Form 10-Q Image Chain Group Limite For: Jun 30
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form
(Mark One)
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
| For the quarterly period ended |
or
| TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from _________________ to _____________________
| Commission File Number |
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation or organization) |
(IRS Employer Identification No.) |
| (Address of principal executive offices) | (Zip Code) |
(Registrant’s telephone number, including area code)
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name on each exchange on which registered | ||
| N/A | N/A | N/A |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
☒ ☐ NO
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
☒ ☐ NO
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ | Accelerated filer | ☐ | |
| ☐ | Smaller reporting company | |||
| Emerging growth company |
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act)
☐
YES ☒
APPLICABLE ONLY TO CORPORATE ISSUERS
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
common shares issued and outstanding as of August 9, 2022.
TABLE OF CONTENTS
| PART I - FINANCIAL INFORMATION | 3 | |
| Item 1. | Financial Statements | 3 |
| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 4 |
| Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 11 |
| Item 4. | Controls and Procedures | 11 |
| PART II - OTHER INFORMATION | 12 | |
| Item 1. | Legal Proceedings | 12 |
| Item 1A. | Risk Factors | 12 |
| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 12 |
| Item 3. | Defaults Upon Senior Securities | 12 |
| Item 4. | Mine Safety Disclosures | 12 |
| Item 5. | Other Information | 12 |
| Item 6. | Exhibits | 12 |
| SIGNATURES | 13 | |
| 2 |
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
INDEX TO UNAUDITED FINANCIAL STATEMENTS
| 3 |
IMAGE CHAIN GROUP LIMITED, INC.
Consolidated Balance Sheets
| June 30, 2022 | December 31, 2021 | |||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Other receivables | ||||||||
| Total Current assets | ||||||||
| Total Assets | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS’ DEFICIT | ||||||||
| Current Liabilities | ||||||||
| Accrued liabilities and other payables | $ | $ | ||||||
| Due to related party | ||||||||
| Total Current Liabilities | ||||||||
| Total Liabilities | ||||||||
| Stockholders’ Deficit | ||||||||
| Preferred Stock, $ par value, shares authorized, issued and outstanding | ||||||||
| Common stock, $ par value, shares authorized, and issued as of June 30, 2022 and December 31, 2021, respectively | ||||||||
| Additional paid in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total Stockholders’ Deficit | ( | ) | ( | ) | ||||
| Total Liabilities and Stockholders’ Deficit | $ | $ | ||||||
See accompanying notes to Unaudited Consolidated Financial Statements
| F-1 |
IMAGE CHAIN GROUP LIMITED, INC.
Consolidated Statements of Operations and Comprehensive Loss
For the period ended June 30, 2022 and 2021
(Unaudited)
| For the three months ended | For the six months ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||
| Revenue | $ | $ | $ | $ | ||||||||||||
| Operating Expenses | ||||||||||||||||
| General and administrative expenses | ||||||||||||||||
| Total Operating Expenses | $ | $ | $ | $ | ||||||||||||
| Loss Before Income Taxes | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Provision for income taxes | ||||||||||||||||
| Net Loss from continuing operations | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Other Comprehensive Income | ||||||||||||||||
| Foreign currency translation | ||||||||||||||||
| Total Comprehensive Loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Basic and Diluted Loss per Common Share | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Basic and Diluted Weighted Average Common Shares Outstanding | ||||||||||||||||
See accompanying notes to Unaudited Consolidated Financial Statements
| F-2 |
IMAGE CHAIN GROUP LIMITED, INC.
Consolidated Statements of Stockholders’ Equity (Deficit)
(Unaudited)
| Preferred Stock | Common Stock | Additional Paid in | Accumulated | Accumulated other comprehensive | Treasury Stock | Total Stockholders’ Equity | ||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Capital | Deficit | loss | Shares | Amount | (Deficit) | |||||||||||||||||||||||||||||||
| Balance, December 31, 2020 | $ | | $ | $ | $ | ( | ) | $ | $ | $ | ( | ) | ||||||||||||||||||||||||||||
| Net loss | - | - | ( | ) | - | ( | ) | |||||||||||||||||||||||||||||||||
| Balance, March 31, 2021 | $ | $ | $ | $ | ( | ) | $ | $ | $ | ( | ) | |||||||||||||||||||||||||||||
| Net loss | - | - | ( | ) | - | ( | ) | |||||||||||||||||||||||||||||||||
| Balance, June 30, 2021 | $ | $ | $ | $ | ( | ) | $ | $ | $ | ( | ) | |||||||||||||||||||||||||||||
| Balance, December 31, 2021 | $ | $ | $ | $ | ( | ) | $ | $ | $ | ( | ) | |||||||||||||||||||||||||||||
| Net loss | - | - | ( | ) | - | ( | ) | |||||||||||||||||||||||||||||||||
| Balance, March 31, 2022 | $ | $ | $ | $ | ( | ) | $ | $ | $ | ( | ) | |||||||||||||||||||||||||||||
| Net loss | - | - | ( | ) | - | ( | ) | |||||||||||||||||||||||||||||||||
| Balance, June 30, 2022 | $ | $ | $ | $ | ( | ) | $ | $ | $ | ( | ) | |||||||||||||||||||||||||||||
See accompanying notes to Unaudited Consolidated Financial Statements
| F-3 |
IMAGE CHAIN GROUP LIMITED, INC.
Consolidated Statements of Cash Flows
(Unaudited)
| For the six months ended | ||||||||
| June 30 | ||||||||
| 2022 | 2021 | |||||||
| Cash flows from operating activities | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash provided by operating activities: | ||||||||
| Expenses paid by related party | ||||||||
| Changes in operating assets and liabilities: | ||||||||
| Other receivables | ||||||||
| Accrued liabilities and other payables | ||||||||
| Net cash provided by operating activities | ||||||||
| Effect of foreign currency translation on cash and cash equivalents | ||||||||
| Net decrease of cash and cash equivalents | ||||||||
| Cash and cash equivalents–beginning of period | ||||||||
| Cash and cash equivalents–end of period | $ | $ | ||||||
| Supplementary cash flow information: | ||||||||
| Interest paid | $ | $ | ||||||
| Income taxes paid | $ | $ | ||||||
See accompanying notes to Unaudited Consolidated Financial Statements
| F-4 |
IMAGE CHAIN GROUP LIMITED, INC.
