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YoY shift: Bearish
Year-over-year tone shift - average net-tone change across Risk Factors and MD&A vs the prior 10-K. This filing is -0.55pp more bearish than last year's.
Why YoY instead of absolute: the LM lexicon has ~6.6× more negative words than positive (legal/risk-disclosure language is heavy on hedging), so every 10-K reads bearish on raw tone. Year-over-year change strips that bias and surfaces the actual shift in management's framing.
Tone shift by section
The two components the gauge averages: how Risk Factors and MD&A each shifted in net tone versus last year's 10-K. The headline above is their average, so a green needle over a soft section just means the other section carried it.
Risk Factors
-0.01pp
Flat
Net-tone change vs last year's 10-K.
MD&A
-1.08pp
Big -
Net-tone change vs last year's 10-K.
Per-snippet highlights
Sentence-level sentiment highlighting with category and subcategory filters is coming once the snippet-scoring pipeline lands. For now, dig into the actual section text on the Sections tab.
Risk Factors (Item 1A)
9,329 words
ITEM 1A. RISK FACTORS .
An investment in our common stock involves a number of very significant risks. You should carefully consider the following known material risks and uncertainties in addition to other information in this document in evaluating our company and its business before purchasing shares of our company’s common stock. You could lose all or part of your investment due to any of these risks.
Risks Relating to the Company
Volatility in Global Interest Rate that is material on our business and may continue to do so for the next twelve months.
Although 2024 marks a period of relative stabilization compared to the peak years of the pandemic, residual challenges and structural shifts continue to affect our operations, client demand, and overall financial performance.
Revenue and Client Demand
During the height of the pandemic, many businesses reduced discretionary spending, including consulting services, which led to a temporary decline in our revenue. While economic activity has , some industries we serve, particularly in sectors like retail, travel, and hospitality, are still recovering from . Additionally, remote work trends and digital transformation initiatives have altered client needs, increasing demand for technology-driven consulting services while reducing traditional in-person engagements.
Language change vs prior 10-K
MD&A (Item 7) - words with the biggest YoY frequency increase
Global supply chain disruptions and inflationary pressures, exacerbated by the pandemic, have increased the cost of certain services and operational expenses. While we have taken steps to mitigate these impacts through strategic pricing and cost management, ongoing economic uncertainty continues to pose a risk to profitability.
Regulatory and Compliance Considerations
The evolving regulatory landscape related to health and safety measures, data security in remote work environments, and government assistance programs has required continued compliance efforts. Any changes in these regulations could impact our cost structure and operational flexibility.
As we move forward, we remain focused on adapting to post-pandemic shifts by enhancing our digital consulting capabilities, optimizing cost structures, and diversifying service offerings. While uncertainties persist, we believe that our strategic investments in technology and human capital position us well for sustained growth in the evolving business environment.
Despitelingeringchallenges from COVID-19, we are optimistic about the long-term prospects of our industry and our ability to drive value for our clients and stakeholders.
We may be materially and adversely affected by the complexity, uncertainties and changes in South-East Asia regulation of the companies and businesses in the consulting industry.
Our business generates and processes personal data, and we are required to comply with Personal Data Protection Act (“PDPA”) laws and regulations for managing personal data. These laws and regulations could create unexpected costs, subject us to enforcement actions for compliance failures, or restrict portions of our business or cause us to change our data practices or business model.
Our operations across Southeast Asia are subject to stringent and evolving data privacy and personal data protection laws, including but not limited to Malaysia’s Personal Data Protection Act 2010 (PDPA) and Singapore’s Personal Data Protection Act 2012 (PDPA). These regulations govern the collection, use, storage, and transfer of personal data, imposing strict compliance obligations on businesses operating within these jurisdictions. Failure to adhere to these requirements may result in significant fines, legal actions, and reputational damage. In Malaysia, businesses must obtain consent before processing personal data and ensure adequate safeguards are in place, while in Singapore, companies are required to implement robust data protection policies, conduct regular audits, and report data breaches promptly. Other Southeast Asian countries, such as Thailand, Indonesia, the Philippines, and Vietnam, have introduced or are in the process of strengthening their data protection regimes, increasing the complexity of cross-border operations. Divergent regulatory frameworks and enforcement practices across the region pose operational challenges, requiring continuous monitoring, staff training, and investment in data security infrastructure. Non-compliance with these data protection laws could materially and adversely affect our business operations, expose us to regulatory scrutiny, and undermine stakeholder confidence.
We may become subject to a variety of laws and regulations in the PRC regarding privacy, data security, cybersecurity, and data protection. We may be liable for improper use or appropriation of personal information provided by our customers.
We may become subject to a variety of laws and regulations in the South-East Asia regarding privacy, data security, cybersecurity, and data protection. These laws and regulations are continuously evolving and developing. The scope and interpretation of the laws that are or may be applicable to us are often uncertain and may be conflicting, particularly with respect to foreign laws. In particular, there are numerous laws and regulations regarding privacy and the collection, sharing, use, processing, disclosure, and protection of personal information and other user data. Such laws and regulations often vary in scope, may be subject to differing interpretations, and may be inconsistent among different jurisdictions.
We expect to obtain information about various aspects of our operations as well as regarding our employees and third parties. We also maintain information about various aspects of our operations as well as regarding our employees. The integrity and protection of our customer, employee and company data is critical to our business. Our customers, end users and employees expect that we will adequately protect their personal information.
We are required by applicable laws to keep strictly confidential the personal information that we collect, and to take adequate security measures to safeguard such information.
Under Malaysia’s Computer Crimes Act 1997 and other related legislation, unauthorized access, theft, or misuse of data, including personal information, is a criminal offense, punishable by fines and imprisonment. Companies operating in Malaysia are required to take reasonable steps to secure their networks and information systems, prevent data breaches, and ensure the lawful processing of personal data. Non-compliance with these data protection and cybersecurity regulations can lead to enforcement actions, reputational damage, and potential disruption to business operations.
Oversea Listing Requirement for local entities
Additional disclosures may be required to ensure that Malaysian investors are adequately informed. Companies are also expected to comply with Bank Negara Malaysia’s (BNM) foreign exchange administration rules when raising funds overseas, particularly regarding the remittance of proceeds and cross-border transactions.
Post-listing, Malaysian entities remain subject to domestic financial reporting and disclosure requirements, alongside the ongoing obligations of the foreign stock exchange. Non-compliance with these requirements may result in regulatory action, fines, or reputational damage, potentially affecting the company’s financial position and market perception.
If we fail to retain existing or attract new businesses to enter the US Public Listing route, maintain and increase our exposure to South-East Asia emerging entities, or if we are unable to collect accounts receivable in a timely manner, our business, financial condition may be adversely affected.
Our business, financial condition, and future growth prospects may be adversely affected if we fail to retain existing clients or attract new businesses seeking to pursue the U.S. public listing route. Our ability to maintain and expand our exposure to emerging entities across Southeast Asia, including Malaysia, Singapore, Indonesia, Thailand, and other developing markets, is critical to our long-term success. These markets represent significant growth opportunities; however, competition is intensifying, and clients may seek alternative advisory firms or financing avenues.
