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Wiseman Global Ltd - Quarter Report: 2021 March (Form 10-Q)

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the Quarterly Period Ended March 31, 2021

 

or

 

[  ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from ______ to ______

 

Commission File Number 333-228130

 

WISEMAN GLOBAL LIMITED

(Exact name of registrant issuer as specified in its charter)

 

Nevada   5731   32-0576335
(State or other jurisdiction of incorporation or organization)  

(Primary Standard Industrial

Classification Number)

 

(IRS Employer

Identification Number)

 

Building 2, Duoli Hi Tech Industrial Park, No.9, Jinlong 1st Road, Baolong Street, Longgang District, Shenzhen City, Guangdong, People’s Republic of China, 518116

(Address of principal executive offices, including zip code)

 

+ (86) 755 8489 9169

(Registrant’s telephone number, including area code)

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

 

YES [X] NO [  ]

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (section 232.405 of this chapter) during the preceding twelve months (or shorter period that the registrant was required to submit and post such files).

 

YES [X] NO [  ]

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

 

Large Accelerated Filer [  ] Accelerated Filer [  ] Non-accelerated Filer [  ] Smaller reporting company [X]
      Emerging growth company [X]

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act [  ]

 

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

 

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

 

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.

 

N/A

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class   Trading Symbol(s)   Name on each exchange on which registered
N/A   N/A   N/A

 

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.

 

Class   Outstanding at May 17, 2021
Common Stock, $0.0001 par value   102,400,000

 

 

 

 
 

 

TABLE OF CONTENTS

 

    Page
PART I FINANCIAL INFORMATION  
     
ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS: F-1
     
  Condensed Consolidated Balance Sheets as of March 31, 2021 (unaudited) and December 31, 2020 (audited) F-1
     
  Condensed Consolidated Statements of Operations and Comprehensive Loss for the Three Months Ended March 31, 2021 and 2020 (unaudited) F-2
     
  Condensed Consolidated Statements of Changes in Stockholders’ Equity for the Three Months Ended March 31, 2021 and 2020 (unaudited) F-3
     
  Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2021 and 2020 (unaudited) F-4
     
  Notes to the Condensed Consolidated Financial Statements (unaudited) F-5 – F-13
     
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 3-5
     
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 6
     
ITEM 4. CONTROLS AND PROCEDURES 6
     
PART II OTHER INFORMATION  
     
ITEM 1 LEGAL PROCEEDINGS 8
     
ITEM 2 UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS 8
     
ITEM 3 DEFAULTS UPON SENIOR SECURITIES 8
     
ITEM 4 MINE SAFETY DISCLOSURES 8
     
ITEM 5 OTHER INFORMATION 8
     
ITEM 6 EXHIBITS 8
     
SIGNATURES 9

 

-2-
 

 

PART I — FINANCIAL INFORMATION

 

ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

WISEMAN GLOBAL LIMITED

CONDENSED CONSOLIDATED BALANCE SHEETS

AS OF MARCH 31, 2021 AND DECEMBER 31, 2020

(In U.S. Dollars, except share data or otherwise stated)

 

   As of
March 31, 2021
   As of
December 31, 2020
 
   (Unaudited)   (Audited) 
ASSETS          
CURRENT ASSETS          
Cash and cash equivalents  $145,691   $67,777 
Accounts receivable   82,701    188,360 
Inventories   457,209    466,363 
Loan to related parties   263,067    128,665 
Amount due from related parties   289    290 
Prepayments   220,629    230,279 
Deposits paid and other receivables   307,849    473,979 
TOTAL CURRENT ASSETS  $1,477,435   $1,555,713 
           
NON-CURRENT ASSETS          
Right of use asset, net   50,530    75,520 
Property, plant and equipment, net   11,079    11,928 
TOTAL NON-CURRENT ASSETS   61,609    87,448 
           
TOTAL ASSETS  $1,539,044   $1,643,161 
           
LIABILITIES AND STOCKHOLDERS’ EQUITY          
CURRENT LIABILITIES          
Other payables and accrued liabilities  $214,635   $204,910 
Income tax payable   308,327    317,113 
Lease liability   45,013    67,532 
Advance from a director   55,852    53,635 
CURRENT LIABILITIES   623,827    643,190 
           
NON-CURRENT LIABILITIES          
Lease liability  $5,701   $8,126 
TOTAL NON-CURRENT LIABILITIES   5,701    8,126 
           
TOTAL LIABILITIES  $629,528   $651,316 
           
COMMITMENTS AND CONTINGENCIES   -    - 
           
STOCKHOLDERS’ EQUITY          
Preferred stock – Par value $0.0001; Authorized: 200,000,000 None issued and outstanding   -    - 
Common stock – Par value $0.0001; Authorized: 800,000,000 Issued and outstanding: 102,400,000 shares as of March 31, 2021 and 102,400,000 shares as of December 31, 2020   10,240    10,240 
Additional paid-in capital   726,760    726,760 
Accumulated other comprehensive loss   39,324    41,692 
Accumulated profits   133,192    213,153 
           
TOTAL STOCKHOLDERS’ EQUITY   909,516    991,845 
           
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY  $1,539,044   $1,643,161 

 

The accompanying notes are an integral part of these unaudited financial statements.

 

F-1
 

 

WISEMAN GLOBAL LIMITED

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

AND COMPREHENSIVE LOSS

FOR THE THREE MONTHS ENDED MARCH 31, 2021 AND 2020 (UNAUDITED)

(In U.S. Dollars, except share data or otherwise stated)

 

   Three months ended March 31 
   2021   2020 
REVENUE  $37,268   $101,681 
           
COST OF REVENUE   (2,827)   (57,098)
           
GROSS PROFIT   34,441    44,583 
           
OTHER INCOME, NET   7,957    73,471 
           
OPERATING EXPENSES          
General and administrative   (122,372)   (197,439)
           
LOSS FROM OPERATIONS   (79,974)   (79,385)
           
INTEREST INCOME   12    33 
           
LOSS BEFORE INCOME TAX   (79,962)   (79,352)
           
INCOME TAX EXPENSES   -    - 
           
NET LOSS   (79,962)   (79,352)
           
Other comprehensive income/(loss):          
- Foreign currency translation loss   (2,367)   (16,822)
           
COMPREHENSIVE LOSS   (82,329)   (96,174)
           
NET LOSS PER SHARE, BASIC AND DILUTED   (0.00)   (0.00)
           
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING, BASIC AND DILUTED   102,400,000    102,400,000 

 

See accompanying notes to the unaudited financial statements.