Notes to Unaudited Consolidated Financial Statements
1. THE COMPANY AND PRINCIPAL BUSINESS ACTIVITIES
Business
Image Chain Group Limited, Inc. (formerly Have Gun Will Travel Entertainment, Inc.) (“ICGL” or the “Company”) was incorporated under the laws of Nevada on December 18, 2013. From inception through the date of the Share Exchange as defined below, the Company was an emerging forward-thinking full-service television pre-production company dedicated to the creation of original concepts and programming with a bold and innovative edge in the reality television space for sale, option and licensure to independent producers, cable television networks, syndication companies, and other entities. On June 11, 2015, the Company amended its Articles of Incorporation with the State of Nevada in order to change its name to Image Chain Group Limited, Inc. and to increase the authorized shares of common stock from to (the “Amendments”). The name change was undertaken in order to more closely align with the operations of the Company’s wholly-owned subsidiary, Fortune Delight Holdings Group Ltd (“FDHG”). The increase in authorized shares was undertaken to allow the Company to utilize the newly available shares to raise capital. The board of directors and the stockholders of the Company approved the Amendments on May 8, 2015.
On February 13, 2017, the Company filed with the Secretary of State of the State of Nevada a Certificate of Correction (the “Certificate of Correction”) to correct a mistake made in the Company’s original Articles of Incorporation with regard to the preferred stock issued in connection with the FDHG Exchange Agreement. As a result, ICGL had shares of common stock and shares of preferred stock issued and outstanding. The Company subsequently entered into an agreement pursuant to which the holder of the preferred stock agreed to retire the preferred stock in exchange for receiving an equal number of shares of common stock of the Company. As of the date of this Report, that exchange of preferred stock for common stock has not yet occurred.
Effective May 1, 2017, the Company increased the authorized shares of Common Stock from to shares with a par value of $ per share, and to decrease the authorized shares of Preferred Stock from to zero (). As of the date of this Report, the decrease in shares of Preferred Stock is still in process.
FDHG, previously, through its wholly-owned operating subsidiaries, was in the business of promoting and distributing its own branded teas that are grown, harvested, cured, and packaged in the People’s Republic of China (“PRC”). The Company’s headquarters was previously located in Guangzhou, Guangdong Province, PRC.
Share Exchange and Reorganization
On November 14, 2017, the Company entered into a share exchange agreement (the “SEA”) with Image P2P Trading Group Limited (“Image P2P”) and Image P2P’s shareholders whereby the Company issued new common shares in exchange for all of the issued and outstanding ordinary shares of Image P2P, which totaled . Image P2P is an investment holding company incorporated and domiciled in the British Virgin Islands.
Share Exchange and disposal of subsidiaries
On November 28, 2018, the Company has entered into a Business Transfer Agreement and Share Exchange Agreement (the “Agreements”) with a group of the original shareholders of Image P2P (the “Image P2P Shareholding Group”), Image P2P and its subsidiaries. Pursuant to the Agreements, the Image P2P Shareholding Group will . Asia Grand Will Limited is the holding company for the Company’s operations in the PRC. Also pursuant to the Agreements, the Image P2P Shareholding Group, Image P2P and Image P2P’s subsidiaries will transfer to the Company (i) all of its right, title and interest to the intellectual property, including copyrights, patents, trademarks, process technology and production know-how, of Image P2P and its subsidiaries, (ii) the exclusive distribution rights in the PRC and worldwide for all products of Image P2P and its subsidiaries, (iii) the exclusive right to all intellectual property developed by Image P2P and its subsidiaries in the future and (iv) the exclusive distribution rights in the PRC and worldwide for all products of Image P2P and its subsidiaries developed in the future.
| F-5 |
The common shares of the Company returned to Image P2P are recognized as common stock in treasury since Image P2P is a wholly owned subsidiary of the Company, and measured at cost which is the fair value of the common stocks as of the date of the disposal of subsidiaries.
The subsidiaries disposed are presented as discontinued operations in this report. Comparatives are reclassified to conform with the presentation.
The Company is currently reviewing and revising its future business plans. To date, the Company has not yet identified its future business plans.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying interim unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X. In our opinion, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the six months ended June 30, 2022 are not necessarily indicative of the results that may be expected for the year ending December 31, 2022. Notes to the unaudited interim condensed consolidated financial statements that would substantially duplicate the disclosures contained in the audited consolidated financial statements for fiscal year 2021 have been omitted. This report should be read in conjunction with the audited consolidated financial statements and the footnotes thereto for the fiscal year ended December 31, 2021 included in the Company’s Form 10-K as filed with the Securities and Exchange Commission on June 30, 2022.
Principles of consolidation
The
consolidated financial statements include the accounts of the Company and its subsidiaries. All significant inter-company accounts and
transactions have been eliminated. The consolidated financial statements include
The Company’s subsidiaries are listed as follows:
| Name of Company | Place of incorporation | Attributable equity interest % | Authorized capital | |||||
| Image P2P Trading Group Limited (“Image P2P”) | USD | |||||||
Use of estimates
In preparing these consolidated financial statements, management makes estimates and assumptions that affect the reported amounts of assets and liabilities in the balance sheet and revenues and expenses during the periods reported. Actual results may differ from these estimates.
Income taxes
Income taxes are determined in accordance with the provisions of ASC 740, “Income Taxes” (“ASC 740”). Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted income tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Any effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.