Furthermore, delays or defaults in collecting accounts receivable from clients could strain our working capital, disrupt cash flows, and impact our profitability. Extended payment cycles or non-payment, particularly from startups and growth-stage companies in emerging markets, could further exacerbate these risks. Failure to address these challenges could materially and adversely affect our business operations and financial performance.
Importance of Fundraising Advisory and Potential Impact.
As a Listing Consultant, our ability to offer clients strategic fundraising options is a critical component of our service offering and is essential to their successful listing and post-listing growth. We facilitate access to various financing avenues, including pre-IPO funding, private placements, bridge financing, and public market capital raising, enabling our clients to secure the necessary working capital to support their business expansion and listing ambitions. Our capacity to identify suitable investors, structure financing solutions, and navigate cross-border fundraising regulations—particularly in Southeast Asia and the U.S.—enhances our value proposition. However, if we are unable to maintain strong relationships with funding partners, or if market conditions deteriorate, limiting access to financing for our clients, our advisory capabilities may be compromised. This could lead to reduced client confidence, delays in listings, and the potential loss of business. Furthermore, if clients are unable to secure sufficient funding through our advisory network, they may resort to less favorable financing terms or alternative consultants, which could materially and adversely affect our business performance and growth prospects.
Our future performance depends to a significant degree upon the continued service of key members of management as well as well-connected Consultants and Key Personnel
We are dependent upon the continued service of Mr. Chun Fong SIM (“Mr. SIM”) , our Chief Executive Officer and Director, and Mr. Eng Wah KUNG (“Mr. KUNG”), our Chief Financial Officer, Secretary and Director. The loss of Messrs. SIM or KUNG or one or more of our other key personnel would have a material adverse effect on our business, operating results and financial condition. We believe our future success will also depend in large part upon our ability to attract, retain and further motivate highly skilled management, marketing, sales and product development personnel. We expect to establish an incentive compensation plan for our key personnel to retain their services. We have experienced intense competition for personnel, and we cannot assure you that we will be able to retain our key employees or that we will be successful in attracting, assimilating and retaining personnel in the future.
Ho Chi WAN, our director and Non-Executive Chairman, beneficially owns approximately or has the right to vote 51.47% of our outstanding common stock. As a result, Ms WAN has a substantial voting power in all matters submitted to our stockholders for approval including:
Election of our board of directors;
Removal of any of our directors or officers;
Amendment of our Amended Certificate of Incorporation or Bylaws;
Adoption of measures that could delay or prevent a change in control or impede a merger, takeover or other business combination involving us.
As a result of her ownership and position, Ms WAN is able to substantially influence all matters requiring stockholder approval, including the election of directors and approval of significant corporate transactions. In addition, the future prospect of sales of significant amounts of shares held by him could affect the market price of our common stock if the marketplace does not orderly adjust to the increase in shares in the market and the value of your investment in our company may decrease. Ms WAN’s stock ownership may discourage a potential acquirer from making a tender offer or otherwise attempting to obtain control of us, which in turn could reduce our stock price or prevent our stockholders from realizing a premium over our stock price.
Procurement of Services and Financing Support in Public Listing Advisory
Our ability to successfully deliver public listing advisory services is contingent upon the availability of essential third-party service providers, including legal advisors, auditors, underwriters, valuation experts, and other professionals involved in the listing process. In certain instances, our capability to secure and coordinate these services in a timely and cost-effective manner is critical to meeting client expectations and ensuring the smooth progression of listing mandates. Additionally, our success relies significantly on the expertise and networks of our key personnel, including consultants who possess specialized knowledge of listing regulations and well-established connections within the financial and regulatory ecosystem. Any disruption in securing these external services, or the loss of experienced and well-connected professionals, could delay client projects, erode client confidence, and negatively impact our business performance.
The success of our business depends on our ability to maintain and enhance our brand.
We believe that maintaining, protecting, and enhancing our brand and reputation is of significant importance to the long-term success and growth of our business. Our brand represents the trust and confidence our clients, partners, and investors place in our services, particularly within the highly competitive consulting and public listing advisory sector across Southeast Asia and other markets in which we operate. A strong and recognizable brand allows us to differentiate ourselves from competitors, attract and retain new clients, and strengthen our relationships with existing clients.
Any failure to preserve the integrity of our brand or any negative publicity—whether arising from regulatory issues, client dissatisfaction, adverse market perception, or operational shortcomings—could materially harm our reputation, reduce market demand for our services, and undermine our competitive position. Moreover, as we expand our operations and seek to grow our presence in Malaysia, Hong Kong, and other key markets, consistent brand development and reputation management will remain vital in gaining market acceptance and driving sustainable business performance. We intend to continue investing in marketing, client engagement, and service quality enhancement initiatives to maintain and elevate our brand’s standing, which we believe is a critical factor to our continued success.
We may grow our business through acquisitions in the near future, which may result in operating difficulties, dilution, and other harmful consequences.
We expect to achieve our business plan through a combination of organic growth and acquisitions and investments. We periodically evaluate an array of potential strategic transactions and may make one or more acquisitions in the near future. The process of integrating an acquired company, business, or technology may create unforeseen operating difficulties and expenditures. The areas where we face risks include:
Implementation or remediation of controls, procedures, and policies at the acquired company;
Diversion of management time and focus from operating our business to acquisition integration challenges;
Cultural challenges associated with integrating employees from the acquired company into our organization;
Retention of employees from the businesses we acquire;
Integration of the acquired company’s accounting, management information, human resource, and other administrative systems;
Liability for activities of the acquired company before the acquisition, including patent and trademark infringementclaims, violations of laws, commercial disputes, tax liabilities, and other known and unknown liabilities;
Litigation or other claims in connection with the acquired company, including claims from terminated employees, customers, former stockholders, or other third parties;
In the case of foreign acquisitions, the need to integrate operations across different cultures and languages and to address the particular economic, currency, political, and regulatory risks associated with specific countries; and
Failure to successfully further develop the acquired product, service or technology.
Our failure to address these risks or other problems encountered in connection with future acquisitions and investments could cause us to fail to realize the anticipated benefits of such acquisitions or investments, incur unanticipated liabilities, and harm our business generally.
Future acquisitions may also result in dilutive issuances of our equity securities, the incurrence of debt, contingent liabilities, or amortization expenses, or write-offs of goodwill, any of which could harm our financial condition. Also, the anticipated benefit of many of our acquisitions may not materialize.
Other factors can have a material adverse effect on our future profitability and financial condition.
Many other factors can affect our profitability and financial condition, including:
changes in, or interpretations of, laws and regulations including changes in accounting standards and taxation requirements;
changes in the rate of inflation, interest rates and the performance of investments held by us;
changes in the creditworthiness of counterparties that transact business with;
changes in business, economic, and political conditions, including: war, political instability, terrorist attacks, the threat of future terrorist activity and related military action; natural disasters; the cost and availability of insurance due to any of the foregoing events; labor disputes, strikes, slow-downs, or other forms of labor or union activity; and, pressure from third-party interest groups;
changes in our business and investments and changes in the relative and absolute contribution of each to earnings and cash flow resulting from evolving business strategies, changing product mix, changes in tax rates and opportunities existing now or in the future;
difficulties related to our information technology systems, any of which could adversely affect business operations, including any significant breakdown, invasion, destruction, or interruption of these systems;
changes in credit markets impacting our ability to obtain financing for our business operations; or
legal difficulties, any of which could preclude or delay commercialization of products or technology or adversely affect profitability, including claims asserting statutory or regulatory violations, adverselitigation decisions, and issues regarding compliance with any governmental consent decree.
