LOGIQ, INC. - Quarter Report: 2016 September (Form 10-Q)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).   [  ] Yes   [X] No

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.

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TABLE OF CONTENTS

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PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

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ITEM 2.  MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

Forward Looking Statements

This quarterly report on Form 10-Q and other reports that we file with the SEC contain statements that are considered forward-looking statements. Forward-looking statements give the Company’s current expectations, plans, objectives, assumptions or forecasts of future events.  All statements other than statements of current or historical fact contained in this quarterly report, including statements regarding the Company’s future financial position, business strategy, budgets, projected costs and plans and objectives of management for future operations, are forward-looking statements.  In some cases, you can identify forward-looking statements by terminology such as “anticipate,” “estimate,” “plans,” “potential,” “projects,” “ongoing,” “expects,” “management believes,” “we believe,” “we intend,” and similar expressions.  These statements are based on the Company’s current plans and are subject to risks and uncertainties, and as such the Company’s actual future activities and results of operations may be materially different from those set forth in the forward-looking statements. Any or all of the forward-looking statements in this periodic report may turn out to be inaccurate and as such, you should not place undue reliance on these forward-looking statements.  The Company has based these forward-looking statements largely on its current expectations and projections about future events and financial trends that it believes may affect its financial condition, results of operations, business strategy and financial needs.  The forward-looking statements can be affected by inaccurate assumptions or by known or unknown risks, uncertainties and assumptions due to a number of factors, including:

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dependence on key personnel;

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Competitive factors;

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degree of success of research and development programs;

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the operation of our business; and

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general economic conditions in the Asia-Pacific Region.

These forward-looking statements speak only as of the date on which they are made, and except to the extent required by federal securities laws, we undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events.  In addition, we cannot assess the impact of each factor on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.  All subsequent written and oral forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by the cautionary statements contained in this periodic report.

Use of Terms

Except as otherwise indicated by the context and for the purposes of this report only, references in this report to:

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“Weyland” the “Company,” “we,” “us,” or “our,” are to the business of Weyland Tech Inc., a Delaware corporation;

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“SEC” are to the Securities and Exchange Commission;

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“Securities Act” are to the Securities Act of 1933, as amended;

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“Exchange Act” are to the Securities Exchange Act of 1934, as amended;

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“U.S. dollars,” “dollars” and “$” are to the legal currency of the United States.

You should read the following plan of operation together with our financial statements and related notes appearing elsewhere in this quarterly report and the most recent Form 10-K and Form 10-Q.  This plan of operation contains forward-looking statements that involve risks, uncertainties, and assumptions.  The actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors.

Overview

Weyland Tech’s CreateApp platform is provided in twelve languages and enables small-medium-sized businesses ("SMBs") to create a mobile application ("app") without the need of technical knowledge, high investment or background in IT.

We believe that SMB's can increase sales, reach more customers and promote their products and services via a simple easy to build mobile app at an affordable and cost-effective manner.

On September 6, 2016 the Company signed a strategic licensing agreement with BGT Corporation Public Company Limited ("BGT"), for the Thai market.

BGT owns the rights to Body Glove, founded in 1953, in Redondo Beach, California. BGT distributes men's & women's sport and casual wears and wetsuits in Thailand and ASEAN countries such as Myanmar, Vietnam, Laos, Cambodia, Malaysia, Singapore and the Philippines. The company has 149 company owned locations in Thailand alone and was listed on the Thailand Stock Exchange in 2007. Body Glove Thailand's website is: http://www.bodyglove.co.th/. BGT, in 2013, established BGT Technology in order to distribute electronic devices and other related accessories under trademarks of Wolfeye, Moontech and Boost.

BGT Technology intends to utilize the Weyland Tech CreateApp platform for BGT's m-Commerce app as well as provide a 'branded app' to other industries in Thailand.

Our Growth Strategy

Although Weyland Tech's CreateApp platform originally focused on the Pan-Asia markets, we have partners that work with us to develop the EU and North American markets. The CreateApp platform is provided in twelve languages and enables small-medium-sized businesses ("SMB's") to create a mobile application ("app") without the need of technical knowledge, high investment or background in IT.

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Given the nature of DIY mobile apps ("apps"), and the primary target market of Small-Medium-sized-Businesses ("SMB's"), a typical go-to-market strategy would have direct sales force or resellers approach SMB's directly to drive license sales.

Over the past eight months, the Company has evolved this model with two distinct market paths to drive recurring revenue sales:

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Strategic Partnerships in countries/regions where our partners are responsible for targeting SMB's either thru an installed base of customers OR groups of Direct Sellers with a sales force encompassing SMB's as end customers.

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Enterprise Solutions where large retailers (hypermarket chains, mall owners, brand owners with company-owned and franchise stores) adopt a 'Master App' on a white-label basis, hosted at a 3rd party regional Hosting or Data Center facility.

With the above strategy, we believe that the Company has been able to maintain a lower capital expenditure base due to the 'level-two' customer support vs. 'level-one' customer support, smaller sales and marketing teams, and the need to provide hosting services.

In addition to the previously announced partnerships this year, the Company is currently in late stage discussions and negotiations with a number of strategic partners and enterprise-sized customers, including major regional and country telecommunications providers, Fortune 500 retailers and 'affiliate' groups.

