UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
OF THE SECURITIES EXCHANGE ACT OF 1934
For
The Quarterly Period Ended
or
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______________ to _______________
Commission
File Number
(Exact name of registrant issuer as specified in its charter)
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
(Address of principal executive offices, including zip code)
Registrant’s
phone 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.
☒ 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 ☐ ☒
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.
Large
Accelerated Filer ☐ Accelerated Filer ☐
Emerging
growth company
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes
☐
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has fled 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.
Yes
☐
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
| Class | Outstanding at March 31, 2023 | |
| Common Stock, $.0001 par value |
TABLE OF CONTENTS
| 2 |
PART I FINANCIAL INFORMATION
ITEM 1. UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS:
CATTHIS HOLDINGS CORP.
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
| F-1 |
CATTHIS HOLDINGS CORP.
CONDENSED CONSOLIDATED BALANCE SHEETS
AS OF MARCH 31, 2023 AND DECEMBER 31, 2022
(Currency expressed in United States Dollars (“US$”), except for number of shares)
| As of | As of | |||||||
March 31, 2023 | December 31, 2022 | |||||||
| Unaudited | Audited | |||||||
| ASSETS | ||||||||
| NON-CURRENT ASSETS | ||||||||
| Intangible asset | ||||||||
| Plant and equipment, net | ||||||||
| Lease asset – right of use | ||||||||
| Total Non-Current Assets | ||||||||
| CURRENT ASSETS | ||||||||
| Trade receivables | ||||||||
| Deposits , prepayments and other receivables | ||||||||
| Cash and cash equivalents | ||||||||
| Total Current Assets | $ | $ | ||||||
| TOTAL ASSETS | ||||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| CURRENT LIABILITIES | ||||||||
| Trade payable | ||||||||
| Other payables and accrued liabilities | ||||||||
| Lease liabilities, short term | ||||||||
| Total Current Liabilities | $ | $ | ||||||
| TOTAL LIABILITIES | $ | $ | ||||||
| STOCKHOLDERS’ EQUITY | ||||||||
| Common Shares, par value $; shares authorized, shares issued and outstanding as of March 31, 2023 and December 31, 2022 | $ | $ | ||||||
| Additional paid in capital | ||||||||
| Foreign exchange translation adjustment | ( | ) | ( | ) | ||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| TOTAL STOCKHOLDERS’ EQUITY | $ | $ | ||||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | $ | ||||||
See accompanying notes to condensed consolidated financial statements.
| F-2 |
CATTHIS HOLDINGS CORP.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSSES
FOR THE THREE MONTHS ENDED MARCH 31, 2023 AND MARCH 31, 2022
(Currency expressed in United States Dollars (“US$”), except for number of shares)
(Unaudited)
For the three March 31, 2023 | For the three | |||||||
| (Unaudited) | (Unaudited) | |||||||
| REVENUE | $ | $ | ||||||
| COST OF REVENUE | $ | ( | ) | $ | ( | ) | ||
| GROSS PROFIT | $ | $ | ||||||
| OTHER INCOME | $ | $ | ||||||
| SELLING AND DISTRIBUTION EXPENSES | ( | ) | ( | ) | ||||
| GENERAL AND ADMINISTRATIVE EXPENSES | ( | ) | ( | ) | ||||
| OTHER OPERATING EXPENSES | $ | ( | ) | $ | ( | ) | ||
| LOSS BEFORE INCOME TAX | $ | ( | ) | $ | ( | ) | ||
| INCOME TAX PROVISION | $ | $ | ||||||
| NET LOSS | $ | ( | ) | $ | ( | ) | ||
| OTHER COMPREHENSIVE LOSS | ||||||||
| -Foreign currency translation | $ | $ | ( | ) | ||||
| TOTAL COMPREHENSIVE LOSS | $ | ( | ) | $ | ( | ) | ||
| Net loss per share, basic and diluted: | $ | ( | ) | $ | ( | ) | ||
| Weighted average number of common shares outstanding – Basic and diluted | ||||||||
See accompanying notes to condensed consolidated financial statements.