Risk Factors Relating to Doing Business in Malaysia
The Malaysian government, along with other regulatory authorities in South-East Asia, exercises significant oversight and discretion over the conduct of business operations, the offering of securities, and foreign investments within their jurisdictions.
Our operations in Malaysia and Southeast Asia are subject to the authority of various regulatory bodies, including the Securities Commission Malaysia (SC) and Bank Negara Malaysia (BNM), which possess the power to influence business activities, capital markets, and foreign investments. Regulatory interventions or sudden changes in policies could affect our ability to raise capital offshore, attract foreign investors, or proceed with securities offerings. These actions may negatively impact the value of our securities and could impair our financial position.
The regulatory environment in Malaysia and the broader Southeast Asia region is dynamic, with ongoing updates to policies governing investments, corporate practices, and financial markets. Businesses with offshore holding structures, such as ours, must remain adaptable to these regulatory developments to ensure continued compliance and sustain operational and financial flexibility. Failure to comply with new requirements may expose us to penalties or operational disruptions.
We face the risk that changes in the policies of the Malaysia government could have a significant impact upon the business we may be able to conduct in the Malaysia and the profitability of such business.
Additionally, shifts in government priorities or regional geopolitical uncertainties may create obstacles for foreign investors and affect market sentiment. Protective policies or stricter financial controls could limit our access to funding sources or delay expansion initiatives. These uncertainties, coupled with evolving regulations, may pose risks to our growth outlook and shareholder value.
Our interests may be adversely affected by changes in policies by the PRC government, including:
changes in laws, regulations or their interpretation especially with respect to application of PRC tax, labor, currency restriction and other laws to Hong Kong operations;
confiscatory taxation or changes in taxation;
Currency revaluations or restrictions on currency conversion, imports or sources of supplies, or ability to continue as a for-profit enterprise;
expropriation or nationalization of private enterprises; and
the allocation of resources.
Substantial uncertainties and restrictions with respect to the political and economic policies of the Malaysia government and South-East Asia laws and regulations could have a significant impact upon the business that we may be able to conduct in Malaysia and accordingly on the results of our operations and financial condition.
The political environment in Malaysia has experienced periodic changes and transitions in government leadership over recent years, often resulting in shifts in national policies and regulatory priorities. Changes in the ruling administration, shifts in coalition dynamics, or political instability can lead to uncertainty in the business environment. These developments may affect government approaches toward foreign investments, financial regulations, taxation policies, and economic development strategies, all of which could have a direct or indirect impact on our business operations and financial performance.
A change in government leadership or policy direction could result in the introduction of new laws or amendments to existing regulations governing sectors relevant to our business, including the consulting, public listing advisory, and capital markets sectors. For instance, stricter requirements on foreign ownership, limitations on offshore investments, or changes in licensing conditions for professional service providers could restrict our business activities or increase our compliance obligations. Additionally, delays in policy implementation or the reversal of previously approved development plans could disrupt our business strategies or delay project execution.
Political uncertainty in Malaysia may also affect investor confidence and market stability, particularly if it leads to concerns over the future direction of the economy or regulatory framework. This could reduce the willingness of potential clients to proceed with capital-raising activities or public listings, impacting our revenue streams. Furthermore, changes in government-driven incentives or support schemes for businesses operating in Malaysia could alter the cost structure or growth prospects for our operations. Any such political shifts could materially affect our ability to maintain stable business operations, achieve growth objectives, and ultimately influence our financial condition and the value of our securities.
The Holding Foreign Companies Accountable Act requires the Public Company Accounting Oversight Board (PCAOB) to be permitted to inspect the issuer’s public accounting firm within three years. There are uncertainties and potential challenges a Malaysian company could face under the Holding Foreign Companies Accountable Act (HFCAA) that. may suspend or de-register our registration with the SEC and delist our securities from applicable trading market within the US.
The Holding Foreign Companies Accountable Act (HFCAA) requires that the Public Company Accounting Oversight Board (PCAOB) be permitted to inspect and investigate the audit work and practices of public accounting firms for issuers listed on U.S. stock exchanges. If a company’s auditor is based in a jurisdiction where PCAOB is unable to conduct inspections for three consecutive years, the company risks delisting from U.S. securities exchanges. Malaysian companies, particularly those with local auditors unfamiliar with U.S. audit oversight requirements or those operating in an environment where local regulations restrict access to certain audit work papers, may face significant compliance challenges. There is uncertainty as to whether Malaysian authorities will fully cooperate with PCAOB inspection requirements, as Malaysia’s regulatory and confidentiality laws regarding audit practices could potentially conflict with U.S. standards. Any failure by our previous Malaysian auditors to comply with PCAOB inspection requests could result in our company being identified as non-compliant under the HFCAA, leading to potential trading prohibitions or delisting from U.S. exchanges, which could adversely affect the liquidity and value of our securities and restrict our access to U.S. capital markets.
Our previous auditor is located in Kuala Lumpur and is subject to PCAOB inspections with its most recent inspection occurring during 2021. Therefore, it is not subject to the determinations announced by the PCAOB on December 16, 2021. However, in the event the Malaysian authorities subsequently take a position disallowing the PCAOB to inspect our auditor, then we would need to change our auditor. Furthermore, due to the recent developments in connection with the implementation of the Holding Foreign Companies Accountable Act, we cannot assure you whether the SEC or other regulatory authorities would apply additional and more stringent criteria to us after considering the effectiveness of our auditor’s audit procedures and quality control procedures, adequacy of personnel and training, or sufficiency of resources, geographic reach or experience as it relates to the audit of our financial statements. The requirement in the HFCA Act that the PCAOB be permitted to inspect the issuer’s public accounting firm within two or three years, may result in the delisting of our securities from applicable trading markets in the U.S, in the future if the PCAOB is unable to inspect our accounting firm at such future time.
Adverse regulatory developments in Malaysia may subject us to additional regulatory review, and additional disclosure requirements and regulatory scrutiny to be adopted by the SEC in response to risks related to recent regulatory developments in Malaysia may impose additional compliance requirements for companies like us with Malaysian-based operations, all of which could increase our compliance costs, subject us to additional disclosure requirements.
Our business operations are subject to the regulatory framework in Malaysia, which continues to evolve. Regulatory authorities in Malaysia, including the Securities Commission Malaysia (SC), Bank Negara Malaysia (BNM), Companies Commission of Malaysia (SSM), and other government bodies, periodically introduce new legislation and update existing rules that govern corporate practices, foreign investments, financial services, data protection, taxation, and anti-corruption. Any adverse regulatory developments, such as the imposition of additional licensing requirements, restrictions on cross-border transactions, enhanced taxation policies, or stricter foreign exchange controls, could increase our operational complexity and compliance costs. Such changes may also limit our business flexibility and affect our ability to conduct cross-border financing and investment activities, which are critical to our regional operations and long-term growth.