 

F-2
 

 

WISEMAN GLOBAL LIMITED

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

FOR THREE MONTHS ENDED MARCH 31, 2021 AND 2020

(In U.S. Dollars, except share data or otherwise stated)

 

Three months ended March 31, 2021 (Unaudited)

 

                   Accumulated     
   Common Stock   Additional   Accumulated   other   Total 
   NUMBER       Paid-in   (DEFICIT)/   comprehensive   STOCKHOLDERS’ 
   OF Shares   Amount   Capital   PROFIT   loss   EQUITY 
Balance as of December 31, 2020   102,400,000   $10,240   $726,760   $213,153   $41,692   $991,845 
Net loss for the period   -   $-   $-   $(79,962)  $-   $(79,962)
Foreign currency translation   -   $-   $-   $-   $(2,367)  $(2,367)
Balance as of March 31, 2021   102,400,000   $10,240   $726,760   $133,191   $39,325   $909,516 

 

Three months ended March 31, 2020 (Unaudited)

 

                   Accumulated     
   Common Stock   Additional   Accumulated   other   Total 
   NUMBER       Paid-in   (DEFICIT)/   comprehensive   STOCKHOLDERS’ 
   OF Shares   Amount   Capital   PROFIT   loss   EQUITY 
Balance as of December 31, 2019   102,400,000   $10,240   $726,760   $803,938   $(9,464)  $1,531,474)
Net loss for the period   -   $-   $-   $(79,352)  $-   $(79,352)
Foreign currency translation   -   $-   $-   $-   $(16,822)  $(16,822)
Balance as of March 31, 2020   102,400,000   $10,240   $726,760   $724,586   $(26,286)  $1,435,300 

 

The accompanying notes are an integral part of these unaudited financial statements.

 

F-3
 

 

WISEMAN GLOBAL LIMITED

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE THREE MONTHS ENDED MARCH 31, 2021 AND 2020 (UNAUDITED)

(In U.S. Dollars, except share data or otherwise stated)

 

   For three months
ended March 31,
 
   2021   2020 
CASH FLOWS FROM OPERATING ACTIVITIES:          
Net loss  $(79,962)  $(79,352)
Adjustments to reconcile net profit to net cash used in operating activities:          
Depreciation   3,128    12,310 
Amortization of ROU asset   22,659    57,220 
Change in lease liability   (24,921)   (57,220)
           
Changes in operating assets and liabilities:          
Accounts receivable   106,050    338,594 
Inventories   7,515    (47,343)
Deposits paid, prepayments and other receivables   129,751    (217,057)
Accounts payable   -    (17,910)
Other payables and accrued liabilities   2,672    (12,186)
Loan to related parties   (90,013)   - 
           
Net cash provided by/(used) in operating activities  $76,879   $(22,944)
           
CASH FLOWS FROM FINANCING ACTIVITIES:          
Advance from a director  $2,200   $9,097 
           
Net cash provided by financing activities  $2,200   $9,097 
           
Effect of exchange rate changes in cash and cash equivalents  $(1,165)  $(3,758)
           
Net (decrease)/increase in cash and cash equivalents   77,914    (17,605)
Cash and cash equivalents, beginning of period   67,777    362,771 
CASH AND CASH EQUIVALENTS, END OF PERIOD  $145,691   $345,166 
           
SUPPLEMENTAL CASH FLOWS INFORMATION          
Income taxes paid  $-   $- 
Right-of-use assets obtained in exchange for operating lease obligations  $50,530   $77,157 

 

The accompanying notes are an integral part of these unaudited financial statements.

 

F-4
 

 

WISEMAN GLOBAL LIMITED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED MARCH 31, 2021 (UNAUDITED)

(In U.S. Dollars, except share data or otherwise stated)

 

1. ORGANIZATION AND BUSINESS ACQUISITIONS

 

Wiseman Global Limited (“WISM”) was incorporated in Nevada on July 17, 2018, and before the transaction described below, WISM is engaged distributing a full line of major household appliances and related products in PRC region including Shenzhen and Hong Kong.

 

Name   Place/date of incorporation   Principal activities
Wisdom Global Group Co., Limited   Seychelles / May 17, 2018   Investment holding
         
Wiseman Global Limited (“Wiseman HK”)   Hong Kong / July 31, 2018   Distributing a full line of major household appliances and related products
         

Shenzhen Wiseman Smart Industrial Co., Limited (“SWSICL”)

 

PRC / March 18, 2019

  Distributing a full line of major household appliances and related products
         
Shenzhen Wiseman Industrial Development Co., Limited (“SWIDCL”)   PRC / December 29, 2017 (Acquired on August 12, 2019)   Distributing a full line of major household appliances and related products

 

Wiseman Global Limited is a company that operates through its wholly owned subsidiary, Wisdom Global Group Co., Limited, a Company incorporated in Seychelles. It should be noted that our wholly owned subsidiary, Wisdom Global Group Co., Limited owns 100% of Wiseman HK, a Hong Kong Company. At this time, we operate exclusively through our wholly owned subsidiaries and share the same business plan with our subsidiaries.

 

On September 7, 2018, Wisdom Global Group Co., Limited acquired 100% of the equity interests of Wiseman HK, from our chief executive officer, Mr. Lai Jinpeng. On September 12, 2018, Wiseman Global Limited, a Nevada corporation, acquired 100% of the equity interests of Wisdom Global Group Co., Limited, from our chief executive officer, Mr. Lai Jinpeng.