ASC 740 prescribes a comprehensive model for how companies should recognize, measure, present, and disclose in their financial statements uncertain tax positions taken or expected to be taken on a tax return. Under ASC 740, tax positions must initially be recognized in the financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities. Such tax positions must initially and subsequently be measured as the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the tax authority assuming full knowledge of the position and relevant facts.
For the periods ended June 30, 2022 and 2021, the Company did not have any interest and penalties associated with tax positions. As of June 30, 2022, the Company did not have any significant unrecognized uncertain tax positions.
| F-6 |
Financial instruments
The carrying value of the Company’s financial instruments (excluding short-term bank borrowing and note payable): cash and cash equivalents, accounts receivable, accounts payable, amount due to a related party, other payables and accrued liabilities approximate at their fair values because of the short-term nature of these financial instruments.
The Company also follows the guidance of the ASC Topic 820-10, “Fair Value Measurements and Disclosures” (“ASC 820-10”), with respect to financial assets and liabilities that are measured at fair value. ASC 820-10 establishes a three-tier fair value hierarchy that prioritizes the inputs used in measuring fair value as follows:
| ● | Level 1: Inputs are based upon unadjusted quoted prices for identical instruments traded in active markets; |
| ● | Level 2: Inputs are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques (e.g. Black-Scholes Option-Pricing model) for which all significant inputs are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Where applicable, these models project future cash flows and discount the future amounts to a present value using market-based observable inputs; and |
| ● | Level 3: Inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques, including option pricing models and discounted cash flow models. |
Fair value estimates are made at a specific point in time based on relevant market information about the financial instrument. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and, therefore, cannot be determined with precision. Changes in assumptions could significantly affect the estimates.
Commitments and contingencies
The Company follows ASC 440 & ASC 450, subtopic 450-20 of the FASB Accounting Standards Codification to report accounting for contingencies and commitments respectively. Certain conditions may exist as of the date the financial statements are issued, which may result in a loss to the Company, but which will only be resolved when one or more future events occur or fail to occur. The Company assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or un-asserted claims that may result in such proceedings, the Company evaluates the perceived merits of any legal proceedings or un-asserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein.
If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s financial statements. If the assessment indicates that a potentially material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed.
Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed. Management does not believe, based upon information available at this time, that these matters will have a material adverse effect on the Company’s consolidated financial position, results of operations or cash flows. However, there is no assurance that such matters will not materially and adversely affect the Company’s business, financial position, and results of operations or cash flows.
Comprehensive income
Comprehensive income is defined to include all changes in equity except those resulting from investments by owners and distributions to owners. Among other disclosures, all items that are required to be recognized under current accounting standards as components of comprehensive income are required to be reported in a financial statement that is presented with the same prominence as other financial statements. The Company’s current component of other comprehensive income includes the foreign currency translation adjustment and unrealized gain or loss.
| F-7 |
Foreign currency translation
Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transaction. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency using the applicable exchange rates at the balance sheet dates. The resulting exchange differences are recorded in the statement of operations.
The accompanying financial statements are presented in United States dollars (“USD”). The functional currency of the Company and Image P2P is the USD. In general, for consolidation purposes, assets and liabilities of its subsidiaries whose functional currency is not the USD are translated into USD, in accordance with ASC 830, “Translation of Financial Statements”, using the exchange rate on the balance sheet date. Revenues and expenses are translated at average rates prevailing during the period. The gains and losses resulting from translation of financial statements of foreign subsidiaries are recorded as a separate component of accumulated other comprehensive income (loss) within the statement of stockholders’ equity.
Treasury Stock
The Company records treasury stock at cost.
The Company computes earnings per share (“EPS”) in accordance with ASC Topic 260, “Earnings per share”. Basic EPS is measured as the income or loss available to common shareholders divided by the weighted average common shares outstanding for the period. Diluted EPS is similar to basic EPS but presents the dilutive effect on a per share basis of potential common shares (e.g., convertible securities, options, and warrants) as if they had been converted at the beginning of the periods presented, or issuance date, if later. Potential common shares that have an anti-dilutive effect (i.e. those that increase income per share or decrease loss per share) are excluded from the calculation of diluted EPS. For the periods ended June 30, 2022 and 2021, the Company did not have any potentially dilutive securities outstanding.
Reclassifications
Certain prior period amounts have been reclassified to conform with the current period presentation. However, there are no material or significant rearrangements or reclassification made during the year.
Recently Adopted Accounting Standards
In February 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-02, Leases (“ASC 842”). The guidance requires lessees to recognize almost all leases on their balance sheet as a right-of-use asset and a lease liability. For income statement purposes, the FASB retained a dual model, requiring leases to be classified as either operating or finance. Lessor accounting is similar to the current model, but updated to align with certain changes to the lessee model and the new revenue recognition standard. Existing sale-leaseback guidance, including guidance for real estate, is replaced with a new model applicable to both lessees and lessors. ASC 842 is effective for fiscal years beginning after December 15, 2018. The adoption of ASC 842, did not have a material effect on the Company’s consolidated financial statements.
Management has considered all recent accounting pronouncements issued. The Company’s management believes that these recent pronouncements will not have a material effect on the Company’s financial statements.
3. GOING CONCERN
The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the discharge of liabilities in the normal course of business for the foreseeable future.
As
of June 30, 2022, the Company had an accumulated deficit of $
These conditions raise substantial doubt about the Company’s ability to continue as a going concern. These financial statements do not include any adjustments to reflect the possible future effect on the recoverability and classification of assets or the amounts and classifications of liabilities that may result from the outcome of these uncertainties. The Company may raise additional capital through the sale of its equity securities, or through borrowings from financial institutions and related parties. Management believes that the actions presently being taken to obtain additional funding and implement its strategic plan provides the opportunity for the Company to continue as a going concern.
| F-8 |
4. ACCRUED LIABILITIES AND OTHER PAYABLES
Accrued liabilities and other payables consisted of the following as of June 30, 2022 and December 31, 2021:
| June 30, 2022 | December 31, 2021 | |||||||
| Payable to My Project Group Limited | $ | $ | ||||||
| Accrued other expenses | ||||||||
| Total accrued liabilities and other payables | $ | $ | ||||||
Effective
from January 1, 2021, the Company entered into service agreement with My Project Group Limited under which monthly compensation of $
5. INCOME TAXES
The Company operates in the United States and its wholly-owned subsidiaries operate in British Virgin Islands (“BVI”) and files tax returns in these jurisdictions.