Additionally, recent regulatory shifts and government enforcement efforts in Malaysia, including heightened anti-corruption measures under the Malaysian Anti-Corruption Commission Act 2009 (MACC Act) and the Corporate Liability Provision (Section 17A), may lead to increased regulatory scrutiny on companies conducting business in Malaysia. This environment could result in additional regulatory reviews or audits of our Malaysian operations, exposing us to potential penalties or reputational harm if any non-compliance is identified.
Furthermore, in response to the evolving regulatory landscape in Malaysia and the broader Southeast Asia region, the U.S. Securities and Exchange Commission (SEC) may adopt or strengthen disclosure obligations and oversight measures for companies like ours with operations in Malaysia. These measures could include expanded reporting requirements regarding financial transactions, internal controls, and compliance with anti-corruption and anti-money laundering laws. Any such regulatory developments by the SEC or other U.S. regulatory bodies could increase the complexity of our financial reporting processes, subject us to more rigorous disclosure obligations, and elevate our compliance burden.
The combination of stricter domestic regulations in Malaysia and potential additional scrutiny by U.S. authorities may significantly increase our compliance costs, require the enhancement of our internal compliance systems, and divert management attention from our core business activities. Failure to comply with any newly introduced regulations or disclosure requirements could result in fines, sanctions, reputational damage, or other adverse outcomes, all of which could negatively affect our business operations, financial performance, and the value of our securities.
We face uncertainty with respect to indirect transfers of equity interests in Malaysia resident enterprises by their non-Malaysia holding companies.
We may face regulatory uncertainty with respect to the transfer of equity interests in our Malaysian operating entity held indirectly through our non-Malaysia holding companies, including our intermediate holding entity in Hong Kong. Malaysia’s legal and regulatory framework governing mergers, acquisitions, and the indirect transfer of ownership interests in resident enterprises by foreign entities is complex and subject to interpretation and administrative discretion. Transactions involving offshore transfers of shares or changes in control of non-resident holding entities with underlying Malaysian subsidiary could trigger reporting requirements, tax implications, or regulatory approvals under Malaysian law, including under the Financial Services Act 2013, Income Tax Act 1967, and guidelines issued by Bank Negara Malaysia (BNM) and other authorities.
Potential Regulatory and Tax Implications
Although there is currently no comprehensive, codified regime specifically addressing indirect offshore equity transfers, Malaysian regulators may scrutinize such transactions to assess whether they result in changes in the ultimate ownership or control of Malaysian resident entities. Any such determination could result in obligations to notify the relevant authorities, reassess tax liabilities, or comply with other regulatory procedures. Failure to make timely disclosures or obtain necessary approvals could expose us to penalties, additional tax assessments, or operational disruptions.
Impact on Business Operations and Investment Returns
Any uncertainty or adverse interpretation regarding indirect transfers of our Malaysian equity interests by our offshore holding companies could increase transaction costs, introduce delays in executing corporate restructurings, or limit our ability to efficiently transfer ownership stakes to potential investors. Furthermore, such regulatory uncertainty could adversely affect the valuation and liquidity of our interests in the Malaysian market, which may reduce the attractiveness of our business to foreign investors and impair our ability to raise capital. These factors could materially and adversely affect our business, financial condition, and shareholders’ investment returns.
Ongoing Regulatory Developments
The regulatory environment in Malaysia and Southeast Asia regarding cross-border equity transactions continues to evolve. We cannot predict whether additional restrictions, reporting obligations, or tax measures targeting indirect offshore equity transfers will be introduced. Any such changes could further increase compliance burdens and create additional uncertainties for our future financing, restructuring, or divestment activities involving our Malaysian operations. We remain committed to monitoring regulatory developments and ensuring compliance; however, any adverse regulatory actions or shifts in policy could materially affect our operational flexibility and overall business performance.
The M&A Rules and certain other South-East Asia regulations may make it more difficult for us to pursue growth through acquisitions.
Our ability to expand our business operations through mergers, acquisitions, or strategic investments in Southeast Asia is subject to various regulatory requirements and government approvals, which may impose significant limitations or delays. In jurisdictions such as Malaysia, Singapore, Indonesia, and other Southeast Asian countries, mergers and acquisitions involving foreign investors are often subject to review by regulatory authorities, including competition regulators, foreign investment bodies, and sector-specific licensing agencies. In Malaysia, for instance, the Malaysian Competition Act 2010 regulates anti-competitive mergers, while the Equity Conditions and Licensing Requirements imposed by certain government agencies may restrict foreign ownership in strategic sectors. Similarly, Singapore’s Competition and Consumer Commission (CCCS) closely monitors transactions that may lessen competition within the market.
Additionally, some Southeast Asian countries maintain foreign equity restrictions and screening mechanisms for foreign investments, particularly in industries deemed sensitive, such as telecommunications, finance, and natural resources. Compliance with these M&A rules often requires obtaining prior approval, conducting due diligence to satisfy ownership and control requirements, and ensuring alignment with national interests or local partner arrangements. These processes can be time-consuming and may result in increased transaction costs or, in some cases, prevent us from completing proposed acquisitions altogether.
Further, regulations on cross-border capital flows and foreign exchange, including those enforced by Bank Negara Malaysia (BNM) and other central banks in the region, may restrict the remittance of funds or impose limitations on financing acquisition activities through offshore sources. Delays or obstacles in securing the necessary approvals for acquisitions could hinder our ability to respond swiftly to market opportunities or execute our growth strategy effectively.
Failure to comply with these M&A regulations or navigate the complexities of regulatory regimes across Southeast Asia could expose us to legal liabilities, fines, or the risk of having transactions nullified. As a result, our plans to expand operations, broaden our service offerings, or strengthen our market position through acquisitions may be significantly constrained, which could materially and adversely affect our business prospects and financial performance.
Regulatory Restrictions on Offshore Investments and Capital Movements in Southeast Asia
Our operations in Southeast Asia, including Malaysia and other jurisdictions, are subject to various regulations governing offshore investment activities by residents, which may limit the ability of our Hong Kong subsidiaries to increase their registered capital, inject funds into our Southeast Asian operating entities, or repatriate profits from these jurisdictions. Regulatory bodies, such as Bank Negara Malaysia (BNM) and other relevant authorities in the region, impose controls on foreign exchange, capital flows, and cross-border transactions, requiring compliance with prescribed limits, reporting obligations, and, in some cases, prior approvals. Any failure to comply with these regulations could result in fines, penalties, or restrictions on our capital movements, and could adversely affect our ability to fund our operations, support business growth, or distribute profits to our shareholders. Changes in these regulatory environments or the imposition of stricter controls could further constrain our financial flexibility and expose us to liability under Southeast Asian laws, which may materially and adversely affect our business, financial condition, and results of operations.
Malaysia regulation of loans to and direct investment in Malaysia entities by offshore holding companies and governmental control of currency conversion may delay or prevent us from using the proceeds we receive from offshore financing activities to make loans to or make additional capital contributions to our Hong Kong subsidiaries, which could materially and adversely affect our liquidity and our ability to fund and expand business.