Specific terms of the relationships and agreements will remain confidential for competitive reasons. However, agreements are expected to continue to support a transition from a license model to a multi-year model with subscriptions, m-commerce revenue sharing and advertising revenues.

Subsequent Events

On October 27, 2016 - Weyland Tech Inc., announces that its partner, Domiciled in Hong Kong with primary base of operations in Kuala Lumpur, Malaysia, has signed and launched a "white label" App. Named "MocaApp," this App focuses on the South East Asian small-medium-sized businesses ("SMB's") market.

Marketing to the mid-tier SMB's in South East Asia, MocaApp plans to offer additional modules and services not available and provided in its standard version over time to help customers' better serve their end users. Actual support and development work is provided in Malaysia although the focus of MocaApp is in the Philippines initially and to other South East Asian countries over the next six months.

A team of 90 across five offices in the Philippines, Malaysia, Vietnam, Thailand, and Singapore supported and customized MocaApp.

MocaApp can be downloaded at www.mocaapp.com launched on November 1st, 2016.

During the months of September and October, 2016, the Company’s management met with current and former officials of the New York Stock Exchange and the NASDAQ Stock Market in order to ascertain which market would be better suited for the Company for an

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uplisting. The Company is currently in application stage and will release further details as they become available.

Results of Operation

Service Revenue

Service Revenue was $2,778,552 and $648,159 for the three months ended September 30, 2016 and 2015, respectively.  The increase is due to continuing service income from our existing customers and the beginning of customer traction from new customers, partners and geographical regions.

Cost of Service

Cost of Service was $1,710,733 and $264,740 for the three months ended September 30, 2016 and 2015, respectively.  The increase was due to increased service costs arising from an increase in our service level income.

License fees

Included in other income are license fees from our Hong Kong partner of $142,803 and a one- time fee from a Singapore company of $ 35,750. (2015: Nil)

Operating Expenses

General and administrative:  General and administrative expenses were $262,309 and $57,016 and for the three months ended September 30, 2016 and 2015, respectively.  Other than our continuing expenditure in software development of $250,262 (2015: nil), a general increase arose due to increased personnel costs, travel and professional costs as a result of the increased level of business and contribution from our CreateApp business.  

Net Profit

The Company reports a net profit of $768,453 and $319,085 for the three months ended September 30, 2016 and 2015, respectively.  The net profit for the period was due to the increased level of business and contribution from our CreateApp business. 

Included in Net profit was amortization of software development costs of $62,500 for the three months ended September 30, 2016. (2015: nil).

Off-Balance Sheet Arrangements

The Company has no off-balance sheet arrangements.

Liquidity and Capital Resources

On September 30, 2016, we had negative working capital of $129,301.  The decrease in working capital is due to our investment in Software development in our CreateApp SMB platform of $2,938,044 during the period.  Operating activities provided funds of $3,027,780 for the nine months ended September 30, 2016.  There was a further Investment in our

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Indian operations of $269,740 and there were share subscription proceeds of $777,544 during the nine months ended September 30, 2016.

Revenue Recognition

The Company's CreateApp platform generates sales to SMB's on a monthly licensing basis (direct sales model) as well as through 'resellers of the platform (reseller model) and country/market specific partnerships whereby the partner rebrands the CreateApp platform under their own branding (white label sales model).

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As a smaller reporting company” (as defined by §229.10(f)(1)), the Company is not required to provide the information required by this Item.

ITEM 4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

Our management is responsible for establishing and maintaining a system of disclosure controls and procedures (as defined in Rule 13a-415(e)) under the Exchange Act) that is designed to ensure that information required to be disclosed by the Company in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time specified in the Commission's rules and forms.  Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer's management, including its principal executive officer or officers and principal financial officer or officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Controls Over Financial Reporting

During the period, we have increased control in our accounting function with the implementation of a cloud based computerized accounting and reporting system.  This has reduced the cycle time of our quarterly results, provided increased financial transparency and enhanced our segregation of duties with our bookkeeper maintaining the accounts and our CFO reviewing these for the CEO and COO and the audit committee and our board.

Our auditors were engaged to review our results for the six months ended June 30, 2016.  No independent review was performed on the results for the three months ended September 30, 2016.

Other than the above, there has been no changes in our internal controls over financial reporting that occurred during our fiscal quarter of the period covered by this quarterly report on Form 10-Q that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

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PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

From time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business. We are currently not aware of any such legal proceedings or claims that we believe will have a material adverse effect on our business, financial condition or operating results.

ITEM 1A. RISK FACTORS

The Company, as a “smaller reporting company” (as defined by §229.10(f)(1)), is not required to provide the information required by this Item.

ITEM 2. RECENT UNREGISTERED SALES OF EQUITY SECURITIES

During the nine months ended September 30, 2016, the Company received proceeds of $777,545 for the private placement of the company's common shares to professional investors at prices ranging from $0.75 - $1.48. These shares were issued pursuant to Regulation D under the Securities Act of 1933, as amended, are exempt from registration by reason of Section 4(2) of the Securities Act of 1933, as amended (the "Act"), and bear an appropriate restrictive legend. The primary purpose of the share issuances was to increase the shareholder base in order to meet NASDAQ Capital Market minimum entry requirements. Several of the share purchasers are professional investment managers at well-known Registered Fund Management Companies and the Company believes their participation increases company credibility in the investment community.

ITEM 3. EXHIBITS

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

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