 

Shenzhen Wiseman Smart Industrial Co., Limited, a wholly-owned subsidiary of Wiseman HK, was incorporated in the PRC on March 18, 2019.

 

On August 12, 2019, SWSICL acquired 100% of the equity interests of Wiseman Industrial Development Co., Limited from Ms. Wu Wenzhi.

 

Wiseman Global Limited and its subsidiaries are hereinafter referred to as the “Company”.

 

2. BASIS OF PRESENTATION

 

The accompanying consolidated financial statements of the Company are prepared pursuant to the rules and regulations of the U.S. Securities and Exchanges Commission (“SEC”) and in conformity with generally accepted accounting principles in the U.S. (“US GAAP”). All material inter-company accounts and transactions have been eliminated in consolidation. The Company has adopted December 31 as its fiscal year end.

 

F-5
 

 

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Use of Estimates

 

The preparation of the consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Management makes these estimates using the best information available at the time the estimates are made; however actual results could differ materially from those estimates.

 

Cash and Cash Equivalents

 

Cash and cash equivalents are carried at cost and represent cash on hand, demand deposits placed with banks or other financial institutions and all highly liquid investments with an original maturity of three months or less as of the purchase date of such investments. The Chinese Renminbi is not freely convertible into foreign currencies. Under the PRC Foreign Exchange Control Regulations and Administration of Settlement, Sales and Payment of Foreign Exchange Regulations, the Company is permitted to exchange Chinese Renminbi for foreign currencies through banks that are authorized to conduct foreign exchange business.

 

Accounts Receivable

 

Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of accounts receivable. The Company extends credit to its customers in the normal course of business and generally does not require collateral. The Company’s credit terms are dependent upon the segment, and the customer. The Company assesses the probability of collection from each customer at the outset of the arrangement based on a number of factors, including the customer’s payment history and its current creditworthiness. If in management’s judgment collection is not probable, the Company does not record revenue until the uncertainty is removed.

 

Management performs ongoing credit evaluations, and the Company maintains an allowance for potential credit losses based upon its loss history and its aging analysis. The allowance for doubtful accounts is the Company’s best estimate of the amount of credit losses in existing accounts receivable. Management reviews the allowance for doubtful accounts each reporting period based on a detailed analysis of trade receivables. In the analysis, management primarily considers the age of the customer’s receivable, and also considers the creditworthiness of the customer, the economic conditions of the customer’s industry, general economic conditions and trends, and the business relationship and history with its customers, among other factors. If any of these factors change, the Company may also change its original estimates, which could impact the level of the Company’s future allowance for doubtful accounts. If judgments regarding the collectability of receivables were incorrect, adjustments to the allowance may be required, which would reduce profitability.

 

Accounts receivable are recognized and carried at the original invoice amount less an allowance for any uncollectible amounts. An estimate for doubtful accounts receivable is made when collection of the full amount is no longer probable. Bad debts are written off as identified. No allowance for doubtful accounts was made for the period ended March 31, 2021.

 

F-6
 

 

Revenue Recognition

 

Revenue is generated through sale of goods, consultancy, integration and installation services. Revenue is recognized when a customer obtains control of promised goods or services and is recognized in an amount that reflects the consideration that the Company expects to receive in exchange for those goods or services. In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The amount of revenue that is recorded reflects the consideration that the Company expects to receive in exchange for those goods and services. The Company applies the following five-step model in order to determine this amount:

 

(i) identification of the promised goods and services in the contract;

 

(ii) determination of whether the promised goods and services are performance obligations, including whether they are distinct in the context of the contract;

 

(iii) measurement of the transaction price, including the constraint on variable consideration;

 

(iv) allocation of the transaction price to the performance obligations; and

 

(v) recognition of revenue when (or as) the Company satisfies each performance obligation.

 

The Company adopted ASU 2014-09, Revenue from Contracts with Customers (Topic 606). Under Topic 606, the Company records revenue when persuasive evidence of an arrangement exists, delivery has occurred, the fee is fixed or determinable and collectability is probable. The Company records revenue from the sale of product upon shipment or delivery of the products to the customer. The Company allows for 12-month warranties to be purchased on the products. Our warranty includes the repair works for the unfunctional products, and the costs of the spare parts are not included in our warranty. In management’s opinion, there is no provision made for warranty provided. The revenue that generated through sale of goods are $3,668.

 

Shipping and handling costs

 

Costs for shipping and handling activities, including those activities that occur subsequent to transfer of control to the customer, are recorded as cost of sales and are expensed as incurred. The Company accrues costs for shipping and handling activities that occur after control of the promised good has transferred to the customer.

 

Earnings Per Share

 

The Company reports earnings per share in accordance with ASC 260 “Earnings Per Share”, which requires presentation of basic and diluted earnings per share in conjunction with the disclosure of the methodology used in computing such earnings per share. Basic earnings per share excludes dilution and is computed by dividing income available to common stockholders by the weighted average common shares outstanding during the period. Diluted earnings per share takes into account the potential dilution that could occur if securities or other contracts to issue common stock were exercised and converted into common stock. Further, if the number of common shares outstanding increases as a result of a stock dividend or stock split or decreases as a result of a reverse stock split, the computations of a basic and diluted earnings per share shall be adjusted retroactively for all periods presented to reflect that change in capital structure.

 

The Company’s basic earnings per share is computed by dividing the net income available to holders by the weighted average number of the Company’s ordinary shares outstanding. Diluted earnings per share reflects the amount of net income available to each ordinary share outstanding during the period plus the number of additional shares that would have been outstanding if potentially dilutive securities had been issued.

 

Related parties

 

Parties, which can be a corporation or individual, are considered to be related if the Company has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Companies are also considered to be related if they are subject to common control or common significant influence.