Our ability to utilize proceeds from offshore financing activities to provide loans to or make direct investments in our Malaysian operating entity through our Hong Kong intermediate holding company may be subject to regulatory approvals and foreign exchange control policies imposed by Malaysian authorities. Under the regulations of Bank Negara Malaysia (BNM), foreign exchange transactions, cross-border investments, and fund transfers involving non-residents may require compliance with specific reporting obligations or prior approval in certain circumstances. Governmental control over currency conversion and foreign investment policies could delay or prevent us from efficiently injecting offshore funds into our Malaysian subsidiary, which could constrain our liquidity, disrupt our capital allocation plans, and hinder our ability to fund operations or pursue business expansion in Malaysia. Any prolongeddelay or inability to deploy offshore financing proceeds as intended may materially and adversely affect our financial condition, business growth, and overall operational performance.
Our Malaysia subsidiary may be subject to restrictions on paying dividends or making other payments to us, which may restrict its ability to satisfy liquidity requirements, conduct business and pay dividends to holders of our common stock.
Our operating entity in Malaysia is subject to local regulations and exchange control requirements that may restrict the free flow of funds, including the remittance of dividends and other payments, to our intermediate holding company in Hong Kong. Any such restrictions could limit the ability of our Hong Kong holding entity to distribute dividends to its shareholders, including directors and other investors, or to fulfill other liquidity needs. While Malaysia generally allows the repatriation of profits, any future changes in foreign exchange policies, taxation, or regulatory requirements could delay or limit dividend payments and other fund transfers. If our Malaysian entity is unable to remit sufficient funds to our Hong Kong intermediate holding company, it may adversely affect our ability to pay dividends to our shareholders and directors in Hong Kong, meet corporate obligations, or fund international business activities, which could, in turn, impact our overall financial condition and shareholder returns.
Governmental control of currency conversion may limit our ability to utilize revenues effectively and affect the value of your investment.
Governmental regulations and controls over currency exchange in certain jurisdictions where we operate, including countries in Southeast Asia, may limit our ability to convert local currencies into other currencies, including U.S. dollars, or transfer funds across borders freely. Restrictions on currency conversion or remittance could impair our ability to utilize revenues generated in those markets effectively to fund our operations, settle obligations denominated in foreign currencies, or reinvest in growth opportunities. Additionally, currency control measures may affect the timing, amount, or feasibility of repatriating profits or dividends to our shareholders. Any such limitations could reduce our operational flexibility, adversely impact our cash flow, and affect the value of your investment in our company. We cannot assure that further foreign exchange restrictions or currency policies will not be introduced, which may further impact our business, financial condition, and results of operations.
Risks Related to our International Operations
We are subject to risks associated with doing business internationally including compliance with domestic and foreign laws and regulations, economic downturns, political instability and other risks that could adversely affect our operating results.
We conduct our businesses in Malaysia, and have assets located in Hong Kong. We are required to comply with numerous and broad reaching laws and regulations administered by United States federal, state and local, and foreign governmental authorities. We must also comply with other general business regulations such as those directed toward accounting and income taxes, anti-corruption, anti-bribery, global trade, handling of regulated substances, and other commercial activities, conducted by our employees and third-party representatives globally. Any failure to comply with applicable laws and regulations could subject us to administrative penalties and injunctive relief, and civil remedies including fines, injunctions, and recalls of our products. In addition, changes to regulations or implementation of additional regulations may require us to modify existing processing facilities and/or processes, which could significantly increase operating costs and negatively impact operating results.
Our operating results may be affected by changes in trade, monetary, fiscal and environmental policies, laws and regulations, and other activities of governments, agencies, and similar organizations. These conditions include but are not limited to changes in a country’s or region’s economic or political conditions, trade regulations affecting production, pricing and marketing of products, local labor conditions and regulations, reduced protection of intellectual property rights, changes in the regulatory or legal environment, restrictions on currency exchange activities, currency exchange fluctuations, burdensome taxes and tariffs, enforceability of legal agreements and judgments, other trade barriers, and regulation or taxation of greenhouse gases. International risks and uncertainties, including changing social and economic conditions as well as terrorism, political hostilities, and war, may limit our ability to transact business in these markets and may adversely affect our revenues and operating results.
We may be exposed to liabilities under the Foreign Corrupt Practices Act, and any determination that we violated the Foreign Corrupt Practices Act could have a material adverse effect on our business.
As a consulting company operating in Malaysia and engaging with clients and business partners across Southeast Asia and internationally, we are subject to various anti-bribery and anti-corruption laws. These include the Malaysian Anti-Corruption Commission Act 2009 (MACC Act), as amended, which imposes strict penalties on companies and individuals involved in corrupt practices, and holds companies liable for the corrupt actions of their employees or associates unless adequate procedures are in place to prevent bribery. In addition, we may also be subject to foreign anti-bribery laws, such as the U.S. Foreign Corrupt Practices Act (FCPA) and Hong Kong’s Prevention of Bribery Ordinance (Cap. 201), if we engage with clients, partners, or investors from these jurisdictions.
These laws prohibit offering, promising, or giving anything of value to government officials or business representatives to gain a business advantage. Non-compliance with these regulations, whether intentional or inadvertent, could result in substantial fines, criminalpenalties, reputational damage, and restrictions on our ability to conduct business internationally. We have implemented internal controls and compliance procedures; however, there can be no assurance that our policies will always be effective in preventingviolations. Any breach of these anti-bribery and anti-corruption laws could materially and adversely affect our business, operations, and financial performance.
We expect our revenues to be paid in non-U.S. currencies, and if currency exchange rates become unfavorable, we may lose some of the economic value of the revenues in U.S. dollar terms.
Our primary operations are conducted in Malaysia and our operating currency is the Malaysian Ringgit. Since we conduct business in currencies other than U.S. dollars but report our financial results in U.S. dollars, we face exposure to fluctuations in currency exchange rates. For instance, if currency exchange rates were to change unfavorably, the U.S. dollar equivalent of our operating income recorded in foreign currencies would be diminished.
We currently do not, but may in the future, implement hedging strategies, such as forward contracts, options, and foreign exchange swaps to mitigate this risk. There is no assurance that our efforts will successfully reduce or offset our exposure to foreign exchange fluctuations. Additionally, hedging programs expose us to risks that could adversely affect our financial results, including the following:
We have limited experience in implementing or operating hedging programs. Hedging programs are inherently risky and we could lose money as a result of poor trades;
We may be unable to hedge currency risk for some transactions or match the accounting for the hedge with the exposure because of a high level of uncertainty or the inability to reasonably estimate our foreign exchange exposures;
We may be unable to acquire foreign exchange hedging instruments in some of the geographic areas where we do business, or, where these derivatives are available, we may not be able to acquire enough of them to fully offset our exposure;
We may determine that the cost of acquiring a foreign exchange hedging instrument outweighs the benefit we expect to derive from the derivative, in which case we would not purchase the derivative and would be exposed to unfavorable changes in currency exchange rates;
To the extent we recognize a gain on a hedge transaction in one of our subsidiaries that is subject to a high statutory tax rate, and a loss on the related hedged transaction that is subject to a lower rate, our effective tax rate would be higher; and
Significant fluctuations in foreign exchange rates could greatly increase our hedging costs.
We anticipate increased exposure to exchange rate fluctuations as we expand the breadth and depth of our international sales.
In our financial statements, we translate our local currency financial results into U.S. dollars based on average exchange rates prevailing during a reporting period or the exchange rate at the end of that period. To the extent the U.S. dollar strengthensagainst foreign currencies, the translation of these foreign currency denominated transactions could result in reduced revenue, operating expenses and net income for our international operations. Similarly, to the extent the U.S. dollar weakensagainst foreign currencies, the translation of these foreign currency denominated transactions could result in increased revenue, operating expenses and net income for our international operations.
