt Instrument, Face Amount | $ 852,405 | $ 865,625 |
Debt Instrument, Interest Rate, Stated Percentage | 30.00% | |
Debt Instrument, Increase, Accrued Interest | $ 88,977 | $ 25,613 |
INCOME TAXES - Foreign componen
INCOME TAXES - Foreign components of loss before income taxes (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Local | $ (119,511) | $ (116,664) |
Enigma BVI [Member] | ||
Foreign, representing | (70,545) | (51,640) |
Digiwork Thailand Co Ltd | ||
Foreign, representing | $ (378,403) | (82,072) |
One Belt One Network HK Limited [Member] | ||
Foreign, representing | $ (26,508) |
INCOME TAXES - CIT in Thailand
INCOME TAXES - CIT in Thailand at the following reduced rates (Details) | 3 Months Ended |
Mar. 31, 2020 | |
Effective Income Tax Rate Reconciliation, Foreign Income Tax Rate Differential, Percent | 20.00% |
Nil - THB300,000 ($9,174) | |
Effective Income Tax Rate Reconciliation, Foreign Income Tax Rate Differential, Percent | 0.00% |
THB300,000 - THB3,000,000 ($91,743) | |
Effective Income Tax Rate Reconciliation, Foreign Income Tax Rate Differential, Percent | 15.00% |
Over THB3,000,000 ($91,743) | |
Effective Income Tax Rate Reconciliation, Foreign Income Tax Rate Differential, Percent | 20.00% |
INCOME TAXES - Reconciliation o
INCOME TAXES - Reconciliation of loss before income taxes (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
INCOME TAXES | ||
Loss before income taxes | $ (568,459) | $ (276,884) |
Statutory income tax rate | 21.00% | 21.00% |
Income tax credit computed at statutory income tax rate | $ (119,376) | $ (58,146) |
Reconciling items: | ||
Non-deductible expenses | 29,713 | 11,125 |
Tax effect of tax exempt entity | 14,815 | 10,844 |
Rate differential in different tax jurisdictions | 3,784 | 2,014 |
Valuation allowance on deferred tax assets | 71,064 | 34,163 |
Total tax expenses | $ 0 | $ 0 |
INCOME TAXES - Deferred tax ass
INCOME TAXES - Deferred tax assets and liabilities (Details) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Net operating loss carryforwards: | ||
United States of America | $ 180,572 | $ 155,475 |
Thailand | 186,136 | 156,264 |
Deferred Tax Assets, Operating Loss Carryforwards | 366,708 | 311,739 |
Less: Valuation allowance | (366,708) | (311,739) |
Deferred Tax Assets, Net of Valuation Allowance | $ 0 | $ 0 |
INCOME TAXES - Additional Infor
INCOME TAXES - Additional Information (Details) ฿ in Millions | 3 Months Ended | 12 Months Ended | ||||
Mar. 31, 2020THB (฿) | Mar. 31, 2020USD ($) | Mar. 31, 2019USD ($) | Dec. 31, 2018 | Mar. 31, 2020USD ($) | Dec. 31, 2019USD ($) | |
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 21.00% | 21.00% | 21.00% | |||
Effective Income Tax Rate Reconciliation, Foreign Income Tax Rate Differential, Percent | 20.00% | 20.00% | ||||
Additional Paid in Capital | $ 3,207,635 | $ 2,990,726 | ||||
Revenues | $ 0 | $ 0 | ||||
Income Tax Expense (Benefit) | 0 | 0 | ||||
Loss before income taxes | (568,459) | (276,884) | ||||
Operating Loss Carryforwards | 740,358 | 859,869 | ||||
Domestic Tax Authority [Member] | ||||||
Operating Loss Carryforwards | 145,660 | |||||
Digiwork Thailand Co Ltd | ||||||
Operating Loss Carryforwards | 930,678 | $ 781,318 | ||||
Maximum [Member] | ||||||
Additional Paid in Capital | ฿ | ฿ 5 | |||||
Revenues | 917,431 | |||||
Minimum [Member] | ||||||
Additional Paid in Capital | $ 152,905 | |||||
Revenues | ฿ | ฿ 30 | |||||
Scenario, Plan [Member] | ||||||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 21.00% | |||||
UNITED STATES | ||||||
Income Tax Expense (Benefit) | $ 0 | 0 | ||||
Loss before income taxes | $ 0 |
SEGMENT INFORMATION (Details)