| F-3 |
CATTHIS HOLDINGS CORP.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
FOR THE THREE MONTHS ENDED MARCH 31, 2023 and MARCH 31, 2022
(Currency expressed in United States Dollars (“US$”), except for number of shares)
(Unaudited)
|
Three Months Ended March 31, 2023 (Unaudited) | |||||||||||||||||||||||
| COMMON STOCK | ADDITIONAL | FOREIGN EXCHANGE | ||||||||||||||||||||||
| Number of shares | Amount | PAID-IN CAPITAL | TRANSLATION ADJUSTMENT | ACCUMULATED LOSSES | TOTAL EQUITY | |||||||||||||||||||
| Balance as of December 31, 2022 | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||||||||||
| Foreign exchange translation adjustment | - | |||||||||||||||||||||||
| Net loss | - | ( | ) | ( | ) | |||||||||||||||||||
| Balance as of March 31, 2023 | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||||||||||
|
Three Months Ended March 31, 2022 (Unaudited) | |||||||||||||||||||||||
| COMMON STOCK | ADDITIONAL | FOREIGN EXCHANGE | ||||||||||||||||||||||
| Number of shares | Amount | PAID-IN CAPITAL | TRANSLATION ADJUSTMENT | ACCUMULATED LOSSES | TOTAL EQUITY | |||||||||||||||||||
| Balance as of December 31, 2021 | $ | $ | $ | ( | ) | $ | ||||||||||||||||||
| Foreign exchange translation adjustment | - | ( | ) | ( | ) | |||||||||||||||||||
| Net loss | - | ( | ) | ( | ) | |||||||||||||||||||
| Balance as of March 31, 2022 | $ | $ | $ | ( | ) | $ | ||||||||||||||||||
| F-4 |
CATTHIS HOLDINGS CORP.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 2023 AND MARCH 31, 2022
(Currency expressed in United States Dollars (“US$”), except for number of shares)
(Unaudited)
For the three months ended March 31, 2023 | For the three months ended March 31, 2022 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
| Net loss | ( | ) | ( | ) | ||||
| Adjustment to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation expenses and amortization | ||||||||
| Changes in operating assets and liabilities: | ||||||||
| Trade receivables | ( | ) | ||||||
| Deposits, prepayments and other receivables | ( | ) | ||||||
| Operating lease liabilities | ( | ) | ( | ) | ||||
| Trade payables | ( | ) | ||||||
| Other payables and accrued liabilities | ( | ) | ||||||
| Net cash provided by / (used in) operating activities | $ | ( | ) | |||||
| CASH FLOWS FROM INVESTING ACTIVITY | ||||||||
| Purchase of property, plant and equipment | ( | ) | ||||||
| Net cash used in investing activity | $ | ( | ) | |||||
| Effect of foreign exchange translation | $ | ( | ) | |||||
| Net increase / (decrease) in cash and cash equivalents | $ | ( | ) | |||||
| Cash and cash equivalents, beginning of period | $ | |||||||
| CASH AND CASH EQUIVALENTS, END OF YEAR/PERIOD | $ | |||||||
See accompanying notes to condensed consolidated financial statements.
| F-5 |
CATTHIS HOLDINGS CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 2023 AND MARCH 31, 2022
(Currency expressed in United States Dollars (“US$”), except for number of shares)
(UNAUDITED)
1. DESCRIPTION OF BUSINESS AND ORGANIZATION
catTHIS Holdings Corp. was incorporated on January 4, 2021 under the laws of the state of Nevada.
The Company, through its subsidiary, engaged in providing digital marketing services.
On
June 25, 2021, the Company acquired
Details of the Company’s subsidiary:
| Company name | Place/date of incorporation |
Particulars of issued capital |
Principal activities | ||||
| 1. | |||||||
For purposes of consolidated financial statement presentation, catTHIS Holdings Corp. and its subsidiary are hereinafter referred to as the “Company”.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of presentation
The consolidated financial statements for catTHIS Holdings Corp. and its subsidiaries (‘the Company’) for the three months ended March 31, 2023 are prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) and include the accounts of catTHIS Holdings Corp. and its wholly owned subsidiary, catTHIS Holdings Corp. The Company has adopted December 31 as its fiscal year end.