Loss from continuing operations before income tax expense (benefit) is as follows:
| For the Periods Ended | ||||||||
| June 30, | ||||||||
| 2022 | 2021 | |||||||
| Loss attributed to United States | $ | ( | ) | $ | ( | ) | ||
| Loss attributed to foreign operations | ||||||||
| Loss before income taxes | $ | ( | ) | $ | ( | ) | ||
The expense (benefit) for income taxes from continuing operations consists of the following components:
United States of America
British Virgin Islands
Under the laws of British Virgin Islands, the Company is not subject to income taxes.
The following table sets forth the significant components of the aggregate deferred tax assets of the Company as of June 30, 2022 and December 31, 2021:
| As of | ||||||||
| June 30, 2022 | December 31, 2021 | |||||||
| Deferred tax assets: | ||||||||
| NOL carryforwards | ||||||||
| United States | $ | $ | ||||||
| Foreign operations | ||||||||
| Change in valuation allowance | ( | ) | ( | ) | ||||
| Deferred tax assets | $ | $ | ||||||
Management
believes that it is more likely than not that the deferred tax assets will not be fully realizable in the future. Accordingly, the Company
provided for a full valuation allowance against its deferred tax assets of $
The Company’s tax returns are subject to examination by United States tax authorities beginning with the year ended December 31, 2013.
| F-9 |
6. RELATED PARTY TRANSACTIONS
Related parties’ relationships are as follows:
| David Po | Director and a shareholder of the Company |
During
the period ended June 30, 2022, the Company did not have transaction with David Po. Amounts due to Mr. Po as of June 30, 2022 and December
31, 2021, were $
The owing to Mr. Po consists of working capital advances and borrowings. These amounts are due on demand and are non-interest bearing.
7. STOCKHOLDERS’ EQUITY (DEFICIT)
Preferred Stock
The Company is authorized to issue shares, with a stated par value of $ per share with such powers, preferences, rights and restrictions which shall be determined by the Corporation’s Board of Directors in its sole discretion, and which designations and issuances shall not require the approval of the shareholders of the Corporation.
During the six months ended June 30, 2022, there were no issuances of Preferred Stock.
As of June 30, 2022 and December 31, 2021, shares of preferred stock were issued and outstanding.
Common Stock
The Company is authorized to issue shares of common stock at a par value of $.
During the six months ended June 30, 2022, there were no issuances of Common Stock.
As of June 30, 2022 and December 31, 2021, shares of common stock were issued and outstanding.
8. SEGMENT INFORMATION
ASC 280, “Segment Reporting” establishes standards for reporting information about operating segments on a basis consistent with the Company’s internal organization structure as well as information about services categories, business segments and major customers in financial statements. The Company has one reportable segment in term of geography.
By geography
As of and for the period ended June 30, 2022 | ||||||||
| Malaysia | Total | |||||||
| Revenue | $ | $ | ||||||
| Cost of revenues | ||||||||
| Depreciation and amortization | ||||||||
| Net loss | ( | ) | ( | ) | ||||
| Total assets | ||||||||
| Capital expenditures for long-lived assets | ||||||||
As of and for the period ended June 30, 2021 | ||||||||
| Malaysia | Total | |||||||
| Revenue | $ | $ | ||||||
| Cost of revenues | ||||||||
| Depreciation and amortization | ||||||||
| Net loss | ( | ) | ( | ) | ||||
| Total assets | ||||||||
| Capital expenditures for long-lived assets | ||||||||
9. SUBSEQUENT EVENTS
The Company has evaluated subsequent events through the date which the financial statements were available to be issued. All subsequent events requiring recognition as of June 30, 2022 have been incorporated into these financial statements and there are no subsequent events that require disclosure in accordance with FASB ASC Topic 855, “Subsequent Events.”
10. SIGNIFICANT EVENTS
During the fiscal year, the World Health Organization declared the Coronavirus (COVID-19) outbreak to be a pandemic, which has caused severe global social and economic disruptions and uncertainties, including markets where the Company operates.
The Company considers this outbreak as non-adjusting-events. The consequences brought about by Covid-19 continue to evolve and whilst the Company actively monitoring and managing its operations to respond to these changes, the Company does not consider it practicable to provide any quantitative estimate on the potential impact it may have on the Company.
| F-10 |
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Cautionary Statements
This Quarterly Report on Form 10-Q (this “Quarterly Report”) contains forward-looking statements, including, without limitation, in the sections captioned “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and elsewhere. Any and all statements contained in this Quarterly Report that are not statements of historical fact may be deemed forward-looking statements. Terms such as “may,” “might,” “would,” “should,” “could,” “project,” “estimate,” “pro-forma,” “predict,” “potential,” “strategy,” “anticipate,” “attempt,” “develop,” “plan,” “help,” “believe,” “continue,” “intend,” “expect,” “future” and terms of similar import (including the negative of any of the foregoing) may be intended to identify forward-looking statements. However, not all forward-looking statements may contain one or more of these identifying terms.
Forward-looking statements in this Quarterly Report may include, without limitation, statements regarding (i) the plans and objectives of management for future operations, including plans or objectives relating to the growth of tea polyphenol sales and development of our tea polyphenol-based products, (ii) the plans or objectives relating to our future business acquisitions, if any, (iii) a projection of income (including income/loss), earnings (including earnings/loss) per share, capital expenditures, dividends, capital structure or other financial items, (iv) our future financial performance, including any such statement contained in a discussion and analysis of financial condition by management or in the results of operations included pursuant to the rules and regulations of the Securities and Exchange Commission, or the SEC, and (v) the assumptions underlying or relating to any statement described in points (i), (ii), (iii) or (iv) above.