 

F-7
 

 

Income Taxes

 

The Company accounts for income taxes using the asset and liability method prescribed by ASC 740 “Income Taxes”. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial reporting and tax bases of assets and liabilities using enacted tax rates that will be in effect in the years in which the differences are expected to reverse. The Company records a valuation allowance to offset deferred tax assets if based on the weight of available evidence, it is more-likely-than-not that some portion, or all, of the deferred tax assets will not be realized. The effect on deferred taxes of a change in tax rates is recognized as income or loss in the period that includes the enactment date.

 

New U.S. federal tax legislation, commonly referred to as the Tax Cuts and Jobs Act (the “U.S. Tax Reform”), was signed into law on December 22, 2017. The U.S. Tax Reform modified the U.S. Internal Revenue Code by, among other things, reducing the statutory U.S. federal corporate income tax rate from 35% to 21% for taxable years beginning after December 31, 2017; limiting and/or eliminating many business deductions; migrating the U.S. to a territorial tax system with a one-time transaction tax on a mandatory deemed repatriation of previously deferred foreign earnings of certain foreign subsidiaries; subject to certain limitations, generally eliminating U.S. corporate income tax on dividends from foreign subsidiaries; and providing for new taxes on certain foreign earnings. Taxpayers may elect to pay the one-time transition tax over eight years, or in a single lump-sum payment.

 

Foreign Currency Translation

 

Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transaction. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency using the applicable exchange rates at the balance sheet dates. The resulting exchange differences are recorded in the statements of operations.

 

The reporting currency of the Company is United States Dollars (“US$”). The Company’s subsidiary in Seychelles, Hong Kong and PRC maintains its books and record in United States Dollars (“US$”), Hong Kong Dollars (“HK$”) and Chinese Renminbi (“CNY¥”) respectively.

 

In general, for consolidation purposes, assets and liabilities of its subsidiary whose functional currency is not the US$ are translated into US$, in accordance with ASC Topic 830-30, “Translation of Financial Statement”, using the exchange rate on the balance sheet date. Revenues and expenses are translated at average rates prevailing during the period. The gains and losses resulting from translation of financial statements of foreign subsidiary are recorded as a separate component of accumulated other comprehensive income within the statement of stockholders’ equity.

 

Translation of amounts from the local currencies of the Company into US$ has been made at the following exchange rates for the respective periods:

 

   As of and for the
period ended
 
   March 31, 2021 
     
Period-end HK$ : US$1 exchange rate   7.75 
Period-average HK$ : US$1 exchange rate   7.75 
Period-end CNY¥ : US$1 exchange rate   6.55 
Period-average CNY¥ : US$1 exchange rate   6.49 

 

Fair Value Measurement

 

Accounting Standards Codification (“ASC”) 820 “Fair Value Measurements and Disclosures”, which defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. The statement clarifies that the exchange price is the price in an orderly transaction between market participants to sell the asset or transfer the liability in the market in which the reporting entity would transact for the asset or liability, that is, the principal or most advantageous market for the asset or liability. It also emphasizes that fair value is a market-based measurement, not an entity-specific measurement, and that market participant assumptions include assumptions about risk and effect of a restriction on the sale or use of an asset.

 

F-8
 

 

This ASC establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are described below:

 

Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;

 

Level 2: Quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability; and

 

Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity).

 

Recently issued and adopted accounting pronouncements

 

In February 2016, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842). Under the new guidance, lessees will be required recognize the following for all leases (with the exception of short-term leases) at the commencement date: 1) A lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and 2) A right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. The new lease guidance simplified the accounting for sale and leaseback transactions primarily because lessees must recognize lease assets and lease liabilities. Lessees will no longer be provided with a source of off-balance sheet financing. The amendments in this ASU are effective for fiscal years beginning after December 15, 2018, including interim periods within those years. This standard takes effect for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. According to this new standard, the Company should record both right-of-use asset and lease liability of $50,530 on its consolidated financial statements for the period ended March 31, 2021.

 

In June 2016, the FASB issued ASU 2016-13, Measurement of Credit Losses on Financial Instruments (Topic 326). ASU 2016-13 requires entities to use a forward-looking approach based on current expected credit losses (“CECL”) to estimate credit losses on certain types of financial instruments, including trade receivables. This may result in the earlier recognition of allowances for losses. ASU 2016-13 is effective for the Company beginning January 1, 2023, and early adoption is permitted.

 

The Company reviews new accounting standards as issued. Management has not identified any other new standards that it believes will have a significant impact on the Company’s consolidated financial statements.

 

COVID-19 Uncertainty

 

An outbreak of respiratory illness caused by the novel coronavirus, commonly referred as “COVID-19” emerged in late 2019 and has spread globally. The COVID-19 is considered to be highly contagious and poses a serious public health threat. The World Health Organization labeled the COVID-19 outbreak as a pandemic on March 11, 2020, given its threat beyond a public health emergency of international concern the organization had declared on January 30, 2020.

 

The epidemic has resulted in social-distancing restrictions, travel restrictions, and the temporary closure of stores and facilities during the past few months. The negative impacts of the COVID-19 outbreak on our business may include, but not strictly be limited to:

 

  - The uncertain economic conditions may refrain clients from engaging our services.

 

  - The operations of businesses in most industries have been, and could continue to be, negatively impacted by the epidemic, which may in turn adversely impact their business performance.

 

For the period ended March 31, 2021, our revenue has been significantly decreased due to the impact of the COVID-19. We are unable to accurately predict the upcoming impact that the COVID-19 will have due to various uncertainties, including the ultimate geographic spread of the virus, the severity of the disease, the duration of the outbreak globally, and effectiveness of the actions that may be taken by governmental authorities. Additionally, it is possible that we may face similar difficulties from future events, such as this, should there be at any point another global pandemic. As of the current date, we do not believe that we have been directly impacted by Covid-19. However, economies throughout the world have been impacted significantly in a vast number of ways, and we cannot state with any level of certainty to what extent we may have been indirectly impacted by market conditions as a result of the pandemic and/or if the pandemic has forestalled, in any capacity, our growth to date.