Basis of consolidation
The condensed consolidated financial statements include the accounts of the Company and its subsidiaries. All inter-company accounts and transactions have been eliminated upon consolidation.
| F-6 |
CATTHIS HOLDINGS CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 2023 AND MARCH 31, 2022
(Currency expressed in United States Dollars (“US$”), except for number of shares)
(UNAUDITED)
Use of estimates
Management uses estimates and assumptions in preparing these financial statements in accordance with US GAAP. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities in the balance sheets, and the reported revenue and expenses during the periods reported. Actual results may differ from these estimates.
Intangible assets, net
The Company follows ASC 360 in accounting for intangible assets, which requires impairment losses to be recorded when indicators of impairment are present and the undiscounted cash flows estimated to be generated by the assets are less than the assets’ carrying amounts. For the period ended March 31, 2023 the Company determined there were no indicators of impairment of intangible assets.
The amortization is provided on straight line method so as to write off the amortization amount of the respective classes of intangible assets as follows:
| Rate % | ||||
| Intangible asset | % | |||
Property, plant and equipment
Property, plant and equipment are stated at cost less accumulated depreciation and accumulated impairment losses, if any. Depreciation is calculated on the straight-line basis over the following expected useful lives from the date on which they become fully operational.
| Categories | Estimated useful life | Depreciation rate | ||||
| Office equipment | % | |||||
| Photography and videography equipment | % | |||||
Expenditures for maintenance and repairs are expensed as incurred. The gain or loss on the disposal of plant and equipment is the difference between the net sales proceeds and the carrying amount of the relevant assets and is recognized in the statement of operations.
Lease
The Company recognizes lease payments for its short-term lease on a straight-line basis over the lease term in accordance with ASC 842.
The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for lease payments made at or before the lease commencement date, plus any initial direct costs incurred less any lease incentives received. Costs associated with operating lease assets are recognized on a straight-line basis within operating expenses over the term of the lease.
In determining the present value of the unpaid lease payments, ASC 842 requires a lessee to discount its unpaid lease payments using the interest rate implicit in the lease or, if that rate cannot be readily determined, its incremental borrowing rate. As most of the Company leases do not provide an implicit rate, the Company uses its incremental borrowing rate as the discount rate for the lease. The Company incremental borrowing rate is estimated to approximate the interest rate on a collateralized basis with similar terms and payments.
| F-7 |
CATTHIS HOLDINGS CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 2023 AND MARCH 31, 2022
(Currency expressed in United States Dollars (“US$”), except for number of shares)
(UNAUDITED)
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.
Revenue recognition
The Company follows the guidance of ASC 606, “Revenue from Contracts”. ASC 606 creates a five-step model that requires entities to exercise judgment when considering the terms of contracts, which includes (1) identifying the contracts or agreements with a customer, (2) identifying our performance obligations in the contract or agreement, (3) determining the transaction price, (4) allocating the transaction price to the separate performance obligations, and (5) recognizing revenue as each performance obligation is satisfied. The Company only applies the five-step model to contracts when it is probable that the Company will collect the consideration it is entitled to in exchange for the services it transfers to its clients.
Revenue is measured at the fair value of the consideration received or receivable, net of discounts and taxes applicable to the revenue. The Company derives its revenue from provision of digital marketing services to customers.
Income taxes
Income taxes are determined in accordance with the provisions of ASC Topic 740, “Income Taxes” (“ASC Topic 740”). Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted income tax rates expected to apply to taxable income in the periods in which those temporary differences are expected to be recovered or settled. Any effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.
ASC 740 prescribes a comprehensive model for how companies should recognize, measure, present, and disclose in their financial statements uncertain tax positions taken or expected to be taken on a tax return. Under ASC 740, tax positions must initially be recognized in the financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities. Such tax positions must initially and subsequently be measured as the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the tax authority assuming full knowledge of the position and relevant facts.