Because our holding company structure creates restrictions on the payment of dividends, our ability to pay dividends is limited.
We are a holding company whose primary assets are our ownership of the equity interests in our subsidiaries. We conduct no other business and, as a result, we depend entirely upon our subsidiaries’ earnings and cash flow. If we decide in the future to pay dividends, as a holding company, our ability to pay dividends and meet other obligations depends upon the receipt of dividends or other payments from our operating subsidiaries. Our subsidiaries and projects may be restricted in their ability to pay dividends, make distributions or otherwise transfer funds to us prior to the satisfaction of other obligations, including the payment of operating expenses or debt service, restrictions on the conversion of local currency into U.S. dollars or other hard currency and other regulatory restrictions. If future dividends are paid in the Hong Kong Dollars, fluctuations in the exchange rate for the conversion of any of these currencies into U.S. dollars may adversely affect the amount received by U.S. stockholders upon conversion of the dividend payment into U.S. dollars. We do not presently have any intention to declare or pay dividends in the future. You should not purchase shares of our common stock in anticipation of receiving dividends in future periods.
It may be difficult for stockholders to enforce any judgment obtained in the United States against us, which may limit the remedies otherwise available to our stockholders .
Substantially all of our assets are located in Hong Kong. Moreover, our current directors and officers are dominantly nationals of Hong Kong. All or a substantial portion of the assets of this person are located outside the United States. As a result, it may be difficult for our stockholders to effect service of process within the United States upon this person. In addition, there is uncertainty as to whether the courts of Hong Kong would recognize or enforce judgments of U.S. courts obtained against us or such officers and/or directors predicated upon the civil liability provisions of the securities law of the United States or any state thereof or be competent to hear original actions brought in Hong Kong against us or such persons predicated upon the securities laws of the United States or any state thereof.
Risks Related to our Common Stock
Due to the limited trading market for our securities, you may have difficulty selling any shares you purchase in this offering.
While our shares of common stock are quoted on the OTC Pink tier of the OTC Markets Group, Inc., there is presently no meaningful demand for our common stock and virtually no public market exists for the shares being offered in this prospectus. The OTC Pink is a regulated quotation service that displays real-time quotes, last sale prices and volume information in over-the-counter securities. The OTC Pink is not an issuer listing service, market or exchange. Although the OTC Pink does not have any listing requirements per se, to be eligible for quotation on the OTC Pink, issuers must remain current in their filings with the SEC or applicable regulatory authority. Market makers are not permitted to begin quotation of a security whose issuer does not meet this filing requirement. If no market is ever developed for our common stock, it will be difficult for you to sell any shares you purchase in this offering. In such a case, you may find that you are unable to achieve any benefit from your investment or liquidate your shares without considerable delay, if at all.
Our common stock may become subject to the “penny stock” rules of the sec and the trading market in our securities is limited, which makes transactions in our stock cumbersome and may reduce the value of an investment in our stock.
Under U.S. federal securities legislation, our common stock will constitute “penny stock” is if has a market price of less than $5.00 per share, subject to certain exceptions. While the market price of our common stock is currently above $5.00, there can be no assurance that are price will consistently remain above $5.00, given the lack of liquidity in our stock. For any transaction involving a penny stock, unless exempt, the rules require that a broker or dealer approve a potential investor’s account for transactions in penny stocks, and the broker or dealer receive from the investor a written agreement to the transaction, setting forth the identity and quantity of the penny stock to be purchased. In order to approve an investor’s account for transactions in penny stocks, the broker or dealer must obtain financial information and investment experience objectives of the person, and make a reasonable determination that the transactions in penny stocks are suitable for that person and the person has sufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks. The broker or dealer must also deliver, prior to any transaction in a penny stock, a disclosure schedule prepared by the Commission relating to the penny stock market, which, in highlight form sets forth the basis on which the broker or dealer made the suitability determination. Brokers may be less willing to execute transactions in securities subject to the “penny stock” rules. This may make it more difficult for investors to dispose of our common stock and cause a decline in the market value of our stock. Disclosure also has to be made about the risks of investing in penny stocks in both public offerings and in secondary trading and about the commissions payable to both the broker-dealer and the registered representative, current quotations for the securities and the rights and remedies available to an investor in cases of fraud in penny stock transactions. Finally, monthly statements have to be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks.
FINRA sales practice requirements may also limit a stockholder’s ability to buy and sell our stock.
In addition to the “penny stock” rules described above, the Financial Industry Regulatory Authority (“FINRA”) has adopted rules that require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative low priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer’s financial status, tax status, investment objectives and other information. Under interpretations of these rules, FINRA believes that there is a high probability that speculative low priced securities will not be suitable for at least some customers. The FINRA requirements make it more difficult for broker-dealers to recommend that their customers buy our common stock, which may limit your ability to buy and sell our stock and have an adverse effect on the market for our shares.
Future issuances of our common stock could dilute current stockholders or adversely affect the market.
Our business plan contemplates expanding our operations through acquisitions which may involve significant issuances of our common stock. Future issuances of our common stock may be at values substantially below the price paid by the current holders of our common stock. In addition, common stock could be issued to fend off unwanted tender offers or hostile takeovers without further stockholder approval. Sales of substantial amounts of our common stock, or even just the prospect of such sales, could depress the prevailing price of our common stock and our ability to raise equity capital in the future. Additionally, large share issuances would generally have a negative impact on our share price. It is possible that, due to additional share issuance, you could lose a substantial amount, or all, of your investment. In addition, if a trading market develops for our common stock, we may attempt to raise capital by selling shares of our common stock, possibly at a discount to market. These actions will result in dilution of the ownership interests of existing shareholders, further dilute common stock book value, and that dilution may be material.
The market for penny stocks has experienced numerous frauds and abuses that could adversely impact investors in our stock.
Company management believes that the market for penny stocks has suffered from patterns of fraud and abuse. Such patterns include:
Control of the market for the security by one or a few broker-dealers that are often related to the promoter or issuer;
Manipulation of prices through prearranged matching of purchases and sales and false and misleading press releases;
“Boiler room” practices involving high pressure sales tactics and unrealistic price projections by sales persons;
Excessive and undisclosed bid-ask differentials and markups by selling broker-dealers; and
Wholesale dumping of the same securities by promoters and broker-dealers after prices have been manipulated to a desired level, along with the inevitablecollapse of those prices with consequent investor losses.
The market price of our common stock may be volatile, and our stock price may fall below your purchase price at the time you desire to sell your shares of our common stock, resulting in a loss on your investment.
The market price of our common stock may fluctuate substantially due to a variety of factors, many of which are beyond our control, including, without limitation:
actual or anticipated variations in our quarterly and annual operating results, financial condition or asset quality;
changes in general economic or business conditions, both domestically and internationally;
the effects of, and changes in, trade, monetary and fiscal policies, including the interest rate policies of the Federal Reserve, or in laws and regulations affecting us;
the number of securities analysts covering us;
publication of research reports about us, our competitors, or the financial services industry generally, or changes in, or failure to meet, securities analysts’ estimates of our financial and operating performance, or lack of research reports by industry analysts or ceasing of coverage;
changes in market valuations or earnings of companies that investors deemed comparable to us;
the average daily trading volume of our common stock;
future issuances of our common stock or other securities;
additions or departures of key personnel;
perceptions in the marketplace regarding our competitors and/or us;
significant acquisitions or business combinations, strategic partnerships, joint ventures or capital commitments by or involving our competitors or us; and
other news, announcements or disclosures (whether by us or others) related to us, our competitors, our core market or the financial services industry.