 

4. ACCOUNTS RECEIVABLE

 

The receivable and allowance balances as of March 31, 2021 and December 31, 2020 are as follows:

 

   March 31, 2021   December 31, 2020 
   (unaudited)   (audited) 
Accounts receivable  $82,701   $188,360 
Less: allowance for doubtful accounts   -    - 
Accounts receivable, net  $82,701   $188,360 

 

F-9
 

 

5. INVENTORIES

 

Inventories consisted of the following as of March 31, 2021 and December 31, 2020:

 

   March 31, 2021   December 31, 2020 
    (unaudited)    (audited) 
Finished goods  $457,209   $466,363 
Inventories  $457,209   $466,363 

 

There is no inventory allowance for the three months ended March 31, 2021.

 

6. PREPAYMENTS

 

As of March 31, 2021, the Company prepayments consist of the prepayment for the professional fees, purchases, and renovation fees.

 

7. DEPOSITS PAID AND OTHER RECEIVABLES

 

Deposits paid and other receivables consisted of the following as of March 31, 2021 and December 31, 2020:

 

   March 31, 2021   December 31, 2020 
    (unaudited)    (audited) 
Deposits paid  $1,648   $1,654 
Loan to third parties   222,149    393,237 
Rental income receivables   60,000    60,000 
Others   24,052    19,088 
Total deposits paid and other receivables  $307,849   $473,979 

 

The loan to third parties are unsecured, with interest-bearing varies of 3% or 7% and repayable within 3 months to 8 months.

 

8. PROPERTY, PLANT AND EQUIPMENT

 

Property, plant and equipment consisted of the following as of March 31, 2021 and December 31, 2020:

 

   March 31, 2021   December 31, 2020 
    (unaudited)    (audited) 
Office equipment  $16,003   $16,003 
Less: accumulated depreciation   (4,881)   (4,075)
Property, plant and equipment, net  $11,079   $11,928 

 

Depreciation expense for the three months ended March 31, 2021 and March 31, 2020 was $806 and $12,310, respectively.

 

9. OTHER PAYABLES AND ACCRUED LIABILITIES

 

Other payables and accrued liabilities consisted of the following as of March 31, 2021 and December 31, 2020:

 

   March 31, 2021   December 31, 2020 
    (unaudited)    (audited) 
Other payables  $97,631   $44,312 
Accrued other expenses   48,330    99,329 
Receipt in advance   68,674    61,269 
Total other payables and accrued liabilities  $214,635   $204,910 

 

F-10
 

 

10. SHAREHOLDERS’ EQUITY

 

As of March 31, 2021, the Company had a total of 102,400,000 shares of its common stock issued and outstanding.

 

There are no shares of preferred stock issued and outstanding.

 

11. ADVANCE FROM A DIRECTOR

 

As of March 31, 2021 and December 31, 2020, there is an advance from a director of $55,852 and $53,635, respectively, which was unsecured and interest-free.

 

12. RELATED PARTY TRANSACTIONS

 

Name of Related Parties  Relationship with the Company
SHENZHEN WISEMAN SMART TECHNOLOGY GROUP CO., LIMITED  A company which is owned 66% by our CEO.
    
WENZHI WU  The family member of the CEO and the Director of the Company.
    
WISEMAN CHIPS SMART TECHNOLOGY (SHENZHEN) CO., LIMITED  The director is the company representative of the Company.
    
XIANGXI WISEMAN INVESTMENT DEVELOPMENT CO., LIMITED  A company which is our CEO is the majority shareholder.
    
JINPENG LAI  The CEO and the Director of the Company.

 

   Period Ended
March 31, 2021
   Year Ended
December 31, 2020
 
Revenue:          
-SHENZHEN WISEMAN SMART TECHNOLOGY GROUP CO., LIMITED  $-   $380 
- WISEMAN CHIPS SMART TECHNOLOGY (SHENZHEN) CO., LIMITED   -    1,780 
           
Cost of revenue:          
- SHENZHEN WISEMAN SMART TECHNOLOGY GROUP CO., LIMITED  $-   $10,017 
- WISEMAN CHIPS SMART TECHNOLOGY (SHENZHEN) CO., LIMITED   -    14,627 
           
Inventories:          
- SHENZHEN WISEMAN SMART TECHNOLOGY GROUP CO., LIMITED  $28,789   $34,523 
           
Other income (cost):          
- SHENZHEN WISEMAN SMART TECHNOLOGY GROUP CO., LIMITED  $(5,665)  $(230,821)
           
Prepayments:          
-SHENZHEN WISEMAN SMART TECHNOLOGY GROUP CO., LIMITED  $63,333   $135,512 
- WISEMAN CHIPS SMART TECHNOLOGY (SHENZHEN) CO., LIMITED   7,630    - 
           
Deposits paid and other receivables:          
- SHENZHEN WISEMAN SMART TECHNOLOGY GROUP CO., LIMITED  $1,648   $1,654 
           
Loan to related parties:          
- SHENZHEN WISEMAN SMART TECHNOLOGY GROUP CO., LIMITED  $66,202   $22,976 
- WISEMAN CHIPS SMART TECHNOLOGY (SHENZHEN) CO., LIMITED   91,565    91,903 
- XIANGXI WISEMAN INVESTMENT DEVELOPMENT CO., LIMITED  $105,300   $13,786 
           
Amount due to related parties:          
- WENZHI WU  $289   $290 
           
Other payables and accrued liabilities:          
- XIANGXI WISEMAN INVESTMENT DEVELOPMENT CO., LIMITED  $68,674   $- 
           
Advance from a director:          
- JINPENG LAI  $55,852   $53,635 

 

The loan to related parties are unsecured, with interest-bearing of 7% and the repayment terms are 2 months, 8 months, or 1 year.

 

F-11
 

 

13. INCOME TAX

 

The Company is an U.S. entity and is subject to the United States federal income tax. No provision for income taxes in the United States has been made as the Company had no United States taxable income for the three months ended March 31, 2021.

 

Wisdom Global Group Co., Limited was incorporated in the Republic of Seychelles and, under the laws of Seychelles, is not subject to income taxes.