The forward-looking statements are not meant to predict or guarantee actual results, performance, events or circumstances and may not be realized because they are based upon our current projections, plans, objectives, beliefs, expectations, estimates and assumptions and are subject to a number of risks and uncertainties and other influences, many of which we have no control over. Actual results and the timing of certain events and circumstances may differ materially from those described by the forward-looking statements as a result of these risks and uncertainties. Factors that may influence or contribute to the inaccuracy of the forward-looking statements or cause actual results to differ materially from expected or desired results may include, without limitation:
| ● | volatility or decline of our stock price; | |
| ● | potential fluctuation of quarterly results; | |
| ● | continued failure to earn revenues or profits; | |
| ● | inadequate capital to continue or expand our business, and inability to raise additional capital or financing to implement our business plans; | |
| ● | decline in demand for our products and services; | |
| ● | rapid adverse changes in markets; | |
| ● | litigation with or legal claims and allegations by outside parties against us; | |
| ● | insufficient revenues to cover operating costs; and | |
| ● | estimates of our future revenue, expenses, capital requirements and our need for additional financing; |
| 4 |
Because the statements are subject to risks and uncertainties, actual results may differ materially from those expressed or implied by the forward-looking statements. ICGL cautions you not to place undue reliance on the statements, which speak only as of the date of this Quarterly Report. The cautionary statements contained or referred to in this section should be considered in connection with any subsequent written or oral forward-looking statements that ICGL or persons acting on its behalf may issue. ICGL does not undertake any obligation to review or confirm analysts’ expectations or estimates or to release publicly any revisions to any forward-looking statements to reflect events or circumstances after the date of this Quarterly Report, or to reflect the occurrence of unanticipated events, except as required by law.
Overview
Image Chain Group Limited, Inc. (formerly Have Gun Will Travel Entertainment, Inc.) was incorporated under the laws of Nevada on December 18, 2013, and initially sought to create reality television programming. References in this Quarterly Report to “ICGL”, “Image Chain”, the “Company”, the “Registrant”, “we”, “our” or “us” are to Image Chain Group Limited, Inc.
On May 5, 2015, ICGL entered into a share exchange agreement (the “FDHG Exchange Agreement”) with Fortune Delight Holdings Group Ltd (“FDHG”) and Wu Jun Rui, on behalf of himself and certain other individuals who were to receive shares of ICGL pursuant to the FDHG Exchange Agreement (the “FDGH Shareholders”). On the terms and subject to the conditions set forth in the FDHG Exchange Agreement, on May 5, 2015, Wu Jun Rui transferred all 50,000 shares of FDHG common stock, consisting of all of the issued and outstanding shares of FDHG, to ICGL in exchange for the issuance to the stockholders of FDHG of 59,620,000 shares of the Company’s common stock, par value $.001 per share (“Common Stock”) and 5,000,000 shares of the Company’s preferred stock, par value $.001 per share (“Preferred Stock”).
As a result of the closing of the FDHG Exchange Agreement, FDHG became the Company’s wholly owned subsidiary. FDHG, through its subsidiaries, manufactured and sold “Image Tea”-branded tea products from its tea garden in Yunnan Province.
On June 11, 2015, the Company amended its Articles of Incorporation in order to change its name to Image Chain Group Limited, Inc. and to increase the authorized shares of Common Stock from 70,000,000 to 400,000,000. The name change was undertaken in order to more closely align with the operations of the Company’s wholly-owned subsidiary. The increase in authorized Common Stock was undertaken to allow the Company to utilize the newly available shares to raise capital.
On or about November 15, 2016, FDHG disposed of its ownership of all operating assets, and as a result ICGL became a shell company, as defined by Rule 12b-2 under the Exchange Act (the “Disposition Event”). The Disposition Event is evidenced by a bought and sold note stamped by the Inland Revenue Department of Hong Kong, which we believe is a legally binding document.
On February 13, 2017, the Company filed with the Secretary of State of the State of Nevada a Certificate of Correction (the “Certificate of Correction”) to correct a mistake made in the Company’s original Articles of Incorporation with regard to the Preferred Stock issued in connection with the FDHG Exchange Agreement. As a result, ICGL had 395,000,000 shares of Common Stock and 5,000,000 shares of Preferred Stock issued and outstanding. The Company subsequently entered into an agreement pursuant to which the holder of the Preferred Stock agreed to retire the Preferred Stock in exchange for receiving an equal number of shares of Common Stock of the Company. As of the date of this Quarterly Report, that exchange of Preferred Stock for Common Stock has not yet occurred.
On May 1, 2017, upon recommendation of the Board of Directors, a majority of Image Chain’s common stockholders consented in writing to amendment of Image Chain’s Articles of Incorporation to (i) effect a reverse stock split on a 1 for 100 stock split basis from 400,000,000 authorized shares with a par value of $0.001 per share to 4,000,000 authorized shares with a par value of $0.001, and (ii) after the reverse stock split, to increase the authorized shares of Common Stock from 3,950,000 to 2,000,000,000 shares with a par value of $0.001 per share, and to decrease the authorized shares of Preferred Stock from 50,000 to zero (0). As of the date of this Quarterly Report, the reverse stock split and increase in authorized shares have been completed, and the decrease in shares of Preferred Stock is still in process, as a result 50,000 shares of Preferred Stock are authorized and outstanding.
| 5 |
Image P2P Trading Group Limited (“Image P2P”), a company organized under the laws of the British Virgin Islands, was incorporated on April 21, 2015. Asia Grand Will Limited (“AGWL”) was incorporated on March 18, 2017 in the Hong Kong SAR. AGWL wholly owns Fuzhi Yuan (Shenzhen) Holdings Limited (“FYSZ”) which was established on June 20, 2017 in the PRC. FYSZ is a wholly owned foreign entity under PRC law. FYSZ wholly owns Jiangxi Fuzhiyuan Biotechnology Limited (“Fuzhiyuan Biotechnology”), which was established on January 5, 2013 in the PRC. FYSZ acquired Fuzhiyuan Biotechnology on July 14, 2017. AGWL and FYSZ are intermediary holding companies. Image P2P conducts its operations through Fuzhiyuan Biotechnology. Image P2P acquired AGWL on Jul 28, 2017.