Going Concern
The
accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the
settlement of liabilities and commitments in the normal course of business. As reflected in the accompanying financial statements,
for the period ended March 31, 2023, the Company suffered net loss of $
The Company’s ability to continue as a going concern is dependent upon improving its profitability and the continuing financial support from its shareholders. Management believes the existing shareholders or external financing will provide the additional cash to meet the Company’s obligations as they become due. No assurance can be given that any future financing, if needed, will be available or, if available, that it will be on terms that are satisfactory to the Company. Even if the Company is able to obtain additional financing, if needed, it may contain undue restrictions on its operations, in the case of debt financing, or cause substantial dilution for its stockholders, in the case of equity financing.
| F-8 |
CATTHIS HOLDINGS CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 2023 AND MARCH 31, 2022
(Currency expressed in United States Dollars (“US$”), except for number of shares)
(UNAUDITED)
The Company calculates net income/(loss) per share in accordance with ASC Topic 260, “Earnings per Share.” Basic loss per share is computed by dividing the net loss by the weighted-average number of common shares outstanding during the period. Diluted income per share is computed similar to basic loss per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common stock equivalents had been issued and if the additional common shares were dilutive.
Foreign currencies translation
Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transaction. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency using the applicable exchange rates at the balance sheet dates. The resulting exchange differences are recorded in the statements of operations.
The reporting currency of the Company is United States Dollars (“US$”). The Company’s subsidiary in Labuan maintains its books and record in United States Dollars (“US$”) respectively, and Ringgits Malaysia (“MYR”) is functional currency as being the primary currency of the economic environment in which the entity operates.
In general, for consolidation purposes, assets and liabilities of its subsidiary whose functional currency is not the US$ 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 year. 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 RM into US$1 has been made at the following exchange rates for the respective periods:
As of and for the three months ended March 31, 2023 | As of and for the three months ended March 31, 2022 | |||||||
| Period-end RM : US$1 exchange rate | ||||||||
| Period-average RM : US$1 exchange rate | ||||||||
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.
Fair value of financial instruments:
The carrying value of the Company’s financial instruments: cash and cash equivalents, prepayment, deposits, accounts payable and accrued liabilities approximate at their fair values because of the short-term nature of these financial instruments.
The Company also follows the guidance of the ASC Topic 820-10, “Fair Value Measurements and Disclosures” (“ASC 820-10”), with respect to financial assets and liabilities that are measured at fair value. ASC 820-10 establishes a three-tier fair value hierarchy that prioritizes the inputs used in measuring fair value as follows:
Level 1: Observable inputs such as quoted prices in active markets;
Level 2: Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and
Level 3: Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.
Recently Adopted Accounting Standards
In June 2016, the FASB issued Accounting Standards Update No.2016-13, Financial Instruments – Credit Losses (Topics 326): Measurement of Credit Losses on Financial Instruments, which introduced the expected credit losses methodology for the measurement of credit losses on financial assets measured at amortized cost basis, replacing the previous incurred loss methodology. In November 2019, the FASB issued ASU 2019-10 highlighted the adoption timeline. For smaller reporting entities, Topic 326 is effective for annual periods beginning after December 15, 2022, including interim period within those fiscal years, of which is effective for the Company on January 1, 2023.
Credit loss rate is determined by historical collection based on aging schedule, adjusted for current conditions using reasonable and supportable forecast. Based on the aging categorization and the adjusted loss rate per category, an allowance for credit losses is calculated by multiplying the adjusted loss rate with the amortized cost in the respective age category.
Recently Issued Accounting Standard
The Company reviews new accounting standards as issued. Management has not identified any other new standards that is believes will have a significant impact on the Company’s financial statements.
| F-9 |
CATTHIS HOLDINGS CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 2023 AND MARCH 31, 2022
(Currency expressed in United States Dollars (“US$”), except for number of shares)
(UNAUDITED)
3. COMMON STOCK
As of March 31, 2023 and December 31, 2022, the Company has an issued and outstanding common share of and respectively.
4. CASH AND CASH EQUIVALENTS
As
of March 31, 2023 and December 31, 2022, the Company recorded cash and cash equivalents of $
5. TRADE RECEIVABLE
Trade receivable consisted of the following as of March 31, 2023 and December 31, 2022.
| As of March 31, 2023 (Unaudited) | As of December 31, 2022 | |||||||
| Trade receivable | $ | $ | ||||||
| Total Trade receivable | $ | $ | ||||||
The income generated was a result of branding and marketing service fees paid by corporate clients which include catalogue management services, video production and live streaming services via green-screen studio production.
6. PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment as of March 31, 2023 and December 31, 2022 are summarized below:
As of March 31, 2023 (Unaudited) | As of December 31, 2022 (Audited) | |||||||
| Cost | $ | |||||||
| Accumulated depreciation | ( | ) | ( | ) | ||||
| Foreign exchange translation | ( | ) | ( | ) | ||||
| Balance as at March 31, 2023, December 31, 2022 | $ | |||||||
This office equipment include, but are not strictly limited to, preparing the interior of the office space for the Company’s use, improving functionality, and purchasing new office equipment.
For
the period ended March 31, 2023, the depreciation of the property, plant and equipment was $
| F-10 |
CATTHIS HOLDINGS CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 2023 AND MARCH 31, 2022
(Currency expressed in United States Dollars (“US$”), except for number of shares)
(UNAUDITED)
7. INTANGIBLE ASSETS
As of March 31, 2023 (Unaudited) | As of December 31, 2022 (Audited) | |||||||
| Cost | $ | |||||||
| Accumulated amortization | ( | ) | ( | ) | ||||
| Foreign exchange translation | ( | ) | ( | ) | ||||
| Balance as at March 31, 2023, December 31, 2022 | $ | |||||||
For
the year ended December 31, 2023, the amortization of the intangible assets was $
8. LEASE RIGHT-OF-USE ASSET AND LEASE LIABILITIES
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, 2023 and December 31, 2022, operating lease right of use asset as follow:
As of March 31, 2023 (Unaudited) | As of December 31, 2022 (Audited) | |||||||
| Initial recognition as of December 1, 2021 | $ | $ | ||||||
| Accumulated amortization | ( | ) | ( | ) | ||||
| Foreign exchange translation loss | ( | ) | ( | ) | ||||
| Balance | $ | $ | ||||||
For
the period ended March 31, 2023, the amortization of the operating lease right of use asset is $
As of March 31, 2023 and December 31, 2022 operating lease liability as follow:
As of March 31, 2023 (Unaudited) | As of December 31, 2022 (Audited) | |||||||
| Balance as of January 1, 2023 and January 1, 2022 | $ | |||||||
| Less: gross repayment | ( | ) | ( | ) | ||||
| Add: imputed interest | ||||||||
| Foreign exchange translation loss | ( | ) | ( | ) | ||||
| Balance as of March 31, 2023 and December 31, 2022 | $ | |||||||
| Less: lease liability current portion | ||||||||
| Lease liability non-current portion | $ | |||||||
| F-11 |
CATTHIS HOLDINGS CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 2023 AND MARCH 31, 2022
(Currency expressed in United States Dollars (“US$”), except for number of shares)
(UNAUDITED)
9. DEPOSITS, PREPAYMENTS AND OTHER RECEIVABLES
Deposits, prepayments and other receivables consisted of the following as of March 31, 2023 and December 31, 2022.
| As of March 31, 2023 (Unaudited) | As of December 31, 2022 | |||||||
| Prepayment | $ | $ | ||||||
| Deposits | ||||||||
| Total deposits, prepayments and other receivables | $ | $ | ||||||
10. TRADE PAYABLE
Trade payable consisted of the following as of March 31, 2023 and December 31, 2022.
| As of March 31, 2023 (Unaudited) | As of December 31, 2022 | |||||||
| Trade payable | $ | $ | ||||||
| Total Trade payable | $ | $ | ||||||
11. OTHER PAYABLES AND ACCRUED LIABILITIES
Other payables and accrued liabilities consisted of the following as at March 31, 2023 and December 31, 2022.
| As of March 31, 2023 (Unaudited) | As of December 31, 2022 | |||||||
| Accruals | ||||||||
| Other payables | ||||||||
| Total other payables and accrued liabilities | $ | $ | ||||||
| F-12 |
CATTHIS HOLDINGS CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 2023 AND MARCH 31, 2022
(Currency expressed in United States Dollars (“US$”), except for number of shares)
(UNAUDITED)
12. AMOUNT DUE TO DIRECTOR
Amount due to director of the following as of March 31, 2023, and December 31, 2022.
As of March 31, 2023 (Unaudited) | As of December 31, 2022 (Audited) | |||||||
| Amount due to director | $ | $ | ||||||
| Foreign exchange translation | ( | ) | ( | ) | ||||
| $ | $ | |||||||
The amount due to director is unsecured, interest-free with no fixed repayment term, for working initial capital purpose.