 

The Company operates in Hong Kong and files tax returns in the Hong Kong jurisdiction. Wiseman Global Limited was incorporated in Hong Kong and is subject to Hong Kong income tax at a tax rate of 16.5%. (the first HK$ 2 million (equivalent US$ 258,000) of profits earned by the company will be taxed at half the current tax rate (i.e., 8.25%) whilst the remaining profits will continue to be taxed at the existing 16.5% tax rate.)

 

SWISCL and SWIDCL were incorporated in the PRC and with the enterprise income tax rate of 25%.

 

No deferred taxes were recognized for the three months ended March 31, 2021.

 

Provision for income tax expense will be projected at year end date.

 

Effective and Statutory Rate Reconciliation

 

The effective tax rate in the periods presented is the result of the mix of income earned in various tax jurisdictions that apply a broad range of income tax rates.

 

The following table summarizes a reconciliation of the Company’s income taxes expenses:

 

   Three months ended 
   March 31, 
   2021   2020 
   (unaudited)   (unaudited) 
Computed expected benefits   (25)%   (25)%
Effect of foreign tax rate difference   1%   6%
Tax losses not recognized   27%   (19)%
Temporary difference not recognized   (3)%   -%
Income tax expense   0%   0%

 

   Three months ended 
   March 31, 
   2021   2020 
   (unaudited)   (unaudited) 
PRC statutory tax rate   25%   25%
Computed expected benefits  $(19,990)  $(19,838)
Effect of foreign tax rate difference   831    4,369 
Tax losses not recognized   21,677    15,469 
Temporary difference not recognized   (2,518)   - 
Income tax expense  $-   $- 

 

F-12
 

 

The following table sets forth the significant components of the aggregate deferred tax assets of the Company as of March 31, 2021:

 

   Three months ended 
   March 31, 
   2021   2020 
   (unaudited)   (unaudited) 
Deferred tax assets:          
Net operating loss carry forwards          
- United States of America  $76,557   $44,440 
- Hong Kong   -    - 
- PRC   -    6,771 
Less: valuation allowance   (76,557)   (51,211)
Deferred tax assets  $-   $- 

 

Value Added Tax (“VAT”)

 

In accordance with the relevant taxation laws in the PRC, the normal VAT rate for domestic sales is 17%, which is levied on the invoiced value of sales and is payable by the purchaser. SWSICL and SWIDCL enjoyed preferential VAT rate of 13%. The Company is required to remit the VAT it collects to the tax authority. A credit is available whereby VAT paid on purchases can be used to offset the VAT due on sales.

 

14. LEASE RIGHT-OF-USE ASSET AND LEASE LIABILITIES

 

The Company implemented new accounting policy according to the ASC 842, Leases, on August 1, 2019 on a modified retrospective basis and did not restate comparative periods. Under the new policy, the Company recognized approximately US$50,530 lease liability as well as right-of-use asset for all leases (with the exception of short-term leases) at the commencement date. Lease liabilities are measured at present value of the sum of remaining rental payments as of March 31, 2021, with discounted rate of 4.75%. A single lease cost is recognized over the lease term on a generally straight-line basis. All cash payments of operating lease cost are classified within operating activities in the statement of cash flows.

 

As of March 31, 2021 and December 31, 2020, the right-of use asset and lease liabilities are as follows:

 

   March 31, 2021   December 31, 2020 
   (unaudited)   (audited) 
Within 1 year  $43,280   $68,897 
After 1 year but within 5 years   8,241    8,271 
Total lease payments  $51,521   $77,168 
Less: unrecognized lease obligations   (807)   (1,510)
Less: imputed interest   -    (138)
Total lease obligations   50,714    75,520 
Less: current obligations   (45,013)   (67,532)
Long-term lease obligations  $5,701   $8,126 

 

Other information:

 

   Three months ended March 31, 
   2021   2020 
   (unaudited)   (unaudited) 
Cash paid for amounts included in the measurement of lease liabilities:        - 
Operating cash flow from operating lease  $71,049   $50,200 
Right-of-use assets obtained in exchange for operating lease liabilities   50,530    77,157 
Remaining lease term for operating lease (years)   0.76    4.16 
Weighted average discount rate for operating lease   4.75%   5.0996 

 

15. SUBSEQUENT EVENTS


In accordance with ASC Topic 855, “Subsequent Events”, which establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued, the Company has evaluated all events or transactions that occurred after March 31, 2021 up through the date the Company issued the financial statements.

 

F-13
 

 

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

The information contained in this quarter report on Form 10-Q is intended to update the information contained in our Form 10-K dated April 15, 2021, for the year ended December 31, 2020 and presumes that readers have access to, and will have read, the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and other information contained in such Form 10-K. The following discussion and analysis also should be read together with our financial statements and the notes to the financial statements included elsewhere in this Form 10-Q.

 

The following discussion contains certain statements that may be deemed “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements appear in a number of places in this Report, including, without limitation, “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” These statements are not guarantees of future performance and involve risks, uncertainties and requirements that are difficult to predict or are beyond our control. Forward-looking statements speak only as of the date of this quarter report. You should not put undue reliance on any forward-looking statements. We strongly encourage investors to carefully read the factors described in our Form S-1/A registration statement, filed on December 12, 2018, in the section entitled “Risk Factors” for a description of certain risks that could, among other things, cause actual results to differ from these forward-looking statements. We assume no responsibility to update the forward-looking statements contained in this quarter report on Form 10-Q. The following should also be read in conjunction with the unaudited Condensed Consolidated Financial Statements and notes thereto that appear elsewhere in this report.