The reorganization of Image P2P and its subsidiaries via the acquisitions detailed above, by and amongst Image P2P and AGWL, FYSZ, and Fuzhiyuan Biotechnology, have been accounted for under US GAAP as business combinations under common control.
On November 14, 2017, Image Chain entered into a share exchange agreement (the “Exchange Agreement”) with Image P2P and the shareholders of Image P2P (the “Sellers”). Pursuant to the Exchange Agreement, the Sellers transferred all 50,000 shares of Image P2P outstanding common stock to the Company in exchange for 500,000,000 shares of Common Stock (the “Share Exchange”). As a result of the Share Exchange, Image P2P became the Company’s wholly-owned subsidiary. Image P2P, through its subsidiaries, is engaged in producing, marketing and selling tea polyphenol products, and is developing for production tea polyphenol-based products. Image P2P is located in the PRC.
The Share Exchange has been accounted for as a reverse- merger and recapitalization of Image Chain where Image Chain (the legal acquirer) is considered the accounting acquiree and Image P2P (the acquiree) is considered the accounting acquirer. As a result of this transaction, the Company is deemed to be a continuation of the business of Image P2P.
On November 28, 2018, the Company entered into a Business Transfer Agreement and Share Exchange Agreement (the “Agreements”) with a group of the original shareholders of Image P2P (the “Image P2P Shareholding Group”), Image P2P and its subsidiaries. Pursuant to the Agreements, the Image P2P Shareholding Group exchanged 200,000 common shares of the Company for the one common share of Asia Grand Will Limited held by Image P2P. Asia Grand Will Limited is the holding company for the Company’s operations in the PRC. Also pursuant to the Agreements, the Image P2P Shareholding Group, Image P2P and Image P2P’s subsidiaries transferred to the Company (i) all of its right, title and interest to the intellectual property, including copyrights, patents, trademarks, process technology and production know-how, of Image P2P and its subsidiaries, (ii) the exclusive distribution rights in the PRC and worldwide for all products of Image P2P and its subsidiaries, (iii) the exclusive right to all intellectual property developed by Image P2P and its subsidiaries in the future and (iv) the exclusive distribution rights in the PRC and worldwide for all products of Image P2P and its subsidiaries developed in the future.
The 200,000 common shares of the Company returned to Image P2P are recognized as common stock in treasury since Image P2P is a wholly owned subsidiary of the Company and measured at cost which is the fair value of the common stocks as of the date of the disposal of subsidiaries.
The subsidiaries disposed are presented as discontinued operations in this report. Comparatives are reclassified to conform with the presentation.
Our principal executive office is located at No. 6, 6-1, 6-2, Jalan BS 10/6, Taman Bukit Serdang, 43300 Seri Kembangan, Selangor, Malaysia. Our telephone number is (852) 3188-2700. We do not have a corporate website. Our periodic and current reports with the SEC can be obtained from the SEC website, www.sec.gov.
Company Overview
On November 28, 2018, the Company disposed of Asia Grand Will Limited and its subsidiaries and hence have terminated the business of tea polyphenol products production and sales.
| 6 |
Currently, since the Sino-US trade war may affect the enterprises operating in China in 2018, the Company has gradually shifted its market target to Malaysia. It is seeking to develop business in healthy Halal food.
While we expect to focus on our efforts in the Halal Food License area, we will continue to seek new business opportunities with established business entities for merger with or acquisition of a target business in order to best protect our shareholder interests. In certain instances, a target business may wish to become our subsidiary or may wish to contribute assets to us rather than merge. We have not yet begun negotiations or entered into any definitive agreements in the Halal Food License business, or for any other potential new business opportunities, and there can be no assurance that we will be able to enter into any definitive agreements.
We anticipate that the selection of a business opportunity in which to participate will be complex and without certainty of success. Business opportunities may be available in many different industries and at various stages of development, all of which will make the task of comparative investigation and analysis of such business opportunities extremely difficult and complex. Business opportunities that we believe are in the best interests of our company may be scarce, or we may be unable to obtain the ones that we want. We can provide no assurance that we will be able to locate compatible business opportunities.
Currently, we do not have a source of revenue. We are not able to fund our cash requirements through our current operations. We have been reliant on loans by affiliated and non-affiliated parties to provide financial contributions and services to keep our company operating. Further, we believe that our company may have difficulties raising capital from other sources until we locate a prospective merger candidate through which we can pursue our plan of operation. If we are unable to secure adequate capital to continue our acquisition efforts, our shareholders may lose some or all of their investment and our business may fail. We currently have no written or oral agreement from our majority shareholder to continue to provide financial contributions.
COVID-19 Outbreak
It is worth highlighting that, on March 16, 2020, Malaysia Prime Minister announced the implementation of Movement Control Order (“MCO”) under Control of Infectious Diseases Act 1988 and the Police Act 1967 to contain the spread of coronavirus disease 2019 (“COVID-19”). Pursuant to the declaration, initial phase of the MCO effectively take place from March 18, 2020 to March 31, 2020 for a period of 14 days, and subsequently extended to May 12, 2020 with three 14-day MCO extensions declared by Malaysia Prime Minister.
Pursuant to the MCO, all government and private premises except those involved in essential supply of goods and services such as water, electricity, energy, telecommunications, postal, transportation, irrigation, oil, gas, fuel, lubricants, broadcasting, finance, banking, health, pharmacy, fire, prison, port, airport, safety, defense, cleaning, retail and food supply should be closed.
