WISEMAN GLOBAL LIMITED The information contained in this quarter report on Form 10-Q is intended to update the information contained in our Form 10-K datedMarch 29, 2019 , for the year endedDecember 31, 2018 and presumes that readers have access to, and will have read, the "Management's Discussion and Analysis of Financial Condition and Results of Operations" and other information contained in such Form 10-K. The following discussion and analysis also should be read together with our financial statements and the notes to the financial statements included elsewhere in this Form 10-Q. The following discussion contains certain statements that may be deemed "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements appear in a number of places in this Report, including, without limitation, "Management's Discussion and Analysis of Financial Condition and Results of Operations." These statements are not guarantees of future performance and involve risks, uncertainties and requirements that are difficult to predict or are beyond our control. Forward-looking statements speak only as of the date of this quarter report. You should not put undue reliance on any forward-looking statements. We strongly encourage investors to carefully read the factors described in our Form S-1/A registration statement, filed onDecember 12, 2018 , in the section entitled "Risk Factors" for a description of certain risks that could, among other things, cause actual results to differ from these forward-looking statements. We assume no responsibility to update the forward-looking statements contained in this quarter report on Form 10-Q. The following should also be read in conjunction with the unaudited Condensed Consolidated Financial Statements and notes thereto that appear elsewhere in this report. Company Overview
Wiseman Global Limited is an early stage company that intends to distribute a full line of major household appliances and related products throughout PRC andHong Kong . Currently, the Company operates in mainlandChina andHong Kong and intends to expand to otherAsia regions such asCambodia . Our principal products are televisions, air-conditioners, laundry appliances, refrigerators and freezers, cooking appliances, dishwashers, mixers and other small domestic appliances. It should be noted that we acquire our products from independent third parties and we do not presently, nor do we plan to, take part in any manufacturing activities. -3- Results of operations
For the three months ended
Three Months Ended September 30, Increase (decrease) in
2019 2018 2019 compared to 2018
(In U.S. dollars, except for percentages)
Revenue $ 1,809,370 100.0 % $ 1,084 100 % $ 1,808,286 166,816.1 %Cost of revenues (1,168,887 ) (64.6 )% (1,004 ) (92.6 )% (1,167,883 ) (116,323.0 )% Gross profit 640,483 35.4 % 80 7.4 % 640,403 800,503.8 % Operating expenses (159,322 ) (8.8 )% (38,012 ) (3,506.6 )% (121,310 ) (319.1 )% Other income, net 14,636 0.8 % - - 14,636 100.0 % Income (Loss) from operations 495,797 27.4 % (37,932 ) (3,499.2 )% 533,729 1,407.1 % Net finance cost 43 0.0 % - - 43 100.0 % Income tax expense (28,292 ) (1.6 )% - - (28,292 ) (100.0 )% Net profit (loss)$ 467,548 25.8 %$ (37,932 )
(3,499.2 )%$ 505,480 1,332.6 % Revenues For the three months endedSeptember 30, 2019 and 2018, the Company generated revenue in the amount of$1,809,370 and$1,084 , respectively. The revenue is generated from the sales of household appliances and related products inChina . Cost of Revenue
Cost of revenue for the three months ended
General and Administrative Expenses
For the three months endedSeptember 30, 2019 and 2018, we had general and administrative expenses in the amount of$159,322 and$38,012 , respectively. These were primarily comprised of professional fees, salary, and advertising and promotion. Net Profit (Loss)
Our net profit for the three months ended
For the nine months ended
Nine Months Ended September 30, Increase (decrease) in
2019 2018 2019 compared to 2018
(In U.S. dollars, except for percentages)
Revenue $ 2,323,165 100.0 % $ 1,084 100 % $ 2,322,081 214,214.1 %Cost of revenues (1,561,237 ) (67.2 )% (1,004 ) (92.6 )% (1,560,233 ) (155,401.7 )% Gross profit 761,928 32.8 % 80 7.4 % 761,858 952,310 % Operating expenses (301,684 ) (13.0 )% (38,012 ) (3,506.6 )% (263,672 ) (693.7 )% Other income, net 25,417 1.1 % - - 25,417 100 %
Income (Loss) from operations 485,661 20.9 % (37,932 )
(3,499.2 )% 498,186 1,313.3 % Net finance cost 105 0.0 % - - 105 100 % Income tax expense (28,292 ) (1.2 )% - - (28,292 ) (100 )% Net profit (loss)$ 457,474 19.7 %$ (37,932 ) (3,499.2 )%$ 495,416 1,306.0 % -4- Revenues For the nine months endedSeptember 30, 2019 and 2018, the Company generated revenue in the amount of$2,323,165 and$1,084 , respectively. The revenue is generated from the sales of household appliances and related products inChina . Cost of Revenue
Cost of revenue for the nine months ended
General and Administrative Expenses
For the nine months endedSeptember 30, 2019 and 2018, we had general and administrative expenses in the amount of$301,684 and$38,012 , respectively. These were primarily comprised professional fees, salary, and advertising and promotion. Net Profit (Loss)
Our net profit for the nine months ended
Liquidity and Capital Resources
Summary cash flows information for the nine months endedSeptember 30, 2019 and 2018 are as follow: 2019 2018 (InU.S. dollars)
Net cash used in operating activities
Cash Used in Operating Activities
For the period endedSeptember 30, 2019 and 2018, net cash used in operating activities was$145,166 and$35,432 , respectively. The cash used in operating activities was attributable to accounts receivable, inventories, and deposits paid, prepayments and other receivables.