 

Company Overview

 

We are a household appliances and related domestic appliances products company in the PRC. Our principal business activity is the provision of household appliances products and related domestic appliances products. Our products improve the home lifestyle and living solutions experience, predominately through power savings, resources efficiencies and functionalities of products. We sell our products to corporate customers, retail customers and independent distributors predominately in the PRC and intend to expand our business in other countries around the world. Our products are typically used in a home setting of consumers of all demographics on a daily basis and meet the convenience-oriented preferences of today’s consumer across a broad range of household activities. We help make daily life easier through a broad range of products that offer multi-purpose functions. Our diverse product portfolio includes televisions, air-conditioners, laundry appliances, refrigerators and freezers, cooking appliances, dishwashers, mixers and other small domestic appliances. Our products are known for their quality, which is recognized by our consumers, retail customers, and corporate customers alike. We believe our customers know they can depend on our trusted brand. These factors generate loyalty which empowers us to develop and launch new products that expand application scenarios and transforms our product portfolio into the smart household appliances category.

 

Our business has three main divisions and revenue streams, namely, (i) sales of household appliances and related domestic appliances products; (ii) consultancy; and (iii) integration and installation services. Virtually all of our products are manufactured by independent original equipment manufacturers (“OEMs”) in the PRC. For the three months ended March 31, 2021, our revenue was $37,268, and our gross profit was approximately $34,441. For the three months ended March 31, 2020, our revenue was $101,681, and our gross profit was approximately $44,583. We conduct our business through Shenzhen Wiseman Smart Industrial Co., Limited and its subsidiaries which are founded in the PRC and our Hong Kong subsidiary, Wiseman Global Limited (“Wiseman HK”).

 

-3-
 

 

Results of operations for the three months ended March 31, 2021 and 2020

 

   Three Months Ended March 31,   Increase
(decrease) in 2021
 
   2021   2020   compared to 2020 
   (In U.S. dollars, except for percentages)         
Revenue  $37,268    100%  $101,681    100.0%  $(64.413)   (63.4)%
Cost of revenues   (2,827)   (7.6)%   (57,098)   (56.2)%   54,271    95.1%
Gross profit   34,441    92.4%   44,583    43.8%   (10,142)   (22.8)%
Operating expenses   (122,372)   (328.4)%   (197,439)   (194.2)%   75,067    38.0%
Other income, net   7,957    21.4%   73,471    72.3%   (65,514)   (89.2)%
Loss from operations   (79,974)   (214.6)%   (79,385)   (78.1)%   (589)   (0.7)%
Net finance income   12    0.0%   33    0.0%   (21)   (63.6)%
Income tax expense   -    -%   -    -%   -    -%
Net loss  $(79,962)   (214.6)%  $(79,352)   (78.1)%  $(610)   (0.8)%

 

Revenues

 

For the three months ended March 31, 2021 and 2020, the Company generated revenue in the amount of $37,268 and $101,681, respectively, representing a significant decrease of approximately 63.4%. The revenue was generated from the sales of household appliances and related products in PRC. The significant decrease of revenue was a result of the overall decline of our business due to the COVID-19 impact in the PRC.

 

Cost of Revenue

 

Cost of revenue for the three months ended March 31, 2021 amounted to approximately $2,827 as compared to $57,098 for the three months ended March 31, 2020, representing a significant decrease of approximately 95.1%. The significant decrease of cost of revenue was due to the revenue generated from consultancy and integration and installation services, which both revenue streams have minimal cost of revenues. The significant decrease of cost of revenue was the result of the overall decline of our business due to the impact of COVID-19 pandemic in the PRC too. The cost of revenue was predominantly the cost of manufactured goods sold to customers.

 

Gross profit

 

Our gross profit decreased from $44,583 for three months ended March 31, 2020 to approximately $34,441 for three months ended March 31, 2021, representing a decrease of approximately 22.8%. The decrease was primarily attributable to our revenue decline. The increase in gross margin from 43.8% to 92.4% was primarily attributable to the revenue for the three months ended March 31, 2021 generated from consultancy and integration and installation services, which both revenue streams have minimal cost of revenues.

 

Operating Expenses

 

For the three months ended March 31, 2021 and 2020, we had operating expenses in the amount of $122,372 and $197,439, respectively, representing a decrease of approximately 38%. The decrease was primarily attributable to the decrease in leases expense and advertising and promotion.

 

Income tax expenses

 

For the three months ended March 31, 2021 and 2020, we had an income tax expenses of nil and nil, respectively.

 

Net Loss

 

Our net loss for the three months ended March 31, 2021 and 2020 remained stable as we had a net loss of $79,962 and $79,352, respectively.

 

Liquidity and Capital Resources

 

Summary cash flows information for the three months ended March 31, 2021 and 2020 are as follow:

 

   2021   2020 
    (In U.S. dollars) 
Net cash provided by/(used in) operating activities  $76,879   $(22,944)
Net cash provided by financing activities  $2,200   $9,097 

 

-4-
 

 

Cash Provided by/(Used in) Operating Activities

 

For the three months ended March 31, 2021, net cash provided by operating activities was $76,879. For the three months ended March 31, 2020, net cash used in operating activities was $22,944. The cash provided by operating activities was attributable to accounts receivables, prepayments, deposits and other receivables.

 

Cash Provided by Financing Activities

 

For the three months ended March 31, 2021 and 2020, the Company had advances of $2,200 and $9,097, respectively, which is unsecured, interest-free, from our sole executive officer and director, Mr. Lai Jinpeng.

 

For the three months ended March 31, 2021 and 2020, net cash provided by financing activities was $2,200 and $9,097, respectively, which reflected the proceeds from advances from the director.

 

Off-balance Sheet Arrangements

 

We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to our stockholders as of March 31, 2021.

 

Contractual Obligations


As a smaller reporting company, we are not required to provide the aforementioned information.

 

Critical Accounting Policies

 

Recent accounting pronouncements

 

In February 2016, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842). Under the new guidance, lessees will be required recognize the following for all leases (with the exception of short-term leases) at the commencement date: 1) A lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and 2) A right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. The new lease guidance simplified the accounting for sale and leaseback transactions primarily because lessees must recognize lease assets and lease liabilities. Lessees will no longer be provided with a source of off-balance sheet financing. The amendments in this ASU are effective for fiscal years beginning after December 15, 2018, including interim periods within those years. This standard takes effect for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. According to this new standard, the Company should record both right-of-use asset and lease liability of $50,530 on its consolidated financial statements for the period ended March 31, 2021.