The stock market and, in particular, the market for financial institution stocks have experienced significant fluctuations in recent years. In many cases, these changes have been unrelated to the operating performance and prospects of particular companies. In addition, significant fluctuations in the trading volume in our common stock may cause significant price variations to occur. Increased market volatility may materially and adversely affect the market price of our common stock, which may make it difficult for you to resell your shares at the volume, prices and times desired.
Investing in our Company is highly speculative and could result in the entire loss of your investment.
An investment in our shares is highly speculative and involves significant risk. Our shares should not be purchased by any person who cannot afford to lose their entire investment. Our business objectives are also speculative, and it is possible that we would be unable to accomplish them. Our shareholders may be unable to realize a substantial or any return on their purchase of the offered shares and may lose their entire investment. For this reason, each prospective purchaser of the offered shares should read this prospectus and all of its exhibits carefully and consult with their attorney, business and/or investment advisor.
State securities laws may limit secondary trading, which may restrict the states in which and conditions under which you can sell the shares offered by this prospectus.
Secondary trading in common stock sold in this offering will not be possible in any state until the common stock is qualified for sale under the applicable securities laws of the state or there is confirmation that an exemption, such as listing in certain recognized securities manuals, is available for secondary trading in the state. If we fail to register or qualify, or to obtain or verify an exemption for the secondary trading of, the common stock in any particular state, the common stock could not be offered or sold to, or purchased by, a resident of that state. In the event that a significant number of states refuse to permit secondary trading in our common stock, the liquidity for the common stock could be significantly impacted thus causing you to realize a loss on your investment.
The Company does not intend to seek registration or qualification of its shares of common stock the subject of this offering in any State or territory of the United States. Aside from a “secondary trading” exemption, other exemptions under state law and the laws of US territories may be available to purchasers of the shares of common stock sold in this offering,
Anti-takeover effects of certain provisions of Delaware state law hinder a potential takeover of our company.
Though not now, in the future we may become subject to Delaware’s business combination law which prohibits certain business combinations between Delaware corporations and “interested stockholders” for three years after the “interested stockholder” first becomes an “interested stockholder,” unless the corporation’s board of directors approves the combination in advance. For purposes of Delaware law, an “interested stockholder” is any person who is the beneficial owner, directly or indirectly, of fifteen percent or more of the voting power of the outstanding voting shares of the corporation. A corporation is subject to Delaware’s business combination law if it has more than 2000 stockholders or has its securities listed on a national securities exchange. The effect of Delaware’s business combination law is to potentially discourage parties interested in taking control of our company from doing so if it cannot obtain the approval of our board of directors.
Because we do not intend to pay any cash dividends on our common stock, our stockholders will not be able to receive a return on their shares unless they sell them.
We intend to retain any future earnings to finance the development and expansion of our business. We do not anticipate paying any cash dividends on our common stock in the foreseeable future. Unless we pay dividends, our stockholders will not be able to receive a return on their shares unless they sell them. Stockholders may never be able to sell shares when desired. Before you invest in our securities, you should be aware that there are various risks. You should consider carefully these risk factors, together with all of the other information included in this annual report before you decide to purchase our securities. If any of the following risks and uncertainties develop into actual events, our business, financial condition or results of operations could be materially adversely affected.
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MD&A (Item 7)
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ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS .
This discussion summarizes the significant factors affecting the operating results, financial condition, liquidity and cash flows of the Company and its subsidiary for the fiscal years ended December 31, 2024, and 2023. The discussion and analysis that follows should be read together with the section entitled “ Cautionary Note Concerning Forward-Looking Statements ” and our consolidated financial statements and the notes to the consolidated financial statements included elsewhere in this annual report on Form 10-K.
Except for historical information, the matters discussed in this section are forward looking statements that involve risks and uncertainties and are based upon judgments concerning various factors that are beyond the Company’s control. Consequently, and because forward-looking statements are inherently subject to risks and uncertainties, the actual results and outcomes may differ materially from the results and outcomes discussed in the forward-looking statements. You are urged to carefully review and consider the various disclosures made by us in this report.
Currency and exchange rate
Unless otherwise noted, all currency figures quoted as “U.S. dollars”, “dollars” or “US$” refer to the legal currency of the United States. References to “Hong Kong Dollar” are to the Hong Kong Dollar, the legal currency of the Hong Kong Special Administrative Region of the People’s Republic of China. References to “Malaysian Ringgit” or “MYR” are to the legal currency of Malaysia. Throughout this report, assets and liabilities of the Company’s subsidiaries are translated into U.S. dollars using the exchange rate on the balance sheet date. Revenue and expenses are translated at average rates prevailing during the period. The gains and losses resulting from the translation of financial statements of foreign subsidiaries are recorded as a separate component of accumulated other comprehensive income within the statement of shareholders’ equity.
Impact of heightened volatility in interest rates
Following the global stabilization of the COVID-19 pandemic, the Company continues to assess any lingering impacts on workforce dynamics and supply chain resilience. However, attention has increasingly shifted toward addressing broader economic uncertainties, particularly the volatility in interest rates and evolving market conditions. Over the past two years, rising interest rates have had a significant global impact, including across Southeast Asia. Higher rates have increased borrowing costs, influenced client spending patterns, and slowed business investments—factors that may directly affect consulting firms like ours.
Monetary authorities across Southeast Asia, including Bank Negara Malaysia and the Monetary Authority of Singapore, have adjusted their policies in response to persistent inflationary pressures and broader macroeconomic developments. The rise in interest rates presents a potential risk to the Company, as it may increase the cost of borrowing, constrain access to affordable financing, and influence the capital expenditure decisions of our clients. These dynamics could result in delays, deferrals, or reductions in consulting project engagements, thereby impacting the Company’s revenue streams.
The Company remains vigilant in closely monitoring interest rate trends and their potential influence on client budgets and market demand. We continue to adopt proactive measures to mitigate these risks, ensuring our business remains resilient and responsive to the evolving economic landscape.
We believe that the Company can generate sufficient cash flow over the next 12 months to implement the revised business plan. We believe that we will need approximately $1.5 million to implement our revised business plan for the 12 months thereafter.
Results of Operations
Our consolidated financial statements have been prepared on a going concern basis, which assumes that we will be able to continue to operate in the future in the normal course of business. In our consolidated financial statements for the year ended December 31, 2024, it has included a note about our ability to continue as a going concern due to consecutive quarterly losses from operations in 2023 as a result of COVID-19 and rising interest rates. Business closures in South-East Asia and limitations on business operations arising from volatile interest rates has significantly disrupted our ability to generate revenues and cash flow during the fiscal year 2024.
