LOGIQ, INC. - Quarter Report: 2016 June (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 offered 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 April 12, 2016 the Company’s partner Aurum Digital, signed an exclusive customer agreement with World Black Belt, Inc.  (“WBB”), to rollout the CreateApp platform within WBB’s 5,035-Direct member network and marketing to WBB’s Affiliate Network of 33,000 Martial Art’s Schools. WBB’s rebranded website, with the CreateApp back-end is www.worldblackbeltpro.com.

On April 15, 2016, the Company applied for listing to the OTC Markets Group’s ‘OTCQB Marketplace’ which is a higher tier market for publicly traded companies. The listing was effective on June 13^th, 2016.

On June 23, 2016, the Company entered into a memorandum of understanding (MOU) with 2C2P, the leading Southeast Asian payments services company.

2C2P and Weyland Tech have agreed to work together on an m-commerce solution that enables Small-Medium-sized-Businesses to provide multi-payment options to consumers in the Southeast Asia region.

On June 30, 2016, the Company signed a Master Service Agreement ("MSA") with Orient Asia Pacific Limited. ("OAP"), for the Indonesia market.

Our Growth Strategy

Although Weyland Tech's CreateApp platform originally focused on the and Pan-Asia markets, we have partners that work with us to develop the EU and North American markets.

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The CreateApp platform is offered 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.

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.

Weyland Tech currently offers the CreateApp platform directly, in the following key markets:

Singapore:

www.createappsingapore.com

India (Jaipur):

www.aapkiapp.in

US/Canada:

www.createappamericas.com

Weyland Tech currently offers a DIY App builder through a 'white label' platform, in the following markets:

EU (excluding Russia, Turkey, Armenia, Azerbaijan) via a Strategic Partnership with Augicom S.A. www.augicom.ch

Malaysia via a Strategic Partnership with Silver Ridge Tangerine Sdn Bhd www.silverridge.com.my

Hong Kong/ South China via a Strategic Partnership with Info Zone Ltd.

Indonesia via a Strategic Partnership with Worldfriend's Network www.worldfriends.com and Orient Asia Pacific Limited.

North America via a Strategic Partnership with Aurum Digital Inc. www.createappamericas.com

Korea via IAM, Inc. http://www.iamyourapp.co.kr/

The Company believes that the strategic partnerships that were structured in late 2015 and early 2016, represent a large enough addressable market opportunity to generate sales and profits in a scalable manner, grow the Company's business and enhance shareholder value.

Subsequent Events

None

Results of Operation

Service Revenue

Service Revenue was $4,133,529 and $100,000 for the three months ended June 30, 2016 and 2015, respectively.  The increase is due to service income from our customers, together with development income from a strategic partner for the development of a master Createapp application of $2,000,000. (2015: Nil).

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Cost of Service

Cost of Service was $2,993,361 and $95,000 for the three months ended June 30, 2016 and 2015, respectively.  The increase was due to service costs paid to an integration/customization partner corresponding with increase in our service income, together with development cost for our European customer for the development of a master Createapp application of $1,750,000. (2015: Nil).

License fees

Included in other income are license fees from our Hong Kong partner of $120,309 and a one- time fee from a Singapore company of $ 35,750. (2015: Nil)

Operating Expenses

General and administrative:  General and administrative expenses were $325,407 and $14,375 and for the three months ended June 30, 2016 and 2015, respectively.  The increase was 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(Loss)

The Company had a net profit of $919,534 and a net loss of $9,375 for the three months ended June, 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 $62,500 for for the three months ended June, 2016.

Off-Balance Sheet Arrangements

The Company has no off-balance sheet arrangements.

Liquidity and Capital Resources

On June 30, 2016, we had working capital of $693,168.  The increase in working capital is due to profit for the period.  Operating activities provided $693,168 for the six months ended June 30, 2016.  There was a further in Investment in our Indian operations of $159,770 and there were share subscription proceeds of $397,430 during the six months ended June 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).

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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.

In addition, our auditors have been engaged to review our interim results for the six months ended June 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 six months ended June 30, 2016, the Company received proceeds of $397,430 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.

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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