 

In June 2016, the FASB issued ASU 2016-13, Measurement of Credit Losses on Financial Instruments (Topic 326). ASU 2016-13 requires entities to use a forward-looking approach based on current expected credit losses (“CECL”) to estimate credit losses on certain types of financial instruments, including trade receivables. This may result in the earlier recognition of allowances for losses. ASU 2016-13 is effective for the Company beginning January 1, 2023, and early adoption is permitted.

 

The Company reviews new accounting standards as issued. Management has not identified any other new standards that it believes will have a significant impact on the Company’s consolidated financial statements.

 

-5-
 

 

Item 3 Quantitative and Qualitative Disclosures About Market Risk.

 

As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide information required by this Item.

 

Item 4 Controls and Procedures.

 

Disclosure Controls and Procedures

 

We maintain disclosure controls and procedures, as defined in Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934 (the “Exchange Act”), that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms and that such information is accumulated and communicated to our management, including our principal executive and principal financial officers, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure.

 


We carried out an evaluation, under the supervision and with the participation of our management, including our chief executive officer, of the effectiveness of our disclosure controls and procedures as of December 31, 2021. Based on the evaluation of these disclosure controls and procedures, and in light of the material weaknesses found in our internal controls over financial reporting, our chief executive officer concluded that our disclosure controls and procedures were not effective. The matters involving internal controls and procedures that our management considered to be material weaknesses under the standards of the Public Company Accounting Oversight Board were: (1) lack of a functioning audit committee due to a lack of a majority of independent members and a lack of a majority of outside directors on our board of directors, resulting in ineffective oversight in the establishment and monitoring of required internal controls and procedures; (2) inadequate segregation of duties and effective risk assessment; (3) insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of both US GAAP and SEC guidelines; and (4) lack of internal audit function due to the fact that the Company lacks qualified resources to perform the internal audit functions properly and that the scope and effectiveness of the internal audit function are yet to be developed. The aforementioned material weaknesses were identified by our chief executive officer in connection with the review of our financial statements as of March 31, 2021.

 

Management’s Report on Internal Control over Financial Reporting

 

Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. The internal controls for the Company are provided by executive management’s review and approval of all transactions. Our internal control over financial reporting also includes those policies and procedures that:

 

  1. pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets;
     
  2. provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. GAAP, and that our receipts and expenditures are being made only in accordance with the authorization of our management; and
     
  3. provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.

 

-6-
 

 

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

 

Management assessed the effectiveness of the Company’s internal control over financial reporting as of March 31, 2021. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control-Integrated Framework. Management’s assessment included an evaluation of the design of our internal control over financial reporting and testing of the operational effectiveness of these controls.

 

Management’s Remediation Initiatives

 

Since October 18, 2018, we engaged Dude Business Consultants Limited as an external consultant to assist with the identification and address of complex and proper accounting issues.

 

In an effort to remediate the identified material weaknesses and other deficiencies and enhance our internal controls, we also plan to initiate the following series of measures to further strengthen the Company’s internal controls going forward:

 

1. hire a reporting manager (“Internal Finance Manager”) who has the requisite relevant U.S. GAAP and SEC reporting experience and qualifications;
   
2. make an overall assessment on the current finance and accounting resources and hire additional accounting members with appropriate levels of accounting knowledge and experience;
   
3. streamline our accounting department structure and enhance our staff’s U.S. GAAP and SEC reporting requirements on a continuous basis through internal training provided by the Internal Finance manager;
   
4. participate in trainings and seminars provided by professional services firms on a regular basis to gain knowledge on regular U.S. GAAP /SEC reporting requirements updates; and
   
5. engage an external “Sarbanes-Oxley 404” consulting firm to help us implement Sarbanes-Oxley 404 internal controls compliance together with the establishment of our internal audit function.

 

We anticipate that these initiatives will be at least partially, if not fully, implemented by the end of fiscal year 2021.

 

Changes in Internal Control over Financial Reporting:

 

There were no changes in our internal control over financial reporting during the three months ending March 31, 2021, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

-7-
 

 

PART II — OTHER INFORMATION

 

Item 1. Legal Proceedings

 

We are not subjected to nor engaged in any litigation, arbitration or claim of material importance, and no litigation, arbitration or claim of material importance is known to us to be pending or threatened by or against our Company that would have a material adverse effect on our Company’s results of operations or financial condition. Further, there are no proceedings in which any of our directors, officers or affiliates, or any beneficial shareholder are an adverse party or has a material interest adverse to our Company.

 

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

 

None.

 

Item 3. Defaults Upon Senior Securities

 

None.

 

Item 4. Mine Safety Disclosures

 

Not applicable.

 

Item 5. Other Information.

 

None.

 

ITEM 6. Exhibits

 

31.1   Rule 13(a)-14(a)/15(d)-14(a) Certification of principal executive officer
     
32.1   Section 1350 Certification of principal executive officer

 

-8-
 

 

SIGNATURES

 

Pursuant to the requirements of Section 13 or 15(d) 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.

 

  WISEMAN GLOBAL LIMITED
  (Name of Registrant)
     
Date: May 17, 2021    
     
  By: /s/ Lai Jinpeng
  Title:

Chief Executive Officer, President, Secretary, Treasurer, Director (Principal Executive Officer, Principal Financial Officer, Principal Accounting Officer)

 

Pursuant to the requirements of the Securities Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities on the dates indicated.

 

Signature   Title   Date
         
/s/ Lai Jinpeng   Chief Executive Officer, Director, President, Secretary and Treasurer   May 17, 2021
Lai Jinpeng   (Principal Executive Officer, Principal Financial Officer, Principal Accounting Officer)    
         
/s/ Yang Lin   Director and Chairperson   May 17, 2021
Yang Lin        

 

-9-