The success of our business strategy is dependent in part upon the availability of additional capital resources on terms satisfactory to management as we are not generating sufficient revenues from our business operations. Our sources of capital in the past have included advance from stockholders and affiliates. There can be no assurance that we can raise such additional capital resources on satisfactory terms. We anticipate to continuing to rely on equity sales of our common shares and shareholder loans while improving our revenue in order to continue to fund our business operations. Issuances of additional shares will result in dilution to our existing shareholders. There is no assurance that we will achieve any additional sales of our equity securities or arrange for debt or other financing to fund our plan of operations.
The Company is currently refining the second stage of its restructuring plan, focusing on optimizing operations and enhancing strategic initiatives to drive sustainable growth. As part of this transformation, we are actively evaluating new opportunities and aligning our resources to strengthen our market position. In line with these efforts, we will be introducing fresh leadership and innovative perspectives to propel the Company forward. We anticipate announcing our new strategic direction for 2025 in the coming months, marking a significant step in our evolution and commitment to long-term success.
Comparison of the years ended December 31, 2024 and December 31, 2023
The following table sets forth certain operational data for the years ended December 31, 2024 and 2023:
Years ended December 31,
Revenues, net
Cost of revenue
Gross profit
Total operating expenses
Operating loss
Other expenses
Loss from continuing operations
Loss from discontinued operations
Net loss
Revenue . We generated $0 revenues for the years ended December 31, 2024 and 2023.
Cost of Revenue . Cost of revenue was $0 for the years ended December 31, 2024 and 2023.
Gross Profit . Gross profit was $0 for the years ended December 31, 2024 and 2023.
Operating Expenses . We incurred operating expenses of $702,499 and $844,429 for the years ended December 31, 2024 and 2023, respectively. Operating expenses for the two years consisted of general and administrative expenses.
Income Tax Expense . Our income tax expenses for the years ended December 31, 2024 and 2023 was $0 and $0, respectively.
Net Loss . We incurred a net loss of $810,887 and $2,636,229 for the years ended December 31, 2024 and 2023, respectively. Loss from continuing operations was $764,534 and $2,496,560 for the years ended December 31, 2024 and 2023, respectively. The decrease in loss from continuing operations is primarily attributable to the decrease in other expenses in the year ended December 31, 2024. Loss from discontinued operations was $46,353 and $139,669 for the years ended December 31, 2024 and 2023, respectively. The decrease in loss from discontinued operations is primarily attributable to the decrease in operating expense in the year ended December 31, 2024.
Liquidity and Capital Resources
As of December 31, 2024 and 2023, we had cash and cash equivalents of $12,055 and $215,425, respectively.
It is expected to incur significantly greater expenses in the near future as we develop our product offerings or enter into strategic partnerships. We also expect our general and administrative expenses to increase as we expand our finance and administrative staff, add infrastructure, and incur additional costs related to being reporting act company, including directors’ and officers’ insurance and increased professional fees. We believe that we will require approximately $1 to 2 million over the next 12-24 months to implement our business plan. For the immediate future, we intend to finance our business expansion efforts through equity purchases by institutional banks, and loans from existing shareholders or financial institutions.
We have never paid dividends on our Common Stock. Our present policy is to apply cash to investments in product development, acquisitions or expansion; consequently, we do not expect to pay dividends on Common Stock in the foreseeable future.
Going Concern Uncertainties
The Company has incurred a net loss of $810,887 for the current year. In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management’s plan is to obtain such resources for the Company by obtaining capital and the continued financial support from management and significant shareholders sufficient to meet its minimal operating expenses and seeking third party equity and/or debt financing. Management believes the Company is currently pursuing additional financing for its operations. However, there is no assurance that the Company will be successful in securing sufficient funds to sustain the operations. These and other factors raise substantial doubt about the Company’s ability to continue as a going concern.
If we cannot raise additional funds, we will have to cease business operations. As a result, our common stock investors might lose all of their investment.
The following table sets forth cash flow data for the years ended December 31, 2024 and 2023:
Years ended December 31,
Net cash used in operating activities
Net cash (used in) provided by investing activities
Net cash (used in) provided by financing activities
Net Cash Used in Operating Activities.
For the year ended December 31, 2024, net cash used in operating activities was $47,803, which consisted primarily of a net loss of $810,887, decreased by impairment in assets of $62,035, stock-based compensation of $682,382, increase in accrued liabilities and other payables of $25,077, and increased by net cash used in operating activities from discontinued operations of $52,763.
For the year ended December 31, 2023, net cash used in operating activities was $148,653, which consisted primarily of a net loss of $2,636,229, decreased by impairment in assets of $372,208, stock-based compensation of $823,529, loss on debt extinguishment of $1,279,923, increase in accrued liabilities and other payables of $5,506, and increased by net cash used in operating activities from discontinued operations of $133,259.
Net Cash (Used In) Provided by Investing Activities.
For the year ended December 31, 2024, net cash used in investing activities was $124,286, which consisted of net cash used in investing activities from discontinued operations of $124,286.
For the year ended December 31, 2023, net cash provided by investing activities was $298,438, which consisted of net cash provided by investing activities from discontinued operations of $298,438.
Net Cash (Used In) Provided by Financing Activities.
For the year ended December 31, 2024, net cash used in financing activities was $31,281, which consisted primarily of proceeds from related party of $9,143 and net cash used in financing activities from discontinued operations of $40,424.
For the year ended December 31, 2023, net cash provided by financing activities was $53,585, which consisted primarily of proceeds from related parties of $4,994 and net cash provided by financing activities from discontinued operations of $48,591.
Off-Balance Sheet Arrangements
We have not entered into any financial guarantees or other commitments to guarantee the payment obligations of any third parties. In addition, we have not entered into any derivative contracts that are indexed to our own shares and classified as shareholders’ equity, or that are not reflected in our financial statements. Furthermore, we do not have any retained or contingent interest in assets transferred to an unconsolidated entity that serves as credit, liquidity or market risk support to such entity. Moreover, we do not have any variable interest in an unconsolidated entity that provides financing, liquidity, market risk or credit support to us or engages in leasing, hedging or research and development services with us.
Critical Accounting Policies and Estimates
We prepare our financial statements in conformity with accounting principles generally accepted by the United States of America (“U.S. GAAP”), which require us to make judgments, estimates, and assumptions that affect our reported amount of assets, liabilities, revenue, costs and expenses, and any related disclosures. Although there were no material changes made to the accounting estimates and assumptions in the past three years, we continually evaluate these estimates and assumptions based on the most recently available information, our own historical experience and various other assumptions that we believe to be reasonable under the circumstances. Since the use of estimates is an integral component of the financial reporting process, actual results could differ from our expectations as a result of changes in our estimates.
We believe that our accounting policies involve a higher degree of judgment and complexity in their application and require us to make significant accounting estimates. Accordingly, the policies we believe are the most critical to understanding and evaluating our consolidated financial condition and results of operations are summarized in “Note 2 - Summary of Significant Accounting Policies ” in the notes to our consolidated financial statements.
Recent Accounting Pronouncements
See “Note 2 - Summary of Significant Accounting Policies ” in the notes to our consolidated financial statements for a discussion of recent accounting pronouncements.
Management does not believe that any recently issued, but not yet effective, accounting standards could have a material effect on the accompanying CFS. As new accounting pronouncements are issued, we will adopt those that are applicable under the circumstances.