On May 1, 2020, Malaysia Prime Minister announced that Conditional Movement Control Order (“CMCO”), a relaxation of MCO will replaced existing MCO on May 4, 2020 onwards and scheduled to expire on original 4th MCO expiration date, May 12, 2020. On May 10, 2020, Malaysia Prime Minister announced that the CMCO will be extended for a period of 4 weeks from May 13, 2020 until June 9, 2020.
Pursuant to CMCO, most economic sectors and activities are allowed to operate while observing the business standard operation procedures such as in our case social distancing and recording the names and telephone numbers of customers and the dates of their visit.
On June 7, 2020, Malaysia Prime Minister announced that Recovery Movement Control Order (“RMCO”) would take place from June 10, 2020 to August 31, 2020, while preserving previous allowable economic activity, interstate travelling is now permissible. On August 28, 2020, Malaysia Prime Minister announced the extension of the RMCO by a further 4 months until 31 December, 2020.
On October 14, 2020, the National Security Council announced that Selangor, Kuala Lumpur and Putrajaya will be placed under CMCO for a period of 14 days to October 27, 2020.
| 7 |
On January 1, 2021, RMCO has been extended until March 31, 2021, following the risk assessment conducted by the Ministry of Health of Malaysia.
An official statement was released by the Prime Minister’s office on 28 May 2021, announcing the implementation of the Phase 1 FMCO (Full MCO, also known as ‘total lockdown’) nationwide for a period of 14 days from June 1 to 14, 2021. Throughout this duration, all economic sectors are not allowed to operate with the exception of essential economic and service sectors. On June 11, 2021, it was announced that the FMCO will be extended for two more weeks, which scheduled to end on 28 June 2021. On June 27, 2021, Malaysia Prime Minister announced that MCO 3.0 initially scheduled to end on 28 June will be further extended as long as the number of cases remains high. As per the 4-phase National Recovery Plan, Phase 1 of MCO 3.0 will remain in place until these criteria are fulfilled:
| ● | < 4000 daily infection cases |
| ● | ICU wards start operating at a moderate level |
| ● | Nation vaccination rate reaches 10% of the population |
Kuala Lumpur transition from Phase 1 to Phase 2 of the National Recovery Plan effective on September 10, 2021.
On 8 March 2022, the Prime Minister of Malaysia announced that Malaysia will commence its transition to the endemic phase and reopen its borders from 1 April 2022. After two years of battling the COVID-19 pandemic, Malaysians are starting to return to their normal lifestyle, albeit under the new normal by adhering to standard operating procedures such as the mask mandate.
On April 28, 2022. the Ministry announced the relaxation of all standard operating procedures (SOPs) starting 1 May — including quarantine updates for COVID-positive cases, doing away with MySejahtera, and more.
During the MCO, CMCO, RMCO and FMCO period, we have minimized the operations and have stopped to seek new business opportunities with established business entities for merger with or acquisition of a target business. We expect the business activities will be resumed gradually.
Results of Operations
Three months ended June 30, 2022 compared to three months ended June 30, 2021.
| Three months ended June 30, | ||||||||
| 2022 | 2021 | |||||||
| Revenue | - | - | ||||||
| Operating expenses | ||||||||
| General and administrative expenses | 49,173 | 48,408 | ||||||
| Total operating expenses | 49,173 | 48,408 | ||||||
| Loss Before Income Taxes | (49,173 | ) | (48,408 | ) | ||||
| Provision for Income Taxes | - | - | ||||||
| Net Loss | (49,173 | ) | (48,408 | ) | ||||
| Other Comprehensive Income | ||||||||
| Foreign currency translation gain | - | - | ||||||
| Total Comprehensive loss | (49,173 | ) | (48,408 | ) | ||||
| Loss per share | ||||||||
| Basic and Diluted Loss per Common Share | (0.00 | ) | (0.00 | ) | ||||
| Basic and Diluted Weighted Average Common Shares Outstanding | 508,539,882 | 508,539,882 | ||||||
| 8 |
Operating Expenses
Our general and administrative expenses increased from $48,408 for the three months ended June 30, 2021 to $49,173 for the three months ended June 30, 2022. The increase was mainly attributed to the consulting fee in the current year.
Net Loss
Our net loss increased from $48,408 for the three months ended June 30, 2021 to $49,173 for the three months ended June 30, 2022. The increase was mainly attributed to the consulting fee in the current year.
Six months ended June 30, 2022 compared to six months ended June 30, 2021.
| Six months ended June 30, | ||||||||
| 2022 | 2021 | |||||||
| Revenue | - | - | ||||||
| Operating expenses | ||||||||
| General and administrative expenses | 101,431 | 98,330 | ||||||
| Total operating expenses | 101,431 | 98,330 | ||||||
| Loss Before Income Taxes | (101,431 | ) | (98,330 | ) | ||||
| Provision for Income Taxes | - | - | ||||||
| Net Loss | (101,431 | ) | (98,330 | ) | ||||
| Other Comprehensive Income | ||||||||
| Foreign currency translation gain | - | - | ||||||
| Total Comprehensive loss | (101,431 | ) | (98,330 | ) | ||||
| Loss per share | ||||||||
| Basic and Diluted Loss per Common Share | (0.00 | ) | (0.00 | ) | ||||
| Basic and Diluted Weighted Average Common Shares Outstanding | 508,539,882 | 508,539,882 | ||||||
Operating Expenses
Our general and administrative expenses increased from $98,330 for the six months ended June 30, 2021 to $101,431 for the six months ended June 30, 2022. The increase was mainly attributed to the consulting fee in the current year.
Net Loss
Our net loss increased from $98,330 for the six months ended June 30, 2021 to $101,431 for the six months ended June 30, 2022. The increase was mainly attributed to the consulting fee in the current year.
Liquidity and Capital Resources
Since the inception of the Company, we have incurred significant net losses and negative cash flows from operations. During the six months ended June 30, 2022 and the six months ended June 30, 2021, we had net losses of $101,431 and $98,330, respectively. As of June 30, 2022, we had an accumulated deficit of $9,548,170. As discussed in our financial statements for the six months ended June 30, 2022, these factors raise substantial doubt about our ability to continue as a going concern.