13. INCOME TAXES
For the period ended March 31, 2023 and March 31, 2022, the local (United States) and foreign components of loss before income taxes were comprised of the following:
| Three months ended March 31, 2023 (Unaudited) | Three months ended March 31, 2022 (Unaudited) | |||||||
| Tax jurisdictions from: | ||||||||
| - Local | $ | ( | ) | $ | ( | ) | ||
| - Foreign, representing | ||||||||
| Labuan | ( | ) | ( | ) | ||||
| Loss before income tax | $ | ( | ) | $ | ( | ) | ||
The provision for income taxes consisted of the following:
| Three months ended March 31, 2023 (Unaudited) | Three months ended March 31, 2022 (Unaudited) | |||||||
| Current: | ||||||||
| - Local | $ | $ | ||||||
| - Foreign | ||||||||
| Deferred: | ||||||||
| -Local | ||||||||
| -Foreign | ||||||||
| Income tax expense | $ | $ | ||||||
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 Company has subsidiaries that operate in various countries: United States, Labuan that are subject to taxes in the jurisdictions in which they operate, as follows:
United States of America
The
Company is registered in the State of Nevada and is subject to the tax laws of the United States of America. As of March 31, 2023,
the operations in the United States of America incurred $
| F-13 |
CATTHIS HOLDINGS CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 2023 AND MARCH 31, 2022
(Currency expressed in United States Dollars (“US$”), except for number of shares)
(UNAUDITED)
Labuan
Under
the current laws of the Labuan, catTHIS Holdings Corp. is governed under the Labuan Business Activity Act, 1990. The tax charge for such
company is based on
| Three months ended March 31, 2023 (Unaudited) | Three months ended March 31, 2022 (Unaudited) | |||||||
| Deferred tax assets: | ||||||||
| Net operating loss carry forwards | ||||||||
| -United States of America | $ | $ | ||||||
| -Labuan | ||||||||
| - | - | |||||||
| $ | $ | |||||||
| Less: valuation allowance | ||||||||
| Deferred tax assets | $ | $ | ||||||
14. RELATED PARTY TRANSACTIONS
There were Metaverse development costs amounting to $ charged by related party, Resource 21 Sdn Bhd during the period ended March 31, 2023.
15. COMMITMENTS AND CONTINGENCIES
As of March 31, 2023, the Company has no commitments or contingencies involved.
16. CONCENTRATIONS OF RISK
The Company is exposed to the following concentration of risk:
(a) Major customers
For the three months ended March 31, 2023 and 2022, the customers who accounted for 10% or more of the Company’s revenues and its accounts receivable balance at year/period-end are presented as follows:
| 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||
| Revenues | Percentage of revenues | Trade receivable | ||||||||||||||||||||||
| Customer A | $ | $ | % | % | $ | $ | ||||||||||||||||||
| $ | $ | % | % | $ | $ | |||||||||||||||||||
(b) Major suppliers
For the three months ended March 31, 2023 and 2022, the supplier who accounted for 10% or more of the Company’s purchases and its outstanding payable balance at year-end are presented as follows:
| 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||
| Cost of Sales | Percentage
of Cost of Sales | Trade Payable | ||||||||||||||||||||||
| Supplier A | $ | $ | % | % | $ | $ | ||||||||||||||||||
| $ | $ | % | % | $ | $ | |||||||||||||||||||
(c) Credit risk
Financial instruments that are potentially subject to credit risk consist principally of accounts receivable. The Company believes the concentration of credit risk in its account receivables is substantially mitigated by its ongoing credit evaluation process and relatively short collection terms. The Company does not generally require collateral from customers. The Company evaluates the need for an allowance for doubtful accounts based upon factors surrounding the credit risk of specific customers, historical trends and other information.