Cash Used in Investing Activities
For the period ended
Cash Provided by Financing Activities
For the period ended
For the period endedSeptember 30, 2019 and 2018, net cash provided by financing activities was$672,788 and$41,866 , respectively. The net cash provided by financing activities was attributable to the proceeds from sale of common stock and repayment to director.
Off-balance Sheet Arrangements
We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to our stockholders as ofSeptember 30, 2019 . Contractual Obligations As ofSeptember 30, 2019 , the Company's subsidiaries lease an office inCambodia under a non-cancellable operating lease for five years commencing fromAugust 1, 2019 and expiring onJuly 31, 2024 . AsSeptember 30, 2019 , the future minimum rental payments under this lease aggregate approximately$1,160,000 and due as follows: 2019$60,000 , 2020$240,000 , 2021$240,000 , 2022$240,000 , 2023$240,000 , and 2024$140,000 . Critical Accounting Policies
Recent accounting pronouncements
InFebruary 2016 , theFinancial Accounting Standards Board (the "FASB") issued Accounting Standards Update ("ASU") No. 2016-02, Leases (Topic 842). Under the new guidance, lessees will be required recognize the following for all leases (with the exception of short-term leases) at the commencement date: 1) A lease liability, which is a lessee's obligation to make lease payments arising from a lease, measured on a discounted basis; and 2) A right-of-use asset, which is an asset that represents the lessee's right to use, or control the use of, a specified asset for the lease term. The new lease guidance simplified the accounting for sale and leaseback transactions primarily because lessees must recognize lease assets and lease liabilities. Lessees will no longer be provided with a source of off-balance sheet financing. The amendments in this ASU are effective for fiscal years beginning afterDecember 15, 2018 , including interim periods within those years. This standard takes effect for fiscal years, and interim periods within those fiscal years, beginning afterDecember 15, 2018 . According to this new standard, the Company should record both right-of-use asset and lease liability of$982,683 on its consolidated financial statements for the fiscal year endedDecember 31, 2019 . InJune 2016 , the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326), Measurement of Credit Losses on Financial Statements. This ASU requires a financial asset (or group of financial assets) measured at amortized cost basis to be presented at the net amount expected to be collected. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial asset(s) to present the net carrying value at the amount expected to be collected on the financial asset. This Accounting Standards Update affects entities holding financial assets and net investment in leases that are not accounted for at fair value through net income. The amendments affect loans, debt securities, trade receivables, net investments in leases, off balance sheet credit exposures, reinsurance receivables, and any other financial assets not excluded from the scope that have the contractual rights to receive cash. For public business entities, the amendments in this Update are effective for fiscal years beginning afterDecember 15, 2018 , including interim periods within those fiscal years. All entities may adopt the amendments in this Update through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective (that is, a modified-retrospective approach). The Company is in the process of evaluating the impact of the adoption of this pronouncement on its consolidated financial statements.
The Company reviews new accounting standards as issued. Management has not identified any other new standards that it believes will have a significant impact on the Company's consolidated financial statements.
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