To date, we have financed our operations principally through borrowings from our related parties. Depending on our future operational results, we may need to conduct one or more equity or debt financings within the next 12 months.
We could potentially need our available financial resources sooner than we currently expect, and we may incur additional indebtedness to meet future financing needs. Adequate additional funding may not be available to us on acceptable terms or at all. In addition, although we anticipate being able to obtain additional financing through non-dilutive means, we may be unable to do so. Our failure to raise capital as and when needed could have significant negative consequences for our business, financial condition and results of operations. Our future capital requirements and the adequacy of available funds will depend on many factors, many of which are beyond our control.
Related Party Loans
See “Related Party Transactions” in Note 6 of Notes to the Financial Statements. These unsecured loans do not bear interest or fixed dates for repayment.
Cash flows
The following table summarizes our cash flows for the periods presented:
Six months ended June 30, | ||||||||
| 2022 | 2021 | |||||||
| Cash flows from operating activities | $ | - | $ | - | ||||
| Cash flows from investing activities | $ | - | $ | - | ||||
| Cash flows from financing activities | $ | - | $ | - | ||||
| 9 |
Operating Activities
Net cash provided by operating activities for the six months ended June 30, 2022 and 2021 were $0.
Investing Activities
Net cash used in investing activities for the six months ended June 30, 2022 and 2021 were $0.
Financing Activities
Net cash provided by financing activities for the six months ended June 30, 2022 and 2021 were $0.
Off-Balance Sheet Arrangements
We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, and capital expenditures or capital resources that are material to stockholders.
GOING CONCERN
These financial statements have been prepared assuming that Company will continue as a going concern. As of June 30, 2022, the Company had accumulated deficits of $9,548,170 due to substantial losses. There was substantial doubt regarding the Company’s ability to continue as going concern as of June 30, 2022. Refer to Note 3. GOING CONCERN of the accompanying notes to the condensed financial statements.
Recent Accounting Pronouncements
See “Recent Accounting Pronouncements” in Note 2 of Notes to the Financial Statements.
Critical Accounting Policies
We prepare our financial statements in conformity with GAAP, which requires management to make certain estimates and assumptions and apply judgments. We base our estimates and judgments on historical experience, current trends and other factors that management believes to be important at the time the financial statements are prepared and actual results could differ from our estimates and such differences could be material. We have identified below the critical accounting policies which are assumptions made by management about matters that are highly uncertain and that are of critical importance in the presentation of our financial position, results of operations and cash flows. Due to the need to make estimates about the effect of matters that are inherently uncertain, materially different amounts could be reported under different conditions or using different assumptions. On a regular basis, we review our critical accounting policies and how they are applied in the preparation our financial statements.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.
| 10 |
Item 3. Quantitative and Qualitative Disclosures About Market Risk
As a “smaller reporting company”, we are not required to provide the information required by this Item.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our principal executive officer and principal financial officer, evaluated the effectiveness of our disclosure controls and procedures as of June 30, 2022. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on the evaluation of our disclosure controls and procedures as of June 30, 2022, our principal executive officer and principal financial officer concluded that, as of such date, our disclosure controls and procedures were not effective.
Changes in Internal Controls
There have been no changes in our internal control over financial reporting during the fiscal quarter ended June 30, 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
| 11 |
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
As of the date of this Quarterly Report on Form 10-Q, we are not a party to any legal proceedings that could have a material adverse effect on the Company’s business, financial condition or operating results. Further, to the Company’s knowledge no such proceedings have been threatened against the Company.
Item 1A. Risk Factors
As a “smaller reporting company”, we are not required to provide the information required by this Item.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not Applicable.
Item 5. Other Information
Not Applicable.
Item 6. Exhibits
| Exhibit Number | Description | |
| (31) | Rule 13a-14 (d)/15d-14d) Certifications | |
| 31.1* | Section 302 Certification by the Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer | |
| (32) | Section 1350 Certifications | |
| 32.1* | Section 906 Certification by the Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer | |
| 101 | Interactive Data File | |
| 101.INS** | Inline XBRL Instance Document | |
| 101.SCH** | Inline XBRL Taxonomy Extension Schema Document | |
| 101.CAL** | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |
| 101.DEF** | Inline XBRL Taxonomy Extension Definition Linkbase Document | |
| 101.LAB** | Inline XBRL Taxonomy Extension Label Linkbase Document | |
| 101.PRE** | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
* Filed herewith.
** XBRL Information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.
| 12 |
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| IMAGE CHAIN GROUP LIMITED, INC. | |
| (Registrant) | |
| Dated: August 9, 2022 | /s/ Chiea Kah Szen |
| Chiea Kah Szen | |
| President and Chief Executive Officer | |
| (Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer) |
| 13 |
Exhibit 31.1
CERTIFICATION PURSUANT TO
18 U.S.C. ss 1350, AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Chiea Kah Szen, certify that:
| 1. | I have reviewed this quarterly report on Form 10-Q of Image Chain Group Limited, Inc.; |
| 2 | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| (a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | |
| (b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | |
| (c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | |
| (d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| (a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and | |
| (b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: August 9, 2022
| /s/ Chiea Kah Szen | |
| Chiea Kah Szen | |
| President and Chief Executive Officer | |
| (Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer) |
Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
I, Chiea Kah Szen, hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
| (1) | the Quarterly Report on Form 10-Q of Image Chain Group Limited, Inc. for the period ended June 30, 2022 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
| (2) | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Image Chain Group Limited, Inc. |
| Dated: August 9, 2022 | /s/ Chiea Kah Szen |
| Chiea Kah Szen | |
| President and Chief Executive Officer | |
| (Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer) | |
| Image Chain Group Limited, Inc. |
A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to Image Chain Group Limited, Inc. and will be retained by Image Chain Group Limited, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.
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