(d) Exchange rate risk
The Company cannot guarantee that the current exchange rate will remain stable, therefore there is a possibility that the Company could post the same amount of income for two comparable periods and because of the fluctuating exchange rate actually post higher or lower income depending on exchange rate of RM converted to US$ on that date. The exchange rate could fluctuate depending on changes in political and economic environments without notice.
| F-14 |
CATTHIS HOLDINGS CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 2023 AND MARCH 31, 2022
(Currency expressed in United States Dollars (“US$”), except for number of shares)
(UNAUDITED)
17. SEGMENT INFORMATION
ASC 280, “Segment Reporting” establishes standards for reporting information about operating segments on a basis consistent with the Company’s internal organization structure as well as information about services categories, business segments and major customers in financial statements. In accordance with the “Segment Reporting” Topic of the ASC, the Company’s chief operating decision maker has been identified as the Chief Executive Officer and President, who reviews operating results to make decisions about allocating resources and assessing performance for the entire Company. Existing guidance, which is based on a management approach to segment reporting, establishes requirements to report selected segment information quarterly and to report annually entity-wide disclosures about products and services, major customers, and the countries in which the entity holds material assets and reports revenue. All material operating units qualify for aggregation under “Segment Reporting” due to their similar customer base and similarities in economic characteristics; nature of products and services; and procurement, manufacturing and distribution processes.
The Company had no inter-segment sales for the periods presented. Summarized financial information concerning the Company’s reportable segments is shown as below:
By Geography:
| For the three months ended March 31, 2023 | ||||||||||||
| United State (Nevada) | Malaysia (Labuan) | Total | ||||||||||
| Revenues | $ | $ | $ | |||||||||
| Other income and gains | ||||||||||||
| Cost of revenues | ( | ) | ( | ) | ||||||||
| Administrative expenses | ( | ) | ( | ) | ( | ) | ||||||
| Other operating expenses | ( | ) | ( | ) | ||||||||
| Selling and distribution expenses | ( | ) | ( | ) | ||||||||
| Net loss | ( | ) | ( | ) | ( | ) | ||||||
| Total assets | $ | $ | $ | |||||||||
| For the three months ended March 31, 2022 | ||||||||||||
| United State (Nevada) | Malaysia (Labuan) | Total | ||||||||||
| Revenues | $ | $ | $ | |||||||||
| Other income and gains | ||||||||||||
| Cost of revenues | ( | ) | ( | ) | ||||||||
| Administrative expenses | ( | ) | ( | ) | ( | ) | ||||||
| Other operating expenses | ( | ) | ( | ) | ||||||||
| Selling and distribution expenses | ( | ) | ( | ) | ||||||||
| Net loss | ( | ) | ( | ) | ( | ) | ||||||
| Total assets | $ | $ | $ | |||||||||
18. SUBSEQUENT EVENTS
The Company has evaluated subsequent events that occurred after March 31, 2023 up through the date of May 15, 2023, the Company issued audited consolidated financial statements 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. During this period, there was no subsequent event that required recognition or disclosure.
| F-15 |
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 14, 2023, for the period ended December 31, 2022 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 consolidated financial statements and the notes to the consolidated 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 quarterly 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 10-K 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 transition 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
catTHIS Holdings Corp., was incorporated in the State of Nevada on January 4, 2021 and it operates through its wholly owned subsidiary, catTHIS Holdings Corp., a Company organized in Labuan, Malaysia. The Nevada and, Malaysia corporations share the same exact business plan.
We are an online platform that provides digital catalogue management service to retailers. Our app “catTHIS” enables users to save PDF catalogues and organize them in a customized way. Users can download the mobile app from Google Play (https://play.google.com/store/apps/details?id=com.incredibleqr.mycatthis.production) or App Store (https://apps.apple.com/us/app/catthis/id1211749794), or access our web-based digital catalogue management system via https://catthis.com/.
We are a startup early-stage company that intend to provide digital marketing services through technology. Its leading mobile application “catTHIS” is a digital catalogue management platform that allows users to upload and share PDF catalogues anywhere and from any devices for free. This environmental-friendly service would significantly bring down the number of physical printed catalogues, newspaper advertisement, magazines and other printed materials. The key feature of this digital catalogue management platform is its engagement metrics, which are extremely useful for users to understand how well its catalogue is reaching their audience.