SEGMENT INFORMATION (Details) | 3 Months Ended | ||
Mar. 31, 2020USD ($)segment | Dec. 31, 2019USD ($)segment | Mar. 31, 2019USD ($) | |
Segment Reporting Information [Line Items] | |||
Number of Reportable Segments | segment | 1 | ||
Number of Operating Segments | segment | 1 | 1 | |
Revenues | $ 0 | $ 0 | |
General and administrative expenses | (307,110) | (296,173) | |
Loss from operations | (307,110) | (296,173) | |
Finance cost | (64,913) | ||
Other expense | (196,436) | 19,289 | |
Loss before income tax | (568,459) | (276,884) | |
Income tax expense | 0 | 0 | |
Net loss | (568,459) | $ (276,884) | |
TOTAL ASSETS | 1,424,194 | $ 1,751,499 | |
Technology development and services provider specializing in coding services in various industries and markets | |||
Segment Reporting Information [Line Items] | |||
General and administrative expenses | (128,720) | ||
Loss from operations | (128,720) | ||
Other expense | (94,314) | ||
Loss before income tax | (223,034) | ||
Net loss | (223,034) | ||
TOTAL ASSETS | 449,055 | 597,087 | |
Lease and install network systems, WiFi devices and related accessories | |||
Segment Reporting Information [Line Items] | |||
General and administrative expenses | (58,879) | ||
Loss from operations | (58,879) | ||
Finance cost | (64,913) | ||
Other expense | (102,122) | ||
Loss before income tax | (225,914) | ||
Net loss | (225,914) | ||
TOTAL ASSETS | 974,718 | 1,153,991 | |
Corporate unallocated | |||
Segment Reporting Information [Line Items] | |||
General and administrative expenses | (119,511) | ||
Loss from operations | (119,511) | ||
Loss before income tax | (119,511) | ||
Net loss | (119,511) | ||
TOTAL ASSETS | $ 421 | $ 421 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES (Details) | Nov. 01, 2019THB (฿) | Nov. 01, 2019USD ($) | Oct. 10, 2019HKD ($) | Oct. 10, 2019USD ($) | Oct. 01, 2019 | Aug. 01, 2019THB (฿) | Aug. 01, 2019USD ($) | Mar. 31, 2020HKD ($) | Mar. 31, 2020THB (฿) | Mar. 31, 2020USD ($) | Mar. 31, 2019USD ($) |
Operating Leases, Rent Expense, Net | $ 33,009 | $ 33,545 | |||||||||
Operating Lease Rent Expense ,Per Month | ฿ 50,000 | $ 1,529 | |||||||||
Payment of rental amounts | 11,509 | ||||||||||
Total minimum future lease payments | 63,409 | ||||||||||
Salary and Wage, Officer, Excluding Cost of Good and Service Sold | 23,654 | ||||||||||
Hok Fung Wai [Member] | |||||||||||
Operating Lease Rent Expense ,Per Month | ฿ 70,000 | $ 2,141 | |||||||||
Term Of Employment Agreement | 3 years | ||||||||||
Salary and Wage, Officer, Excluding Cost of Good and Service Sold | $ 45,000 | 5,769 | |||||||||
Kowloon Hong Kong [Member] | |||||||||||
Operating Lease, Expense | $ 55,000 | $ 7,051 | |||||||||
Din Daeng District, Bangkok, Thailand [Member] | |||||||||||
Operating Lease Rent Expense ,Per Month | ฿ 127,120 | $ 3,887 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Capital commitments (Details) | Mar. 31, 2020USD ($) |
COMMITMENTS AND CONTINGENCIES | |
For purchases of equipment, payable in the twelve months ending March 31, 2021 | $ 1,006,301 |
THAILAND AND HONG KONG CONTRI_2
THAILAND AND HONG KONG CONTRIBUTION PLANS (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Defined Contribution Plan, Cost | $ 437 | $ 199 |
One Belt One Network HK Limited [Member] | ||
Defined Contribution Plan, Employer Discretionary Contribution Amount | $ 577 | $ 1,290 |
CERTAIN RISKS AND CONCENTRATI_2
CERTAIN RISKS AND CONCENTRATIONS (Details) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Enigma BVI [Member] | ||
Amount of R& D services | $ 1,000,000 | |
Digiwork Korea [Member] | ||
Amount of R& D services | $ 1,000,000 |