Results of Operation
For the three months ended March 31, 2023
Revenues
For three months ended March 31, 2023, the Company has generated revenue of $34,123. The revenue generated was the result of branding and marketing service fees paid by corporate clients which include catalogue management services, video production and live streaming services via green-screen studio.
| 3 |
Cost of Revenue and Gross Profit
For the three months ended March 31, 2023, cost incurred arise in providing marketing service fees paid by corporate clients which include catalogue management services, video production and live streaming services via green-screen studio is $28,478 and generate a gross profit of $5,645.
Selling and distribution, general and administrative and other operating expenses
For the three months ended March 31, 2023, we had selling and distribution, general and administrative and other operating expenses in the amount of $31,906, which was primarily comprised of company subcontractor, rental, and upkeep of office expenses.
Net Loss
For the three months ended March 31, 2023, the Company has incurred a net loss of $26,064. The loss is mainly derived from the selling, general and administrative expenses.
Liquidity and Capital Resources
As of March 31, 2023, we had cash and cash equivalents of $8,166.
We depend substantially on financing activities to provide us with the liquidity and capital resources we need to meet our working capital requirements and to expand our business in connection with ongoing operations. For the three months ended March 31, 2023, we have met these requirements primarily from previous sales of our common stock.
Cash Used In Operating Activities
For the three months ended March 31, 2023, net cash generate in operating activities was $2,212, which were the result of our growth of revenue.
Credit Facilities
We do not have any credit facilities or other access to bank credit.
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, 2023.
Recently Adopted Accounting Standards
In June 2016, the FASB issued Accounting Standards Update No.2016-13, Financial Instruments – Credit Losses (Topics 326): Measurement of Credit Losses on Financial Instruments, which introduced the expected credit losses methodology for the measurement of credit losses on financial assets measured at amortized cost basis, replacing the previous incurred loss methodology. In November 2019, the FASB issued ASU 2019-10 highlighted the adoption timeline. For smaller reporting entities, Topic 326 is effective for annual periods beginning after December 15, 2022, including interim period within those fiscal years, of which is effective for the Company on January 1, 2023.
Credit loss rate is determined by historical collection based on aging schedule, adjusted for current conditions using reasonable and supportable forecast. Based on the aging categorization and the adjusted loss rate per category, an allowance for credit losses is calculated by multiplying the adjusted loss rate with the amortized cost in the respective age category.
Recently Issued Accounting Standard
The Company reviews new accounting standards as issued. Management has not identified any other new standards that is believes will have a significant impact on the Company’s financial statements.
| 4 |
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
Evaluation of Disclosure Controls and Procedures:
We carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of March 31, 2023. This evaluation was carried out under the supervision and with the participation of our Chief Executive Officer. Based upon that evaluation, our Chief Executive Officer concluded that, as of March 31, 2023, our disclosure controls and procedures were not effective due to the presence of material weaknesses in internal control over financial reporting.
A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis. Management has identified the following material weaknesses which have caused management to conclude that, as of March 31, 2023, our disclosure controls and procedures were not effective: (i) inadequate segregation of duties and effective risk assessment; and (ii) insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of both US GAAP and SEC guidelines.
Changes in Internal Control over Financial Reporting:
There were no changes in our internal control over financial reporting during the quarter ended March 31, 2023, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II — OTHER INFORMATION
Item 1. Legal Proceedings
We know of no materials, active or pending legal proceedings against us, nor are we involved as a plaintiff in any material proceedings or pending litigation. 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 us.
Item 1A. Risk Factors.
We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
None.
Item 3. Defaults Upon Senior Securities
None
| 5 |
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information.
None.
ITEM 6. Exhibits
| Exhibit No. | Description | |
| 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 * | |
| 101.INS | Inline XBRL Instance Document* | |
| 101.SCH | Inline XBRL Schema Document* | |
| 101.CAL | Inline XBRL Calculation Linkbase Document* | |
| 101.DEF | Inline XBRL Definition Linkbase Document* | |
| 101.LAB | Inline XBRL Label Linkbase Document* | |
| 101.PRE | Inline XBRL Presentation Linkbase Document* | |
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
* Filed herewith.
| 6 |
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.
| catTHIS Holdings Corp. | ||
| (Name of Registrant) | ||
| Date: May 19, 2023 | ||
| By: | /s/ Yeo Choon Pin | |
| Title: | Chief Executive Officer, Director | |
| 7 |